Tour de Force
Peloton is taking the fitness industry on a wild ride.
Peloton, the brand behind the revolutionary stationary exercise bike that delivers world-class instructor-led group spin and fitness classes to the comfort and convenience of one’s own home, has not merely taken the lead in the cycling circuit—it has unequivocally put a spin on the entire fitness industry.
“Peloton was founded on the principle that people want to work out, but many obstacles get in the way,” explains Peloton cofounder and chief operating officer, Tom Cortese. “It was a personal matter for our CEO, John Foley, and his wife, when they were no longer able to fit boutique-studio fitness classes into their busy schedules. Thus, the idea for Peloton was born,” he says. That idea being to bring studio-style, group fitness classes home so you can access the motivation, power, and intensity anywhere, anytime. He explains that the company has innovated the status quo of the fitness industry model by combining the best in hardware, software, and content to offer people a better way to work out, and at home.
Foley and Cortese, along with Yony Feng, Hisao Kushi, and Graham Stanton, all who had worked together at IAC/InterActiveCorp, founded Peloton in 2012; two years later, their New York City-based cycling studio and production hub launched simultaneously with the sale of the first Peloton bike. But Cortese says they never set out to be a stationary bike company. “Our vision is for the bike to be one of the many ways Peloton will deliver content to users.” It is this philosophy that has upended the fitness industry.
With a sleek four-by-two-foot footprint, the $1,995 bike features a carbon steel frame, nearly silent belt-drive, 22-inch high-definition, sweat-proof touchscreen, clip-in pedals, and speakers. Peloton’s $39-per-month subscription grants the coveted title of Peloton Member and provides access to 14 live classes per day, as well as a bank of more than 10,000 on-demand immersive workouts of varying length (five to 120 minutes), theme, type, difficulty, and instructor teaching style. An unlimited number of accounts for one household is included, and members can supplement their indoor cycling with Peloton’s Beyond the Ride collection of off-the-bike running, walking, cardio, strength, yoga, floor, boot camp, and outdoor workouts spanning the gamut from stretching to shadowboxing, planks to pushups.
“The average American spends $52 per month on fitness. Considering that your whole household can use the bike, if you have more than one person using Peloton a few times a week, the cost of the equipment and subscription quickly pays for itself,” Cortese justifies. “You’re getting the high quality experience of a boutique fitness class without the expense of losing half your day, making the accessibility and lack of compromise that Peloton offers well worth it.” Peloton bike owner Adrienne Figur has found her purchase to be a sound investment for precisely that reason. “It doesn’t pay to have a gym membership anymore. My Peloton more than offsets that cost, and I use it more than I did the gym because of the convenience factor.”
“Fitness is a $100 billion industry globally, so we were pretty confident that people would see the value and invest in a quality fitness experience that could cater to their lifestyle,” Cortese reveals. “And we were right; our sales more than doubled from 2016 to 2017.” They skyrocketed from $170 million to $400 million. Halfway through 2018, the company boasted a million members, which included US Peloton bike owners, Peloton digital subscribers across the US and Canada, commercial riders at the many hotels, clubs, and apartment buildings that have Peloton bikes, and those who take live classes at the Peloton cycling studio.
“I think Peloton is so well received because it solves a problem that affects everyone—time management,” Cortese asserts. “Bringing quality, world-class fitness programming into the home or on the road, Peloton is giving people the accessibility they need.” Figur, who travels weekly, emphatically agrees. “With Peloton, I am tied to my own availability, not the availability of classes, cancellations, etc.,” she affirms. “I also like that I can take classes from my iPad, which is helpful for Beyond the Ride workouts, if I want to do yoga in a hotel room, or strength in a hotel gym. I can work out whenever I have any blip of time—as little as 10 minutes or as long as I want.”
Pedaling its Own Path
“We don’t consider Peloton to have any direct competitors,” maintains Tom Cortese, Peloton cofounder and COO. “There are no comparable fitness experiences that offer [Peloton’s] breadth and depth of live and on-demand quality fitness content.” What’s helping keep Peloton ahead of the curve?
Guinness World Record: 10,000+ Peloton riders in a live class
$170 million in sales in 2016 soared to $400 million in 2017
1,000,000+ Peloton members as of June 2018
11,000+ classes on demand 24/7
Peloton Studios, New York (anticipated 2019): 35,000-square-foot, state-of-the-art flagship location with broadcast and production operations and studios that live stream hours of content daily
Peloton riders can monitor their live in-class metrics of cadence (speed), resistance, output (power in kilojoules), heart rate, and leaderboard position. Records are stored on the bike, enabling each cyclist to track their own progress and improvement over time. “By tapping into your personal achievements and creating connections with others across the leaderboard, it doesn’t feel like you’re doing a solo workout in your home,” Cortese reveals. “The leaderboard brings that full authenticity of a boutique fitness class to your workout, allowing you to track your progress versus other riders and your own personal record.”
The definition of a peloton—the main body of riders in a bicycle race—gave inspiration to the company’s namesake, with the belief that riders in a peloton work together, conserve energy, and perform better because of one another. This rings true for Peloton bike owner Lyndsie Viente, who works intensely to keep up with the virtual peloton during her rides at home. “The motivating, addictive part is always trying to do better on the leaderboard,” she admits. “I set a goal for myself at the start of the class and always try to beat that. It gets really fun when I am close to [besting] a personal record. In the gym working out on my own, I found myself just going through the motions because I needed to and enjoyed it, but no one was there pushing me. Now I find myself improving and pushing to be better.”
Peloton sought to increase its market share, having opened its Tread Studio in New York in May 2018, followed by a product line extension with the Peloton Tread that autumn. Constructed of a carbon steel frame with a shock-absorbing rubber slat-belt, it is designed for optimal comfort and stability to make for the smoothest, lowest-impact running experience on the market, Cortese claims. The $3,995 tread comes equipped with a heart-rate tracker, 32-inch high-definition, sweat-proof touchscreen, free-mode function, 20-watt sound bar, and speed and incline knobs. “The treadmill market is five times as big as the indoor cycling market,” Cortese declares. “Ever since announcing that Peloton Tread [was] available for pre-order, we [saw] great interest from both members and prospective members alike.” The tread’s $39-per-month subscription features more than 1,000 on-demand workouts and 10 live classes per day; however, members’ subscriptions cover access to the Peloton bike, tread, and digital content, so only one subscription fee applies for entrée to all three platforms.
Peloton widened its reach, expanding into the United Kingdom and Canada in 2018, selling direct-to-consumer via Peloton’s website as well as multiple Peloton retail locations throughout London, Toronto, and British Columbia. “We also plan to open a London-based studio that will stream live classes taught by European instructors to different time zones around the world,” Cortese shares.
Additionally, the brand launched Peloton Digital, an expanded Peloton iOS app, which streams live and on-demand classes directly to iPhones, iPads or Apple TVs via AirPlay, facilitating enthusiasts’ access to Peloton workouts anytime, anywhere.
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