Peloton is planning to relaunch its brand as the struggling fitness company works to shed its old image, but the process will run alongside a new recall involving more than 2.1 million potentially faulty original Bikes. Relaunch plans include a new tiered subscription model, as well as efforts to inform shoppers that it does other things than sell exercise bikes, according to a letter to investors.
The company has yet to release details on the new subscription pricing structure, but it has revealed the intent behind the change — rather than take a one-size-fits-all approach, Peloton will now offer options that will enable customers to choose the level of benefits and cost that best suits their needs.
“The way to think about it is that [the tiers] aren’t all going to offer the same offering to consumers,” said Liz Coddington, CFO at Peloton during a call with investors. “So for example, what we offer for Connected Fitness is all of our content on our hardware along with access to the app. The different app tiers will have different amounts of content experiences available to you at different price points. So that’s how we’re protecting the all-access membership in that regard.” Peloton will have its work cut out for it as it looks to spread awareness of its other fitness options. The Row rowing machine only has 4% unaided brand awareness, while its Guide camera sits at 1% and the Peloton app is at 5%, according to CEO Barry McCarthy. “I think we have opportunities to improve all of those significantly,” he said on the investor call.
“Let’s take the app by way of example,” McCarthy continued. “Even before we invested in making it better, the net promoter ccore is 20% higher than our next highest-rated product, which is Bike Plus, which has been quite successful for us — but only 5% of people even know it exists, which makes it 10 times lower than Bike. So there’s lots of opportunity for us to lean into that.”
These efforts could help the retailer turn its fortunes around after facing serious challenges in the past year, including the departures of its co-founders and SVP of Marketing, Communications and Membership. They will also need to help the business overcome the potential negative press generated by its latest recall, which affects original Bikes sold from January 2018 to May 2023 in the U.S.
The U.S. Consumer Product Safety Commission and Peloton have identified 35 reports of seat posts breaking on the units sold during this period, and Peloton is offering free, updated seat posts to all who purchased a Bike during the affected period. The replacement can be made at home and doesn’t require a service call.
While the recall is relatively minor, its comes just one year after Peloton recalled all Tread and Tread+ treadmills following the death of one child and reports of more than 70 injuries. The brand also has wrestled with the fallout from two separate portrayals of fictional characters suffering from heart attacks on its equipment. Clearly the upcoming relaunch will need to improve trust as well as expand awareness for Peloton to reclaim its former halo.