A steep incline ahead for Peloton
It seems that those who benefited from the pandemic celebrated before they reached the finish line and are now feeling the hangover. Companies like fitness unicorn, Peloton Interactive (NASDAQ: PTON), are losing their place in the race and desperately want to reposition themselves.
The company’s popularity increased while Covid cases soared throughout the pandemic. However, the less deadly new variants and more relaxed pandemic restrictions spell an uphill battle in maintaining that growth.
This has caused the brand to look for different ways to regain their position in the industry. One of those is the peculiar way they managed to put themselves in the mouths of others. I’m talking about the two missteps the company recently experienced. In both cases, the brand was linked to heart attacks suffered by characters in the sequel to HBO’s Sex and the City and SHOWTIME’s Billions series. It seems that Peloton would prefer being talked about rather than not being at all. After all, negative attention is still attention.
The above makes sense, as the brand may refuse to lose the ground it made in recent years. Peloton acknowledged decreasing demand for its products which has been its core revenue stream, but Peloton is not going to slow down. Tweaks to its strategy include increasing delivery fees while resizing its production by considering seasonal patterns that could guide sustainable production levels and growth. The company has been challenged in the past on these two fronts as, during the pandemic, it suffered from supply chain bottlenecks and overwhelming and unsustainable growth.
If you’re thinking that the race is about to be over for Peloton, I wouldn’t be too sure. In fact, it’s not the only company that’s feeling the brunt of the pandemic. The downturn it has suffered erased the ground gained during the pandemic, for the time being. What is certain is the pandemic’s ability to return when it’s least expected, bringing back confinements. Additionally, Peloton has shown that it is willing to do anything to maintain its unicorn status. That being said, the company is yet to play one of its cards, which is to implement its subscription service model in a better way, similar to how other streaming service giants have done to capture their market share.
Therefore, there is still a chance that the company will find a user base among those who cannot resist a membership, that would give them access to additional services and perks. If it succeeds, it can make a comeback all the way to the pole position. Hopefully, at a gradual, sustainable, and healthier pace this time.