Peloton Re-brands itself from High-End Exercise Bike Maker to Health Company
Peloton Strategic Shift: From High-End Priced Hardware to an Attainable Subscription Service
Peloton rebrands itself from a high-end Exercise Bike maker to a health and fitness company for all. Transitioning from high-end pricing to a more attainable app subscription service, to attract a larger demographic aligned with the global trend of integrating fitness and wellness into everyday life.
Peloton is undergoing a significant rebrand shift, dumping its identity as a seller only of upscale exercise bikes and treadmills to a health app for all.
Peloton unveiled its plan for a total brand relaunch, complete with a major ad campaign and announcement of new app subscription tiers and a gym integration feature.
This change in direction was most likely influenced by app data usage suggesting more than half of all workouts were not cycling-related but rather associated with other forms of fitness like yoga and meditation or walking and strength.
Peloton branded and owned delivery vans were a familiar sight in many urban areas across the U.S.
OUR TAKE
Transitioning from Hardware to Fitness Content
Contesting the idea that its brand identity is primarily more a hardware bike brand, it now aims to position its app – in which users can participate in a wider range of live fitness classes tracking real-time performance metrics – as its core product and identity. In short, move from hardware to a fitness content provider.
Peloton wants to redefine who a Peloton member/user is. For years, Peloton – which initially had a cult-like following and whose class instructors became influencers and celebrities in their own right – was seen as a brand for consumers with an attractive lifestyle and in a higher income bracket. Peloton is now looking to broaden its position by expanding its appeal to everyone.
This goal may be a massive challenge, keeping its current members while at the same time attracting new ones to expand its base. Relinquishing its brand image of exclusivity and elitism may prove difficult as Peloton aims to find ways to connect with new audiences and capture attention and engagement to drive its bottom line.
The Peloton brand has been known for past elaborate music collaborations, high-profile sessions with their instructors, and other brand partnerships – like Puma with instructors Olivia and Alex and instructor Cody with Dancing with the Stars. It is difficult to predict if current members will leave Peloton over its rebrand, and management will have to focus on making this new brand experience different from any other fitness brands out there.
It is hard to see how you teardown a Mercedes fitness experience and then transition it to a Walmart version keeping all members happy – time will tell.
Peloton App Options
The company rolled out new pricing for tiered membership that ranges from $12.99 to $24 per month and said that its app now offers the largest number of free classes.
CEO Barry McCarthy replaced founder John Foley just over a year ago to restore a business that experienced numerous stumbles, from marketing missteps to recalls. He has made a hard push to shift the company's focus from high-priced hardware to software and fee-based apps, most likely influenced by his Netflix background.
The company revealed their member usage data indicated more than half of all workouts were not cycling-related but associated with other forms of fitness like yoga and meditation or walking and strength.
Its newest app feature, Peloton Gym, will be available across all membership levels and allows users to work out at their own pace. The workout sessions are written-out and demoed by instructors to support video illustrating a series of floor-based routines.
The new branding approach is launching across all Peloton markets in the United States, United Kingdom, Canada, Germany, and Australia, and align with a worldwide trend toward health and wellness, supported by wearable technology, virtual fitness classes, and customized nutrition plans, to make fitness and well-being an integral aspect of everyday life.
Financial Impact
Peloton experienced incredible sales growth during the height of the coronavirus pandemic. The New York company’s share price multiplied by more than five times in 2020 amid lockdowns that made its pricey indoor bikes and treadmills popular among customers who pay a monthly fee to participate in interactive workouts.
Sales began to slow in 2021 as vaccines allowed people to roam more freely from their homes, including visits to the gym.
Shares of Peloton Interactive Inc., down 46% this year, are at $8.33. Peloton stock peaked in January 2021 at $171 per share, at the time of writing down 95% from the all-time high.
Peloton's strategic shift involves transitioning from high-end pricing to a more attainable subscription service, enabling a larger demographic to access and benefit from its products in line with the global trend of integrating fitness and wellness into everyday life.