You probably saw the TV commercial: A thirty-something mom is shown giving her toddler a bath, enjoying a dinner party and arguing with her young daughter. The thread that holds her life together though is Peloton, an exercise bike with a 22-inch HD screen that connects to a far-off trainer.

That Internet connectivity is a key selling point for Peloton and explains why the device sells for $1,995. Users can hop on their Peloton exercise bikes and stream live on-demand classes for an additional $39 a month. Once on the device, the instructors take into account which resistance level you should be hitting. The instructor can see your real-time stats and shout your name to motivate you.

Although some have charged that Peloton’s pricing is exorbitant Tom Cortese, COO and co-founder of Peloton, said that compared to a gym membership, it’s cheap. That’s especially true if you’re comparing it to high-end chains which can charge as much as $200 a month. “You’re paying to access inferior equipment and inferior instruction,” he said. “I say inferior equipment because most of that equipment is changed out every 10 years and is certainly not tech-forward.”

Cortese believes the device will disrupt the $15.9 billion U.S. fitness industry. But some gyms -- particularly on the high end -- are embracing Internet connectivity to ward off such disruption. By offering more accountability and feedback, better in-gym tech could also counter the industry’s high churn rate -- some 40 percent of gym members abandon their memberships within the first year. Club operators spend a median $118.65 in sales and marketing for each new membership account. But existing members provide a median $793.40 in annual revenue, according to the International Health, Racquet and Sportsclub Association.

For consumers, this additional digital interface adds a layer of personalization and the ability to tap into real-time coaching that can help nudge them towards their fitness goals and encourage them to stay. This movement coincides with the ubiquity of broadband Internet access, which enables such connections in the gym or at home.

A human connection -- from your screen

Like retail, the fitness industry is seeing a digital-based shakeout. High-end chains like Equinox, Orangetheory and Rumble are thriving. So are more utilitarian chains like Planet Fitness that charge $10 a month. But chains in the middle are suffering

One of the draws for boutique-style chains is what Matt Powell, VP and Senior Analyst for sports at NPD, dubs “social fitness” in which a gym member takes part in spin classes, Pilates, yoga or Zumba. “It used to be the participant went to the gym and worked out by themselves and didn't talk to anyone and spent 20 minutes on the treadmill and 20 minutes on the elliptical and maybe did a little lifting and then they left,” he said.

That’s changed though and chains like SoulCycle and Equinox have capitalized on the idea that gym members crave the competition and camaraderie of working out with others.

The twist is that “working out with others” can happen online and without a gym. For instance, online fitness company Kenzai draws groups of 200 or so people that it splits into smaller groups of a dozen or so for 90-day sessions. The company not only pairs each person with a personal trainer, but keeps them all connected (virtually) so they will be motivated to stay with the program.

“Every week you upload a photo. If you’ve been cheating, it will be clear to everyone on your team because you won’t be [physically] changing,” said Patrick Reynolds, the founder of Kenzai. If a member doesn’t upload a photo, they get kicked out they go more than 10 days without uploading their training blog, they also get kicked out. Despite -- or maybe because of -- such a disciplined approach, about 85 percent of people stay with the program. “You’re all suffering together. If you want to complain together, you can.”

Beachbody is another brand that offers at-home workout programs from celebrity trainers for $99 a year.  With Beachbody On Demand, users can stream workouts via the Internet and also join private Facebook accountability groups where team members share photos daily, including “sweaty selfies” and photos of meals to share recipes and stay on track with their nutrition.

Quantified fitness

At first blush, Internet connectivity may seem unnecessary in a gym. Why do you need the Internet to lift weights or run on a treadmill? But gyms have the same needs for IoT applications as any other business. IoT can help monitor equipment and offer preventative maintenance so it is available more often. One innovator in this area is Life Fitness, which now uses the Internet to monitor equipment in 10,000 gyms globally. Gyms can also use data to see which machines are getting the most use and double up on machines that are overused and get rid of the ones that no one uses.

But the killer app for gyms will likely be in the area of quantified fitness. While in the past you needed a coach to track fitness markers like your body mass index or your VO² max, now there are devices that can provide those measurements at a fairly low price, offering feedback data that provide the small victories needed to stick with a workout plan.

Intel’s vision of the Gym of the Future, for instance, imagines a scenario in which a fitness club member enters and an IoT device at the gym recognizes her and offers her tailored workout advice. That’s not as fanciful as it may sound; wearable devices like Huami’s Amazfit Stratos watch can closely track your fitness levels and share that data. Ubiquitous broadband and robust wireless connectivity also provide seamless connectivity.  “You get more personalized input into your workout, so you can be more effective in your workout and you can share that data with your fitness instructor or doctor and they have better insight into guiding you to a better form as well,” said Frederik Hermann, head of marketing and sales for Amazfit.

To gym or not to gym?

For fitness clubs there are two dynamics at play. One is that social accountability and data feedback -- two elements essential to change habits and stick with a workout plan -- can be an effective way to fight churn. The other is that those elements can be replicated without going to a gym. The challenge for fitness clubs is to make themselves an integral part of many consumers’ workout experiences.

One thing working in the gyms’ favor is that wearable fitness devices have high churn rates too -- about a third of consumers stop using their wearable device six months after they purchase them.

As many are finding, merely having a fitness device doesn’t make you fit. While Peloton offers a mechanism to address lagging motivation, gyms can use a combination of IoT-based feedback, social interaction and high-touch service to help consumers reach their goals too. The race is on to see which model will win.

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