Peleton’s Bad Business Model & Marketing

SUMMARY: Forget the fact that Peleton is being crucified on social media for their bad commercials. While Peloton has enjoyed a first-mover advantage, “the lack of differentiation of its bike has finally caught up to it as the competition is not only making virtually identical exercise bikes but ones that are both more affordable and functional,” Citron said in its report.

Second movers have created better bikes with features Peloton doesn’t offer, like swivel screens that allow for mat exercises, open platforms that allow users to watch TV or Netflix, and iPad attachments, the note said. Peloton’s hardware hasn’t changed meaningfully since 2014, Citron said.

“Peloton’s glory days of hardware sales are in the rear-view mirror,” Citron wrote, adding that Peloton “will inevitably compete with Amazon” and lower-priced alternatives if it wants to meet consensus expectations.


Was Peleton’s business model ever going to succeed?

A government study estimates that nearly 80 percent of adult Americans do not get the recommended amounts of exercise each week. In addition as many of 60% of people who buy exercise equipment stop using them.

Peleton’s business model was comprised of people continuing to pay for a video to compete against others and get inspiration. The costs range from $59.95 a month to $99.95 a year. That’s a lot of money for cash strapped millennials who are the most obese generation in history.

Then there are those pesky ads

Adweek’s Amy Vaughan said “Whether they meant to or not, Peloton has joined the ranks of those who are portraying a world very few of us wish to see reflected.

Right now, women are fighting for equal pay, being paid less but expected to do more at work and home. And then they need to ask to pay more for anything marketed to them.

Unless their husband buys it for them, that is. Problem solved, right Peloton? In a time of empowerment and equality, you’ve set us back about 50 years in the first two seconds.

People are also making fun of Peleton’s ads in social media in other ways as well. People joke that most of their ads are set in multimillion-dollar homes with expansive views of extraordinary vistas. They point out that most of the people in the commercials are in exceptional shape, and while it seems they’re involved in intense workouts, they miraculously hardly sweat. 

One has to wonder if their VP of marketing and ad agency are going to be held accountable. Competition has caught up to Peleton and they don’t know how to react. Their ads only reinforce the view that somebody in the chain doesn’t know what the hell they are doing.

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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