Pandemic Fitness: Peloton Takes a Dive
The pandemic rearranged the landscape for many industries, and it certainly did that for the fitness industry. In 2019, it was a $97 billion industry. Then it shrank to $54 billion in 2021. Facilities closed and suddenly the big trends were fitness apps, home fitness, and outdoor workouts. Proving that luck matters, Peloton soared in the pandemic. But success can be fleeting. Though the pandemic isn’t over, the soaring success of Peloton seems to be.
Last week, CNBC reported that Peloton would halt production of its bikes and treadmills. That day, the company’s stock fell by 24 percent.
Hardware Sales Down
The company disputed CNBC’s report. But in the same breath, its CEO conceded that the company is cutting production and considering layoffs. Setting aside the spin control, one thing is clear. The demand for these fancy bikes at home is dwindling.
Reporting on Peloton for Vox, Emily Stewart gives personal insight on the reason for the softening demand:
“I bought my Peloton bike in June 2020. Things were not good for me in the sense that I barely left my home, which is why they were so good for Peloton. I spent upward of $2,000 on it and waited two months for it to be delivered. Part of it came semi-broken, and I was terrified I’d have to wait another two months for it to be replaced and for me to finally live my stationary bike dreams. (I did not.)
“I really like the Peloton a lot. I use the bike itself or one of the other exercise classes available through my subscription most days. I also share my subscription with a coworker, meaning our combined activity makes me look very fit. I have my favorite instructors, and I talk about Peloton an embarrassing amount. I also am not going to buy another bike, nor am I going to buy the treadmill, both of which Peloton spent the 2021 holiday season advertising to me in my email inbox – often at a discount – heavily.”
In short, explosive growth came when lots of people wanted equipment for exercise at home. But now, most everyone who wants it, has it. So the explosive growth is very likely over.
A Permanent Change in Fitness?
As the omicron wave begins to fade, we can do more than just speculate about the future of the pandemic. We can also see what sticks in the transformation of the fitness industry. Writing for the Financial Times, Patrick McGee sees a difference between the prospects for selling home fitness equipment and for connected fitness – defined as the use of digital hardware, apps, content, and social media in sports and fitness activities.
Simply having equipment doesn’t overcome the basic fact that humans like being at rest. Professor Daniel Lieberman explains it succinctly in his recent book:
“Because few of our ancestors were physically inactive and unfit, the brain’s hedonic response to exercise never evolved to work well in persistently sedentary individuals.”
McGee insists that this means connected fitness can persist beyond the bubble created by the pandemic:
“This is why connected fitness matters: it’s the closest thing yet to cracking the code that will get more people physically active.”
So as people drift back to fitness facilities, we expect that things will not be the same as they were in 2019. The pandemic has brought some permanent changes to the fitness industry. This will become clear in the months ahead.
Click here for more on connected fitness and here for more on how omicron is affecting the fitness industry. For more on Peloton’s situation, click here. Finally, for a broader view of the ups and downs of businesses that profited from the pandemic, click here.
The Cyclist, painting by Mario Sironi / WikiArt
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January 25, 2022