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With the rate of COVID-19 vaccinations on the rise and the presumed end of the coronavirus pandemic in sight, Retro Fitness is introducing a new stationary bike and bundled service offering intended to cater to consumers’ changing preferences around how and where they work out.
Retro Fitness’ “Get Wheel” program, launched on Tuesday, gives consumers the best of both worlds — a joint subscription to virtual, at-home programming and a three-year membership to the company’s brick-and-mortar gyms with purchase of a “Retro Fitness Cobra by Matrix” bike for $1,200. The Get Wheel program includes exclusive cycling classes at launch.
According to CEO Andrew Alfano, the program is designed to give members options in anticipation of a time when Americans might opt to split their time working out at home to maintain the convenience while also returning to studios and traditional gyms for the sense of community. Retro Fitness operates a chain of 140 franchise-owned gyms around the country.
“One of the things Retro Fitness has always prided itself on is not only do we build a community inside the four walls of our clubs, but outside of our club as well,” Alafno told Insider. “This is really taking it one step further as we focus beyond brick and mortar.”
‘The at-home solution is not going to go away’
According to a recent survey of more than 11,000 gym members across 142 countries conducted by athletic-shoe review website RunRepeat, 27% of global respondents said they do not plan on returning to the gym, even after being vaccinated. That percentage was higher when looking solely at the US, at nearly 35%.
The Cobra by Matrix bike and dual membership is Retro Fitness’ attempt to capture consumers on both ends of that spectrum.
While other traditional gyms and rivals like Life Time and Planet Fitness launched their own digital-membership programs during the pandemic to capitalize on the virtual-fitness boom, Retro Fitness doubled-down by launching its own connected product.
“We recognize that the at-home solution is not going to go away, but we firmly believe that it complements the gym, as a healthy lifestyle is really happening all the time,” Alfano said.
The bike and dual-membership program also marks the latest in a series of the company’s efforts to expand into more lifestyle content, including cooking and nutrition tips on its app in partnership with the Culinary Institute of America.
Traditional gyms bounce back
While Retro Fitness might seem late to the game, dropping a connected at-home bicycle at this stage of the pandemic, Alfano said the move is not because its in-person memberships are hurting. In fact, new memberships are up 20% year-over-year since January, and increased by 50% last month alone, he said.
“The fitness industry is really coming back strong, especially following a global pandemic,” he said. “Our in-club joins are through the roof, and we recognize, especially coming out of the pandemic, exercise is medicine, and health clubs are really now considered an extension of healthcare with people recognizing they need to get fit and healthy.”
Alfano added that he has seen an increase in investor interest in Retro Fitness and traditional gyms more broadly, as private-equity firms start “looking for industries that are about to take off” as vaccinations increase.
“What we’re seeing from the investor community is tremendous interest in both our franchise sales and in individual clubs but also area development,” he said. “I think the industry as a whole, both from a consumer perspective but also from an investor perspective, is really attractive.”
Appealing to investors
Ultimately, the dual options will likely appeal to investors as questions arise over the longevity of the virtual-fitness boom. While many fitness executives have said the virtual-exercise trend is here to stay, some investors are beginning to question the long-term returns on their investments.
On its quarterly earnings call last week, Lululemon executives fielded multiple questions from analysts regarding the long-term profitability potential for Mirror, the high-tech fitness system that the company acquired in June 2020 for $500 million.
“The value is really in the long term and the long-term value of the subscription revenue,” Meghan Frank, chief financial officer of Lululemon, told investors on the call. “We’ve learned a lot since we purchased the business, and COVID created an even greater opportunity than we saw at that time. And we’re going to invest behind the momentum we see in that business to really drive that long-term value.”
Alfano said he believes there is value in having both at-home and in-person options, though traditional gyms will always be core to the Retro Fitness business model.
“People are recognizing after a global pandemic that being fit and being healthy really is the best vaccine they’ll ever have,” he said. “People need and want to get back to the gym. They want to get back on the fitness journey.”
Originally published at https://www.businessinsider.com/retro-fitness-ceo-explains-why-it-entered-digital-fitness-wars-2021-4 on .