Home Articles How the prevalent COVID-19 pandemic helped the service sector break the internet

How the prevalent COVID-19 pandemic helped the service sector break the internet


As little as 15 years ago, the idea of buying clothes online was stressful and confusing. How would you try them on? How would you return them if they didn’t fit? What if the photos didn’t truly reflect the product? 

In a similar vein, just two years ago, most of us thought online fitness classes were a pie in the sky idea that would never take off. How would you get proper instruction from the trainer if you’re not there in person?

And more importantly, why would you pay for online classes when you can get them for free on YouTube?

In both cases, our assumptions and predictions have been proven wrong.

Buying clothes online is no longer a niche option – it’s the norm, especially with physical stores closed due to lockdowns. According to the US census bureau, e-commerce sales for the second quarter of 2021 totalled USD $211.7 billion, or 13% of all retail sales. 

Likewise, the service industry is booming online. Just as the retail sector graduated to e-commerce over a decade ago, the pandemic has seen the service sector shift to online offerings, virtual experiences, and digital classes. 

For many service businesses around Australia, online classes and events have enabled them to ride out the cash-flow bumps of periodic lockdowns and the reduced capacity as a result of social distancing measures. Keeping staff active and earning through physical closures has been pivotal in retaining staff and maintaining morale.

The online fitness revolution

Take online fitness, for example, which is estimated at over USD $6B, and growing annually at over 33%, according to Allied Market Research. Australian fitness studios are able to compete for clients globally with very little investment beyond a smartphone. 

Exercising at home through an online platform is something many of us have embraced since the start of the pandemic in early 2020. Whilst for some, workouts at home are just a stopgap until the gyms reopen, for many people they have proved valuable. 

Online classes have given consumers a wider array of choices in their fitness routine. You can take Pilates, yoga, group exercise, bootcamp and just about any other class you can imagine from teachers all over the world. Apple’s recently launched Fitness+ program is proving that online classes are going mainstream, and the concept is here to stay. 

According to Mindbody, online pre-recorded fitness classes have almost doubled since the start of the pandemic, and live-streamed classes have more than tripled.

This differential growth in livestream classes suggests clients crave human interaction, something most people find valuable in their in-person fitness classes.

Like the early days of online retail, we’re seeing an explosion of small operators in the online fitness space, alongside a handful of larger companies.

Barriers to entry for new online fitness businesses are almost nonexistent, resulting in many exercise instructors deciding to branch out on their own and offer online sessions to their clients without the intermediary of a studio or gym to take a share of their profits.

A new way of thinking

The shift to online is happening beyond the fitness industry. In fact, a wide range of service-based businesses have shifted to online offerings for the very first time, and there’s no indication of them slowing down once the pandemic is over. 

Medical services, including therapy and psychology services, have started to realise the benefit of telehealth offerings. Therapists can now accept patients from entirely different states, opening up their potential client base and helping those in remote areas access services that previously were too far away to contemplate. 

Elsewhere, conferences are shifting to a hybrid format, where attendees have the option to attend the conference in person or online. This helps fit the conference content into people’s schedules far more easily, as well as opening up the potential customer base.

In the past, video-based offerings were expected to have professional backdrops, lighting rigs, and cinema-level editing. Thankfully, the pandemic has changed our expectations.

All you need to run a successful online event, course, or class is a smartphone with internet access and a few square metres of floor space. People care far more about the actual content provided than fancy lighting setups and professional backdrops. 

Of course, as the industry grows and matures, we will likely see vertical and horizontal segmentation along with a shrinking number of players as the market decides who is going to stick around for the long haul. Eventually, the market will segment into several larger players, each owning a larger slice of their particular market.

Right now though, we’re still in the early stages of the initial explosion in the service industry. It’s an exciting time for consumers and business owners alike, as new business models create opportunities and lower barriers to entry for service industry professionals; and vastly increased choice and accessibility for consumers.


Raphael Bender is the CEO of Breathe Education. In 2006, Raphael started a Pilates and yoga studio in Melbourne’s CBD called Breathe Wellbeing.