by Matt Weik, BS, CSCS, CPT, CSN
Peloton came out of the gate, ready to race the competition. They were so eager to jump out front that they went without their helmet. While being cautious can prevent falls, sometimes timing can come back to bite you in the butt.
A few years back, when everyone was locked in their homes like caged animals, fitness companies and equipment for home use blew up. People were fighting to get whatever inventory was still in stock at their local stores, and others flooded the internet to buy whatever they could find.
Well, Peloton was standing there with a big, bright, shiny object, and people were forking over thousands of dollars to get their bike and “join the community” online. Their growth even had the business valued at around $50 billion.
Now, the brand is falling back and sucking massive wind. So much so that they’re letting people go.
In this article, we’re going to dive a little deeper into the issues Peloton is currently faced with and the potential causes.
Disclaimer: This article is for informational purposes only and is not meant to treat or diagnose any condition. It is recommended that you speak with your doctor before starting any exercise program, making changes to your nutrition plan, or adding any new supplements into your current regimen.
Peloton: It Was Fun While It Lasted
If you haven’t been paying attention to a brand that was once considered the “future of fitness,” they are going through some rough times right now. Why? Because they are still on that pandemic wave, only there is no pandemic lifting their sales.
So, naturally, you’d only assume the sales are going down. And that they are.
Peloton is having a rough time keeping CEOs, and because their expenses keep rising without the same increase in revenue, they’re officially cutting 15% of their workforce — eliminating nearly 400 employees.
Now, why would sales be slow for the brand, to the point they have major layoffs? There are a few reasons, and I’m going to give you some of my opinions below.
1. The waves have calmed from the storm
When we were all told to stay home, gyms across the nation closed. Peloton was a solution to this problem by allowing people to purchase their bikes, treadmills, etc., and train from home. With the internet, you could connect directly into their interface and join their online community.
Sure, that was fun during that timeframe because you got to interact with others live, but once the pandemic restrictions were lifted, everyone wanted to go back to the gym and train with real people, not virtual personalities.
That’s not to say the Peloton instructors weren’t good, but even watching some of the commercials with their instructors had me cringing.
At the same time, Peloton was pumping out equipment as quickly as they could get it manufactured and built, and now we are seeing numerous product recalls on defective equipment. Take those costs and add in a dying subscription model that no one wants to pay for anymore, and there’s only one direction you’re heading… DOWN.
A brand like Peloton didn’t have to be witty with its marketing and products during the pandemic because people simply needed equipment. What worked during the pandemic doesn’t work now, and it seems like the brand never truly had a strategy in place for when we got through the pandemic. And clearly, it led them to the problems they’re facing now.
2. Disposable income is low
Inflation is killing everyone, and bank accounts are getting squeezed harder than ever. People are just trying to stretch their dollar further, as the cost of everything has gone up dramatically.
Add in the fact that some people are still having an issue getting a job or finding work, households simply don’t have the disposable income they once had. With Peloton being an expensive purchase, less and less people are willing to shell out that kind of coin in order to get and stay fit.
The demand for Peloton was there initially, and most people had no idea at the time how long things would stretch out with the pandemic. People were buying Peloton equipment as a quick fix for what they thought was going to be a short inconvenience. Weeks turned into months, and after we made it through the other end and things opened back up, the Peloton equipment they once purchased is now covered in dust.
3. People want physical interaction again
Personally, I’m an introvert, so the pandemic didn’t affect me one bit. But those who are extreme extroverts were going nuts. It was like you took a crazy animal from the wild and put them in a cage. It’s no wonder mental health issues rose during the pandemic.
Once things “returned to normal,” everyone craved in-person interaction and experiences. People wanted to get outdoors. They wanted to eat at restaurants with their friends and family. They wanted to play sports and hit the gym. They wanted to, well… get out of the house they were locked in for so long.
Overall, Peloton has some major issues they need to work on and fix. It starts from the top down, and I’m not so sure they’ve ever had the right people in place to truly see this brand into the future. They may have had the “best for now” at the time, but the long-term strategy would always suffer with that type of leadership.
I don’t know if you use Peloton, did in the past, or will in the future, but one thing is for sure, the brand fell off their bike and bumped their head. They need to be fixed back up before saddling back up for another ride. Otherwise, they may have one ride left, and it’s into the sunset.