November 27, 2022

Wellness has become a catch-all, and consumers can’t get enough.
The active pursuit of holistic health. That’s how the Global Wellness Institute (GWI) sums up its namesake state of being.
And, according to a McKinsey survey, consumers view wellness through a broad lens, where health, fitness, nutrition, appearance, sleep, and mindfulness are the focus.
While definitions vary, as the meaning of wellness expands, so does the market.
Reeling from the pandemic, consumers want holistic wellness.
And its importance is only growing. A recent McKinsey report found that 50% of US consumers now say wellness is a top priority in their day-to-day lives, up from 42% in 2020.
The report also states that the lines between wellness dimensions are blurring further, with consumers indicating existing offerings don’t meet their needs.
Driving demand, younger generations are seeking out wellness at rates up to 7% higher than the average consumer.
For companies in the space, the report goes on to identify key growth drivers that can’t be ignored.
It’s personal. Consumers now expect data-driven personalization. Following the lead of Netflix and Spotify, wellness brands are dialing in.
In particular, companies like StravaWHOOP, and Oura are tapping integrations and interoperability to improve the customer experience. Meanwhile, the rise of wearables, home diagnostics, and computer vision enable real-time personalization.
Service-based. While products account for 70% of consumer wellness spending, services are gaining ground. Over the next year, 45% of people intend to spend more on services vs. 25% buying more products.
Lending further support to this trend, Mindbody recently noted that 87% of consumers plan to maintain or increase spending on wellness services. Leading the way, bookings for nutrition counseling and massage were up 15% and 11%, respectively, through this year vs. the same period in 2019.
Shut-eye. Apparently, the $500B sleep economy isn’t big enough.
After health, sleep is the highest priority for consumers. At the same time, it’s the area with the highest unmet need — one in three Americans are sleep-deprived, with the national average slipping to 6.8 hours of shut-eye per night.
As smart mattresses and bedtime elixirs try to change that, more startups are working to diagnose and treat sleep disorders.
Pay-to-play. Even amid economic uncertainty, consumers say they won’t curb wellness spending.
Unwell. Still, as we’ve pointed out, more spending doesn’t equate to better health outcomes. So, whether it’s increasing access to healthcare, leveraging tech to spur innovation, or simply making our cities more walkable, we have a lot of work ahead of us.
Boutique fitness is still booming.
On the Fitt Insider Podcast: Barry’s CEO Joey Gonzalez discusses how the international HIIT studio accelerated out of the pandemic.
We also cover: the launch of its cycling concept RIDE and the foundational strength behind group fitness.
Listen to today’s episode here
Gym visits are trending up, but it’s not business as usual.
Back on track. After a false start last year, 2022 marked a clear turning point for in-person fitness.
As peak COVID restrictions lifted and connected equipment sales stalled, brick-and-mortar operators welcomed the gym faithful back.
Riding the wave, big-box gyms and boutique studios alike are touting gains.
But… Increased traffic doesn’t tell the full story — IRL participation and frequency are headed in opposite directions as at-home exercise remains popular.
Looking ahead: Adjusting to shifting demand, brands are adopting new business models. While Peloton doubles down on subscriptions, Life Time is raising prices, with CEO Bahram Akradi telling Axios the health club wants fewer members paying higher dues.
Still, putting the “here or there” argument aside, getting more people moving more often remains the largest and most important challenge.
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Fitness equipment maker Nautilus is mulling a sale.
For context: Owner of brands like Bowflex and Schwinn, the company has been in business for more than 30 years.
More recently, with the rise of connected fitness, Nautilus set its sights on a tech-enabled makeover. Boosted by COVID restrictions, it posted record growth during the pandemic — but the lift didn’t last.
Reorienting. Underway for years, Nautilus made its transition from product-led hardware company to consumer-led digital company official in 2021, announcing its North Star strategy.
Despite its efforts, Nautilus saw sales decline 70% YoY in Q1’23 as losses mounted.
At the time, CEO Jim Barr remained bullish on home fitness, reaffirming plans to double direct-to-consumer sales by 2026.
Unwilling to wait, the Nautilus board elected to pursue strategic options, including a sale.
Takeaway: Hardly alone, Nautilus joins a growing list of equipment makers who bet that pandemic-era demand would last forever. As the pendulum swings, downsizingconsolidation, or worse remain likely possibilities.
Today’s newsletter was brought to you by Anthony Vennare, Joe Vennare, and Ryan Deer.
Anthony Vennare
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