Anders Gran is a keynote speaker within digital business transformation and CEO of Scandinavian tech company WellnessTech Labs.

Covid-19 Accelerates the fitness industry’s transformation

The fitness industry is facing a rapidly changing market landscape in the battle against the Corona virus. It’s clear that many players, large and small, have had too strong a focus on optimizing their core business. Hence, many are poorly equipped to switch to an increased share of digital services as demand changes. In many cases, this may have major consequences even after the immediate Corona crisis has subsided.

However, there are exceptions and good examples of action to be inspired by.

Governments’ measures to limit the spread of the new Corona virus shake industry after industry. The world of fitness is no exception. During the past week, several scandinavian players have acted strongly and we see similar actions globally. Facilities are closed down and membership fees frozen, certainly accelerated by authorities’ decisions. Nevertheless their actions have initiated a wave of measures in the industry and also something of a self-censorship among members who choose to exercise in other places than the gyms. Layoffs naturally follow when the business is paused.

Many players try to find quick solutions to offer their members “something digital” to avoid loosing them for good. A situation where it is easy to panic and start losing members instead of retaining them.

The lockdown that is happening in society today can lead to bigger changes than one might think. About the same time as the first clubs announced that they would be closing down temporarily, we saw Twiik doubling in active users. It is reasonable to believe that other online platforms are experiencing the very same thing. A great oportunity for those gyms that have a digital offering for their members and where the relationship can be maintained. Highly challenging for players who have kept all focus on the physical facility without a plan for how to serve members remotely.

Many times the gym members are in fact already digital. If you have missed the ongoing shift with the consumer, it is about time to think about it now.
For instance, a high proportion of our users are also active in physical gyms. Many have independently combined their physical gym and digital services to optimize their training, but a large proportion are directly connected through their gym membership. Coaching, inspiration and community are already part of the gym members’ everyday life. This is the reality.

So why is this a problem for many clubs? The challenge is not the lack of digital platforms to get an online business going. There are several opportunities and suppliers today. The threat comes from within.

In many cases, it is clear that the digital training services and products that many clubs offer today is seen as nice-to-have or a bonus to members rather than something they actually pay for. It’s rarely treated as a core product offering. This makes it difficult for many clubs when online training is all of a sudden one of the things customers actually want to buy. Like now.

Thousands of paying subscribers in Twiik app and in our gym-specific apps on the Welltech platform have already proven that consumers are more than ready to pay for training online and community. Services such as Freeletics and Sweat with Kayla have successfully proven the value of a digital training community, independent of physical facilities. This serves as an interesting opening for clubs who want to think beyond their four walls.

One can assume that a wellness club or studio can also build value and charge for digital services as the consumers turn away from facilities— whether this is due to Covid-19 or a general shift in behavior.

Creating a credible digital product requires that the online services be integrated with the regular membership. Clubs must commit to the same high standards in terms of quality and experience as they do in the choice of machines, floors and even staff.

Although the industry has been shaken by the Corona virus actions, what we see happening is really not something new. The difference is that the industry is forced to accelerate its offer to its members overnight. Clubs and studios need to think about how to create a future proof business model and a product that stands on multiple legs. A business that can withstand the type of twists and turns we are witnessing today.

What about those great examples?

Necessity is the mother of the invention and the industry is not short of necessity at the moment. Here are a few good examples that I have seen in the last few days. Different actions that that clubs and trainers have taken to meet the shift in demand and avoid freezing of membership fees or steeply declining PT bookings:

  • Offer pre-programmed workouts, programs and courses online. Although this may seem obvious to many, a lot of trainers and clubs are taking their first steps to launch this type of online offering now. When doing this, it is absolutely key to focus primarily on your members to make them feel they get value for their membership fees.
  • Launch PT-online with sign-up via the web and social media. Clubs are finding different ways to campaign this, some even include it in the membership fee to keep subscriptions active. A good way to add value to this is to combine programmed plans with live video sessions.
  • Broadcast live workouts instead of group training in the club or studio. If you have no tools, you can do this through social media such as Facebook, but be careful to separate the offer between members and non-members. If everyone has access to a class, it is not a member product and does not add value to my membership.
  • Launch ‘Exercise at home’ Challenges: Again, social media is good for distribution, but does not necessarily deliver value to your members, which can thus be counterproductive. If you want this to really work for you, make sure to use a tool that allows you to target and communicate with your members and not the entire world.
  • Go corporate wellness: Offer local companies digital training challenges, online coaching and home training offerings for employees. Many companies have already started to look for a wellness solution for distributed teams and this situation accelerates the need.

We’re likely to see more examples within the next couple of weeks. We are at the beginning of the shaping of a new landscape and it is far from clear what it will look like when the crisis has subsided.

One thing is clear however, the change that the next six months will bring will last considerably longer than that.