The Sleepy Commercial Fitness Industry
Still (Mostly) “Bent Metal and Marketing”
It had been nearly a decade since I last attended IHRSA, the big health club convention. With some clients that I advise doing work in the fitness-tech space, and with the show being just a day trip away this year, I decided it would be a good time to go walk the show floor and catch up on the latest innovations targeted to clubs.
My flights gave me just six hours to cover the show, which I worried at first might be tight to dive into a decade’s worth of new offerings. I made it through in just under three.
As I walked show floor, I couldn’t help but hear in my head the voice of Steve Green, venture capitalist from Canaan Partners and co-lead of our Series A round at FitLinxx, from when I gave him a tour of the same show nearly two decades earlier. After we walked past booth after booth, with music blaring and beautiful models in tight clothing up on pedestals demonstrating equipment, Steve concluded in his typically succinct, bottom line way: “This industry is nothing but bent metal and marketing.”
Twenty years later, that’s still (mostly) the case.
To some extent, that makes sense. After all, these companies do supply the equipment, the bent metal, that goes into gyms. However, with all the new fitness tech for consumers, it seems more progress should have been on display for clubs as well.
Two things surprised me most. First, despite steady growth in fitness center enrollment and a fair amount of creativity in the business models of some studio offerings, the supplier side of the industry seems to have been pretty sleepy in the last decade, content with mostly just small incremental additions to old themes and little in the way of new, broadly applicable innovation.
Second, the industry remains overwhelming focused on the physiology of exercise performance and optimizing results for those who are already self-motivated rather than the psychology of turning exercise into a habit for the average or beginning exerciser. Whether the root cause of that gap is supplier-driven (no one building it) or buyer-driven (clubs not interested), it remains a substantial missed opportunity. (In a future post, I will detail the missed opportunity for leveraging technology to help staff help exercisers stick with their programs, which could open new consumer segments and dramatically increase retention rates for clubs in the process.)
A few industry contacts asked for my observations on what’s changed, and after emailing a few sets of notes, I figured I’d summarize it in one place. My thoughts on commercial fitness equipment, commercial fitness tech, and some conclusions follow.
Incrementalism in Fitness Equipment
Generally, I saw no significant innovation from equipment suppliers. There doesn’t seem to be an Augie Nieto or Paul Byrne figure in the industry these days. Outside of a couple of interesting high end niche products from Europe, which are unlikely to be widely adopted for reasons I outline below, it felt like a mature industry focused on small variations on existing themes, repackaging, and competitive commodity offerings.
High End Niche Product Lines
The most interesting newer product lines I saw came from eGym out of Germany and Reaxing out of Italy, but both appear targeted to high end niche markets.
eGym has a line of strength equipment that combines a slick user interface with motorized resistance. It essentially perfected the variable resistance that LifeCircuit was aiming for many years ago, with very smooth, finely, and instantaneously controlled resistance. Combined with the flexible user interface, it can support a wide range of workout protocols, including varying resistance within a rep and throughout a set. They described applications from physical therapy to sports training and everything in between. With full data collection, and tablet support for data analysis, it has the makings of a very flexible platform. It was a little hard to get a price from them, but I believe they were in the $7–10K range per station, which would price it out of most centers, but they said they have hundreds of sites in Europe already.
Another interesting product line from Reaxing, an Italian company, was based on the idea that doing exercise while reacting to changes in balance is more real-life and better functional training. This reminded me of our first FitLinxx client, the strength coach for the NY Knicks, having the players do certain exercises and drills on balance boards. Reaxing’s product line was creative, but given the large amount of floor space it requires, and cost of what is effectively a more robust approach to the basic balance board, it will likely also face challenges getting widely adopted.
Small Variations on Existing Themes
Outside of the high end niche products, mostly there were just small changes to categories of equipment that have been around for a long time, and most of the changes didn’t seem to materially improve the user experience.
For instance, a decade ago there were lots of lines of spinning bikes, and now there are a lot of lines of spinning bikes. But now there was, for instance, a line on which you can tilt from side to side while spinning as though you are going around a curve. This plus-one-feature design approach is a hallmark of a mature (sleepy) industry.
Another large supplier developed a sort of stepper / sort of elliptical hybrid on which you can vary your stride — it didn’t seem to improve either the stepper or the elliptical experience though, and it actually seemed to just make it more confusing to use. I wouldn’t call it a useful convergence.
Repackaging for Group Exercise
There were a number of equipment offerings targeted for the growth of group classes and studios, but essentially they were just packaging. Take anything from boxing stations to high end treadmills that have been in the market forever, and bunch them together in a booth with someone in front on a headset, and, voilà, you have turned an individual activity into a group class activity.
Excessively Competitive Commodity Categories
For as long as I can remember, there have been suppliers entering with me-too product lines that have virtually no chance of having profit margins. There were both old and new examples of that on display this year.
A continuing trend is that there were still, oddly enough, new lines of strength equipment coming to market that are effectively the same as the old lines. And there were the 10'x10' booths with one piece of cardio equipment and one person working the booth, but no one stopping to try it.
A new category that I don’t remember seeing a decade ago was really large fans — like giant propellers. I saw the first one in a booth that looked like your typical ceiling fan but with 10' blades, and I thought that it was sort of interesting and novel. Then as I kept walking I saw four or five competitors for this niche concept. Margins gone.
The Most Innovative Fitness Tech is not Reaching Health Clubs
While there’s talk outside of the show floor (in keynotes, industry-related podcasts, and the like) about future directions for and future impacts of technology in the industry, relatively little of that was evident in current offerings for clubs.
The most innovative fitness-related technologies, like wearables and various mobile apps, are targeted straight to the consumer (B2C). That’s not ideal for fitness centers trying to update and upgrade their user experience. And it’s also not ideal for B2C vendors that suffer from low ongoing usage of their devices once the novelty wears off. These vendors could benefit from fitness centers’ and their trainers’ skill in working with the consumer in a B2B2C model — more about that in the conclusions below.
Following were the notable categories of technology that were represented:
There continues to be a wide range of products for club management with functions like billing, enrollment management, scheduling, etc., and many have evolved to use modern technologies like cloud based architectures and mobile features. These systems are essential for club operations, but they do not materially impact the members’ exercise experience or the KPI’s of the club, like program adherence and retention, and it is not an area of focus for me.
Focus on Physiology of Performance Over Psychology of Adherence
In terms of consumer-facing technology, the vast majority of what was being displayed is for monitoring exercises in real-time (heart rate trackers, interactive coaching on strength machines, etc.). The focus is overwhelmingly on optimizing proper technique and squeezing out the last few percentage points of performance from an exercise — i.e., the physiology of exercise.
While there’s nothing wrong with those offerings, it misses the other half (or more) of what technology can be leveraged for: namely, impacting the psychology of staying motivated to keep coming back. This balance seems clearly indicative of the ongoing focus of the industry on catering to the self-motivated (more on this in the conclusion).
Heart Rate for Group Classes
A number of companies, including Polar, the long-time leader in heart rate training, are providing systems for group classes with display boards showing where all the class members are within their respective zones. This is a very helpful innovation for 1-to-many training used in programs like Orangetheory, spinning classes, etc., allowing a single coach to help many exercisers perform more optimally in a class.
A few products made use of scanning and vision technology. One did a 3D body scan for body composition assessment. A couple others, including SmartSpot are using vision tech to provide interactive feedback on free weight workouts. That’s pretty cool in theory, but the UI was not ready for prime time— data-rich and hard to follow.
Fitness Networking Category
In my old category that FitLinxx and Life Fitness had dubbed “Fitness Networking,” there also has been relatively little innovation. The best new feature that both eGym and Technogym added was combining range of motion and lift speed into a single construct, displayed as a winding lane that you try to keep a dot within on the screen by moving the weight up and down.
A UK-based company, Pulse Fitness, had a lower priced system apparently designed to compete with Technogym. The rep claimed it was the same other than using a card instead of a key, but the interfaces were pretty clunky and less likely to be adopted by the target demographic. It seemed more likely to be a “check the box” option for lower end clubs.
In this, as in other categories, the focus is almost entirely on physiology and not the psychology of adherence. For that reason, to me, despite some maybe slicker interfaces, the segment has arguably moved backwards not forward in the last decade in terms of delivering on its full potential: a B2B2C tool enabling instructors and technology to work together to help users get good results and to provide the short-term and long-term motivational support, based on the behavioral psychology, needed to keep them coming back.
Summary and Conclusions
Generally, other than a few high end niche products that are unlikely to be widely adopted, the last ten years of innovation for club-targeted products appear to have provided little more than incremental improvements on long-standing categories, and technologies that provide feedback to help already motivated exercisers optimize performance.
Whether the gap is buyer-driven, supplier-driven, or both, the industry is largely missing the massive impact that technology could have on the psychology of program adherence. B2B2C offerings, in which technology helps instructors help many members succeed on and stick with programs (which I will detail in a future post) could be game-changing for the next tier of prospective exercisers. This can create value immediately, and even more substantial value over time as healthcare models evolve and as technology continues to become more powerful. It appears, however, that unless something changes, that revolution will most likely happen in venues other than commercial clubs.