Peloton Cuts Price of Tread, Row Machines Amid Shift Away From Hardware
The connected fitness giant is now relying on the magic of its content delivered through the Peloton app
As Peloton cycles away from its signature fitness hardware, the connected fitness brand announced it has lowered the price of its signature treadmill and rowing machines.
The new pricing means Peloton Tread is now $500 less ($2,995 from $3,495), and the Row is $200 less ($2,995 from $3,195.) Peloton’s all-access membership is separate.
The lowered pricing comes as Peloton has signaled the desire to be known for more than just high-end fitness hardware, opting instead to showcase its content.
Peloton recently introduced a gamified fitness experience to its treadmill with Lanebreak Tread, another way to pivot attention to its premium content while jumping on the gamified fitness trend. .
Peloton CEO Barry McCarthy has long believed that content is king for the connected fitness company.
The fitness brand also recognizes that its members and their desired fitness experiences have evolved away from cycling to engagement in areas such as strength training, yoga, meditation and other fitness activities. Additionally, Peloton’s latest marketing campaigns tend to target younger fitness consumers — those who may be more cost-conscious but are willing to use an app and subscribe at a cost for their fitness journey.
A recent report showed that Peloton’s app is the eighth most popular health and fitness app.
McCarthy has said he thinks of Peloton’s app as its own end game, wanting to expand the brand’s reach with its content and instructor-led experiences, and enable consumers to use Peloton’s content on competitive hardware. Regardless of what that means for the company, McCarthy made it clear that the company’s path to success is through the Peloton app.
“Maybe we’ll see the all-access subscription hardware business or maybe not, I don’t really care… the path to the promised land is the app, I think,” McCarthy told investors early this year. “At least, that’s how I conceptualize it, and that’s the opportunity we’re trying to pursue.”
The pivot may just prove fruitful. In the U.K., Peloton’s hardware sales have slowed, but its subscription revenue has increased 89% over the prior year, with Peloton adding new members and reporting low churn rates.
Peloton is also steadily focused on international growth, with plans to add new markets in Western Europe, which McCarthy said is enabled by the app relaunch.
Are Lower Prices Enough To Drive Demand?
While the reduced Tread price may interest potential Peloton consumers, some may not find a steep enough discount in the Row. Before Peloton officially debuted the connected rower, consumers seemed to snub the expected price tag.
As of now, the financial performance of the Row is also still unknown. During Q3’s earnings call, Peloton chief financial officer Liz Coddington said that the company isn’t explicitly sharing what the sales have been for the Row, stating that it’s still a newer product and that consumer awareness is still low despite favorable reviews.
“I think we have opportunities to work on that,” McCarthy has said of the Row’s awareness. “Frankly, we didn’t really know what to expect when we launched, but the combination of the favorable critical reviews and then the reception from our users has been quite good….it’s a new category for us.”
Peloton is expected to release its next earnings report August 24.
