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Originally Posted On: Fitness and Health App Market IAPs Boost | AdAction.com
The way people exercise has forever changed. Covid-19 closed gyms and kept people at home. Some continued their fitness and healthy lifestyle journey. They engaged in more virtual workouts, adopted digitized healthcare technology, and introduced mindfulness into their lives. The fusion of technology and a pandemic created opportunities in the fitness and health app market. That led to significant increases in downloads and in-app purchases (IAPs).
Based on new data and projections for the future, this industry has legs. These new behaviors aren’t likely to fade, even post-pandemic. So, how can you position your fitness or health app to reap the rewards? We’ve got some ideas.
New Data Shows Europe Fitness and Health IAPs Hit Record Level
Sensor Tower published new data about the Health & Fitness category, revealing IAPs rose by 70.2% to $544.2 million, which was a record. In the graph below, you can see the huge jumps, with Q3 having the best return. The top apps raking in the most money were the fitness app Strava and the mindfulness apps Calm and Headspace.
Image: Sensor Tower
The majority of this spend occurred in the Apple App Store, with 72.2% of the revenue.
Downloads in the Health & Fitness categories also saw dramatic increases, with a 46% growth. The peak was Q2 2020, and the data attributes this rise to government-backed Covid-19 contract tracing apps, so that’s really an outlier of the data. A big difference in downloads versus spending is that Google Play had the advantage here, accounting for 62.2% of all downloads.
Fitness and Health Apps Covid-19 Boost, Trends Likely to Keep Accelerating
As we reported last year, Covid-19 did boost downloads globally by 46%. Looking at the data regionally, you’ll notice U.S. adoption had interesting highlights, including 74% of Americans used at least one app during quarantine and that 56% of app users canceled their gym membership.
These trends of adoption and usage aren’t likely to wane. Grandview Research predicts the fitness and health app market will expand by a compound annual growth rate (CAGR) of 21.6% from 2021 to 2028 and reach $15.5 billion by 2028. The company’s report also noted that North American users were responsible for the largest revenue share in the industry in 2020, at 34.9%. In looking at growth regions, the data points to opportunities in Asia Pacific due to the large smartphone penetration and India.
What Can Health and Fitness App Marketers Takeaway from this Data?
Making data-driven decisions is the path of most 21st-century companies. In the last year, we’ve learned a lot about app user behavior. However, because of the pandemic and its many consequences, the data is new. It doesn’t continue the route of 2019. 2020 was a unique year, one that changed almost everything we know about consumer behavior.
Thus, the most important takeaway for you is to keep that in perspective. Further, you can’t expect that post-pandemic, that consumers will revert to old behaviors. The game has changed forever. And in change, there is opportunity!
Staying Relevant to Users: How to Encourage More IAPs
Health and fitness apps likely have a new position in their market. That message and value proposition are evolving, but you can do some specific things to stay relevant to users so that drive engagement, retention, and IAPs.
Converting to Subscriptions
Subscriptions are fueling consumer spending on fitness. Apps are collecting IAPs here. There’s also been a huge surge in subscriptions for brands like Peloton, Tempo, and Tonal. Their revenue numbers indicate a customer base that’s subscription hungry.
Apps that use a subscription model have several options to convert more users. As they spend more time on your app, they’ll want to unlock new content and workouts or eliminate ads. You just need to keep subscribing top of mind. Offerwalls are an excellent ad unit. By using a reward platform like offerwalls, the messages aren’t disruptive since the interaction is user-initiated.
There are many possibilities of leveraging offerwalls to earn subscribers. They are highly scalable and can reach global audiences. With so much versatility, they can make an impact in getting users to make IAPs.
Promoting Special Features
If your health and fitness app has a free version, you have to give users a strong reason to pay. You can accomplish this through feature upgrades, known as unlockable items. It applies to all apps in the category:
- Fitness/virtual workouts: Free users can view basic classes.
- Mindfulness: Non-paying consumers can access beginner meditation.
- Health tracking: Users who don’t pay can only look at certain vitals or metrics.
Free users that continue to use the app are engaged, so that’s good news. How do you get them to make a purchase? You don’t want to make the user experience so bad they have no choice, as that could backfire. Instead, you should imbue the value. Message that to them consistently, so they have FOMO (fear of missing out).
Some good ideas would be to position campaigns around social proof like testimonials or visually showing users what they could experience with the next set of features.
One-Time Premium Purchases
Subscriptions offer recurring revenue. Feature upgrades could be both recurring or one-time. But there’s another category of one-time purchases and may be very attractive to users. Some examples include health assessments based on vitals and data or one-on-one time with a trainer or nutritionist. The latter could be recurring, but for most, it may be a single event.
To earn additional returns, you should make these events exclusive. You may want to exclude them from subscriptions or feature upgrades. That means you’d promote them differently as well. A good approach is CPE (cost per engagement) campaigns. You can employ them in many scenarios, from top-level to deep-level engagement. Some of these premium purchases may align better with new users or those who are long-term. Your data can tell you a clear story of when people are likely to buy these services.
The Future of Health and Fitness Apps Looks Healthy
Technology is a part of so many aspects of modern life. In times when in-person interactions weren’t possible, technology picked up the demand. Regardless of when the pandemic ends, the future of health and fitness apps looks healthy. There are opportunities to obtain more paying users when you develop strategies based on data and versatile campaigns.
If you’d like to generate more IAPs for your app, we can help. Get in touch with our mobile app experts today.