COVID-19 has forced the mass closure of gyms and fitness studios all over the world.
With it, we’ve seen a spike in the popularity of both online fitness classes as well as home workout equipment.
According to retail intelligence company Stackline, ‘weight training’ is the 8th fastest growing e-commerce category, recording a 308% year-on-year increase in March 2020. The related category, ‘fitness equipment’, came in 31st with a 170% bump.
The Google Trends snapshots below, for fitness equipment and kettlebell respectively, echo these numbers.
Fitness retailers everywhere, including big box retailers like Rebel (below) and Kmart in Australia, found themselves with empty shelves, after an initial flurry of panic buying by gym bros and girls fearful of lost gains!
Two months after this flurry, shelves still remain bare at most retailers.
Online fitness classes too surged as personal trainers and buff celebrities alike took to Zoom and Instagram to run classes remotely.
Gyms have responded by leasing out their equipment, selling online courses and running live classes, but notwithstanding Government concessions and relief provided by landlords, it is probably not going to be enough to see many of them survive.
The question is though, what will the gym business look like after the COVID-19 lockdown ends?
While Business Insider wrote a piece which focused on the physical layout of gyms after Coronavirus, optimising for physical distancing between gym-goers, how many former customers will actually return?
I’ve identified five profiles of former gym-goers and what their behaviour might look like once gyms re-open for business.
Research from the Institute for Corporate Productivity has found that just 15% of people said they did not plan on revisiting remote work options in the wake of COVID-19. The forced remote work experiment has forced people to adapt and in many cases come to the realisation that they can be just as, if not more productive, from home.
The same argument would no doubt hold true for a legion of gym-goers who are now comfortably working out from home, or outdoors in parks with their friends.
They’ve invested money into workout equipment, set up their home gyms, and gotten comfortable using online programs or classes. They might have grown accustom to the benefits of working out remotely, such as saving time, cranking whatever music you want to, and also the joys of working out outdoors.
Behaviour after lockdown: It is likely that a material percentage (but not all) of this profile will continue to work out remotely, especially if they’ve invested a healthy sum into fitness equipment and online class subscriptions.
This is the segment of gym-goers who were paying for a gym membership before, but had to overcome lots of inertia to get to the gym regularly. For many people, lockdown has become an excuse to stop working out, and spend more time watching, say, Tiger King or The Last Dance.
Behaviour after lockdown: As with anything, the laws of motion dictate that once we stop something, it’s much harder to get going again. It’s likely that we’ll see a very slow re-adoption of gym memberships for this segment, with some failing to get back into it altogether.
It has been projected that something like 20% of Americans will be unemployed thanks to COVID-19, while others would be temporarily stood down, or facing pay-cuts.
Behaviour after lockdown: Will continue to work out from home, or seek out budget workout options such as unmanned, no frills 24x7 gyms with low monthly fees.
After months of social distancing, it’s not like we will all simply revert back to the way things were before. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said that he doesn’t think we should shake hands, ‘ever again’.
Behaviour after lockdown:
As a result, many former gym-goers might find the idea of sharing equipment that others have touched with their sweaty hands a bridge too far, and instead opt to stay away.
As the title suggests, this category accounts for gym-goers who love being around other people, who want to get out of the house, as well as serious trainers who want to lift heavy, and those who are into a specialist discipline, be it martial arts, pilates or some other such discipline that requires both specific equipment and hands-on training.
There will also be other gym-goers in this category who simply can’t get motivated enough to train regularly from home, and need the shared gym environment to keep up a routine.
Behaviour after lockdown:
This category of gym-goers is likely to race back to gyms as soon as they can, notwithstanding a percentage of them who will no doubt wait for case numbers to look ‘safe’ before they do.
Given that many people will continue to work out remotely, some will have regressed to lazier behaviours, and others are either fearful of returning or financial unable to commit, gyms should expect a slow recovery, and might be well advised to entice a return by offering discounts on memberships and other incentives.
The recovery might reflect the product adoption curve below, penned by sociologist Everett Rogers. He found that early adopters represent about 16% of the eventual market, with the early and late majority following, but not before a considerable lag.
And it’s also possible that the size of the eventual market may never be as large as it was before COVID19, forcing many gyms to re-think their business models if they are to survive.
Aside from special offers, gyms might also have to up the ante on marketing efforts, offer online courses, as well as re-think how they enforce social distancing and cleanliness in order to allay potential visitors of their hygiene concerns.
In nature, generalists tend to thrive in fast-moving and uncertain environments because they can adapt. However, specialists tend to thrive in uber-competitive environments because they have a unique differentiator that is not easily replicated.
Specialist gyms — martial arts, reformer pilates, CrossFit — are therefore likely to recover faster than generalist weight-training gyms. This is because they are characterized by by social bonds, group and one-one-one training, specialist trainers, complex movements and progressions, and expensive equipment — all things that are not easily replicable at home, especially if you’re serious about getting your blackbelt or qualifying for the next CrossFit Games.
However, the value that generalist gyms provide is more easily replicable at home, and therefore nowhere near as defensible. For many generalists, unless they are offering budget options or otherwise command a loyal membership, recovery might be difficult.
The gym landscape was already incredibly competitive before COVID-19, what with the proliferation and growing popularity of so many new and breakthrough forms of working out and keeping fit in recent years (Soul Cycle, CrossFit, MMA etc), leading to the US health and fitness industry being valued at US$30 billion by September of 2018.
With all of the aforementioned factors though, it is likely that many a gym will struggle to get back on their feet.
And it’s not just gyms, with a Goldman Sachs estimate suggesting that 50% of small businesses in the US can’t survive three months under the current COVID-19 enforced social distancing measures.
A Conundrum of Real Estate
If you’re a generalist gym with a large floorplate, you might be considering moving to a smaller space to pay less rent, accounting for a downturn in demand.
However, the smaller space won’t lend itself to practicing social distancing as well as a large space. It’s a damned if you do, damned if you don’t equation.
Either way, social distancing measures might decrease the maximum capacity of a lot of gyms, which may have a direct impact on membership numbers as well (if I can’t go to the gym because they’re at capacity, why would I keep paying?).
In the animal kingdom, the ability to adapt to change renders us survivors or consigned to history. So too in business, and in the fitness industry.
Gyms who can reorganise around the new realities — smaller market, more hygiene concerns, less disposable income, pervasive laziness, the resilience of specialist offerings — will be more likely to succeed.
For more on business model reinvention, check out the following post.