The workout — once the province of the home or the gym — is now, fully and perhaps forever, omnichannel.
Which leads to the question as to whether fitness junkies will remain wedded to the software/hardware bundle that has sustained, perhaps most notably, the likes of Peloton, or whether they will simply take the software with them, in a connected ecosystem that sees them enjoying the great outdoors and hitting the gym.
That shift would come at the detriment of the bikes and the treadmills gathering dust in the bedroom/home offices spawned during the pandemic.
Exhibit A: On Friday (Aug. 12), Peloton cut 780 jobs and shuttered a so-far-undisclosed number of stores … and the “aggressive” closings point to a movement watching margins rather than pursuing a growth-at-any cost strategy. In one bit of retooling, as reported by CNBC, the company is also shifting its logistics activities, and will let third party logistics firms to handle the last mile, which will save costs. At the same time, the company is boosting its prices on some of its hardware where the Tread machine will see its sticker price hiked by $800, to as much as $3,500. That hike follows increases in Peloton’s subscriptions, which had been raised to this $44 from $39.
The Pivot and the Cutting of the (Hardware) Ties
We’ll know more when Peloton reports results later in the month, but the pivot seems necessary as its subscriber growth had been cut in half, per recent earnings.
At a high level, the cutting of the cord, if we may put it that way — with a tethering to the at-home hardware — may be showing up elsewhere, in competitors’ results.
For example, as noted in this space, Planet Fitness reported this week that during the second quarter, the company added 300,000 net new members, ending the quarter with 16.5 million. The company also grew its store base to more than 2,300 locations with the addition of 34 new stores. Management said on the conference call that, in general, consumers are more cost conscious, “even trading down to Planet from high-priced gyms,” as CEO Chris Rondeau said. In addition, the app is part of the experience, as management said about 20–25% of new joins are done through the app.
And in addition, the number of teens signing up for the High School Summer Pass was three times higher than that in the pre-pandemic year of 2019 — the last time the company offered the program. That’s further evidence of the great migration back to brick and mortar workouts.
The one thread running through all of this seems to be software — the apps and the workouts that go with us wherever we go. A day in the park, for example, can include a workout, or a gym session can have several permutations of workouts … and what doesn’t need to be in place, necessarily, is the hardware.