Six key factors behind the explosive growth of connected fitness
“Connected Fitness” is the application of digital technology to sports, fitness and wellness activities using a “smart” mix of hardware, software, and content. Think fitness trackers, workout apps, wearables, and smart exercise equipment like Apple Watch, Peloton, Brrrn, Tonal, Hydrow, ClassPass, Tempo, Fitbit, Strava, Garmin, Lightboxer, Zwift and Whoop, among many others. The rapidly growing industry became red hot during COVID-19, as people sought alternatives to their gyms during quarantine, and with major funding and deal announcements, such as Lululemon’s $500m acquisition of Mirror and Tempo’s recent $60m raise.
1. Fitness + Sports have always been about connection – even before we had smart products and interfaces… now, digital connectivity has made new experiences and business opportunities possible
“Connection” has always been a core part of fitness – first and foremost, connecting better with one’s own self to improve personal health, fitness, and wellbeing. In a gym or sports team environment, the powerful connections that people build with instructors, trainers, teammates and the community of members create motivation and accountability, as well as vibes, camaraderie, and being a part of something bigger. High growth boutique gyms like SoulCycle, Orangetheory Fitness, CorePower Yoga, EverybodyFights, Rumble Boxing and CrossFit have all leveraged the power of human connection to fuel their growth and retention.
Connected Fitness adds a digital layer to the entire user experience that amplifies these personal and social connections, creating new opportunities and experiences in a way that brings the gym experience home. Peloton has replicated the studio cycling experience; Mirror delivers group fitness classes. Brrrn, a boutique fitness studio specializing in cold temperature fitness, has established a new category of at-home fitness with their original slide board and subscription model. Sports teams are able to stay connected and find performance advantages by using technology. Apps like Hudl enable coaches to review game footage, DRIVN improves team communication, Zwift allows at-home cyclists to train in virtual group rides, and Strava encourages runners and cyclists to track, share and celebrate activity with their network. Hydrow has focused on bringing the experience of rowing on water to the wide audience who has never rowed before.
2. Like triathletes, Connected Fitness companies need to be great at three different businesses – hardware, software and content – all while delivering an exceptional, addictive user experience
It is difficult to be great at one business model, but Connected Fitness companies - many of which are startups – must quickly master three different ones. First, they have to design, develop, commercialize, manufacture, and deliver hardware. It is often said that “hardware is hard”– because of its high complexity and cost. Second, as software companies, they must design and develop intuitive digital products that are continually updated. Third, they must produce exceptional content that is delivered to their customers at a high level of quality and frequency. All three of these businesses are cost and labor intensive on their own, but must also be seamlessly connected as one best-in-class brand experience. This means not only executing flawlessly with fundamentals like on-time delivery, reliability and customer service, but also delivering an “addictive” workout experience that keeps members coming back for more every day.
Hydrow’s challenge was not to do the same thing that everyone else had done with rowing machines but to bring the experience of rowing to life in a completely new way. This meant leveraging design and technology to mimic the feeling of rowing on the water and bringing as much of the outdoor environment as possible indoors.
3. Success comes from building communities – and welcoming first-timers
Building and sustaining a community that supports and motivates its members is key to the success of both boutique gyms and connected fitness companies.
Hydrow’s product is not only the experience delivered from company to each individual customer; It’s also the experience shared between the customers themselves, and the company’s ability to be a catalyst for these customer-to-customer experiences.
Hydrow has also expanded its member community by bringing new users to a sport perceived by many as elitist and unaccessible.
4. Connected Fitness was booming before COVID-19; quarantine brought it to new customer groups and new businesses
Connected fitness had already gone mainstream before COVID-19; quarantine only accelerated the adoption of Peloton, Mirror and others with new consumers. Hydrow’s sales exploded during quarantine:
In the connected fitness space, much of the conversation is about apps, wearables and equipment, but brick-and-mortar gyms have also been forced to go digital-first. They've had to pivot their business model entirely, and quickly figure out how to take their programming and classes online without losing their unique brand experiences.
5. Connected Fitness has the potential – and obligation – to create major societal change
By definition, Connected Fitness can reach many more people than a traditional gym, but for broader mainstream adoption it is important to think about how access to the benefits of connected fitness and community can be democratised to drive social change. Right now, the cost of a Peloton bike or an Apple watch, along with the connected apps and the associated monthly subscriptions are not affordable by the mass market.
And in a time where the world’s population is suffering from the coronavirus pandemic, Smith is having a hard time reconciling his company’s success with the losses of the coronavirus:
6. Boston is – and will continue to be – a global hub of the Connected Fitness industry
Boston is the second largest center of VC investment in the country, and with many of the world’s most renowned tech companies and universities based here, the region has long been a global center of the science and technology industry. Many influential sports, lifestyle and fitness brands also have their headquarters in the area, including New Balance, Reebok, PUMA, Spartan Race, EverybodyFights, Asics, Converse, RueLaLa, Polartec, TB12 Sports, Saucony and NOBULL. With the large and growing talent pool in the area, it is no wonder that a significant number of Connected Fitness companies are Boston-based, including Hydrow, Runkeeper, Whoop, CoachUp, Hudl, NIX Biosensors, Lightboxer, DRIVN Coaching, InsideTracker, Prezence – and many others.