Let’s just agree 2020 was a catastrophuck and frustratingly the first weeks of 2021 have followed suit – new virus variants, more lockdowns, further business closures, rising cases, and worsening R numbers. Month in, month out.
From a wellness point of view, the year begins with a false-positive. We place unrealistic expectations on ourselves in one month against the reality of how we live the other eleven. Lose weight, stop smoking, drink less. And do it all at once. Sound familiar?
These intentions are financially captured in the fitness industry’s biggest fiscal month (30% revenue for the year in some cases). For many fitness operators unable to benefit from January, spells even more pressure on bottom lines.
Similarly, in addition to engaging and exciting existing members, operators now need to discover alternative strategies to attract those all-important new customers.
Some gym chains took their online offerings free, in the hope that brand recognition will eventually lure people back to their physical spaces. Others are taking a different path, keeping their powder dry and laying low until reopening – when, presumably, they will go all-in with ‘fill-in-the-gap month’ is the new January.
Meanwhile, for businesses in the Fit-tech and Well-tech markets, there are clear opportunities to expand the long arms of their reach. Both B2B and B2C markets are hot, as consumers seek out fitness services that can be done anywhere, and facility operators need help making their offers available in the digital space.
It’s another perfect example of how COVID-19 has shaken up our business approaches and demanded flexibility. As we head further into 2021, one thing is for sure. Just like we did in 2020, we will spend most of the next 11 months on the edge of our seats, ready to react to whatever is thrown our way.
BOXING OUR WAY THROUGH
Despite the huge, negative disruptions, being forced to live in a constant, pandemic-induced flux has had its benefits. Dealing with the constant not-knowingness has resulted in entirely new skills. For one, the pandemic has taught us to be more fluid, more nimble, and lighter on our feet.
We all became boxers in 2020. We were all on the ropes taking the hits - with jabs, hooks, uppercuts, and even haymakers thrown our way. The clever ones quickly realized that it would be dangerous not to be able to roll with the punches.
A select few were able to ‘dance like a butterfly, sting like a bee’ with Ali but most just got ‘punched in the mouth’ with Tyson.
There were some clear winners in these bouts. It is estimated that the number of people who took part in home workouts jumped from 8 percent to 53 percent during 2020. Meanwhile, investment in connected fitness solutions topped US$1bn.
As a result, operators – as well as individual instructors and personal trainers – who took their business online, while facilities were closed or working at reduced capacity, have created entirely new customer bases.
Established players had tailwinds too. Take Strava and its 70 million active users growing by around 2 million a month. It’s now the largest sports community in the world, covering 195 countries. Thanks to its growing customer base, it raised US$110m in a late-stage funding round that valued the company at more than US$1.5bn.
NEW MODELS, NEW APPROACHES
Today, the fitness and wellness sector is much less flat-footed than it was at the beginning of 2020. The pivot to digital, which defined the first lockdown in March-April 2020, was followed by the emergence of the hybrid model - where businesses basically ran two businesses - a physical and a digital one.
The next evolution will see the amalgamation of both as it transitions towards phygital where the best features from each world enhance the customer experience.
The brave new future which awaits has been brought forward by at least five years thanks to the pandemic, according to Ian Mullane, CEO of Keepme.ai [featured in Bite #4 podcast], and will have a profound effect on our industry.
It will be influenced by tech and data and will tear down the structures that have for so long restricted us. The boundaries between home, work, and “third spaces” will vanish. There will no longer be wellness at work or wellness at home – there’ll simply be...wellness.
To offer a taste of how things will change, consider the prediction made by Grand View Research, which estimates that the global connected equipment market will be worth US$6bn by 2024. The projection is based on the fact that US consumers alone spent more than US$2bn on home fitness equipment, between the six months between March and September 2020.
This shows how important it is for businesses to be able – and be prepared – to go against the status quo. Those who can adapt themselves to new ways of thinking will not only survive, but thrive. Being brave and doing something fresh can pay huge dividends.
To give a recent example from another sector, who would’ve thought that taking a traditional period drama set in the early 1800s, mixing it with modern themes – such as diversity – and garnishing with pop music would work? Well, Netflix did. And we all watched as The Duke waltzed a debutante across the floor to a rendition of an Ariana Grande chart-topper played on strings as part of a show for ‘society’ as they navigate life’s ups, downs, and expectations.
Described by some as a mix between Downtown Abbey and Gossip Girl, Bridgerton has already become a smash hit, with more than 63 million households tuning in during the first month.
Hailed as revolutionary, not least due to its strikingly different, colorblind approach to depicting interracial relationships, Bridgerton is a true disruptor. What more, as the show’s chosen milieu involves the royal family, it mirrors – or rather, contrasts – how such relationships are treated in “real life”. Look no further than to the battles between the British media and Meghan Markle.
Why is this relevant? Because it shows that taking a traditional format, embracing what’s good about it, then mixing it with something that resonates with new audiences can indeed revolutionize a product, a service, or an experience. To move beyond the institutionalized trappings of the past and forge a brighter future – regardless of what industry we’re in – we must first disrupt, or at least acknowledge the cause of those disruptions, then harness them in ways that will propel us to new heights.
We are witnessing a revolution in real-time. As the pandemic rages on, every segment in every industry has been touched; it has the potential to alter everything – from the way we communicate, travel, and do business, to the way we spend our leisure time and consume goods and services.
Some of the changes have already taken place. We may not remember our first Zoom call, but it now resides in our daily vernacular as a noun, an adjective, and an effing expletive if too many happen back-to-back.
Just like previous revolutions, some changes are more of a slow burn. The First Industrial Revolution – which transformed manufacturing processes – started in the 1760s and lasted until the 1840s. The second – sometimes referred to as the Technological Revolution – ran from the 1870s until the breakout of WWI in 1914.
In both cases, change was gradual, and the benefits took years, even decades, to truly blossom. Talking of something else that took a while to bloom – how many centuries did it feel like before the Duke of Hastings and Daphne finally got their act together in Bridgerton? (Screams “yes” at the screen, even now!)
Economists have long pondered what the third industrial revolution will look like. Many have predicted that it would be kickstarted by the discovery of new communications methods. Others thought that it would be brought on by renewable energy solutions. Some have seen the key to it being some as-yet-unknown technological breakthrough.
It’s time and it’s here.
ROARING INTO THE 20s
In five months, the pandemic accelerated digital solutions by five years. Relationships and how they were nurtured determined the very survival of a business. Fitness chains were defined by their ability to serve their fans online.
“There are decades where nothing happens; and there are weeks where decades happen.” ― Vladimir Ilyich Lenin
Going through these testing times has taught us a lot about innovation. Big Tech has taken the moment to close the loop on delivering their entire ecosystem of wellness. Apple has utilized its hardware – such as iPhones, Apple Watches, and iPads – and combined them with the subscription-based Apple Fitness and Apple Music. The Google Fit Platform acquired Fitbit to take a slice of the action.
Lululemon cozied up to Mirror to become a genuine lifestyle brand by snapping up the hugely impressive fitness streaming solution Mirror in a deal worth US$500m.
Meanwhile, at-home pioneer and star-spangled player, Peloton acquired Precor, combining its B2C expertise with a high-end B2B supplier. Their combined capability makes the mind boggle.
"A pairing like that, well, would certainly be most enchanting indeed." – Queen Charlotte in Bridgerton
All of these show how the industry is changing – the revolution is underway. From a business point of view, however, everything we’ve gone through has led us to an even better place. We are now more nimble, more prepared to accept change, and much more adaptive to new technologies and fresh ways of thinking.
It’s also comforting to realize that a number of key ideas and concepts will continue to define our industry. We are in the business of making people healthier and fitter by offering the tools to do so – that principle will never change.
But just like WWI and the Spanish Flu pandemic in the 1910s led to the roaring 1920s, we can look forward to the COVID-19 pandemic being followed by another period of prosperity and innovation.
The exciting aspect for the fitness/wellness tech sector is that it gets to sit in the driver’s seat. A lot of the innovation has always been driven by tech and there is no end in sight to that trend. In the land of phygital, tech will be king.
So be brave, keep innovating and embrace change.
And remember – there are three types of business in this world. There are those who are happy doing what they do, as that’s what they’ve always done. There are also those who occasionally see opportunities but hesitate to take them, as it would mean changing something.
Then there are those, which we call winning businesses. They go out looking and chasing for opportunities – and when they see them, they grab them with both hands.
So be brave – and be a Netflix. Look for the elements and opportunities to build your own Bridgerton. The roaring 20s will be with us very soon...
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1) The Leisure Database Company: 2020: The Year of Digital Fitness
2) The Leisure Database Company: 2020: The Year of Digital Fitness
3) Strava: https://blog.strava.com/press/yis2020/
5) The Leisure Database Company: 2020: The Year of Digital Fitness