Has the $40-a-pop boutique fitness class become a vestige of a time before the global coronavirus pandemic and the ensuing economic fallout?
Pretty much, according to industry insiders and experts.
While many gyms and fitness studios across the country have reopened after spring’s government-mandated lockdowns, many consumers are opting not to return. According to a survey conducted in May by the Associated Press-NORC Center for Public Affairs Research, only about half of the regular gym-going respondents polled said they’d be comfortable returning to their in-person gym routine in the future.
After months stuck at home, out of work, or both due to COVID-19, U.S. consumers are increasingly conscious of not just health and safety, but cost — two key factors that are reshaping the fitness landscape.
Like many apparel retailers, some fitness chains are already showing signs of serious financial trouble. Last month, yoga chain Yogaworks filed for Chapter 11 bankruptcy protection. In September, spin studio chain and SoulCycle competitor FlyWheel filed for bankruptcy and announced it was closing all its studios. Gyms are in trouble, too — 24-Hour Fitness and Gold’s Gym both declared bankruptcy early in the pandemic.
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Pre-COVID-19, boutique fitness classes and luxury gym memberships were considered a status symbol, especially for Millennials with disposable incomes to spend in large cities. But with the pandemic reshaping how and even where people live, consumers are increasingly moving away from allegiance to the fitness chains that were popular in the 2010s — think SoulCycle and Equinox — and opting for at-home fitness options via online platforms, apps and connected fitness systems such as Peloton and Mirror.
The market is becoming increasingly fragmented as well, as individual trainers, many of whom gained sizable social followings while teaching at popular chains, have moved on to start businesses of their own during the pandemic.
Boutique fitness chains are in trouble, said Lucie Greene, futurist and owner of Light Years consultancy, “for multiple reasons.”
“That idea of being packed into a room — even if it [becomes] safe, there’s going to be cognitive disconnect and reaction to that in the future,” she said. “And it’s linked to an economic and cultural moment that has passed. All those brands represent the hyper-consumer, Millennial wellness direct-to-consumer moment which feels sort of excessive, like ‘Really? Did we really spend $38 on a 45-minute class?’ The whole model was based on a really inflated price point.”
Perhaps no one understands this better than Isaac Calpito, the celebrity trainer, choreographer and founder of Torch’d. Calpito, who typically trains an A-list and elite clientele, started doing Torch’d workouts every day on Instagram Live during quarantine. The workouts are free, but he partners with No Kid Hungry, a nonprofit focused on food insecurity for vulnerable children. His wildly popular workouts have raised nearly $1 million to date.
“Online, particularly Instagram, has really changed the game — before this, sure, I was known in rarified circles in New York and Hollywood, but now I’m in people’s living rooms all over the world.”
Calpito is working on an app, set to launch at some point next year, that will offer his training videos at a far more affordable price point than say, a one-on-one, in-person private session would typically cost.
Online fitness platforms that offer a variety of classes for a low monthly price point have seen a surge in sign-ups since the spring stay-at-home orders.
Melissa Wood Tepperberg, founder of MWH Method, her proprietary method of yoga-Pilates hybrid-style workouts and the Melissa Wood Health app, where she shares her prerecorded flows for $9.99 a month, saw her membership double at the beginning of the pandemic. Thanks to her low monthly cost, she says she sees very little churn.
Tepperberg launched her business as an online platform — while she has previously taught classes at Bandier’s fitness studio and has done in-person teaching events, she has built her community mostly virtually, gaining a following through Instagram and converting followers into clients.
“I wanted to find something that gave me good time management, where I was able to be a mom but still do something to keep me sane — it’s really accessible for everyone,” said Tepperberg, who rarely posts workout routines longer than 45 minutes. “My sisters and friends would always say, ‘gym memberships are so expensive.’ This is something you can literally do anytime, anywhere.”
Tepperberg’s $9.99-a-month subscription, which includes access to her entire library of workouts with new ones added every week, seems like the type of business model poised to thrive during and after the pandemic, as consumers become used to working out at home and not paying hundreds of dollars for monthly gym memberships or boutique fitness class packages.
“The virtual stuff is here to stay — we’re never going to return back to normal, especially with the convenience and the habits people are forming right now,” said Bergen Wheeler, international director of innovation of Bānde Together, an online fitness platform that is currently in beta. “I’m not really sure people will be willing to go back into [studios] because it’s become so easy not to do it on your own time, get out of bed, throw on leggings and be in your studio with the community and teacher you want to have.”
Prior to the pandemic, Wheeler was a popular instructor and the national fitness director for Exhale. During the stay-at-home orders, she started doing live weekly Zoom classes with about 100 of her most loyal clients. With one of them, Rebecca Balyasny, founder of Lionel Advisors and now Bānde’s ceo, she quickly realized an opportunity for a “connected fitness community” — an online platform featuring live classes where the students could all see each other and the instructor was able to give real-time feedback, allowing for the vibe of a boutique fitness class without the cost or commute.
“It feels like you’re in the studio,” said Wheeler, who is planning on a January 2021 launch for Bānde.
It’s not all bad news for boutique fitness, however. Fitness brands that have been able to pivot quickly to digital still remain relevant to consumers — possibly even more so than pre-pandemic.
Taryn Toomey’s The Class is one of these fitness brands that was able to easily shift to digital in March. While not a multiple-location, traditional chain à la SoulCycle or Barry’s Bootcamp — The Class operates a flagship studio in New York’s Tribeca and two satellite locations in Los Angeles and Vancouver, it was certainly a well-known brand for in-the-know urbanites pre-pandemic.
In 2019, The Class launched its virtual platform — unlimited live and prerecorded classes for $40 a month. That decision turned out to be fortuitous when lockdown orders came into effect in March.
“It was like a hockey stick of growth — it was very pronounced right around mid-March” said Toomey, founder of The Class.
“We started seeing thousands of customers a day, literally just showing up out of nowhere — it’s not as if we did anything special in terms of customer acquisition,” added Chris Sanborn, chief operating officer of The Class.
Reflecting back, Sanborn says The Class’s online platform has mostly acquired customers through word of mouth on social, despite having had celebrity shoutouts from the likes of Alicia Keys and Drew Barrymore throughout the pandemic.
“When people are doing [The Class], for whatever reason they’ll feel compelled — usually not right away but at some point — to post on social of them doing it. They’ll turn the camera on themselves while the dog is running around, or at the screen when the teacher is saying something profound. We’re reaching micronetworks of students [that way] — growth happens more from that than when a celebrity [posts] about it,” said Sanborn.
Now, Toomey and Sanborn are totally rethinking The Class’s business model. While fitness studios in New York are allowed to remain open currently under specific health and safety conditions, neither feels that The Class’s in-person format — with 40-ish people packed into a room and lots of talking from the instructor — is viable during a pandemic.
Both Toomey and Sanborn feel there’s a future for the in-person experience — post-pandemic, they see the studio as a kind of mothership, which online students from all over the world can come and experience while visiting New York.
“Our business has forever changed — we’re now a global company,” said Toomey.
“Our expenses are different, our operating posture is different — the entire staff, which was trained to do live classes and events, has been refocused on digital,” said Sanborn. “A business like ours that is built on a virtual product like the one that we offer is inherently more stable financially, and has a higher ceiling than it had when we were just brick-and-mortar.”
Many in the industry don’t see boutique fitness as totally dead — rather, the future of fitness is likely to be mostly online, with the brick-and-mortar experience as incremental, not fundamental, to the overall business.
“We’re most interested in digitally native fitness brands, both in the at-home, connected fitness category and the app-based fitness and wellness space,” said Alicia Sontag, partner at Prelude Growth Partners. “I don’t think we’d look at anything purely brick-and-mortar. At this point, how could you?”
Erin Frankel, cofounder of Jetsweat, a platform that allows users to take virtual classes from a variety of boutique fitness studios for a $20-a-month subscription, thinks that consumers are at a point where at-home workouts have become a habit, but are still likely to return to in-person classes in the future.
“You can’t really replace the in-studio experience online — you can try to replicate it as best as possible but that sense of community is irreplaceable,” said Frankel. “But consumers have been exposed to digital fitness now — people who may have gone to a fitness class five times a week [prior] to the pandemic will start doing three times a week and fill the rest of the week up with digital classes.”
Frankel’s thinking is echoed by Dale Borchiver and Elizabeth Endres, cofounders of Sweats & The City, a New York-based blog and Instagram account that reviews boutique fitness classes.
Both Endres and Borchiver have slowly made their way back to some boutique fitness classes in New York, but have incorporated online workouts into their daily routines and are planning to continue to do so in the future.
“People are dying for community — we’ve felt that [as we’ve] crept back into classes,” said Endres.
“At the end of the day, people are going to crave that community aspect,” added Borchiver. “Some people are going to prefer to do one to two times [per week] in person and the rest virtual. I always looked at virtual as something to use when I was traveling. Now, when I’m really busy, I realize how much time I save with it.”
Frankel’s Jetsweat’s platform hosts many small boutique brands, such as ModelFit, Fhitting Room and Studio House Pilates, that don’t have the bandwidth or resources in-house to create an online platform or shoot new, regular content — Jetsweat does everything on the backend for them. During the pandemic, Jetsweat added a white label business, using its tech and content resources to power platforms for big-name boutique brands. In building out that side of the business, Frankel has observed a new trend — instructors who are leaving boutique fitness chains to build brands of their own.
“The power dynamic has shifted between the studios and the instructors that work at the studios,” said Frankel. “A lot of instructors have created their own brand presence online through Zoom and IGTV Classes. Now they’ve branched off and started creating their own digital brand, they’re not relying on studios anymore.”
THREE KEY TAKEAWAYS:
• The length of the pandemic is fundamentally changing consumer habits, and the adoption of at-home fitness is one that may stick long term.
• The market is becoming more fragmented, as individual instructors — many who gained followings by teaching at boutique fitness studios — create their own brands.
• Consumers are rethinking cost. Virtual options are often more affordable than in-person — think $40 per month vs. $40 per class. Affordability will be a key factor in post-pandemic fitness landscape.