Could Microsoft, Marriott or Goop be a buyer for Peloton?
As Peloton's co-founder, John Foley, dismounts from the saddle, there is a strong case for the fitness bike brand that captured the imagination of the lockdown generation to get a new coach.
Facing a steep hill of losses, limited subscribers and a decimated workforce, the odds of a sale are climbing - and there are a number of brands already circling, ready to swoop in.
Both Amazon and Nike are rumored to be positioning themselves to make a play in the world of connected fitness. For some, Amazon seems like the strong fit; the e-commerce giant's sheer size has the capability to bring the bike to the mass market. For others, Nike's hold on the fitness world makes more sense; Nike's ethos is all about community and experiences, the former being something that has placed Peloton at the head of the race.
For me, neither spark real excitement. Peloton is a premium brand, from hardware to experience, so a glorified logistics network such as Amazon would do more harm than good. Yes, it would have access to Amazon's resources, but what makes Peloton desirable is its elite status - Amazon's broad appeal isn't that. And as for Nike, while the better of the two, it's too obvious a choice.
"Instead, Peloton should look off-road for a potential suitor. There are a number of brands that have the potential to form a union that could breathe new life into the brand, all while maintaining a sense of exclusivity and luxury."
— Nora Bradshaw, Head of Growth, Superunion North America
As the dawn of web3 arrives, the fitness experience is an exciting way of entering things like the metaverse. With Microsoft already making a big metaverse play, Peloton could be the next step in transforming how we see the metaverse entering our everyday lives.
Peloton already has the fundamentals down. It uses hardware and software to create a collaborative community experience. Couple that with headsets and VR, and you could find yourself biking through a virtual landscape, or creating an avatar for your virtual spin class.
Peloton is already a gamified and immersive experience, so with help from a giant such as Microsoft, it could bring a whole new generation of future-hungry riders into the studio.
Premium fitness and travel experience go hand-in-hand. At the height of the pandemic, Peloton placed bets on that very notion by acquiring Precor, a major provider of workout machines to gyms and hotels, and it even launched Peloton Hotel Finder on its website to allow travellers to continue their workout streaks when away from their living rooms.
A global luxury hotel brand such as Marriott, with epic chains such as St. Regis and W hotels in its portfolio across the globe, could not only keep existing owners happy on their holidays, it could attract other travelers to book as well with the intention of test driving something new - leveraging its luxury experience to inspire them to go home and purchase a bike.
There is already a lot of overlap and synergy between Peloton owners and Class Pass users. They're both subscription fitness experiences. They're also both premium-priced experiences aimed at millennials with cash in their pockets. The opportunity here is not about ownership though. It's really in the unfixed choice that Class Pass offers. Without needing to invest in a $2000 bike, users could rent one from Peloton and use Class Pass's credits model to purchase sessions to gain access to the platform.
Large luxury equipment that costs thousands of dollars isn't an easy sell right now, especially as people are craving the outdoors. Consumers want more choice, control, convenience and value, which subscription models allow. But to work well, it would also require loyalty - something Peloton has in abundance.
Peloton may not even need to be sold. If you've seen its investor slides, you'll know that a huge problem it has lies with those at the helm. Poor decision making and a lack of credibility are enough to maim any brand.
What it needs is an injection of wellness royalty to separate the bike from the business. Think Gwyneth Paltrow and her wellness brand Goop as an ambassador - a luxury lifestyle community that could arguably put Peloton's to shame.
Leading brands are more likely to use figureheads to champion the brand's vision and goals. Personality and presence help to build trust, not only with consumers but with shareholders too. Peloton has struggled with its public presence (remember its sexist ad?) so having a wellness visionary such as Gwyneth could bring in enough credibility to get the bike back on the road.
Peloton has got a lot right. It has also got a lot wrong. But it has a product that lives up to its values - creating an engaging experience that puts members first. That's what makes it special. Ultimately, it will be the brand that feels like it can't beat Peloton at this kind of magic that will win out and get the chance to kick it up a gear.
First published in The Drum.