Undoubtedly, digital fitness has been one of the pandemic’s big winners. In 2020 alone, fitness tech grew by 29% to become a $49.5 billion market — all while gyms, studios and classes suffered a -37% revenue decline. That stratospheric growth has continued apace, even while lockdown restrictions have eased and gyms reopened.
Now, rather than recede, analysts are predicting a bright future for digital fitness brands. As part of a hybrid model in unison with brick and mortar gyms and studios, the physical activity market is forecast to nearly double from $738 billion in 2020 to $1.2 trillion by 2025.
But if the pace of this digital arms race persists, how long until the market reaches saturation? Are software or hardware companies best placed to capitalise and how are brands differentiating to stay relevant? Here, we’ve canvassed established and up-and-coming digital fitness brands to learn how they plan to stay ahead of the competition in 2022.
Peloton — fitness as a form of entertainment
In charting the hopes and fortunes of the digital fitness market, it’s impossible to ignore Peloton. For over a decade, the New York City-based fitness unicorn has spearheaded the growth of the at-home exercise market.
Long before COVID-19 levelled the playing field, the company filed an IPO having proven demand for its connected home exercise bike by generating over $800 million in sales since 2012.
At first, the pandemic turbocharged the company’s sales, then gradually global supply chain issues, lawsuits and high-profile scandals started eroding Peloton’s lead over the chasing pack. Some commentators have even speculated if the time is now right for the company to sell.
Nevertheless, the company still counted 2.49 million subscribers at the end of December 2021. Part of this user loyalty can be credited to high profile entertainment partnerships with media companies, personalities and cultural pioneers — such as Beyoncé, DJ Tiesto and “face-off” music platform Verzuz — that has elevated the Peloton experience.
Digital fitness platform Obé Fitness has similarly tapped into this trend of fitness as a form of entertainment by “eventicising” its workout classes. In partnership with HBO Max, Obé Fitness ran classes and “workout parties” around shows including Euphoria, Game of Thrones and Sex and the City that helped boost its membership up to 30% month-over-month.
Gamification is another crucial trend Peloton is looking to tap into with the launch of an in-app video game. “Lanebreak” — last reported as still being trialled in beta mode.
The company will hope to reap similar rewards as gamified digital cycling company Zwift, which debuted its first virtual Tour de France in 2020, helping boost its customer base by 191% in the last year alone.
Connected rower Ergatta, meanwhile, is betting its entire future success on building a brand that’s part video game, part sports.
Echelon — catering for a truly diverse audience
Rather than hunt down celebrity collaborations, connected fitness brand Echelon has consistently sought to undercut its chief rival’s high price point. The 2017-founded company even poached Peloton’s designer Eric Villency to launch its latest connected bike, the EX-8S, which was initially available to pre-order for $1,999 versus Peloton’s $2,496 Bike+.
“Accessibility will continue to be huge — at Echelon it’s certainly been a big part of getting us to where we find ourselves today,” Angelo Ramsbott, President at Echelon Fitness International, told Welltodo. “Accessibility of course comes in a number of forms, and we’re committed to continuing to show up as a leading force across these — price, convenience, catering for all abilities and preferences.”
The Florida-headquartered firm isn’t just taking aim at Peloton. In just five years, Echelon has released multiple bikes, two smart treadmills, two connected rowing machines and two interactive fitness mirrors offering HIIT, core, yoga and Pilates workouts. And to consolidate its grip across these diverse categories, Ramsbott said “localisation” of both studios and trainers will be key.
“It’s about striving to provide something for everyone,” he said, noting that Echelon opened its first studio in the UK last year and recruited local instructors to better relate to a UK audience.
“We expect localisation of our offering where relevant will contribute to our continued growth across territories and we are continually developing new products and equipment to enhance our current offering to cater for a truly diverse audience.”
Tonal — leveraging star power
One category Echelon is yet to venture into is connected resistance training. Tempo, JaxJox and especially $450 million-backed smart home gym company Tonal have each taken chunks out of Peloton’s lead by recreating the versatility of the gym’s weights room in a compact home-friendly package.
Last year, Tonal leveraged the considerable global brand recognition and reputation of NBA icon LeBron James, who became an investor and partner to establish itself as a household name, as well as striking a deal with department store Nordstrom to install sales stations in 40 stores across the US.
As such, rather than voice concern about competition closing in around Tonal, CEO Aly Orady is bullish about the company’s prospects in 2022. “Tonal has seen unprecedented growth over the past two years,” he told Welltodo.
“In November, we hit our highest sales numbers to date and were able to 3x our sales year-over-year, eclipsing growth rates of any other connected fitness equipment brand. We see no indication of sales slowing down and maintain the highest engagement rates in the industry, with members working out every other day for 40 minutes on average.”
Having launched in August 2018, Orady said Tonal’s $2,995 wall-mounted device has been able to competitively differentiate itself as the leader in strength training by introducing adaptive digital weights that offer a more efficient, personalised and interactive experience than traditional weights.
Now, he said, the company is targeting 45 million households and the $60 billion addressable strength training market segment in the US –– “ which is a much larger total addressable market than studio fitness and any cardio segment”. The brand plans to do so, in part by opening another production studio in New York, as well as hiring more coaches and leveraging its notable athlete roster for performance-specific training.
Vitruvian — building out a hardware network
While Peloton, Tonal and Tempo are blurring the lines between exercise and entertainment, the Founder and CEO of Australian rival Vitruvian believes sticking to your core proposition is the only way to guarantee success in an increasingly competitive — and hostile — industry.
“I’m not at all compelled by camera or form-based products and I think Peloton’s new strength training product [Guide] is a joke,” Jon Gregory told Welltodo in December. “It looks like Peloton has forgotten why they were such a good business in the first place. They make really effective hardware. That’s really what underpins their business.”
Like Tonal, Vitruvian is a compact, at-home solution for strength training that uses motors and two retractable cables to generate up to 200kg of resistance. It also draws on adaptive algorithms to provide a greater challenge or greater assistance with every rep, depending on the user’s goals.
In a wide-ranging, combative interview, Gregory stated Vitruvian would never get sidetracked by the glitz and hype around connected fitness, and that Peloton would be better off focusing on its hardware, rather than software.
“Maybe they think they’re a media company now but there are way better people — namely Apple and Disney — who actually know what they’re doing. Vitruvian will never be doing that,” he said.
“What makes these businesses interesting and valuable is that they are a hardware network. Once people get them they’re invested in the network and they keep paying for their subscription.”
Gregory added: “The fitness businesses that understand that and don’t get carried away by the razzle-dazzle of connected fitness hype will survive. Companies that understand what their true value proposition is and how to deliver it will do very, very, very well — and Vitruvian intends to be that company.”
Freeletics — bridging the motivation gap
The connected fitness space has largely been dominated by the US, with UK and Australian startups playing catch up. But since 2013, German-founded digital fitness app Freeletics has set the standard for AI-driven gym-free workouts.
“Freeletics’ mantra has always been that workouts should take place ‘anytime, anywhere’, and we’re pleased to see more and more users adopting this approach,” Freeletics’ Lead Data Scientist Simon Alger told Welltodo.
However, he said, part of the challenge facing connected fitness brands over the coming months and years, will be sustaining the initial enthusiasm and loyalty they’ve enjoyed under the artificial conditions of the pandemic.
“Now that millions of consumers have gone out and purchased connected equipment that’s sitting in their homes, the industry’s age-old question remains: will they actually use it?” he said.
“The biggest opportunities for brands, especially those with recurring membership models, lie in how they will attempt to bridge this motivation gap and keep their users working out regularly. Some have chosen to replicate the gym-style class format at home, which will certainly be successful with some audiences.”
Like Zwift, Ergatta and Peloton before them, Freeletics has instead turned to gamification with the launch of a “strength gaming” model called STÆDIUM. “Powered by Freeletics” and launched in November, STÆDIUM combines a console, base and set of smart connected weights that range from 2-24kg.
The console, designed to be used with a TV or computer screen, houses a smart, AI-powered motion-sensing camera that tracks the user’s velocity, range of motion and exercise form with each rep. “The idea is to take the principles that make digital games addictive — no one ever has to drag their feet and force themselves to play a game — and apply these to strength training,” Alger explained.
With this approach, made possible by recent advances in motion tracking technology, Freeletics has seen users eagerly anticipating workouts and ending with a perception that time spent working out was much shorter than it actually was. “We’re excited to bring this innovation to customers in 2022,” Alger added.
Fiit — digitising functional fitness
Quickly gaining ground on the pre-pandemic frontrunners is Fiit, the UK’s leading interactive fitness platform. Through 2021, the London-based startup penned deals with Sky, Amazon, Samsung and US telecoms giant Comcast to beam workouts into millions of households across the UK and US, directly through their televisions.
Then, in late 2021, the $9 million-backed brand announced it would be exclusively teaming up with Assault Fitness to launch the world’s first interactive AssaultBike workouts this January. “Whilst the functional fitness sector is a high-growth category, this sector has not had the same competitive breakthrough — until now,” read a company statement on the launch.
In a move that appears to take aim at the highly engaged — yet up to now, overlooked — CrossFit community, it’s the first example of functional fitness equipment being digitised for home workouts.
For £899, Fiit members in the UK will be able to upgrade their home gym/living room with an AssaultBike Pro, then jump into three new class concepts — Sprint, Metcon and Endure — to track their reps and workout data live and on-screen via the app.
The partnership will equally help Fiit tap into Assault Fitness’ global fanbase, many of whom already own an AssaultBike Pro or Elite. If successful, this could create the blueprint for future transatlantic collaborations between digital brands that see a synergy between their respective audiences.
Throughout 2022 and 2023, Fiit hinted that its product roadmap will be further enhanced, with a new range of category-defining functional fitness equipment-based products being developed and rolled out on a global scale.
GRNDHOUSE — tapping into the boutique fitness community
While Fiit is making headway in the functional fitness space, GRNDHOUSE plans to channel all the benefits of boutique fitness into a new community-centric app.
Founded by five former Barry’s UK trainers at the start of 2021, the company also opened its first physical site in Paddington, London, this month.
“It’s a competitive landscape. There are a lot of products surfacing off the back of Peloton’s success, and the industry is facing scepticism on whether the pandemic caused a fake boom in digital fitness and if the growth is actually sustainable,” Co-founder Connor Minney recently told Welltodo.
“At GRNDHOUSE, we believe having a dedicated and supportive community, exceptional trainers and content, and a software-first instead of hardware-first approach will be key for survival over the next few years.”
The new GRNDHOUSE app will allow members to create their own profile, follow and be followed by the trainers and fellow members, gather data, collect awards and post their results on their timeline for the community to champion and inspire each other.
This, Minney said, would enable members to connect within the app after their training session with other like-minded individuals instead of relying on other social media platforms to find their community.
Speaking at November’s Balance Festival, Minney added that the company will look to partner with national gym chains — like Fiit did with 24/7 operator The Gym Group — to reach new audiences and straddle the worlds of at-home and in-person fitness.
Meta — leading the charge of VR fitness apps
While Peloton, Tonal and Freeletics are driving innovation within their respective niches, every digital fitness brand is likely to face increasingly stern competition from tech heavyweights that are eager to muscle in on this lucrative market.
Most notably, Facebook has the capital and capability to transform the sector. In October, Meta (formerly known as Facebook) signalled its intent by acquiring Within, the parent company of Virtual Reality (VR) fitness platform Supernatural.
Designed for Oculus Quest and paired with the user’s smartphone, Supernatural delivers precise coaching, fitness tracking and immersive workouts that blend the worlds of exercise and entertainment. As such, the move is expected to usher in a new era for VR experiences, a market predicted to grow at an annual rate of 18% to hit $69.60 billion by 2028.
Meta’s VP of Play Jason Rubin suggested this was just the beginning. “We believe fitness will be a massive success in VR where multiple third-party fitness apps can succeed,” he wrote in a blog post. “Together we will explore ways we can enhance future hardware to support VR fitness apps, encouraging other developers to bring new fitness experiences to VR.”
Boutique fitness chain Trib3 has since become one of the first fitness operators to strike a deal to launch a gym in the metaverse, with the ability to drive real-world revenues.
“People will be able to swap Trib3 Sweat Points they earn in the gym for Dose tokens which can then be spent in the metaverse,” explained Trib3 CEO, Kevin Yates. Adding: “This is a landmark opportunity for our brand and our sector, and we are proud to be one of the first to be grabbing it with both hands.”
We’ll have to wait and see how long Peloton and the chasing pack can outrun Meta and the coming tide of VR-driven connected fitness brands. But one thing is for sure, the digital fitness arms race is only just heating up and there are likely to be some high profile casualties on the way to the finish line.