The pandemic has changed the fitness industry forever and the lockdown of gyms, clubs and studios has forced an industry-wide digital transformation.
Personal trainers, coaches and instructors have quickly pivoted their practices from offline to online, resulting in a boom of both personal and group fitness conducted on Zoom, YouTube, Instagram and more. Digital-first fitness companies like MIRROR Home Fitness, Peloton and SWEAT have all experienced massive growth during the pandemic, while bricks and mortar fitness has struggled to survive.
Earlier this month, the Financial Post reported that Lululemon Athletica Inc. is ‘making a big bet that people will still exercise at home when the pandemic subsides’. It has recently acquired MIRROR Home Fitness—both a mirror and a digital screen that allows users to see their reflection while simultaneously participating in a workout class—for US$500 million.
Leading the pack of digital-first fitness companies is Peloton, whose ‘revenue surged 66% during the fiscal third quarter, as more people purchased its fitness equipment and tuned into its live classes’. Sales for the company’s connected fitness products totalled $420.2 million, up 61% from a year ago and subscription revenue totalled $98.2 million, up 92% year over year. Projected 2020 total revenue is expected to reach between $1.72 billion and $1.74 billion, which would represent a year-over-year increase of 89%. In contrast, major fitness chains like Gold’s Gym and 24-Hour Fitness are closing locations and filing for bankruptcy protection, citing Covid-19 related reasons.
We’ve learned we can workout from anywhere, on our own terms, and that the home is as good a place as any.
What is Peloton?
Peloton is an connected fitness platform founded in 2012 that produces live and on-demand fitness classes spanning cycling, strength training, yoga, cardio, meditation and bootcamp. Above all, it’s known for its flagship product: a high-end spin bike with a Wi-Fi enabled, 22-inch touchscreen that streams instructional content and brings users together with a like-minded fitness community.
On the bike, users join classes where their cadence (speed) and resistance (pedalling power) are combined to produce watts (an effort indicator) which competitively moves their ranking up and down a leaderboard in real time. In essence, the Peloton bike isn’t just a bike, it’s a socially connected fitness game inside a community that rewards personal achievements and makes exercising incredibly addictive.
Where customer experience (Cx) and psychology meet
By integrating the same addictive properties (sounds, rewards, triggers) that social media and casinos employ to hook users, Peloton is building a cultlike following. As Jeremiah Owyang notes: Peloton is ‘not just about the hunk of sweaty metal, plastic, and electronics—they’ve tapped into a sense of belonging, even when we’re physically separated’. He describes Peloton’s secret for tech and fitness addiction as getting ‘A-DOSE’:
Adrenaline
From the workout, offering exhilaration and a high.
Dopamine
Released from digital “high-fives,” scores on the leaderboard.
Oxytocin
Bonding hormone often increased via group or pack behaviour.
Serotonin
Released from aerobic fitness. The brain is thought to regulate anxiety, happiness, and mood.
Endorphins
Trigger a positive feeling in the body, similar to that of morphine.
Peloton has achieved the near impossible. It has made fitness and exercise addictive to millions and gamed users into building healthy habits. How did they do it?
Financial investment
Peloton is undoubtedly expensive. With a minimum cost of $2000 for the bike (excluding cleats, mats, etc.) plus another $40 a month subscription fee for the app, it’s both an investment and commitment. Premium pricing motivates participation.
Product form factor
Peloton positions their bikes—which are beautifully designed—as a feature of the home environment rather than a piece of ugly exercise equipment meant to be stowed away after each use. Their bikes are purpose-built for public display and signal to the world that their riders are committed to fitness. Prominence and presence means owners are more likely to use it.
Quality programming
Peloton is not easy, but the depth, breadth and quality of its programs keep people coming back for more. Classes vary in difficulty and are built for beginners right through to professional athletes. Training options include: endurance, high intensity interval training (HIIT) and even Tabata. Workout lengths vary from 5 to 90 minutes and users can filter by musical preference.
Instructors
Instructors on the platform are incredibly engaging and are packaged and presented in a high gloss production that transforms them into fitness celebrities. They are young, diverse, beautiful and charismatic and show a vested interest in helping users achieve their fitness goals (through a screen). Riders create emotional bonds with individual instructors and their unique riding styles and participate in the continuous journey of fitness and self-improvement. It’s very personalized, yet users also feel as if they’re part of a team.
Biometrics and digital rewards
Peloton is a master of fitness gamification. As users continue to participate on the platform, they earn digital badges and rewards for their dedication and personal achievements. These range from hitting a personal best on a ride (maximum output) through to celebrating milestones like 50, 100, or 1000 rides. During classes, fellow riders motivate each other with digital ‘high-fives’.
Beyond hardware
If someone doesn’t want to buy Peloton hardware, but wants the Peloton experience, they can easily do so through the digital app. It’s as simple as taking up a subscription and then sweating through the training programs with any brand of bike, treadmill or weights they have available.
Now that fitness practices have increasingly shifted online, and new habits have been formed, the question remains: As gyms begin to reopen, and safety protocols are put in place will members choose to come back? Peloton is betting they won’t.