Revision as of 05:50, 25 January 2022

Peloton

Peloton Interactive is an online exercise equipment company based out of the United States. Created in 2012, the company combines technology with its stationary workout equipment, ranging in products from a bike to a treadmill, to provide an at-home boutique fitness experience. Peloton’s main goal is to offer flexibility and accessibility in its workouts through live and recorded classes, and various types of workouts beyond its stationary gym equipment such as boxing, cardio, and pilates.

About

There are currently 2.33 million Peloton subscribers worldwide and since becoming a global brand, Peloton has expanded into Canada, Germany, and the United Kingdom. Almost half of Peloton’s user demographic is between the ages of 25 and 35 years old, with the second largest age group being older than 35 years old. Around 60% of Peloton’s users have a household income between $50,000 and $150,000, which has led to some concerns about wealth disparity within the fitness industry, made more evident by the coronavirus pandemic.

With the shift to virtual environments, Peloton grew in popularity as many users were unable to access gyms and in-person workout classes due to worldwide lockdown restrictions. As of 2021, the company reached $4.02 billion in annual revenue, especially after seeing a sharp increase in growth during the coronavirus quarantine.

History

Initial Beginnings

Peloton Interactive was established in 2012 by former Barnes & Noble e-commerce executive, John Foley. Feeling a sharp discord between his instructor-led workout classes and his own self-led workouts, Foley wanted to find a solution that could allow for workouts from the comfort of his home, while still being motivated and led by an instructor. Throughout this first year, Foley created a team and went through the Series A phase of venture capital funding to secure $3.5 million along with $400K initial seed.

First Peloton Prototype

In 2013, the first prototype bike was created. This bike model was used to make Peloton’s first Kickstarter video, helping them to not only achieve more brand awareness, but raise $307,000 to continue building Peloton.

Growth from Funding

In April 2014, Peloton received $10.5 million in Series B phase of venture capital financing. With this money, Peloton improved its initial bicycle model to become ready for actual consumer use. After being put into production and slowly selling, Peloton opened its first studio in New York City neighborhood, Chelsea, where Peloton instructors could record their workout classes for users. While greatly expanding, the production cycle to bring bikes into users’ homes proved to be slower than expected.

In 2015, Peloton raised $30 million in a Series C funding phase. This allowed the company to expand into physical retail locations, as well as speed up the bike’s production. As demand picked up, the company hired a delivery service to personally ensure the Peloton bikes were quickly, efficiently, and successfully brought into consumers’ homes. As 2015 came to a close, Peloton secured another $75 million in funding, allowing the company to focus on expanding its software engineering team.

Products

All-Access Membership

Along with purchasing the at-home gym equipment, users have the ability to buy All-Access Membership. This membership is priced at $39/month and gives users unlimited access to live and recorded classes, leaderboard statistics, and real-time performance metrics. Without purchasing the membership, users can still use their Bike or Tread but have no access to on-demand content and metrics. The cost of this membership has been a source of contention, as some claim it has only exacerbated the wealth disparity within the fitness community.

Bike

The bike was first prototyped in 2013 on Kickstarter, with a price tag of $1,500. For its actual consumer release, the bike was priced at $2,245. The bike features a resistance knob for manual control and a large 21.5” sweat-resistant, swiveling HD touchscreen in which users can access hundreds of Peloton classes. With the release of the Bike+, the Bike was repriced to $1,495.

Bike+

On September 19, 2020, the Bike+ was debuted and made available for purchase in the United States, Germany, Canada, and the United Kingdom. Priced at $2,495, it features a completely rotating HD touchscreen measuring 23.8” and a resistance knob for manual control or an auto-resistance option to follow along with instructors.

Tread

Between November 2020 and March 2021, the Peloton Tread was sold through invitation-only releases and Peloton showrooms. This new tread was priced at $2,495. The Tread was built to give users more total body workouts, with features such as intuitive speed, incline control knobs, and jump buttons to simulate the running experience. In addition to these features, it also has a 23.8” touchscreen with speakers, a small frame so as not to interfere with one’s living space, and a 59” belt.

On May 5, 2021, the U.S. Consumer Product Safety Commission (CPSC) and Peloton announced two recalls for the Tread+ and Tread.

Tread+

On the market since 2018 and until April 2021, the Tread+ was the premium version of the Tread, available for purchase online and in Peloton showrooms. The Tread+ was priced at $4,295 and featured a shock-absorbing slat belt to lessen joint impact, 32” touchscreen, and a “Free Mode” button which turns off the Tread+ motor to allow one to run freely on their own.

Features

Leaderboard

Live Class

Recorded Classes

Facetime during class

Peloton App

Cardio

Boxing

Pilates

Strength

Ethical Concerns

Privacy

Encouraging Exercise Addictions

Wealth Disparity

Tread+ Recall

On May 5, 2021, the U.S. Consumer Product Safety Commission (CPSC) and Peloton announced two recalls for the Tread+ and Tread.

The Tread was specifically recalled for the problem of its touchscreen detaching and falling, which posed a big risk for consumers. At the time of its recall, Peloton had received eighteen reports of the screen loosening and six reports of it detaching and falling. While there were no major injuries from this issue in the United States, users in Canada and the United Kingdom faced minor injuries such as bruises and abrasions. Consumers who possessed the Tread were advised to immediately halt use of it and either return it for a refund or a repair.

On August 24, 2021, Peloton announced that the Tread would be coming back with more integrated safety features than before. These new safety features include the Tread lock in which users must enter a four-digit passcode to unlock the product before every use and a safety key to come to a quick stop during the workout, if necessary.

The Tread+ was specifically recalled for being tied to the death of a six-year-old child who was pulled under the treadmill’s slats. Along with this death, Peloton also received 72 reports of adults, children, and pets being pulled under the treadmill, as well. Children were involved in 29 of these reports, and many of their injuries included broken bones, second- and third-degree abrasions, and lacerations.

The company faced backlash during this recall, as Peloton initially refused to cooperate with CPSC for weeks. After a child’s death from the Tread+ in March 2021, Peloton did not want to provide federal safety regulators with the identity of the child, due to privacy concerns. This refusal to share information about the child led to a delay in the safety investigation by the Consumer Product Safety Commission, as the agency had to be issued an administrative subpoena to receive this information.

After Peloton refused CPSC’s request for a recall, the agency issued a statement encouraging consumers to immediately stop using the product. In response to this, Peloton stated these claims were “inaccurate and misleading.” Many consumers were upset with this decision to continue selling the product and the response to CPSC’s concerns. After this backlash, Peloton agreed to cooperate with CPSC and recall its Tread+ and Tread. Despite this recall, many users were upset by the handling of this issue. Senator Richard Blumenthal, who chairs the senate subcommittee that oversees the CPSC, released a statement after the recall, saying “This recall is the right step – though dangerously delayed.” When the fight between CPSC and Peloton first surfaced in April 2021, Peloton’s stock went down 7%, and after the announcement of the recall, stock prices fell another 14%.

While the Tread is being sold again with new safety features as of August 2021, the Tread+ is still not for sale.