First on CNN Business: Best Buy starts to sell home exercise equipment
New York(CNN Business) Americans are busy and want everything on demand from their living rooms, including workouts. Best Buy is looking to capitalize on the trend by selling at-home exercise equipment.
Best Buy announced Tuesday that it will begin selling $2,000 Flywheel stationary bikes that offer virtual cycling classes; Hydrow rowing machines that give rowers views of Miami and New York; and NordicTrack treadmills with interactive coaching.
"Consumers want the benefits of boutique exercise clubs in the convenience of their homes," Josh Will, who oversees Best Buy's health assortment, told CNN Business in an interview. "They're looking for a shortcut. We call it the 'fitness hack.'"
The equipment, which is now available online and will be added to dedicated sections at more than 100 stores by the end of the year, marks Best Buy's first significant step in the fitness industry. As part of its push, Best Buy will also offer vibrating massage balls, rollers and compression boots like LeBron James and other pro athletes use to recover after games.
The move is the latest part of Best Buy's long-term strategy to expand beyond selling televisions and laptops and build tech expertise in areas like exercise, sleep and health. The company's new chief executive Corie Barry, who took over last week, previously oversaw Best Buy's recent effort into offering technology assistance at customers' homes and connected health care for aging Americans.
"Best Buy has been working aggressively and successfully to diversify its product mix," said Brian Nagel, managing director at Oppenheimer. "A move into fitness is a logical step."
Flywheel and Hydrow
Wearables, including activity trackers and fitness watches, have been some of Best Buy's fastest-growing products in recent years, leading the company to explore other tech opportunities in the fitness market.
Several consumer trends have converged to draw Best Buy (BBY) into the industry. First, more Americans want to get in shape. Since 2008, gym membership in the United States has increased by 37%, according to the International Health, Racquet & Sportsclub Association. Gym chains such as Planet Fitness (PLNT) are expanding rapidly and moving into vacant Sears and Toys 'R' Us stores.
Meanwhile, recent tech innovations in fitness have started to allow consumers to skip the gym and video stream classes live from their homes or train remotely with a virtual instructor.
Venture capital-backed startups such as Mirror, Tonal, Peloton and Hydrow have cropped up to cater to time-strapped consumers who want personalized studio workouts on their own schedules. Peloton, which filed to go public earlier this month, is best known for its internet-connected stationary bikes and subscription cycling classes that can be streamed live or on demand.
"We're seeing a growing intersection between technology and fitness," Will said. "The industry is starting to be built."
The industry may be emerging, but it's also growing quickly. One analyst, Brian Smith from Piper Jaffray, pegs the digital fitness market at around $5 billion today — up from $2.1 billion three years ago.
Best Buy did not disclose the customer demographic it is targeting with its latest effort, but Nagel from Oppenheimer said he believes the company is chasing mid-to-upper-end consumers willing to pay up for tech-powered workouts.
Best Buy piloted the equipment at a handful of stores before deciding to start rolling it out to a tenth of its locations nationwide. To convince customers to buy bikes and treadmills, the retailer will offer free demos in stores and delivery and installation from its Geek Squad employees.
Might Best Buy sell existing bikes like Peloton one day? Will did not rule it out.
"We're always looking to partner with innovative companies on their technology," he said. "We're just getting started."
