Sales Spike for Exercise Equipment Companies During Pandemic

May 28, 2020


Increase in Earnings

Earnings reports from leading fitness equipment companies have revealed a spike in sales. According to a Ware2Go study, 87% of Americans have taken up new activities during the coronavirus pandemic. Almost half of survey respondents, 42%, cited exercising as a top activity.

Nautilus reported first quarter net sales up 11% and retail sales up 23.9% citing particular strength in its Bowflex brand.

The company’s online fitness platform JRNY, which launched in October, saw a 50% spike in downloads during the first 30 days after U.S. states began implementing stay-at-home orders.

Peloton also reported positive earnings, 66% increase in revenue for first quarter and noted a 94% increase in subscriptions. In addition, Peloton ended the quarter with a backlog of bike deliveries. In fact, for those consumers looking to purchase a Peloton, were greeted with this message on its website, “Our delivery timeframe is normally 2-3 weeks after purchase. Due to the COVID-19 crisis, orders placed today are unlikely to be delivered any sooner than 5 weeks from now, and over 7 weeks in some areas.”

What Else We Can Expect

Sporting goods stores such as Dick’s Sporting Goods, will likely see an uptick in e-commerce sales as well. Although it closed its stores in late March due to the pandemic, the company allowed customers to pick up at stores via its Curbside Contactless Pickup service. During the fourth quarter of 2019, Dick's online business reached 25% of sales. We’ll see how the retailer fared when it announces first quarter earnings on June 2.

How long can fitness equipment providers benefit? It’s difficult to say. Nautilus expects high demand for home exercise products to persist in the second quarter, but the company views the situation as temporary, and will continue working on initiatives to improve its sales under normal conditions.

How Will These Companies Adapt

Such initiatives will likely include focusing on e-commerce capabilities as well as supply chain improvements. Nautilus plans to continue to launch digital products in order to catch up to Peloton. In addition, the company also has a strong background in supply chain and manufactures a number of its products in Taiwan, China and Vietnam. From a risk-management improvement perspective, the company may want to review its supply chain to identify and mitigate future risks.

With almost all of its manufacturing in Taiwan, Peloton may want to consider diversifying to reduce transportation costs and delivery times. Dick’s Sporting Goods as well as other retailers with storefronts may want to continue to strengthen omnichannel capabilities. Dick’s Curbside Contactless Pickup service is a great delivery option. It may want to consider additional delivery options as well as technology investments to improve supply chain visibility.

There are a number of possibilities for exercise equipment companies as consumers may remain skeptical of returning to gyms and businesses embrace the work-from-home trend post-pandemic. However, they will need to plan now or run the risk of falling behind in a highly competitive market.

 


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

 

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Sales Spike for Exercise Equipment Companies During Pandemic

May 28, 2020


Increase in Earnings

Earnings reports from leading fitness equipment companies have revealed a spike in sales. According to a Ware2Go study, 87% of Americans have taken up new activities during the coronavirus pandemic. Almost half of survey respondents, 42%, cited exercising as a top activity. Nautilus reported first quarter net sales up 11% and retail sales up 23.9% citing particular strength in its Bowflex brand. The company’s online fitness platform JRNY, which launched in October, saw a 50% spike in downloads during the first 30 days after U.S. states began implementing stay-at-home orders. Peloton also reported positive earnings, 66% increase in revenue for first quarter and noted a 94% increase in subscriptions. In addition, Peloton ended the quarter with a backlog of bike deliveries. In fact, for those consumers looking to purchase a Peloton, were greeted with this message on its website, “Our delivery timeframe is normally 2-3 weeks after purchase. Due to the COVID-19 crisis, orders placed today are unlikely to be delivered any sooner than 5 weeks from now, and over 7 weeks in some areas.”

What Else We Can Expect

Sporting goods stores such as Dick’s Sporting Goods, will likely see an uptick in e-commerce sales as well. Although it closed its stores in late March due to the pandemic, the company allowed customers to pick up at stores via its Curbside Contactless Pickup service. During the fourth quarter of 2019, Dick's online business reached 25% of sales. We’ll see how the retailer fared when it announces first quarter earnings on June 2. How long can fitness equipment providers benefit? It’s difficult to say. Nautilus expects high demand for home exercise products to persist in the second quarter, but the company views the situation as temporary, and will continue working on initiatives to improve its sales under normal conditions.

How Will These Companies Adapt

Such initiatives will likely include focusing on e-commerce capabilities as well as supply chain improvements. Nautilus plans to continue to launch digital products in order to catch up to Peloton. In addition, the company also has a strong background in supply chain and manufactures a number of its products in Taiwan, China and Vietnam. From a risk-management improvement perspective, the company may want to review its supply chain to identify and mitigate future risks. With almost all of its manufacturing in Taiwan, Peloton may want to consider diversifying to reduce transportation costs and delivery times. Dick’s Sporting Goods as well as other retailers with storefronts may want to continue to strengthen omnichannel capabilities. Dick’s Curbside Contactless Pickup service is a great delivery option. It may want to consider additional delivery options as well as technology investments to improve supply chain visibility. There are a number of possibilities for exercise equipment companies as consumers may remain skeptical of returning to gyms and businesses embrace the work-from-home trend post-pandemic. However, they will need to plan now or run the risk of falling behind in a highly competitive market.  
ABOUT SPEND MANAGEMENT EXPERTS Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.  

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