This is Why Peloton Failed
Where Peloton Go Wrong?
How does a mighty fitness empire like Peloton fall rapidly in a short amount of time? That’s been the question for many in the company, but the public seems to have all the answers to why. Peloton is a multifaceted company with physical fitness equipment and a tech portion that focuses on fitness apps and online fitness communities. During the Covid-19 pandemic, sales excelled as gyms and studios closed. As one of the few options during a pandemic, the public seemed okay with price tags on equipment exceeding $3,000 and monthly memberships of $60+. With mass sales and plans for new production facilities, it seemed this giant was unstoppable. However, the tables quickly turned with the warmer weather, vaccines, reopening of fitness centers, and competitors entering the online exercise community space.
Did Peloton Take The Easy Way Out?
I’ll break down their collapse using the 4th Law of Systems by Peter Senge in his book The Fifth Discipline. Senge states, “The easy way out usually leads back in.” But what does this mean? It means attempting complex solutions when a more straightforward option is evident. Before public knowledge of the collapse, Peloton ran multiple social media ads with discounts on their products. It was otherwise known as a quick fix, but it wasn’t enough to distract people from the messy lawsuit with Lululemon and the PR nightmare of HBO’s show “And Just Like That…” stating the Peloton bike killed a beloved main character.
The quick fix of discounts did nothing to help their failing brand image in the public eye. Soon after, general knowledge of plummeting shares and the departure of their CEO, closing physical stores, and laying off employees put the company in the crosshairs.
Can Peloton Backpedal Enough To Save Itself?
Peloton focused on the pandemic, scaled up to fast, and ignored a focus on entry-level ways into the brand. Their slight discounts and partnerships with expensive athleisure wear companies weren’t solutions; they were short-term fixes. Peloton needed to invest in creative solutions that would involve rebranding, creating tiered equipment, and other entry-level ways into the brand with enough promotion to drive awareness and lead people through the purchasing funnel.
They started at the top with the assumption they’re the same tier as Apple and ignored the already competitive market of less expensive products and companies which could quickly adapt that technology like Nordictrack. With the cards stacked against them, Peloton needs to backpedal itself, strategize, and refocus its efforts to build a successful future.