Could Anyone Spare a Dumbbell?

February 18, 2021

Source: eBay Source: eBay

I just sold my treadmill on Craigslist. It was a nice mid-level unit that I purchased eight years ago with the intention to use it as a way to mix up my workout routine — especially when the weather was messy outside. Reality matched my expectations for less than a year, and I eventually soured on running in my basement. I found it to be incredibly boring. Over time, the treadmill became a dust collector and dumping ground for random stuff. Lately, I’ve been focused on getting rid of things that I don’t need or use, and the treadmill fell squarely in that group of things.

I dusted off the machine and listed it with zero expectations that it would sell — at the same time, trying to figure out a “plan B” if it didn’t. To my surprise, I had a dozen serious inquiries the next morning, and it was sold and out of my house less than 24 hours after I listed it — with no negotiation, and at the tail end of the big snowstorm. As it turns out, it’s really hard to get your hands on a treadmill now. They’re largely out of stock in stores and online — and pre-owned ones sell almost as soon as they’re listed for sale. This got me thinking about how traditional fitness norms have been and continue to be challenged during the COVID-19 pandemic.

During the first few months of the coronavirus outbreak, gyms were largely closed, as they were considered high-risk venues for infection. Even as they reopened, patrons have been hesitant to return out of fear of contracting the virus. While the state-mandated closures and hesitance of gym-goers to return to the gym didn’t cause health clubs to file for bankruptcy, it did push a number of them into it — including Gold’s Gym, 24 Hour Fitness, Flywheel Sports and Town Sports International (Boston, New York and Philadelphia Sports Clubs).

At the same time, sales of home fitness equipment have gone through the roof. According to eBay data, which analyzed 3 million transactions between March and April of 2019 and during the same period in 2020, demand for weights (dumbbells, weight plates and kettlebells) was up between 10 and 20 times period-over-period. Sustained demand led to shortages in both new and used weight equipment. Shortages extended to larger equipment such as treadmills, elliptical machines and bicycles. Demand even outstripped the supply of Peloton (Nasdaq: PTON) indoor bicycles. The former venture-backed company saw its annual revenue double in 2020 to $1.826 billion from $915 million in 2019 as it struggled to keep up with the demand for its equipment. This demand spike prompted the company to purchase sports equipment manufacturer Precor in order to better control its supply chain.

The growth in home fitness has benefited several emerging venture-backed fitness equipment companies, each offering some form of subscription-based technology-enabled equipment. These include Tonal Systems (Shasta Ventures; Mayfield Fund; Sapphire Ventures), Tempo Interactive (Khosla Ventures; General Catalyst; Founders Fund) and Mirror, which Lululemon purchased in June 2020 (Spark Capital; Point72 Ventures; First Round Capital). Health and fitness apps such as Future (Kleiner Perkins; Founders Fund; Khosla Ventures), Strava (Jackson Square Ventures; Sequoia Capital; Technology Crossover Ventures) and Zwift (Shasta Ventures; KKR; Amazon) also saw a surge during the pandemic. According to market intelligence firm Sensor Tower, between January and November of 2020, approximately 2.5 billion health and fitness apps were downloaded worldwide — a 47% increase from the same period in 2019.

This new generation of fitness tools differs from their predecessors in degree of interactivity, data-logging, feedback and gamification. All of this technology serves to make working out more fun — and if it’s more fun, users are more likely to continue doing it. The revenue models of these companies differ from the legacy model, which often begins and ends with the sale of a piece of equipment. For many of the current generation of fitness companies, however, the sale of equipment is just the beginning of the relationship with their users. Often, there is also a subscription component that enables the user to work out virtually with other users or with a trainer, set goals, track progress, etc. — creating a stickier, longer-term relationship.

Key Takeaway    

It’s too early to tell how significantly the growth in home gym popularity will impact brick-and-mortar gyms. Still, the COVID-19 pandemic certainly accelerated the trend of forgoing the gym for the convenience and safety of working out at home. Equipment like Peloton and Tonal, along with apps like Zwift and Future, make working out from home interactive and fun. As with many other aspects of life, there will surely be some winners and many more losers as the home fitness space matures.

Tags: Coronavirus | Fitness equipment | Peloton | Technology | Private equity

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