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Fitness Consumers Want Choices, Just Not Pelotons

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Sept. 12, 2022 — Fitness consumers are flipping demands they made 2 years ago in the darkest days of the COVID pandemic.

Then, conventional wisdom told us that gyms were dying because people would rather stay home and work out than risk exposure in a fitness facility. Now, the reverse seems true, with membership sales and attendance rising again at many in-person businesses, and those shiny workout-at-home companies struggling to provide more than expensive clothes hangers in spare bedrooms.

There’s no doubt the pandemic disrupted the fitness industry permanently. A third of brick-and-mortar fitness locations went out of business permanently. Consumers stayed home, some with online training and others with shiny new brands that became household names.

But the pandemic isn’t what it once was, and it looks like some of that disruption might result in some lasting changes, but not the way it seemed at first.

Fitness consumers are winning. They’re gaining more options, more flexibility, a return to pre-pandemic pricing, and – observers hope – greater awareness that lifestyle habits directly impact our ability to stay strong against health challenges, including strange, new diseases.

The Big One

No brand became more closely linked to the pandemic than Peloton. The high-end at-home bikes connected users to instructors and other participants around the world for group classes, competitions, and more, creating an elite and somewhat self-adoring image compared to sweating it out in a weight room.

The brand wanted to be the main disruptor of the fitness world, and it was for a time.

It spawned other high-tech home gym equipment, like Tonal and Mirror. It became so successful that it was used as an instant goal-clarifier for startups, as in, “We’re going to be the Peloton of home knitting.” It even got embroiled in the “Sex and the City” universe when Carrie Bradshaw’s husband had a fatal heart attack while using one.

But now, the trendy cult-like magic is gone.

Peloton has reported company losses for 6 straight quarters, including a $1.2 billion quarterly loss announced last month. The company has cut jobs, closed retail locations, started selling used equipment, and started hawking products on Amazon.

Some observers say the company might have had better long-term luck without the temporary sales boom the pandemic provided.

“The days of Peloton’s pandemic-era glory are a distant memory now as it hunkers down to remain afloat. Revenue is drying up, losses are widening, and shares of the connected fitness guru are down 92% from the all-time high hit in January 2021,” The Motley Fool reported.

(A Peloton spokesperson said the company was not available for an interview for this article.)

The company is not alone in struggling.

The cycling chain SoulCycle said last month it would close a quarter of its locations. Like a lot of fitness businesses, SoulCycle had to shutter its doors when the pandemic hit, and some didn’t reopen.

“It’s yet another signal that consumers’ exercise habits continue to change as the pandemic wears on,” CBS reported.

Companies making in-home workout equipment are struggling, too. NordicTrack’s parent company, iFit Health and Fitness, dropped plans for an initial public offering. Tonal, which had expanded with mini stores in some Nordstrom locations, cut a third of its staff.

Gym Attendance on the Rise

As the Peloton trend has withered, consumers have been returning to gyms and studios. They want to be among people, to have access to trainers, to use more equipment than can fit in their homes, and to be challenged in new ways being offered by new brands like Pure Barre.

For example, low-cost chain leader Planet Fitness reported sales were up 13.6% in the second quarter of 2022, with a total membership of 16.5 million.

“Our high-quality, affordable fitness experience resonates now more than ever as Americans are seeking value and feeling the rising costs of everyday items such as food and gas,” says Chief Executive Officer Chris Rondeau.

“We believe that people will continue to prioritize their health and wellness while being more cost-conscious, and we offer a welcoming environment for people of all fitness levels. During the second quarter, our join trend returned to pre-pandemic seasonality with the addition of approximately 300,000 net new members.

And Xponential Fitness, which owns 10 boutique franchise brands including Row House, Pure Barre, and CycleBar, saw a 66% increase in revenue in the second quarter of this year.

The pandemic left some new demands around cleanliness, says Josh Leve, CEO of the Fitness Business Association, an organization of gym owners and other fitness professionals.

“What members want now is not about the best workout, the most equipment, or the most classes,” Leve says. “It will be about whether or not I trust my health to you and your team.”

Hybrid Workouts Let You Have It Both Ways

And the rise of “hybrid” options, boosted greatly by the lockdown, will last, he says. This became a common gym offering when owners provided training online to their customers who weren’t allowed to come into the gym or studio during lockdown.

“Before, when these businesses were looking to generate new revenue, they had to get more people to walk in the door,” he says. “Now the opportunities are endless. People can join your studio but train remotely.”

And consumers aren’t going to let go of that option, says Chris Craytor, board chairman of IHRSA, a global trade organization serving the fitness industry.

“The hybrid type of fitness is here to stay,” he says. Consumers like having the option of being able to exercise with a gym or studio from their homes or in the brick-and-mortar location. They’ve gotten used to it, as many office workers are now reluctant to go back to spending 40 hours a week in the office.

“What we’re seeing now is more people coming back into the clubs,” he says, noting “no hesitation” from consumers about COVID. “Consumers just want to return to exercise.”

Some want a super-low price, like they find at Planet Fitness and other chains like it.

But they want something they can’t get at home: the social aspect of going to a gym or studio. That’s particularly true for older consumers, he says.

“The benefits of being in person are priceless, both from a technical perspective in the training and from the sense of community,” says Rosa Coletto, owner of Full Circle Fitness in Tustin, CA. “Our demographic of older adults generally appreciates and prefers working in person to ensure safety, efficiency, and effectiveness.”

What’s Next

Craytor says consumers are coming back after COVID wanting strength training and “coached experiences” like in-person training like Xponential’s rowing and Pilates classes.

Strength training is another phrase for weightlifting, which generally requires a lot of heavy equipment and more room to use it than many homes can offer. Some clubs are even reducing the amount of space devoted to cardio machines so they can offer more weightlifting and other options, he says.

The main idea is to get people moving on a regular basis to improve lives and public health problems like obesity and medical costs – whether at home or in the gym.

Consumer needs change, as the pandemic showed so dramatically for fitness and other industries.

New Pelotons used to be hard to find. Now selling a used one can be a challenge.

On Facebook, the Peloton Buy Sell Trade (BST) group claims more than 200,000 members.

Nurse Olivia Hilton bought a Peloton in 2020 with a discount offered to health care workers, spending $3,000 “on this bike that collected dust,” she recently told The New York Times.

She sold it on Facebook after she dropped the price from $1,500 to $1,200.

She felt guilty about selling it. But ultimately, she said she decided to “get the thing out of your house if you don’t want it anymore.”

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