People paid a premium to build their home gyms. Will fitness clubs lure them back?

Pandemic creates a new demand for personalization, convenience among consumers

Meghan Van Metre, the owner of Barre3's Menlo Park location, mops the studio's newly remodeled floor on Aug. 30, 2021. Photo by Magali Gauthier.

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People paid a premium to build their home gyms. Will fitness clubs lure them back?

Pandemic creates a new demand for personalization, convenience among consumers

Meghan Van Metre, the owner of Barre3's Menlo Park location, mops the studio's newly remodeled floor on Aug. 30, 2021. Photo by Magali Gauthier.

For the past few years, Meghan Van Metre searched for the right place to open her franchise of Barre3, a fitness studio chain that mixes elements of Pilates, yoga and ballet.

She fell in love with the community it fostered ever since she took her first Barre3 class about four years ago. So when Van Metre recently took over the lease of the Menlo Park location on El Camino Real, which closed in July 2020, it felt like her dream was coming to fruition. Plus, Van Metre was born in Menlo Park, so opening a business in the city was like a homecoming.

"The stars really aligned with the Menlo Park studio," she said.

But as Van Metre opens her remodeled Barre3 studio, she also is aware that the landscape of the fitness industry and the demands of consumers have drastically changed over the past 19 months due to the pandemic.

As gyms shut down for much longer than other retail businesses, the exercise industry pivoted to offer greater personalization, convenience and safety from airborne viruses like COVID-19.

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As a result, some fitness buffs and casual gym-goers continued their membership at a brick-and-mortar club but worked out from home. Chains like CorePower Yoga and Barre3 built a robust online presence by hosting live classes and uploading a digital library of recordings while physical locations were closed.

But in the Midpeninsula, many locals who have the resources took lockdown life as an opportunity to create their personal fitness bubbles and routines.

Janet Dafoe, 72, used a personal trainer for several months after Functional Lifestyles in Palo Alto temporarily closed. For $75 per session, a personal trainer came to the home twice a week to help Dafoe and her husband exercise on their front porch.

"I have various free weights, bands and a good front porch with lots of railings and other things to hook things on," she said.

Toni King and Audrey Ryder have surfed that wave of new demand for one-on-one courses. The couple owns a high-end personal training service called Tonik Fitness, which has trainers go to people's homes or conduct virtual classes. At $150 for a one-hour session, Tonik's prices are steeper than other similar services. But still, business has boomed.

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"Our revenues probably doubled," King said.

In contrast, the two also opened a new Yoga Six franchise in Mountain View last September — at $158 per month for unlimited classes — but have yet to turn a profit. The rise in delta variant cases is slowing the progress to profitability, King said. Meanwhile, there are still prospective clients for Tonik Fitness on a waitlist.

"Our clients were referring their cousins, uncles, brothers, sisters, neighbors — we have clients literally from all over the world now," King said.

Fitness on demand

People also turned to the latest trends in expensive fitness equipment such as Peloton, Lululemon's Mirror or Tonal, which have customers spending anywhere from $1,000 to $5,000 in upfront costs. Access to online classes offered by the same brands come with an additional monthly fee that can cost as much as a gym membership.

But while prices may be high, people in the Midpeninsula who were already paying $20 and up for an individual class at a boutique studio said they are finding that the returns, financially and physically, are worth it.

Andrew Navarro of Palo Alto purchased a Tread, Peloton's premium treadmill, in January for around $5,000 and a monthly subscription for $39.

It's not a cheap investment, Navarro, 46, said. But he finds that he's actually saving money by dropping his membership to 24 Hour Fitness and the regular visits to Barry's Bootcamp, a high intensity interval training workout, which costs around $35 per class. He and his partner could spend around $4,000 to $6,000 a year on a membership and classes, Navarro said. With Peloton, they can buy one treadmill and both take advantage of the classes through a single subscription.

"There were some months where I would go to Barry's almost everyday and that racks up 500 bucks right there," Navarro said. "It gets expensive."

Ellen Kiss exercises using her Tonal machine in the garage of her home in Palo Alto on Aug. 30, 2021. Photo by Magali Gauthier.

Ellen Kiss, 44, a designer and teacher who currently works from home in Palo Alto, invested in Tonal, a $3,000 strength-training machine that mounts to the wall and comes with adjustable arms that can be used for weight lifting. A monthly subscription with Tonal costs $49.

Before the pandemic, Kiss visited various fitness studios, paying at least $20 per session in search of a workout that would motivate her into a regular routine. She tried Orangetheory, SoulCycle, Samyama Yoga Center and a Pilates studio in Palo Alto. None could really keep Kiss on a consistent workout schedule.

"I'm too lazy," she laughed.

Kiss realized part of the problem with in-person classes had to do with convenience. Before, she had to plan every time she went to a fitness studio. With equipment now at home, Kiss consistently works out three times a week; all she has to do is put on workout clothes and walk to her garage. Even on her more lethargic days, Kiss said she can at least opt for a quick 30-minute class and still feel productive.

Navarro made a similar discovery for himself. Typically, he might spend nearly the same amount of time it takes to exercise just preparing to go to the gym and getting ready for work afterward. Now he's able to work out from home. The result? He's already shedding the weight he gained during the pandemic.

"My intent was never convenience," he said. "My intent was that I need to get my a-- into the gym or do something."

Americans overall have increased spending on the latest fitness technology.

According to a McKinsey & Company article published June, monthly consumer spending on internet-connected fitness equipment, which includes Peloton, increased 5% and spending for paid apps rose about 10%.

"A little more than 10% of the American general population also have set up home gyms or have accessed fitness resources online during the pandemic," one study by McKinsey said.

By 2028, the home fitness equipment market is projected to grow from $10.73 billion in 2021 to $14.74 billion in 2028, according to a report by Fortune Business Insights.

In the realm of cycling alone, Peloton bikes became so popular the company experienced supply constraints and delivery delays, pushing Peleton to invest more than $100 million just to expedite shipping.

For Tom Craig, 62, part of the allure of his NordicTrack bike — a counterpart to the more-trendy Peloton bike in price and features — is the experience of the online classes. Riders don't merely sit alongside a virtual instructor belting commands and encouragements. Instead, NordicTrack's classes use a lesser form of virtual reality to make the workout more engaging. The screen can simulate the experience of moving through a different continent or country or even one's own city using Google Maps' "street view" function.

"I did one in the North Pole at Christmas time," said the Palo Alto resident, who described himself as an "elliptical junkie."

Peloton's subscription includes themed workout sessions that reflect the current cultural zeitgeist, with classes that emphasize mental health, Black History Month or Beyoncé, for example. (One New York Times culture critic called it, "A total curation of the mind.")

Greater personalization is one of the greatest draws of the smart fitness equipment industry. But beyond all the bells and whistles, there's a critical feature of at-home equipment that keeps people like Craig, Kiss and Navarro at home rather than in the gym: It works.

"I got the bike last August," Craig said. "By the end of the year, I dropped 20 pounds."

Kiss and Navarro both said they were unsure if they would return to their gyms, given the effectiveness of at-home workouts. Kiss said she might consider a class for a social occasion with her friends. But for her regular routine? Even if the situation with the pandemic improves, she doesn't anticipate returning to the gym.

"For me, it's less about COVID and more about convenience," she said.

Creating a more varied fitness routine

Ellen Kiss exercises using her Tonal machine in the garage of her home in Palo Alto on Aug. 30, 2021. Photo by Magali Gauthier.

Not everyone is turning their backs on in-person exercise, however — even for those who might have hopped on the latest fitness equipment trends.

Rhonda Clark, who works in marketing at Stanford University, purchased Lululemon Athletica's Mirror for $1,500 along with a $39 monthly subscription around last April. She opted for the Mirror because it takes up less space just like a Tonal — lululemon brands it as, "The nearly invisible home gym." — and replicates a lot of the classes she would take at Orangetheory.

Clark said she would love to return to in-person classes. But what's stopping her are the mask mandates that businesses recently reinstituted.

"I'm not against masks, don't get me wrong," she said. "But just for working out, it's so uncomfortable."

Clark expects to return to Orangetheory once mask mandates are loosened. But it doesn't mean she'll let the dust settle on her Mirror. Instead, she plans to use both for variety.

Elizabeth Moragne, 55, shares Clark's issue with masks during workouts. She's sticking with her Peloton bike until restrictions loosen up, but she's itching for the day she can resume her morning routine and be around people when she exercises in person.

"It was a very nice routine to get up, go early in the morning and go get coffee afterward," Moragne, a community volunteer, said. "I want to pick it back up. As soon as things, again, go back to dropping masks, I want to go back to taking some in-person classes, for sure."

'For me, it's less about COVID and more about convenience.'

-Ellen Kiss, who's found motivation to work out at home, using a Tonal strength-training machine

Clerk and Moragne's experience may speak to the growing demand for variety and choice within the fitness industry.

A study by the International Health, Racquet & Sportsclub Association found that 1 out of 5 people who have health club memberships also subscribe to a premium online fitness service.

"To meet the demands of health club members, clubs will need to do it all. It's no longer outdoor vs. virtual vs. in-club vs. at-home fitness," the report said. "Moving forward, a hybrid or omni-channel approach to delivering fitness, wellness and sport will be the expectation of consumers."

This preference for variety may come as a positive, especially for gym and boutique studio owners in the Midpeninsula, where residents have relatively higher household incomes and, consequently, the resources to spend on at-home equipment as well as a gym membership or in-person classes.

When looking specifically at studio classes as opposed to a gym, where people often exercise independently, Van Metre finds that at-home equipment doesn't really compete with studios like Barre3 since they always served different clients: those who prefer a do-it-yourself model and those who prefer to be a part of a community. If anything, she said, the two can only complement each other.

"People like variety anyway," she said.

Meghan Van Metre, the owner of Barre3's Menlo Park location, mops the studio's newly remodeled floor on Aug. 30, 2021. Photo by Magali Gauthier.

Corey Mailloux, founder of Functional Lifestyles in Palo Alto, which offers classes capped at 10 clients for a more personal experience, said that he always saw the fitness industry as a spectrum of clients with different preferences: There are clients who prefer to work out by themselves at the gym or at home, clients who prefer a large group when training, and then those who prefer more intimate classes, Mailloux said.

"Yes, the at-home gym is partly competition, but it's also a separate thing inside of that continuum," he said.

And when it comes to serving individuals with low to middle incomes, gyms, which typically require a one-time initiation fee and a monthly fee, still have the upperhand. Multiple studies of the fitness equipment industry found that one of its main barriers to market growth is its high cost and the requirement of space at home.

This rings especially true for studios that offer highly specialized forms of exercise using particularly expensive equipment. Reach Pilates, which has served Palo Alto for nearly three decades, offers workouts that require machines or "apparatus classes." The studio focuses on exercises on the mat and the machines.

To replicate what's offered at Reach, studio manager Kathleen Paice said that a client may be looking at purchasing up to $15,000 for five pieces of equipment.

"We did have a couple clients who bought one piece of equipment and did classes virtually because they had the means to do that," Paice said. "But even those clients have come back because it's part of their routine."

Despite the at-home trend, there will always be people who gladly consider themselves gym rats.

'To meet the demands of health club members, clubs will need to do it all. It's no longer outdoor vs. virtual vs. in-club vs. at-home fitness. ... A hybrid or omni-channel approach to delivering fitness, wellness and sport will be the expectation of consumers.'

-International Health, Racquet & Sportsclub Association 2021 report

As someone who thrives under a competitive environment, Reema Dhillon, 38, said she pays nearly $1,000 a month for classes at Barry's, CorePower Yoga and Rumble Boxing — no problem. Any at-home or virtual options, Dhillon found, just didn't push her enough as much as in-person classes.

"I couldn't even muster up enough motivation to do the workouts at home," the Palo Alto resident said. "It just really hindered all my progress. It was kind of depressing."

In a survey of 1,171 Americans published by the International Health, Racquet & Sportsclub Association, 48% of participants said they had a harder time finding the motivation to exercise without their fitness club. The same survey also found that 54% found their new workout routine less challenging, while 53% said it was less consistent.

Dhillon, who works at a law firm in Palo Alto and used to compete in softball and track and field, tried some of the workout videos on YouTube and even her boyfriend's Peloton but found nothing challenged her as much as her classes. Her only outlet while fitness studios were closed was walking 10 miles a day.

"Being around other students creates that competitive environment," she said. "And that's what I thrive under — being faster or pushing myself because the person next to me is doing it. I feed off of that."

In the weeks leading up to the debut of Van Metre's studio, the Menlo Park native hosted several outdoor Barre3 classes thanks to getting a permit from the city.

"People are saying, 'Oh my gosh we're so glad you're back,'" she said.

Van Metre acknowledged that the pandemic and now, in California, the threat of poor air quality due to the wildfires are formidable risks for an already vulnerable industry. But with pent-up demand to exercise and reconvene, she remains optimistic.

"Really the goal is to bring our community together again," she said.

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People paid a premium to build their home gyms. Will fitness clubs lure them back?

Pandemic creates a new demand for personalization, convenience among consumers

by / Palo Alto Weekly

Uploaded: Wed, Sep 22, 2021, 9:47 am

For the past few years, Meghan Van Metre searched for the right place to open her franchise of Barre3, a fitness studio chain that mixes elements of Pilates, yoga and ballet.

She fell in love with the community it fostered ever since she took her first Barre3 class about four years ago. So when Van Metre recently took over the lease of the Menlo Park location on El Camino Real, which closed in July 2020, it felt like her dream was coming to fruition. Plus, Van Metre was born in Menlo Park, so opening a business in the city was like a homecoming.

"The stars really aligned with the Menlo Park studio," she said.

But as Van Metre opens her remodeled Barre3 studio, she also is aware that the landscape of the fitness industry and the demands of consumers have drastically changed over the past 19 months due to the pandemic.

As gyms shut down for much longer than other retail businesses, the exercise industry pivoted to offer greater personalization, convenience and safety from airborne viruses like COVID-19.

As a result, some fitness buffs and casual gym-goers continued their membership at a brick-and-mortar club but worked out from home. Chains like CorePower Yoga and Barre3 built a robust online presence by hosting live classes and uploading a digital library of recordings while physical locations were closed.

But in the Midpeninsula, many locals who have the resources took lockdown life as an opportunity to create their personal fitness bubbles and routines.

Janet Dafoe, 72, used a personal trainer for several months after Functional Lifestyles in Palo Alto temporarily closed. For $75 per session, a personal trainer came to the home twice a week to help Dafoe and her husband exercise on their front porch.

"I have various free weights, bands and a good front porch with lots of railings and other things to hook things on," she said.

Toni King and Audrey Ryder have surfed that wave of new demand for one-on-one courses. The couple owns a high-end personal training service called Tonik Fitness, which has trainers go to people's homes or conduct virtual classes. At $150 for a one-hour session, Tonik's prices are steeper than other similar services. But still, business has boomed.

"Our revenues probably doubled," King said.

In contrast, the two also opened a new Yoga Six franchise in Mountain View last September — at $158 per month for unlimited classes — but have yet to turn a profit. The rise in delta variant cases is slowing the progress to profitability, King said. Meanwhile, there are still prospective clients for Tonik Fitness on a waitlist.

"Our clients were referring their cousins, uncles, brothers, sisters, neighbors — we have clients literally from all over the world now," King said.

People also turned to the latest trends in expensive fitness equipment such as Peloton, Lululemon's Mirror or Tonal, which have customers spending anywhere from $1,000 to $5,000 in upfront costs. Access to online classes offered by the same brands come with an additional monthly fee that can cost as much as a gym membership.

But while prices may be high, people in the Midpeninsula who were already paying $20 and up for an individual class at a boutique studio said they are finding that the returns, financially and physically, are worth it.

Andrew Navarro of Palo Alto purchased a Tread, Peloton's premium treadmill, in January for around $5,000 and a monthly subscription for $39.

It's not a cheap investment, Navarro, 46, said. But he finds that he's actually saving money by dropping his membership to 24 Hour Fitness and the regular visits to Barry's Bootcamp, a high intensity interval training workout, which costs around $35 per class. He and his partner could spend around $4,000 to $6,000 a year on a membership and classes, Navarro said. With Peloton, they can buy one treadmill and both take advantage of the classes through a single subscription.

"There were some months where I would go to Barry's almost everyday and that racks up 500 bucks right there," Navarro said. "It gets expensive."

Ellen Kiss, 44, a designer and teacher who currently works from home in Palo Alto, invested in Tonal, a $3,000 strength-training machine that mounts to the wall and comes with adjustable arms that can be used for weight lifting. A monthly subscription with Tonal costs $49.

Before the pandemic, Kiss visited various fitness studios, paying at least $20 per session in search of a workout that would motivate her into a regular routine. She tried Orangetheory, SoulCycle, Samyama Yoga Center and a Pilates studio in Palo Alto. None could really keep Kiss on a consistent workout schedule.

"I'm too lazy," she laughed.

Kiss realized part of the problem with in-person classes had to do with convenience. Before, she had to plan every time she went to a fitness studio. With equipment now at home, Kiss consistently works out three times a week; all she has to do is put on workout clothes and walk to her garage. Even on her more lethargic days, Kiss said she can at least opt for a quick 30-minute class and still feel productive.

Navarro made a similar discovery for himself. Typically, he might spend nearly the same amount of time it takes to exercise just preparing to go to the gym and getting ready for work afterward. Now he's able to work out from home. The result? He's already shedding the weight he gained during the pandemic.

"My intent was never convenience," he said. "My intent was that I need to get my a-- into the gym or do something."

Americans overall have increased spending on the latest fitness technology.

According to a McKinsey & Company article published June, monthly consumer spending on internet-connected fitness equipment, which includes Peloton, increased 5% and spending for paid apps rose about 10%.

"A little more than 10% of the American general population also have set up home gyms or have accessed fitness resources online during the pandemic," one study by McKinsey said.

By 2028, the home fitness equipment market is projected to grow from $10.73 billion in 2021 to $14.74 billion in 2028, according to a report by Fortune Business Insights.

In the realm of cycling alone, Peloton bikes became so popular the company experienced supply constraints and delivery delays, pushing Peleton to invest more than $100 million just to expedite shipping.

For Tom Craig, 62, part of the allure of his NordicTrack bike — a counterpart to the more-trendy Peloton bike in price and features — is the experience of the online classes. Riders don't merely sit alongside a virtual instructor belting commands and encouragements. Instead, NordicTrack's classes use a lesser form of virtual reality to make the workout more engaging. The screen can simulate the experience of moving through a different continent or country or even one's own city using Google Maps' "street view" function.

"I did one in the North Pole at Christmas time," said the Palo Alto resident, who described himself as an "elliptical junkie."

Peloton's subscription includes themed workout sessions that reflect the current cultural zeitgeist, with classes that emphasize mental health, Black History Month or Beyoncé, for example. (One New York Times culture critic called it, "A total curation of the mind.")

Greater personalization is one of the greatest draws of the smart fitness equipment industry. But beyond all the bells and whistles, there's a critical feature of at-home equipment that keeps people like Craig, Kiss and Navarro at home rather than in the gym: It works.

"I got the bike last August," Craig said. "By the end of the year, I dropped 20 pounds."

Kiss and Navarro both said they were unsure if they would return to their gyms, given the effectiveness of at-home workouts. Kiss said she might consider a class for a social occasion with her friends. But for her regular routine? Even if the situation with the pandemic improves, she doesn't anticipate returning to the gym.

"For me, it's less about COVID and more about convenience," she said.

Not everyone is turning their backs on in-person exercise, however — even for those who might have hopped on the latest fitness equipment trends.

Rhonda Clark, who works in marketing at Stanford University, purchased Lululemon Athletica's Mirror for $1,500 along with a $39 monthly subscription around last April. She opted for the Mirror because it takes up less space just like a Tonal — lululemon brands it as, "The nearly invisible home gym." — and replicates a lot of the classes she would take at Orangetheory.

Clark said she would love to return to in-person classes. But what's stopping her are the mask mandates that businesses recently reinstituted.

"I'm not against masks, don't get me wrong," she said. "But just for working out, it's so uncomfortable."

Clark expects to return to Orangetheory once mask mandates are loosened. But it doesn't mean she'll let the dust settle on her Mirror. Instead, she plans to use both for variety.

Elizabeth Moragne, 55, shares Clark's issue with masks during workouts. She's sticking with her Peloton bike until restrictions loosen up, but she's itching for the day she can resume her morning routine and be around people when she exercises in person.

"It was a very nice routine to get up, go early in the morning and go get coffee afterward," Moragne, a community volunteer, said. "I want to pick it back up. As soon as things, again, go back to dropping masks, I want to go back to taking some in-person classes, for sure."

Clerk and Moragne's experience may speak to the growing demand for variety and choice within the fitness industry.

A study by the International Health, Racquet & Sportsclub Association found that 1 out of 5 people who have health club memberships also subscribe to a premium online fitness service.

"To meet the demands of health club members, clubs will need to do it all. It's no longer outdoor vs. virtual vs. in-club vs. at-home fitness," the report said. "Moving forward, a hybrid or omni-channel approach to delivering fitness, wellness and sport will be the expectation of consumers."

This preference for variety may come as a positive, especially for gym and boutique studio owners in the Midpeninsula, where residents have relatively higher household incomes and, consequently, the resources to spend on at-home equipment as well as a gym membership or in-person classes.

When looking specifically at studio classes as opposed to a gym, where people often exercise independently, Van Metre finds that at-home equipment doesn't really compete with studios like Barre3 since they always served different clients: those who prefer a do-it-yourself model and those who prefer to be a part of a community. If anything, she said, the two can only complement each other.

"People like variety anyway," she said.

Corey Mailloux, founder of Functional Lifestyles in Palo Alto, which offers classes capped at 10 clients for a more personal experience, said that he always saw the fitness industry as a spectrum of clients with different preferences: There are clients who prefer to work out by themselves at the gym or at home, clients who prefer a large group when training, and then those who prefer more intimate classes, Mailloux said.

"Yes, the at-home gym is partly competition, but it's also a separate thing inside of that continuum," he said.

And when it comes to serving individuals with low to middle incomes, gyms, which typically require a one-time initiation fee and a monthly fee, still have the upperhand. Multiple studies of the fitness equipment industry found that one of its main barriers to market growth is its high cost and the requirement of space at home.

This rings especially true for studios that offer highly specialized forms of exercise using particularly expensive equipment. Reach Pilates, which has served Palo Alto for nearly three decades, offers workouts that require machines or "apparatus classes." The studio focuses on exercises on the mat and the machines.

To replicate what's offered at Reach, studio manager Kathleen Paice said that a client may be looking at purchasing up to $15,000 for five pieces of equipment.

"We did have a couple clients who bought one piece of equipment and did classes virtually because they had the means to do that," Paice said. "But even those clients have come back because it's part of their routine."

Despite the at-home trend, there will always be people who gladly consider themselves gym rats.

As someone who thrives under a competitive environment, Reema Dhillon, 38, said she pays nearly $1,000 a month for classes at Barry's, CorePower Yoga and Rumble Boxing — no problem. Any at-home or virtual options, Dhillon found, just didn't push her enough as much as in-person classes.

"I couldn't even muster up enough motivation to do the workouts at home," the Palo Alto resident said. "It just really hindered all my progress. It was kind of depressing."

In a survey of 1,171 Americans published by the International Health, Racquet & Sportsclub Association, 48% of participants said they had a harder time finding the motivation to exercise without their fitness club. The same survey also found that 54% found their new workout routine less challenging, while 53% said it was less consistent.

Dhillon, who works at a law firm in Palo Alto and used to compete in softball and track and field, tried some of the workout videos on YouTube and even her boyfriend's Peloton but found nothing challenged her as much as her classes. Her only outlet while fitness studios were closed was walking 10 miles a day.

"Being around other students creates that competitive environment," she said. "And that's what I thrive under — being faster or pushing myself because the person next to me is doing it. I feed off of that."

In the weeks leading up to the debut of Van Metre's studio, the Menlo Park native hosted several outdoor Barre3 classes thanks to getting a permit from the city.

"People are saying, 'Oh my gosh we're so glad you're back,'" she said.

Van Metre acknowledged that the pandemic and now, in California, the threat of poor air quality due to the wildfires are formidable risks for an already vulnerable industry. But with pent-up demand to exercise and reconvene, she remains optimistic.

"Really the goal is to bring our community together again," she said.

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