Peloton Looks Beyond the Bike With New Wellness Strategy
Peloton is retooling its playbook with personalized plans, mindfulness content and real-life events, but will the pivot pay off?
Peloton is moving beyond cardio as it pushes to become a full-spectrum wellness ecosystem, with plans to expand its offerings in strength training, mindfulness, sleep and recovery to broaden its appeal. Also on the roadmap: tripling the number of real-life events over the next year.
The connected fitness giant reported $624 million in revenue for the third quarter, a 13% drop from a year earlier. Revenue from Connected Fitness products fell 27% to $205 million, while subscription revenue declined 4% to $419 million. The company ended the quarter with 2.9 million paid fitness subscribers, down 6% from the prior year.
“The mix of member engagement in these categories is increasing, so we’re responding by creating even more experiences to serve these needs,” Peloton CEO Peter Stern noted in his Q3 letter to shareholders.
Peloton added kettlebell training programs to its Strength+ app and by the end of Q3, nearly 70,000 members had completed a kettlebell workout. Meditation engagement also saw an uptick, with class participation rising 7% during Q3. Meanwhile, time spent in sleep and recovery content climbed 2%. Peloton also leaned into personalization with the January launch of AI-powered workout plans (dubbed Personalized Plans) tailored to individual goals and preferences. The new offering saw nearly 500,000 members starting a Personalized Plan in Q3.
Peloton leadership highlighted the value of its membership when compared to brick-and-mortar fitness operators and noted the fitness industry’s historical stability during economic downturns.
“I think it’s worth pointing out that if you look at the price of our all-access membership, which provides access to a huge library of classes and more than 50 expert instructors at a price of $44 a month in the U.S., that’s lower than many monthly gym memberships and also lower than the prices of individual classes at some boutique fitness studios,” Peloton CFO Liz Coddington said on Thursday’s earnings call. “As you think about the broader fitness industry as it relates to macro, we took a look at historical GDP data related to the broader fitness industry and it shows that the fitness industry has been quite resilient during periods of economic uncertainty.”
Although steadfast in positioning itself as an alternative to traditional gyms, Peloton identifies both gyms and hotels as important channels to extend its reach beyond the home – an effort already well underway.
In addition to a new collection of on-demand workouts available for guests at 2,400 Hilton hotels, Peloton launched a pilot program with Precor to bring instructor-led tread classes and has enlisted Precor to provide installation and maintenance support for Peloton equipment in commercial gym settings. The connected fitness company also highlighted its new Peloton-branded workout space at the University of Texas at Austin, which opened in February, reaching nearly 1,000 first-time Peloton users so far.