Peloton Interactive Inc, formerly Peloton Interactive LLC is a US-based exercise equipment and fitness media company known primarily for its flagship products, the Peloton Bike, and the Peloton Tread. Though it was founded on Kickstarter a decade ago, Peloton has grown exponentially over the past few years, especially as the COVID-19 pandemic forced people to work out efficiently at home. The company’s first-of-its-kind subscription platform allows users to stream fitness classes that they can take part in from home using their Peloton hardware.
Anyone who owns a Peloton Bike can subscribe to the service and take part in Peloton-exclusive indoor biking classes. Similarly, anyone with a Peloton Tread can attend live or on-demand indoor running training sessions.
- Internet-connected stationary bikes and treadmills
- Sports apparel and accessories: cycling shoes, dumbbells, resistance bands, and fitness apparel.
- Connected fitness subscriptions (access to live and on-demand fitness group classes at home that are led by its instructors), and the Peloton Digital app (for household users to access its classes).
As of June 2022, the company had approximately 6.9 million members. Peloton Interactive sells its products directly to customers through a multi-channel sales platform that includes showrooms, inside sales, and e-commerce.
Peloton Digital – Unique Value Proposition
- More than a stationary workout equipment
Peloton offers live classes just like traditional gyms or clubs would, but because it is multidimensional, the class serve 1. to simulate the feeling of group fitness, and 2. to create content to fill Peloton’s virtual library, allowing members to choose the type of class, music, specific instructor, and length in a personalized bespoke exercise. It empowers members to control and exercise completely on their own terms.
- More than a group fitness
Virtual high fives, digital leaderboards, and challenging friends are just a few of the cues Peloton has taken from in-person group fitness. Peloton uses its virtual platform to create emotional and social value as its instructors and members can use Peloton for culturally relevant issues (for example Black Lives Matter movement in 2021) and form an affinity group by their interests or workplace. It excels in the reach and scale, and the physical act of exercising with like-minded people which amplifies the emotional value of the users.
- More than a playlist
Peloton is strategically becoming one of the forefronts of music culture. It collaborates with celebrities like Beyonce, Taylor Swift, and Cavin Harris to not only power the workout but also encourage a multi-channel experience by allowing favorite songs during class and automatically building a playlist in Spotify to revisit. It recognizes the value of music in the experience and designed the platform to amplify artistry and build community.
- More than individual goals
By leveraging the relationships instructors have with members, Peloton has created a sense of intimacy in a virtual space where many other digital platforms have failed. This intimacy is key in building platform stickiness and lifetime buy-in from members. To do this, Peloton instructors personally connect with members in class, and also on social media platforms. Often during the live taping of a class, instructors will call attention to a story shared by members on social media. This intimacy fosters a sense of true connectedness among members and the Peloton experience.
After COVID and Sustainability
- Peloton’s Connected Fitness Products segment currently generates most of the company’s revenue, but its Subscription segment is more profitable and growing fast.
- The company announced a major business restructuring in February 2022 that includes plans to reduce its global workforce and scale back its manufacturing footprint.
- Barry McCarthy was named Peloton’s new CEO and president on Feb. 8, 2022, replacing John Foley, who was named the company’s new executive chair.
- Peloton announced that it would be reducing its global workforce by approximately 2,800 positions, and corporate positions by about 20%. Peloton also said it would reduce its manufacturing and delivery footprints and cut back its planned capital expenditures in 2022 by approximately $150 million.
- Peloton Interactive Inc. “PELOTON ANNOUNCES COMPREHENSIVE PROGRAM TO REDUCE COSTS AND DRIVE GROWTH, PROFITABILITY, AND FREE CASH FLOW”, https://investor.onepeloton.com/news-releases/news-release-details/peloton-announces-comprehensive-program-reduce-costs-and-drive