We examine the health of the fitness tech sector and what app makers should consider when creating a product or service.
For every one person tracking their runs on Strava or building their stamina with Couch to 5K, we’d hazard a guess that there are many more who have downloaded but never used these apps. The fitness technology market may be huge, but the motivation for many consumers to engage consistently with various gadgets and platforms is also sizeable.
We thought we’d examine the health of the fitness tech sector, look at its winners and losers and ask what app makers should consider when creating a product or service.
Peak performance
The fitness tech market is performing well. The value of the global fitness tracker market was estimated to be over $36 billion in 2020 and will grow to $114.36 billion in 2028. A quick look at Google Play stats would support this. Take the aforementioned apps: Couch to 5K has ‘1M+’ downloads, while Strava boasts ‘3M+’, and that’s without counting the many millions more downloads via Apple Store.
The pandemic certainly helped, marking a boom time for the sector. Confined to our homes and allowed our one daily walk per day, many consumers swapped gym memberships for at-home workout streaming services and home gym equipment. A considerable number combined the two, buying Peloton bikes and becoming members of its subscription service, for example.
As a result of these socio-economic conditions, fitness apps generated $5.35 billion revenue in 2021 according to one estimate, a 54% increase on the year prior. However, embarking on a new fitness journey or trying to beat your personal best is rarely a smooth journey.
Caught in a negative cycle?
Let’s take Peloton again as an example. The health of Peloton’s business took (another) turn for the worse this month, when it recalled more than two million of its bikes as a result of safety issues. The fitness tech company was riding high during the pandemic, when locked-down consumers brought their workouts indoors. Sales were up 172% and more than a million people subscribed to its streaming service.
Race forward to 2022. The company laid off 12% of its workforce, increased the price of its products and closed stores. More recently, as a result of the recall, its shares have fallen and consumer trust in the brand has been impacted. Or perhaps we should say, further impacted. The company has previously faced a backlash over its advertising campaigns, including an ad many saw as sexist and has also had to recall its treadmill following a child’s death.
Peloton – like many others operating in this space – has had more ups and downs than a competitor in the Tour de France. It may have made some poor marketing decisions in the past, but Peloton’s volatile history – and its fate – have also been the result of the unpredictable fitness tech sector.
A Christmas gift to marketers
Health and fitness marketers know that January is a peak time for building business. Guilt about overindulgence during the holidays and a desire to make resolutions have traditionally seen an increase in gym memberships. Many marketers in the fitness tech market also have cause to celebrate in January. In addition to consumers downloading apps as an alternative to the gym, many will also have purchased fitness wearables and connected equipment, helping to boost sales.
Annual occasions like this are predictable, and marketers and manufacturers can plan accordingly. However, other market influencers – like covid, marketing fails and safety issues – are more difficult to forecast.
Exercising good cybersecurity practice
Today’s fitness tech companies have a further challenge to consider, one that wasn’t a concern in the traditional gym sector: cyber security. In 2018, for example, MyFitnessPal admitted that personal details of around 150 million of its users had been compromised in a cyber attack.
In addition to the threat of cyber criminals, many consumers are growing increasingly wary of how tech companies collect and use their data. By using fitness apps and wearables, consumers may be sharing not only their location data – something processed by app makers across the board – but things like calorie intake, mental wellbeing, diet, step count, sleep patterns, weight and other personal health information. Personalising user experience via data can be beneficial to both consumer and fitness tech company, but poor security or opaque privacy policies can result in major PR and security disasters.
Those operating in the space must put safety and cybersecurity at the heart of their business. This should include following strict data protection protocols, having adequate cybersecurity measures at the back-end, and also being open and transparent with consumers about how information is processed. The ability to opt out of data sharing, having clear and visible marketing policies and including privacy and security controls that users can easily access and operate should all be considered.
A healthy balance to app design
We all know that getting fit and using fitness technology requires motivation. As such, app makers need to balance the need for security and privacy features with the requirement to make apps as frictionless as possible. Great UX design, flexible subscription models, gamification and the ability to connect with other users and share fitness achievements can all help with this.
Appdrawn has experience in the fitness and leisure sector, working with clients to build apps and platforms and advising them on challenges and opportunities. If you’re thinking of entering the space, want to create or update an app or platform, get in touch – we’d love to hear from you.