For the last three years, Peloton bikes were the must-have for millions of home fitness fans. The lockdown boosted demand significantly.
Yesterday, Peloton dropped a bombshell. Alongside disappointing financial results, they slashed the price of their bikes by 20%, knocking £400 off the price tag.
Many in the financial world covered this story as if they were vindicated. Popular contrarian economics new site Zero Hedge comically called the bikes ‘exercise bikes with an iPad glued on’.
While I’m sure you know there is a lot more to them than this, there are now a lot of rivals when it comes to interactive home workouts.
You might think from the sudden drop in both the share price and the price of the fitness equipment that Peloton stopped growing. Looking into the details, this was not the case. In fact, they grew, adding revenue and boosting their paid subscribers to a massive 874,000. Overall revenue is listed at $936.9 million – almost a billion dollars. When you consider this company only recently burst onto the scene, these are impressive figures.
What made the share price tank is forward projections. While hidden in financial speak, the message for me is that the Peloton bubble has burst.
The massive reduction in the headline price of their bikes confirmed some desperation. This is great news if you were thinking of buying one – though a big red flag for shareholders.
Home fitness solutions that include interactive live training are now available via the biggest fitness brands. What used to be a unique selling point has now been introduced by NordicTrack, Proform, Reebok and many others.
Using ‘iFit’ as an example, the scope of the interactive apps has grown. You now get vast libraries of training sessions, that work with different fitness levels / goals. You get social media interaction, Google Maps based workouts (choose your own or pick from selected highlights). Let’s not forget the next level stat tracking. The icing on the cake is that the trainers adjust your resistance / incline or stride length (depending on your equipment), varying your workouts.
For me, NordicTrack equipment is better made and has better tech than Peloton. You get a better machine for your money, and all the benefits of interactive training.
Exercise bikes with tablet holders have been around for years. Before the new wave of training apps, the idea was to watch your favourite TV show, or maybe use it to play music. These days, you can choose from training apps such as Zwift, KinoMap or Les Mills on Demand. Even the super-budget f-bikes have optional tablet holders.
What this lacks is the ability of the trainer to remotely adjust the peddling resistance. If you are prepared to do this yourself, and have an iPad already, then you can set something up for between £200 and £500 – a big difference from the £1,350 for the original Peloton. That is even without the ongoing subscription costs.
Jump into the £500+ price range and you can get brilliant app-compatible bikes. Examples include the SportsTech ESX500, which has quality German engineering and works with KinoMap.
Peloton have physical stores around the country. This adds a significant financial overhead – especially when you compare it to the likes of Reebok or JLL, who sell online. While the price reduction (and publicity) might boost sales in the short-term, Peloton will need to innovate to maintain their lead in the remote classes + high-end equipment space.
To end on a positive, If there is any company that are capable of doing this – it is Peloton.