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Four factors behind the success of digital fitness brand Peloton – Econsultancy

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on 07/11/2019
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To some, a Peloton bike might seem like nothing more than a regular indoor exercise bike with a tablet perched on the handlebars.

To its 500,000+ subscribers – it is a way of life.

Of course, you don’t have to be a Peloton fanatic to realise that the brand does actually offer more than just a way to exercise at home. Combining innovative hardware, connected technology, and online content – Peloton has grown massively since its launch in 2002. After reporting $915 million in total revenue for the year ending June 30th 2019, the brand raised $1.2 billion in its IPO this September.

So, what has contributed to Peloton’s path to success? Here’s more on the brand’s rise and the reasons behind it.

A connected fitness experience

If you’ve ever taken a spin class, you’ll be familiar with the torturous euphoria that comes along with it. It’s tough, sweaty, but can be oddly addictive. Peloton aims to bring this experience into people’s homes, affording both convenience and increased work-outs. The brand’s high-tech range of exercise bikes allow users to take a studio-led cycling class via live streaming technology.

According to the company, Peloton retains an average of 96% of its customers. This is highly impressive considering the ease with which most people ditch their gym memberships or stop going to spin classes in-person. Of course, it helps that Peloton is a real investment – it’s doubtful that anyone would splash out £1,990 (the UK retail starting price) and not at least try to use it consistently. However, the retention rates are also to do with Peloton’s user experience, which aims to deliver across the board.

As well as the hardware itself, Peloton owns the entire work-out experience. This extends to the classes, the instructors, and even the music that users cycle to.

Interestingly, some people have recently complained about a downgrade in the music Peloton uses. This comes after the brand was sued by members of the National Music Publishers Association (NMPA) for failing to obtain the correct license to use certain songs in exercise videos. This highlights the premium experience that people expect from digital fitness brands like Peloton, of which music is an integral part.

Peloton instructors are also key to the user experience, with users often establishing their favourites early on. On the back of their roles, instructors have also enjoyed their own unique sense of fame. The New York Times suggests that, “no brand is trying harder to make the connection between working out and glossy entertainment more explicit than Peloton.” Indeed, the fact that instructors create their classes alongside ‘producers’ – who help to plan, edit, and market the content – contributes to this correlation between fitness and entertainment.

Due to the virtual nature of classes, it’s easy to assume that there would be less of a connection between users and instructors than in real life. However, this connection can actually be heightened, as people feel like they are getting a one-to-one experience. Instructors are encouraged to break through the ‘fourth wall’ and speak directly to individuals at home, often shouting out the names of class leaders.

Building a community

The at-home aspect of Peloton could also result in a rather isolated fitness experience. However, the brand ensures that this is not the case due to the strong online community that surrounds it. This mostly stems from the competitive nature of classes, which include both a live and on-demand leadership board. There’s also monthly competitions and the ability to earn digital badges, plus the option to add, and video chat with, friends during classes.

Peloton’s virtual community not only allows users to connect and compete (regardless of the fact that they are home alone) but it also helps to ensure they continue doing so – and act as brand advocates at the same time. The brand strengthens this through live events, such as its annual ‘Home Rider Invasion’, which allows Peloton users to meet instructors in person as well as their fellow riders.

Naturally, much of Peloton’s social media centres around promoting and fostering its online community. User generated content makes up a large part of its Instagram content, while localised Facebook groups help to create and encourage discussion between members. Peloton also draws on the online influence of its instructors, with many having built huge Instagram followings due to the popularity of their classes.

Expanding the brand

For all its dedicated fans, Peloton has naturally generated criticism, mostly relating to its high-end price tag (and the type of consumer-driven lifestyle it may perpetuate). A Twitter thread mocking the brand’s latest ad highlights this – ‘I had my carpenter build a $9,000 finished wood riser for my Peloton bike in my glass-enclosed zen garden/home gym.’

However, the brand itself doesn’t take this kind of criticism too seriously. Peloton’s SVP and head of marketing even commented that she was “proud to see Peloton become a big enough brand that it is now part of the cultural conversation.”

As well as becoming more self-aware, perhaps this criticism is why Peloton has also started to promote its more inclusive side. For customers that want the full bike experience, Peloton offers financing options that stagger the cost to $39 a month – roughly the same as a monthly gym membership, or a bit more than a one-off boutique fitness class. As well as this, Peloton now offers a digital subscription that can be used without any exercise equipment. Subscribers can simply stream classes on any phone or tablet.

This has moved Peloton away from its ‘Apple of the fitness world’ reputation, and more into Netflix territory, whereby its main product is the content rather than the hardware. This might very well help to widen its customer-base, and appeal to Peloton users who want to work out while travelling. However, with a number of cheaper connected fitness brands popping up – as well as the rumours that rivals Equinox are set to launch streaming classes – Peloton still needs to work to sustain interest.

One way it is doing this is with expansion into other areas of fitness. Peloton has recently released ‘Tread’ – a connected treadmill in the same vein as the bike. Its Peloton Digital service also extends beyond cycling and running with yoga, bootcamp, and strength classes.

Brick-and-mortar for marketing

As well as releasing new hardware, Peloton is shrewd in how it attracts new customers, using its physical presence to allow people to try out its product. Peloton now has bikes in a large number of Westin hotels – an upscale chain owned by Marriott – as well as showrooms across the US as well as in Canada and the UK.

Its expansion into the UK has been a particularly big focus, with a reported £50m going into the launch of multiple showrooms in cities including London, Birmingham, and Manchester.

Why a digital world needs physical retail

Interestingly, Peloton’s physical presence is not necessarily for the benefit of existing customers, but more for the purpose of marketing and sales. Though the Peloton Studio near London’s Oxford Circus allows users to take part in filmed or live-streamed classes, the rest of the UK showrooms are mainly dedicated to test rides and tutorials. This allows potential customers to learn about and try out the Peloton before they invest – a vital step before making any luxury retail purchase.

It’s certainly not for everyone, but Peloton has succeeded in innovating the digital fitness industry, and has in turn given rise to multiple new brands (and imitators) in the space.

Now with continued expansion in terms of both place and product, Peloton’s efforts to stay number one appear strong.



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