How digital customer experience transformed the health and fitness industry
As 2020 unfolded, many gyms and health clubs across the world found themselves having to close as their customers were told to stay at home. Most people thought that the shift to online fitness classes would be temporary. As the months dragged on, many health and fitness businesses realized that gyms and group sporting events wouldn’t resume any time soon. Consumers also started approaching fitness in different ways with a permanency that few anticipated. Businesses that saw the shift found a consumer base ready to try new ways of maintaining a healthy lifestyle and a willingness to shift their spending.
Customer experience geared to meet the new and enhanced focus on health
The COVID pandemic was a wake up call for many. Not just because of the disruption that it caused to daily life, but because it placed health under the spotlight. Obesity and associated health factors, such as hypertension and diabetes, put many people in the high risk category of getting severely ill. Because of this, many who were self-professed couch potatoes, started making the effort to get fitter and healthier.
Additionally working from home meant people were by default more sedentary. Walking around less, sitting more and generally being less active. People very quickly started to realize that this was not only impacting their physical health but also their mental and emotional wellbeing. It didn’t take long for large numbers of people to start looking for ways to get the endorphins flowing again. This meant looking at exercise options that would enable them to get a good workout within the confines of their homes.
By May 2020, home gym equipment sales in the United States had already increased by 170%—with most of these purchases being made on e-commerce sites such as Amazon and Flipkart. These two platforms reported a 50% increase in home gym purchases. With in-store sales declining, other sports brands such as Decathlon and Nike adapted their e-commerce strategies to focus on the digital customer experience. They achieved growth between 5% and 30% just by making improvements to their websites and apps.
By the end of the first quarter in 2020, it became very apparent that optimizing e-commerce had the greatest potential for growth. But with many brands diverting their marketing efforts away from brick and mortar establishments to online platforms, it was also getting more competitive. It wasn’t enough to simply take an offering online. It needed to offer an on brand and frictionless customer experience. One that delivered on the desires to meet physical exercise needs while also delivering a sense of emotional and community connectedness as well as tap into people’s innate desire for achievements and competitive spirits.
How companies brought the gym experience into people’s homes
Before COVID, the idea of having a home gym complete with an exercise bike or treadmill may have been appealing simply because it seemed convenient to be able to exercise at home rather than have to go to the gym. For many, the discipline of having to work out alone at home overshadowed the convenience and a few months later most treadmills became a clothes rack. There was a sense of needing to be in an environment where others were working out too, in order to stay motivated. But still finding the time to get to a gym for regular workouts and to take advantage of classes was an ongoing challenge.
In 2012, a fitness tech startup set out to change this. Combining a spinning bike with technology to create an immersive and connected home exercise experience. The result was Peloton, a now well recognized leader in home exercise equipment and online workouts. While their products were deemed luxury—with a price tag of around $2,000, excluding monthly subscription fees and other extras—their focus on creating great customer experiences was the catalyst to their rise to market leadership. In 2020, while many gyms were closing their doors for good, Peloton achieved 100% growth with revenue exceeding $1.8 billion. Their memberships also more than doubled increasing to 3.1 million from 1.4 million in 2019. In addition to spinning bikes, Peloton added treadmill and mat exercises including strength training, yoga and pilates classes, further expanding their online fitness market.
For those unable to afford Peloton, home gyms became all about resistance belts, skipping ropes, dumbbells and yoga mats. E-commerce sites recorded significantly higher average order value (AOV) on fitness equipment. According to Ecommerce Times, the sales of dumbbells increased by 1,980% in April 2020 compared to April 2019, in fact it became almost impossible to buy dumbbells as supply ran out. To complement this, fitness instructors took their classes online and existing online fitness communities grew exponentially.
Strava, a fitness tracking app that is well known for its competitive nature, grew its community by 2 million users in 2020. Activity uploads increased by 1.1 billion. Wearable fitness devices such as the Apple Watch expanded their product offerings with online fitness classes (Apple Fitness Plus).
Lululemon, a brand initially focused on women’s activewear and yoga equipment, had grown steadily since it was founded in 1998 and had 460 stores globally. When the pandemic hit it initially had a 13% increase in website traffic but realized it needed to do much more. It introduced online fitness challenges and made use of live streaming with brand ambassadors. As a result, e-commerce sales drove 68% growth in revenue.
In 2020, an increased focus of e-commerce drove many offline vendors to adapt and take their offerings online. Even companies such as Weight Watchers (WW) started expanding their offerings while still promoting their core values of a holistic approach to dieting and wellness. Other apps such as Noom doubled down on localization and personalization to grow their subscribers. Tonal, an AI-powered, wall-based home strength training device achieved revenue growth of 700% in 2020 and managed to raise $110 million in funding.
Customer Journey Optimization—the future of fitness and e-commerce
E-commerce is expected to grow to $13 billion by 2025, fueled in part by the changes brought on by COVID-19, but also due to the growing popularity of shopping online. Customer expectations are also increasing, highlighting the need for frictionless, personalized digital experiences throughout the customer journey. In this competitive environment the ability to experiment with as many ideas as possible to optimize CX is necessary. AI helps digital leaders find and experiment with ideas and combinations that deliver the best customer experiences. It also helps them connect with customers which results in generating revenue lift. In a rapidly changing industry solutions that optimize for growth will help health and fitness companies remain competitive in the world of e-commerce.