What’s Ahead for At-Home Fitness?

The future of at-home fitness will be one of the most debated topics of 2022. While gyms begin to welcome back members, and established brands like Peloton plan ways to get out of a sales slump, up-and-coming brands like Ergatta, Tonal and some newer entries are betting big that consumers who discovered the convenience of working out at home during the pandemic will continue to do so. 

The devastation to gyms caused by the arrival of COVID-19 in early 2020 continued well into 2021 as huge numbers of former gym regulars continued to enjoy the benefits of fitness apps and equip home gyms to complement their changed schedules and lives. To what extent this trend will continue or what’s ahead for at-home fitness remains one of the most debated topics in the fitness industry this year.   

The nimble fitness tech industry pivoted early in the pandemic to provide easy and efficient at-home workout products and services to a captive audience desperate for something to take the place of their gyms and studios. Consumers who never worked out at home or used tech fitness products took huge steps outside their comfort zone. While many people engaged with live-streamed and pre-recorded virtual fitness classes supplied by their regular gyms, a survey done by Mindbody found that 40% of people who participated in virtual workout offerings while sheltering at home purchased the service from businesses they’d never frequented in person, shaking consumers loose from old habits and values and causing them to embrace innovation and technology in a way they’d never experienced before.  

Speeding to the top of the hill was Peloton, the subscriber-based fitness company most known for its $2,000 bikes and $4,000 treadmills. The 10-year-old company went public a few months before the pandemic hit, and demand for its machines surged, as did subscription sales of virtual classes ranging from spinning to strength training and yoga. Sales doubled in 2020, and the company’s market capitalization hit $50 billion. In the fiscal year ending June 30, 2021, revenue doubled again, to $4 billion, putting tremendous pressure on a supply chain that couldn’t really handle the demand, and the company’s net loss in the year was $189 million, compared to a $72 million loss in the prior year. 

Other tech players benefitted from the pandemic lockdown as well.

At-home fitness startup Tonal, which calls itself the “world’s smartest home gym and personal trainer” raised $250 million in funding from investors including celebrated athletes Maria Sharapova, Mike Tyson, Lebron James, Drew Brees and Stephen Curry. According to Tonal CEO Aly Orady: “People want smarter, more connected ways to work out… we will continue to demonstrate how intelligent fitness will fundamentally change the way people train and maintain their health. Even with a price tag of $3,000 (excluding its monthly subscription), Tonal reportedly enjoyed early and steady sales growth, earning unicorn status in the early part of 2021 with a $1.6 billion valuation. Orady said Tonal was created “to replace every machine in the gym,” and aims to take the company public when it’s “best for the business.” 

At-home rowing became extremely popular during the pandemic, with Ergatta and Hydrow at the head of the pack. Ergatta turned the $5 million it raised in a seed funding round in its first year of business to a valuation of $200 million a year later. CEO Tom Aulet believes widespread interest in the company’s “addictive” product, priced at $2,495, comes from the gamification of the workouts that offer a competitive aspect absent in instructor-led exercises. “Connected fitness was already growing quickly, then Covid really accelerated adoption tailwinds,” Aulet told Bloomberg. Among one of Ergatta’s earliest disciples is former NFL quarterback and activist Colin Kaepernick. Kaepernick joined the company as an advisor and investor at its inception and also became its face for a national campaign in 2021. After winning “The Best Rower” award by Men’s Health in 2021, Ergatta’s future looks bright so far. 

Rower Hydrow also gained ground thanks to some well-known investors from the entertainment world. Lizzo and Justin Timberlake joined Kevin Hart, who also serves as Creative Director, to support the brand. By September 2021, nearly $200 million of funding capital had been raised, and rumors of the company going public made headlines. However, like Tonal, it appears Hydrow is taking its time before taking the big IPO step, and instead plans to use some of its investment capital to expand content to users and to grow overseas, away from the scrutiny of Wall Street.

Mirror, acquired by Lululemon for $500 million in 2020, is a high-tech connected video screen with a camera for interactive streaming. In its first year as part of the apparel giant, sales of the device (whose price tag ranges from $1,500 to $2,000, depending on the accessories package, with an extra monthly subscription fee), topped $170 million. 

Tempo has taken a slightly different route to success, offering both premium and affordable at-home fitness options. The company quickly became a frontrunner in the at-home strength training space in 2021 after raising $220 million. Described as the first all-in-one home gym to use “advanced 3D sensors and AI” for personal training purposes, the Tempo Studio starter package comes at a price of $2,495, but a lower-priced Tempo Move smart home gym carries a $395 price tag, giving fitness enthusiasts with more modest means and less space a lower price point and a more compact size in product.

Though restrictions are being lifted and gyms and health clubs are opening back up, most industry watchers feel that at-home, virtual and on-demand fitness are here to stay, with the most likely future scenario being a hybrid situation, with home and virtual workouts not replacing, but enhancing, the gym experience. Although some of the large budget chains like Planet Fitness have reported a return to pre-pandemic membership levels, some high-end gyms, like Equinox, say the rebound has been slower, possibly because their members loaded up on premium-priced home gym equipment. 

And of course, like employees who plan to work from home permanently, some consumers who prefer the convenience of or need the flexibility of at-home workouts probably won’t go back to the gym. 

What is happening to the pandemic high-flyers? In addition to its supply chain issues, which have hamstrung sales growth of equipment, Peloton is struggling from missteps that have led to lawsuits, product recalls, backlash from an appearance on a high-profile HBO Max film that ended up being a public relations nightmare. Most recently, the company closed two production facilities, and laid off 200 employees as it sits with warehouses full of unsold bikes. In the most recent fiscal quarter ended December 31, equipment sales fell by 8.5%, and net profit swung from $63.3 million in the year-ago period to a loss of $436.3 million.

Despite all of this, Peloton still managed to secure enviable collaboration deals with Taylor Swift, Beyoncé, and Spotify. It has also introduced Peloton Guide, an AI-enabled connected strength training system that connects to a TV. Will these initiatives help Peloton on what promises to be an uphill climb back to its former position? Or, as The New York Times’ Steven Kurutz wrote, will Peloton will go the way of NordicTrack as just another once-trendy fitness brand turned “glorified clothing rack”?

Tonal, Hydrow, and Ergatta will have much to prove in 2022 and beyond. Although competition from upstarts is ramping up, these companies have a proven track record, solid following, and unique offerings. But since they’re privately held, how they’ve fared in the receding months of the pandemic is not clear, since none of them seem to be serious moving toward a public stock offering. 

MIRROR has failed to achieve the sales growth hoped for by its management, with sales declining in the most recent fiscal period, while overall lululemon revenue increased 30 percent to $1.5 billion, evidence of how hard it is to win in this competitive arena. Although reportedly representing less than 3% of Lululemon sales, MIRROR is still an important growth vehicle for the apparel company. CEO Calvin McDonald told analysts during lululemon’s third quarter 2021 earnings call: “We want everybody sweating on a Mirror to be in lululemon and we want everybody sweating with lululemon to be engaging and using a Mirror… our core business is our priority and will always remain our priority and Mirror is a way in which we drive that business forward.” 

Many industry watchers feel that the technological innovation that powered the at-home workout trend through the pandemic will continue to drive healthy growth in the fitness industry. In its recent Global Fitness Trends report, research site RunRepeat predicts that the world fitness industry will enjoy CAGR of more than 14% over the next six years. The fitness tracker, app and digital fitness segments will grow their combined share of the market from 22% in 2019 to 49% in 2028. The gym industry, by contrast, will drop from its pre-pandemic 60% share to 30%, according to the research. 

New products using AI, VR, AR, and biometric data collection advancement and other technologies may inspire consumers to continue to invest in their home gyms. 

RowerUp brings a robot coach to its rowing machine using AI-powered technology to analyze user movements via webcam and give real-time feedback on form and technique. The technology is applicable for other workouts like running and CrossFit, so we can expect to see similar offerings emerge in other workout segments.

Climbing, which, like rowing, provides a low-impact cardio workout that engages the full body, is making a comeback with CLMBR, a system that allows at-home climbing with a machine that is more compact than other cardio equipment.

New offerings from VAFit, Les Mills and Freeletics use VR headsets to provide an immersive or gaming workout experience. 

Those concerned about staying safe at the gym may want to invest in the Airvida E1, an air purifier with built-in noise-canceling earphones. The device contains a portable air purifier built on ible’s Breathing Pathway Eco Ion Technology, and promises a 99.7 coronavirus removal rate.

The winners in post-pandemic fitness will help people achieve hybrid routines that include trips to the gym and the workouts in the convenience of one’s home. Tonal CEO Orady feels that gyms, studios and other training facilities will have to adapt to shifting mindsets and trends and keep realistic about their services and brand identities: “The idea that you have to go to the gym every single day of the week creates too much friction. A better approach would be to create strategic touchpoints with the customer where they need to physically be there. And then offer other pieces in the home on their own.” 

The COVID-19 pandemic has irrevocably changed not only the way people work out, but also how they approach fitness and wellness. As the world inches closer to a new normal, suppliers of products and services for on-demand fitness can expect continued growth opportunity and a future full of possibilities, powered by both a new appreciation for wellness and a heightened comfort level with emerging technologies.