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The Tipping Point: COVID-19 Versus the Fitness Industry
Words Bevery Pokuah
Corporate Sales Executive Bevery Pokuah, explains how the fitness industry has been effected as a result of the pandemic and gives us an insight into what we could expect to see in the future.
Credit: UnsplashIn early March, Barry’s BootCamp announced that it will be shutting all its red rooms across the US, Canada, Milan, Sweden, Norway and finally, London. Shortly afterwards, F45 followed suit by shutting all franchises in the US and the UK. ClassPass's CEO Fritz Lanman revealed that over 80 % of ClassPass's 30,000 clients, across 30 countries, have now temporarily closed for business. He also added that “these businesses have kept our communities healthy and resilient, and the global COVID-19 puts them at risk”.
We are currently in unprecedented times. COVID-19 has sent the world into a global uproar, spurring lockdowns in a majority of countries, effectively shutting down all non-essential trade. This has ultimately affected the likes of companies above, the operation of gyms, leisure centres, health clubs and fitness studios.
Credit: UnsplashThe previous stability of annual memberships allowed companies such as 24 hour and Equinox to borrow amounts in order to fund global expansion. Now, each will be fighting with high levels of debt and the strong prospect of an abrupt drop in revenue. All gyms, whether a high end, value-oriented gym or fitness boutique will suffer as long as COVID-19 and its knock on effects last. Although, it's too early to gauge the magnitude of the potential sale shortfall due to traditional gyms often requiring customers to sign up for annual memberships. In order to cut down all operation costs some fitness chains have either laid off or furloughed staff to cut costs.
Duncan Bannatyne the CEO of The Bannatyne Group has said that the impacts of COVID-19 could cost £30 million. The company hasn't been able to pay rent and has therefore negotiated with its landlords to switch from quarterly to monthly rent payments, as soon as banking facilities kick in to ease cash flow. Bannatynes will be reopening all profitable sites once the lockdown is over but may permanently shut less profitable locations. This move will most likely cause other operators to follow suit, which means the industry may see a huge shrinkage in the number of sites physically operating. Some operators won't bounce back and those that do must have strategized strong contingency plans.
However in the midst of this crisis, the fitness industry is gradually adapting to the ‘new normal’ finding innovative ways to extract value using connectivity. Health and fitness apps have doubled in availability compared to figures in recent years. The virtual togetherness that this pandemic has created demonstrates that fitness is one of the industries that had adequate tools already established to survive. The industry has unified to help the public and businesses cope during this time. Exercise is a crucial factor of healthy living, as people need to remain active and the industry is making vital changes to ensure the public is connected to their clubs and engaged in exercising at home.
The innovators within the industry are constantly learning and testing new ways to advance. Some digital fitness brands have found themselves in fortunate positions than its brick and mortar counterparts because they are equipped to offer services like remote workouts to consumers and have naturally seen the demand as a result of consumers being prevented from working out in person. Different gyms have created a range of their own in-house solutions for their members, with options offering fitness programmes to the general public and live classes for free on multiple social media handles or alternatively migrating classes to digital platforms giving members access to on demand workouts.
Would you have ever imagined for the world of work to become so globally connected due to digital influence? Image Credit: UnsplashGympass, a corporate wellness company, announced that they will be expanding their current access to their digital app with nutrition plans, wellness, lifestyle information and virtual workouts. Technogym have introduced MyWellness for professionals, a new digital suite of professional touchpoints for MyWellness helping fitness clubs to provide their customers with a truly unique experience that cultivates ongoing engagement with their customers. The fitness company Beachbody has experienced a 200% increase in online subscribers, approximately 1.5 million subscribers since moving to online classes.
COVID-19 has now forced many brands to react by driving a stronger online presence and discovering new ways to connect. Though the growing health concerns have left gyms on hold, the response of the fitness industry is clear that current sales in gym equipment has surged which suggests that restriction on movement has led people to crave physical activity explaining the sudden influx of online equipment orders. The UK’s exercising habits have now been transformed with home fitness workouts, cycling and walking now becoming the most popular methods of exercise. 25 % of people now take part in regular home fitness workouts which is far above the UK’s gym membership penetration level of 15.6% (figure from the 2019 state of the UK fitness industry). This market shift highlights that the fitness industry customer base is highly loyal and this elevated strong devotion to health will play a pivotal role in the recovery of gyms upon reopening their doors.
Fitness apparel companies such as Nike, Gymshark, Under Armour and many more have also taken a stand to support the community, empowering consumers through their brands. The fitness industry is heavily relying on social media, offering greater accessibility and content with context for the future. The creativity and adaptability is an indicator that this industry will bounce back post coronavirus.
The definition of gyms goes beyond the four walls, as current circumstances have redefined this function and brought to light the sense of community that gyms bring to their members. It is a safe haven for some and a place of expression for others. I believe that it is business as usual for gyms but there is now a greater demand and services will need to be dramatically enhanced. Gyms will now be hubs and life centres which create multi-faceted wellness experiences, moving from physical health aspects to mental health. This would prove that gyms have the ability to retain its members, whether they go into the facilities or decide to workout from home, something that gyms would have been terrified to trial before the current crisis.
Bevery Pokuah - Corporate Sales Executive
