Peloton to sell fitness equipment, apparel on Amazon

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A logo of Peloton Interactive Inc. on an exercise bike at the company’s showroom in Dedham, Massachusetts, USA, on Wednesday, February 3, 2021.

Adam Glanzman | Bloomberg | Getty Images

Peloton has partnered with Amazon in an effort to broaden its customer base and regain investor confidence as revenue growth slows through pandemic highs and the stock price plummets.

In its first foray outside of its direct direct-to-consumer business, Peloton will offer a selection of its connected fitness equipment and accessories on Amazon’s US website starting Wednesday.

That includes the original bike, which retails for $1,445. It will also sell its power product known as Peloton Guide, which costs $295. Excluded from the tie-up are the more expensive Bike+ and Tread treadmill machines.

Peloton’s share rose about 8% in pre-market trading.

Kevin Cornils, Peloton’s chief commercial officer, said there are already about half a million searches on Amazon for Peloton’s products each month, despite the lack of presence on the site before Wednesday.

“Post-Covid the retail environment – ​​online and in stores – continues to evolve, and that’s something we’re trying to better understand to make sure the Peloton of the future is properly calibrated for that,” Cornils said in a phone call. interview.

“We want to make it as easy as possible to get a Peloton,” he added.

This marks Peloton’s first partnership with another retailer to sell its merchandise. Until now, the company relied on its website and physical showrooms and sold directly to consumers. But under CEO Barry McCarthy, who took over in February, Peloton has committed to expanding its distribution globally and cutting customer acquisition costs to return the company to profitability.

Peloton embarked on an $800 million restructuring plan when company founder John Foley stepped down as CEO in February as costs spiraled out of control and losses mounted. It has since been testing a subscription model for its equipment as another way to boost sales. Peloton has also abandoned all internal manufacturing to simplify the supply chain.

Earlier this month, the company announced additional cost-cutting measures, including more layoffs, store closures, price hikes and exiting its last-mile delivery business.

Peloton’s share price has fallen about 70% so far. The market cap has fallen to about $3.7 billion, from a high of $50 billion in early 2021.

The move to Amazon indicates that McCarthy, formerly of Netflix and Spotify, isn’t afraid to take risks to get the company back on its feet. McCarthy has also said that Peloton’s goal is to have 100 million members one day, a goal Foley has set by 2020. Peloton ended its last quarter with about 7 million members.

Testing the water

In addition to the Bike and Guide, Peloton will sell a selection of accessories on Amazon, including the branded cycling shoes, bike mat, weights, yoga blocks, water bottle and heart rate bracelet. Shoppers will also see an assortment of his branded clothing, including sports bras, leggings, shorts, tank tops, hats and sweatpants.

“This is a really good start for us, with a digital retailer, to test the waters,” explains Cornils.

Over time, it’s possible Peloton will adapt its range on Amazon as it learns what people are looking for, he said. It’s also possible Peloton will look to other retailers for similar deals to expand its reach, he added.

It might also make sense for Amazon and Peloton to consider making the fitness company’s live and on-demand workout content another perk for paying Amazon Prime customers. Cornils did not confirm whether this was a possibility.

Analysts speculate that Peloton is considering ways to broaden the distribution of its content under McCarthy, a content and subscription guru.

Shoppers purchasing a Peloton Bike from the Amazon site can select a self-assembly option instead of scheduling time with a professional to assemble it. The expert fitting option will be available for those who prefer it.

Cornils said it will be a learning experience for the company to see what customers prefer and how they react to a self-assembly option. This isn’t something Peloton has offered before, but it’s another way the company can cut costs.

Peloton’s support team will manage ongoing customer service requests related to repairs, maintenance requests, subscriptions and general questions, while Amazon’s customer service team will provide support for product purchases, delivery, installation and returns.

“Physical retail will always remain an important part of our strategy,” says Cornils. “This is more a reflection of us trying to match with the consumer.”

Peloton will report its fiscal fourth quarter results before the market opens on Thursday. Analysts expect the company to post a loss per share of 72 cents on revenue of $718.19 million, according to Refinitiv’s consensus.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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