FitTech Insider

The future of gyms, scenario II: Is the gym dead, Ellen?

Gym owners, sport brands and other experts seem to know the future of the fitness market. In this series, we spoke to those that ultimately decide where gyms are heading: consumers like Ellen. Episode 2: Why the gym is (nearly) dead.

As gyms were forced to close, the list of at-home converts is growing. What exercisers gain in optionality, gyms and studios could lose in leverage. Consumers have learnt to appreciate the perks of working out at home and the vantages of virtual fitness: There has never been more on-demand fitness content available. Working out from home is affordable and flexible. Tech enables customization and substitutes not only coach but also community. For some, the outdoors is the new gym. Gym might not be dead like a doornail, but covid is the end of gym as we know it.

About this series "The gym is dead, long live the gym"
“Gym is dead!” claim those that make good money from virtual fitness. “Long live the gym!”, indeed is what gym owners want to hear. Fittech Insider spoke to those that ultimately decide where gyms are heading: The consumers.

The future of gyms, scenario I: Long live the gym!
The future of gyms, scenario II: The gym is dead!
The future of gyms, scenario III: The return of the gym.

Why will gyms die?

Reason #1: Everything we need is available outside the four walls of the gym
A surge in home fitness providers has led to a large variety of equipment and content. Johannes arranged his proper home gym already pre-Covid-19. “With measures put in place demand was soaring - it was hard to buy fitness equipment online”, he says. His gym consists of a free weight area and two hybrid machines. He trains five to six days a week, mostly with friends.

Unlike many others, Johannes does not use any apps or on-demand fitness content. Ellen P. however did. “Virtual fitness and mindfulness classes helped me stay sane in these crazy times”, she says. During the lockdown she combined outdoor endurance training with HIT and yoga. Since the start of the pandemic, some 80% of fitness consumers live-streamed workouts compared with 7% in 2019, according to a MindBody survey. Online training is New Top Fitness Trend for 2021 according to ACSM Annual Forecast, more than 4,000 health and fitness pros surveyed by the American College of Sports Medicine (ACSM) identified online training as the new top trend in fitness for 2021.

Train whenever, wherever - Even regular gym-goers seem to get hooked by the convenience of it. This is the moment that people turn to home gym and on-demand options for good. (Photo shows Gabriele Alexandru; Credits: Sigrid Mayer)

Reason #2: ...and in some ways better than what we were used to.
Yes, going a step further, one might even say that digital options provide a level of convenience and personalization unrivaled by gyms. AI coaches and supports individuals in the pursuit of a healthier lifestyle. Kerstin C., appreciates options of personalization and gamification offered by tech. “The offer at my gym was in my opinion not customer-focused enough”. Kerstin uses apps like mindbody to keep track of her fitness routines and live-streams guided fitness and yoga classes. Simon O, reports to have been impressed by how well virtual coaching works. “I feel as motivated and pushed as back then in the group”.

The prequel: Disruption did not just start with the Covid-19 outbreak

As the Fitt Insider writes: “Long before the coronavirus cropped up, brick-and-mortar providers felt the pressures of oversaturation, a looming recession, and the emergence of connected on-demand fitness”. Notwithstanding, the Corona-Pandemic seems to have accelerated existing trends.

Reason #3: We prefer investing once instead of signing binding subscriptions
“Going to the gym is expensive - and, let’s be honest - always a bit of a hassle”, says Johannes. He is convinced: After the initial investment home gym saves time and money. “Some years ago I spent 20 bucks on my gym subscription per month”, tells Simon, “now I pay over 80 euros for my virtual HIT training program - and it’s totally worth it”. Simon was “positively surprised that tech enables holistic and effective training”. He does not have troubles to motivate himself and will keep up his routine also after measures are lifted.

According to global consulting firm LEK, consumers have increased their spending on digital fitness by 30% – 35% compared to pre-COVID-19 levels. We’ve also been outfitting our homes with pricey Peloton bikes at such a rate the brand saw profits grow by 100% in 2020 to $1.8 billion. Rival equipment outfitter Nautilus saw its 2020 third-quarter sales jump 151.8% year over year. Even the relatively new Mirror, whose interactive fitness “machine” is a sleek, wall-mounted looking-glass that does not junk up décor, was expected to bring in $100 million in revenue in 2020.

Armin P. cancelled his gym subscription already before Covid-19 hit - bothered by “long-term commitment and inflexibility”. He reportedly realized that he does not need a gym to stay fit and healthy: “Walking is my new favorite workout - 6.000 to 10.000 steps a day. In summer I play golf, in winter I do ski-mountaineering”. He feels in better shape today than when the pandemic started.

Zooming out: Fitness got hit By the numbers, the retail fitness industry is among the hardest hit by coronavirus shutdowns, as the Fitt Insider states. Some figures:
  • US gyms could see $10 billion of revenue wiped out.
  • 25% of US health clubs could close by the end of 2020.
  • As of August 2020, US bookings through Mindbody were down 70% YoY.
  • The global industry could shrink to $45B in 2020, down from $85B in 2019

Reason #4: Outdoor is the new gym
A recent WSJ article explored the power of spending more time in nature, suggesting that two hours outdoors is the new 10,000 steps. Between March and September last year, data from Fitbit, Garmin, and MapMyRun showed increased activity levels, as runners logged 22%, 31%, and 68% more miles, respectively. According to Strava, in 2020, users logged one and a half to two times more runs and bike rides than usual, while outdoor walks increased by three. As cycling boomed, bicycles quickly sold out. In April alone, bicycle sales totaled $1B according to the NPD.
US shoe brand Run Repeat surveyed 4,538 active adults from 122 countries about what they believe was the best way to stay fit in 2021, in comparison to the start of 2020, before the pandemic. THey found: Exercising outdoors is the most popular fitness trend going into 2021: 59.1% of active adults chose outdoor activities like running, training, hiking, and walking as the best way to stay fit in 2021; up 14.6% from the start of 2020. 39.4% of gym members are switching to running and other outdoor activities in 2021.

Reason #5: We feel safer at home
According to the 2020 Mindbody survey, 92% of consumers are most concerned with rigorous cleaning guidelines in their decision to return to a fitness business, followed by reducing the number of clients allowed in the business (76%), and making changes to the physical layout to allow for adequate social distance (75%). That might be the reason that 58% of consumers questioned feel more comfortable returning to boutique fitness studios as opposed to only 25% who feel comfortable returning to multiplex facilities and health clubs. “I would not feel comfortable in crowds like we experienced pre-Corona”, says Ellen.

The punchline: Our expectations have changed. Gyms should thus strive to capitalize on massive shifts in consumer behavior. And better yesterday than tomorrow, as current economic data shows.

For this issue, Fittech Insider spoke to:

Armin, 61 years old, works as a business consultant. He seeks for options to stay fit and healthy without long-term commitment to one specific establishment. Flexibility is key, he says. He cancelled his gym subscription already prior to the pandemic. Sports helps him to keep up a good mood - and in shape.

Johannes (upper row), 25 years old, student, works out with friends in his home gym. Getting new equipment once Corona started was hard, he said. He works out five to six days a week and does not plan to return to the gym. He describes himself as ambitious: Getting better day by day is what keeps him going.

For Simon, 27 years old, currently pursuing his PhD, regeneration is an alien word. He focuses specifically on outdoor endurance sports and works out using a virtual app of the gym he used to go to before Corona hit. And he prefers Strava over Instagram.

Kerstin (left), 36 years old, is currently pursuing her MBA in Digital Business at EU Business School Geneva. She describes herself as health-conscious and highlights the importance of sport to balance her currently tight working schedule - not only for the body but also for the mind.

Ellen (right), 28 years old, works in marketing and loves to do different kinds of sports to get away from everyday life and to gain new energy. She likes to work out alone, but also with friends or in groups, especially in HIT-trainings. At the gym she enjoyed going to the sauna and pool after working out.

Photo credits: Private