Tech

How Peloton is leading the revolution in smart home gyms

  • The digital-fitness industry exploded during the pandemic and is showing no signs of stopping.
  • Though Peloton led the boom, a crop of competitors debuted innovative ways to work out at home.
  • Here’s everything you need to know about the fast-growing digital-exercise market.
  • See more stories on Insider’s business page.

Gone are the days of Tae Bo and Jane Fonda workout tapes. The at-home fitness scene is more high-tech than ever before, with numerous streaming classes and connected-equipment options to bring the gym experience into the home.

Experts say that while the virtual-fitness trend may have been ramping up in recent years, the pandemic accelerated its growth as Americans flocked to brands like Peloton, Tonal, and Mirror.

Increasing vaccination rates have jump-started local economies and led fitness studios to reopen. But analysts say that at-home exercise habits are likely to become routine. Some anticipate a hybrid model of fitness involving in-person group-fitness classes or gym visits supplemented by digital subscriptions and at-home workouts.

With virtual exercise more popular than ever, Insider is covering all aspects of how the industry has grown, with top players looking to cash in. Many companies are also finding that the road to No. 1 puts them on a collision course with Peloton.

Peloton reigns supreme

Peloton was a decisive winner in the pandemic, raking in $1.8 billion in revenue in 2020. The company boasts more than 4.4 million paying subscribers across its bike, treadmill, and standalone membership programs.

The fitness brand’s popularity persisted even as supply-chain woes led to significant delivery delays. Peloton also recalled its Tread+ treadmill in April after the Consumer Product Safety Commission released a report detailing injuries to 38 users and the death of one child.

To address the supply-chain concerns and maintain sales momentum, Peloton acquired the equipment manufacturer Precor for $420 million in December. The company has also said it’s improving safety mechanisms and redesigning its Tread+.

Demand for Peloton remains strong, despite its stock price dropping 17% so far this year. And it’s said it’s experimenting with a variety of new features, including virtual gaming.

Tonal in use

A woman using a Tonal machine.

Tonal


Competition at an all-time high

Peloton may be leading the way in the digital-fitness industry, but several companies are hot on its heels.

Brands like Echelon have found success selling cheaper connected bicycles. Tonal, Tempo, and Mirror have also introduced Americans to smart gym systems featuring high-tech products that take up minimal space and require little equipment.

Meanwhile, group-fitness studios with devoted fan bases — including Orangetheory, Barry’s Bootcamp, Zumba, Physique 57, and CycleBar — unveiled digital platforms and enhanced apps with new streaming workouts.

The pandemic also gave rise to an entrepreneurial spirit among fitness instructors. Facing furloughs or layoffs, industrious trainers sought out companies like Mindbody and Moxie’s “Patreon of Fitness” program that provide resources to run their own virtual-fitness businesses from home.

What’s next for digital fitness

The past 18 months have been transformative for the fitness industry, with seismic shifts in how Americans work out paving the way for record-breaking sales.

Investors are looking to find the next Peloton, and many are eyeing the fast-growing indoor-rowing sector. Brands like Ergatta, CityRow, and Hydrow have increasingly impressed Wall Street, raising more than $55 million combined in recent months.

They’re also interested in equipment manufacturers, which have been integral in accelerating the at-home-fitness market. Beyond Precor, companies like Nautilus, Icon Health & Fitness, and Core Health & Fitness have helped bring connected equipment into American homes.

To bolster sales, digitally native fitness brands have forged partnerships with physical retailers to allow people to try their products in stores. Tonal, for example, has started selling its products in select Nordstrom stores, and experts say the trend will continue.

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