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Lessons in agility from the rise and rise of fitness as a service brands

From Peloton to Apple Fitness+, the rise of at-home workouts has paved the way for brands offering ‘fitness as a service’ to build cult followings and lift revenues in the process. Where some have gamified sport, others have hinged their proposition on glossiness and exclusivity. The real question, though, is whether they can stay relevant when life returns to normal?

Prior to 2020, you might have known Peloton best for the ridicule it faced over a “dystopian” and “sexist” Christmas ad showing a husband giving his wife a stationary bike as a gift. Fast-forward just over a year and the high-end exercise firm has seen global membership surge to 1.63 million, with revenues forecast to hit $3.9bn in 2021.

The company – which offers high-tech exercise equipment complete with a ‘connected workout’ membership system which beams live or on-demand classes right into people’s homes – has been a huge beneficiary of people staying home in 2020. In the first quarter of this year alone, sales surged by 232% as consumers turned to its bikes, treadmills and accessories during the pandemic.

It’s not alone either. With gyms still closed in many global markets and personal trainers restricted in what they can offer, other winners are emerging as consumers seek out virtual fitness classes. We’re not talking shakily-filmed Zoom or Instagram Live sessions beamed from the local barre studio here; this new ‘fitness as a service’ category is being dominated by some of the world’s biggest brands.

In December 2020, Apple launched Apple Fitness+, which brings studio-style workouts to iPhone, iPad, and Apple TV and incorporates workout metrics from Apple Watch for ‘a first-of-its-kind personalized and immersive experience’.

Nike, meanwhile, waived subscription fees to its Training Club app early on in the pandemic. Adding to the crop of connected devices intended to replicate a gym class is Mirror, a looking glass monolith that becomes a screen ready to display on-demand workout videos.

The World Economic Forum reports a 46% increase in downloads of fitness apps in 2020 globally and 24% increase in daily active users.

With this trend showing no signs of slowing down, these businesses are employing clever marketing techniques to build cult followings – from motivational gamification to luxury positioning. However, whether they can keep pace as lockdown draws to an end and life returns to normal remains to be seen.

Cultivating personality

All of these services have taken a different tack when it comes to advertising. Apple’s Fitness+ promo had all the hallmarks of an iPhone ad and positioned the service as being ‘for everyone’. Peloton has recently chose to spotlight the stories of real riders and showcased how the solution can work for everyone in the family. Indoor cycling app Zwift bagged professional cyclist Mathieu can der Poel for its TV spot aired during the Tour De France last year.

For Craig Dempsey, media planning director at Essence (which handles Peloton’s media in the UK and Germany), regardless of their creative approach, the services providing virtual communities for their subscribers are coming out on top.

“A key win for these brands has been the coaching talent, with many instructors having large Instagram followings, driving familiarity with users which keeps them coming back,” he adds.

In short, fitness from home brands are finding success in cultivating the personalities of the instructors being beamed into people’s homes, making people feel like they have a real connection with the face behind their screen.

Dempsey’s right. Peloton’s 33-strong cohort of instructors each hold a celebrity status in their own right, and large social media fanbases to boot. Groomed and glamourous, their personalities draw people to specific rides due to their individual styles and carefully-curated soundtracks – from ’running with Adrian’ to Cody Rigsby (the ‘King of Quarantine’).

“Online communities will be key for maintaining the presence of connected fitness brands,” he adds.

This aspirational type of marketing doesn’t just allows these platforms to attract cult-like followings. It also presents an opportunity for marketers to use these communities as sounding boards to improve features and products that will better suit people as different living and working patterns evolve.

“To continue this growth and retain post-lockdown audiences, brands will need to pick the right instructors that appeal to the masses, with unique and fresh training content to keep people engaged as well as continuing to innovate hardware that can fit into and around the home.”

Some of these apps are also relying on tie-ups with musicians and celebrities to drive interest and cement their exclusive positioning. Apple Fitness+, for instance, naturally boasts a deep integration with Apple Music. The tech giant recently had its editors curate a series of playlists with tracks designed to users keep their energy levels up and ‘complete that last set, run the last mile, or hold that last pose.’

For its part, Peloton recently inked a multi-year partnership with Beyoncé, which is seeing the artist develop classes for its subscription service. The collaboration kicked off with a series of classes themed on her ‘Homecoming’ tour in honor of historically Black colleges and universities.

Tom Moore, head of retail at VMLYY&R Commerce, predicts these brands will continue to lean on high-profile personalities to showcase just who subscribers can gain ‘access’ to by signing up.

“Expect brands to drive deeper connection with celebrity sports personalities past and present across disciplines. Imagine Sir Mo Farah taking the morning park run group or Marianne Vos leading a Sunday morning hill climb.

“The ability for serious fitness enthusiasts to connect beyond a community of peers to their heroes will be a compelling draw,” he notes.

Motivation stations

While a personality-led approach is key for some of the more premium digital fitness players, a key marketing challenge facing all of these companies is how to keep people motivated.

For many fitness brands, the core strategy is pinned around showing a user progression.

“This is the ‘better you’ approach, mastered by the likes of Nike and Garmin,” explains Matt Readman, head of strategy at Dark Horses and the mastermind behind Peloton’s 2020 Christmas ad.

“If people can measure and quantify their improvement the more motivated they will be. This trend will continue as we enter a new era of fitness tech,” he continues, pointing to companies such as Nurvv – a connected insole brand that helps people improve their running technique as “taking things to a totally new level of measurement”.

The element of virtual community exalted by Dempsey has a role to play here, says Readman. Brands like Zwift and tracking app Strava share users’ data and stats with their friends, using a “competitive community” to motivate members.

Recent research from Flinders University backs this up, finding that the social sharing elements of these apps often provide the necessary encouragement for people to engage with them more enthusiastically and progress on their fitness journey.

Readman highlights how another effective way to keep people moving is to make fitness something they “want to do not have to do”. This is where gamification comes into play.

The Nike Run Club app embraces this, encouraging users to log their sessions and to take part in organised challenges with other running buddies. Many of the challenges appear as colorful full-screen modals offering prizes to participants. Each challenge is accessible for a limited time only – and this urgency gives undecided users an extra nudge to commits.

A spectator sport

VMLY&R’s Moore says that beyond ’points for prizes’ systems, Peloton and Nike could also find success in mass events. Many of these brands host virtual events and races, but, the occasions don’t currently transcend participants. So it might be time for them to take a lesson from the world of e-sports.

“The industry needs to move beyond personal exercise and community connection to become a spectator sport where we all tune in to watch a virtual ‘London Marathon’. Tech has a significant role to play here to ensure this becomes a compelling proposition for broadcast audiences.”

Cost is, of course, another factor on which the future success of these players hinges on and it’s a case of the premium matching the price. Where Nike Training App is completely free, Peloton users need to stump up $1,895 for a bike then a further $39 per month for a subscription.

In an increasingly crowded landscape, the brands competing with digital subscription-based models could choose to align themselves more with the models of Netflix and Spotify, which have both made monthly payments more palatable to people’s wallets.

In the UK alone, there’s already data to suggest that exercise in the second and third lockdowns is declining, compared with the fitness fad of the first, with two-fifths of people say they are doing less physical activity this time round.

About a fifth of people say they are watching more TV, streaming more films and gaming more.

Though motivation to exercise is one of the hardest behaviors to maintain, there is hope, however.

“For many of us the reason why we workout is changing,” asserts Readman.

“Exercise used to be purely to ‘get in shape’, but now people understand the impact of fitness on not just their physical health, but their overall wellbeing.

“The good news is that exercising for mental health reasons means people are more likely to stick with it. If they’re working out for physical results, there’s always a risk they will be disappointed. Whereas if they exercise because it makes them happier, they are far more likely to get the reward they seek.

“This is a massive opportunity for fitness brands to retain the followers they’ve recruited. While many advertisers will claim to improve mental health, their approach is still very much stuck in an appearance-based world.”

Check out The Drum’s special Health hub, which examines how the key players – from health agencies to pharma firms to brands – are doing their part to return the world to normality.