What Caused Peloton to Crash?

Peloton Shares are Down 85% from their Peak

Peloton shares have crashed 85% from their peak. Until recently, their bikes and treadmills with connected live trainers were the must-have fitness equipment.

There are four key reasons for this sudden fall from grace. They cover:

• The availability of better value alternatives
• Unique aspects of Peloton buyers
• Higher overheads (especially shops)
• Peak work from home has passed

Peloton Crash: A Big Choice of Alternatives

When Peloton released their bike and training system it was a brand-new concept. These days, there are rival live trainer systems. If you are really on a budget a bike with an iPad / Tablet holder and a simple Google Maps connected app works from 10% of the price. In the mid-range there are big brands with live training.

NordicTrack and Proform are a great example.

They both connect to ‘iFit.’ This works with bikes, treadmills, rowers, and cross-trainers.

When you compare it to Peloton, the list is uncannily similar: You get trainer-led workouts, a huge library of training videos, maps, and scenery, tracking and social media functions. Like Peloton, the trainers can remotely control your fitness equipment. Adding speed, resistance, or incline to everyone at the same time.

What is different about NordicTrack is the price of the machines.

Instead of £2000+, their bikes start at £500. For £1000 you can get an amazing treadmill, bike or rower that will last you for years.

Peloton Alternatives on a Budget

The cheapest possible setup costs less than £150. This would involve a folding exercise bike (the UltraSport f-bikes for example), with a tablet holder and an app life Zwift or KinoMap. You could even use YouTube for a completely free workout.

Keep in mind that the resistance of your ride can’t be changed automatically. You can access scenic routes or try a pre-recorded training session.

If your budget is bigger, then studio style bikes (which look similar) can be yours in the £300 to £500 range. JLL are a British brand producing some excellent machines. I would also check out SportsTech. This is a German brand, quickly getting a reputation for the quality of their engineering.

What Makes Peloton Buyers Different?

I think Peloton buyers and your general fitness fans are subtly different. Of my own friends and family, the announcement of buying one (and there is always an announcement) raised an eyebrow.

These were not the kind of people who regularly worked out at all. They wanted to. In fact, the bikes were bought with the intention of turning over a brand-new leaf. It worked for a while too. The difference is that these buyers were the people that identified as ‘the kind of person who owns a Peloton’ and not the kind of person who takes health and fitness seriously.

If you know anything about habits, the rest is easy to guess…

Did High Overheads Cause the Peloton Crash?

Most fitness brands go direct to consumer. The model of dedicated shops in good locations is expensive to maintain. Rent, staffing and bills all need to be factored in. Add a high-profile advertising campaign, and celebrity endorsements.

How much of the price of the machines was taken up with this kind of overhead?

Compare this with Sole Fitness or Reebok. Their distribution model is lean – with both direct to buyer and third-party retail options.

Peak Work from Home Has Passed

Lockdowns are now coming to an end around the world. With this, the old more social ways to keep fit are reopening. Anyone that loves working from home and is able to continue this will do. A lot of people are happy to go back to their offices.

The surge in purchases driven by the lockdown is over. If anyone based their predictions of future growth on this, well, it will be obvious this was a mistake in hindsight.

Wrapping Up: The NordicTrack S15i Studio Cycle with iFit: A Peloton Replacement for Real Fitness Fans

NordicTrack have been making top-level fitness equipment for decades. You’ll find their machines in commercial gyms, and increasingly in homes.

The S15i gives you an amazing machine, live training via iFit on the integrated 14” monitor and up to 20% incline matching resistance. You get this for a lot less than a Peloton (even without the sale prices) when you compare the specs.

Sure, you don’t get the ‘brand’ to brag about on social media – this bike is all about getting fit, with engaging training and all the best tech. I know which option I prefer!

My see my detailed review of the NordicTrack S15i here.

Better still, check out the full impressive picture gallery now, on this page over at www.nordictrack.co.uk

One quick disclaimer to end. This page covers my thoughts on fitness and the commercial environment. It is my humble opinion only, and not investment advice!