Company Sees Future in Home Workouts as Demand Surges
Interactive fitness equipment maker Peloton is making a significant move by breaking ground on its first U.S. factory near Toledo, Ohio, aiming to begin production in 2023 and employ 2,000 workers. This initiative underscores Peloton’s commitment to the workout-from-home trend that has gained traction during the pandemic.
Demand for Peloton’s products skyrocketed during the pandemic, leading to long wait times for customers eager to receive their bikes. While the backlog has since decreased, the company reported a staggering 141% increase in sales during the first three months of the year.
Peloton’s founder and CEO, John Foley, believes that home fitness will inevitably dominate the industry, akin to how streaming services transformed movie-watching habits. He described traditional gym attendance as “a broken model of yesteryear.” Peloton plans to expand its presence in gyms located in hotels, apartment complexes, and college campuses, along with launching new workouts via its app. Last year, the company acquired Precor, which has U.S.-based manufacturing and product development facilities.
Foley stated, “Fitness is one of the few remaining categories that is going to be massively disrupted by a digital experience.”
During the pandemic, many small gyms pivoted to virtual offerings via platforms like Zoom to maintain connections with their members. As a result, there’s now an expectation for these services. Michael Stack, CEO of Applied Fitness Solutions in Michigan, noted that while small gyms may lack the high production quality of tech-driven companies, they can provide personalized online offerings that emphasize member-staff relationships.
Not all gym operators are convinced that virtual training will be a significant part of their offerings. Jeff Sanders, CEO of Apex Athletic Health Club in New York, expressed concerns about matching the quality and cost of digital services, noting that many members miss in-person interactions.
The fitness industry has faced unprecedented challenges, with around 9,000 health clubs—22% of the total nationwide—closing since the pandemic began, resulting in 1.5 million job losses, according to the International Health Racquet & Sportsclub Association. The association is advocating for a $30 billion relief fund as many clubs struggle with lost revenue and back rent.
Despite these challenges, Helen Durkin, executive vice president of public policy for the association, believes that the rise of home workouts does not spell doom for fitness centers. Many exercise enthusiasts, she pointed out, continue to hold gym memberships alongside using home fitness solutions, with 40% of Peloton users also belonging to gyms.
Digital fitness is expected to remain a staple, according to Michelle Segar of the University of Michigan’s Sport, Health and Activity Research and Policy Center. She emphasized the flexibility that virtual training offers, making fitness more accessible to individuals with irregular schedules.
Cindy Cicchinelli, a former gym-goer who has embraced Peloton, appreciates the convenience of working out at home: “I can roll out of bed and not worry about running to the gym,” she shared, noting that she saves on commuting time.
While gym owners assert that their facilities pose no greater risk of virus transmission than other public spaces, many believe that it will take time for people to feel comfortable returning to large, crowded gyms. Dave Karraker, owner of MX3 Fitness in San Francisco, has reconfigured his studios into personal workout spaces and reports growing popularity, indicating a strong desire for social interactions post-isolation.
“Gyms are great ways to meet new people, especially if you’re single,” he noted, capturing the social aspect that many fitness enthusiasts miss.
