Peloton Gets Wake-Up Call With Amazon Prime Bike Scare
After a surge in demand from homebound fitness buffs, Peloton faces a raft of challenges and potential stiff competition from heavy hitters.
However strong Peloton’s business has been in recent months, big challenges loom.
Photographer: PelotonIt seems logical that six months of pandemic-era living would be a boon for Peloton Interactive Inc. Gyms were closed for long stretches, and even as some have reopened, crowded fitness classes don’t feel safe or are no longer offered. These dynamics have led more people to embrace digitally connected at-home exercise – an emerging business of which Peloton is a standout. That, in turn, has helped send Peloton shares soaring.
The pandemic appears to have helped Peloton evolve its business in a key way: an explosion in the number of workouts per subscription. It seems being stuck at home has been an impetus for Peloton owners to either use its offerings more often or, crucially, tap into the company's wider range of classes, such as stretching and meditation. In other words, it is serving for many as a bona fide replacement for a gym membership — just as Peloton has long intended. That should help with customer retention and make its steep price tags look like a good value instead.