The fitness industry has a new star: Peloton. What is behind the success of the indoor fitness bike and how sustainable is the business model?
It must have been sometime in February when I saw Peloton adverts for the first time in the opening credits of a YouTube video. Live and on-demand workouts for at home, German-speaking trainers and a fitness bike with a gigantic screen – I was immediately interested. With over 2,000 euros for the “original bike” and 39 euros a month for the courses, Peloton was anything but a no-brainer.
But Corona came. Holidays and events fell through, social contacts had to be reduced to a minimum and I – like many others – hardly left the house. I took this as an opportunity to finally do something for my fitness – and ordered the Peloton Bike.
It has to be said that Peloton does it very well: if you order a bike, you have 30 days to test it. If you are not satisfied, the bike will be picked up by the shipping company. Without incurring any costs.
As far as the user experience is concerned, you orient yourself towards companies like Apple and Amazon. Everything should be as simple and comfortable as possible for the user, so that they feel that they are in good hands. It starts with the order: after you have placed it online, you will receive a call from the shipping company, who will coordinate the delivery date. Exactly to the hour. That was actually the first time that I had to deal with a shipping company that really delivered on time. At Peloton, “delivery” means that the bike is brought to the desired location fully assembled and set up. The buyer can start with the first training as soon as the shipping company has left the door. If you have any questions, you can make an appointment with a Peloton expert. That may sound banal, but it is elementary in this price segment.
Peloton meets the zeitgeist
Two months have passed since then. In that time, I did over 100 workouts and didn’t even think about sending the bike back. And that seems to be the case for most Peloton users, which is why the company’s sales jumped 172 percent year-on-year to $ 607 million in the third fiscal quarter that ended in late June. The number of subscribers rose within a year by 113 percent to just under 1.1 million. By mid-2021 it should be 2.1 million.
Of course, the corona pandemic and the associated stay-at-home mentality have contributed to this explosive growth. Reducing the popularity of Peloton to that alone does not do the company justice. Founded in 2012, Peloton first caused a stir in 2013 with a Kickstarter campaign. Since then, the concept has been consistently developed.
And that is the first reason for Peloton’s (sustained) success: Although marketing is primarily focused on indoor fitness bikes, Peloton now covers the entire range of courses: cycling, running, strength, yoga, meditation and stretching. For 39 euros you can get almost all workouts relevant in the fitness area. Live and on-demand, with first-class trainers. This is exactly where the difference to apps like Freeletics, Headspace or Asana Rebel lies, in which the algorithms simply reassemble the sequences and exercises that have been recorded once.
The second and from my point of view decisive success factor for Peloton is a completely different one: the zeitgeist. For one thing, there are more and more people who don’t want to train with hundreds of others in the crowded gym. Nevertheless, they value a high quality workout and want a trainer who guides them and interacts with them. This is exactly where Peloton’s live and on-demand workouts come in. If I want, I can train in live courses almost around the clock.
On the other hand, the Peloton concept saves a lot of time. Now I do a 30 to 45 minute workout every morning before going to the desk. If I had to go to the gym every time, that wouldn’t be possible. I probably wouldn’t even do three workouts a week because I simply don’t have the time to spend two hours a day doing 45 minutes of training.
The target group of Peloton is clearly defined: The company wants to address all those who want to train regularly and focused in the home gym under supervision. For the target group, the price only plays a subordinate role, as at the end of the day they don’t pay more than they would in a good gym – not to mention the cost of a personal trainer.
In addition, the whole family can train at Peloton for 39 euros a month. Each with its own profile. If you then factor in the time and comfort factor, even the one-time 2,145 euros for the bike can be put into perspective very quickly.
Peloton: There is still a lot of potential in live and on-demand training
That’s not to say that Peloton’s concept of wisdom is the ultimate. There will also be people in the future who prefer to work out in the gym. Or people who simply put on their running shoes and go for a jog in the forest. And if you just want to do some sport now and then, Apple’s Fitness + is a great thing.
A lot of passionate cyclists I know simply pack their bikes on a roller trainer or buy classic indoor bikes for around 1,000 euros. The “digital components” are then taken over by the iPad and apps such as Zwift, Rouvy or Virtugo. In contrast to Peloton, however, these providers focus primarily on gamification and less on live courses with trainers.
In addition, the focus at Zwift or Rouvy is primarily on cycling, while Peloton has recently started offering strength workouts with the two German trainers Irène Scholz and Erik Jäger. In the course of the year the Peloton treadmill will come to Germany. A rowing machine is also rumored to be planned.
It remains to be seen whether Peloton will become the “Apple of the fitness industry”, as it is called in some articles. It is very likely that other providers with a similar approach will follow shortly, because the topic of home fitness is still in its infancy in many ways.