Peleton and Amazon have announced a new sales partnership this week. This is, of course, of greater benefit to Peloton, who is looking to broaden their customer base and win over its investors from slower pandemic revenue growth and consistent stock price slips.
This will be Peleton’s first venture outside of what has been a consistent core, direct-to-consumer business focus. And now, Peleton products will make available a suite of connected-fitness equipment and accessories through the online Amazon marketplace.
Peleton Chief Commercial Officer Kevin Cornils has intimated that Peleton products populate approximately half a million searches on Amazon every month, already. And this remains consistent even though the product is not available through the web retailer; at least, for now. This has led the company to redirect some of their focus, at least, on making Peleton products as accessible as possible; and Amazon is certainly one way to do that.
In a phone interview, Cornils said, “Post-Covid, the retail environment—online and in stores—is continuing to evolve, and that’s something that we’re trying to understand better to make sure the Peloton of the future is calibrated appropriately for that.”
At the same time, Peleton has had a bit of restructuring to do this year. It started after costs began to spiral out of control and losses seemed to continue mounting. Then, in February, CEO John Foley stepped down. That is when Peleton launched an $800 million restructuring plan and started testing a new equipment subscription model to help improve sales. They also strategized a means to simplify their supply chain.
The first product this project will bring to market is Peloton’s original Bike. Retailing for $1,445, this will help lead the charge and introduce Amazon’s subscriber base to their product line. This includes Peleton’s proprietary strength product—the Peleton Guide—which retails for $295. At the same time, Amazon will not offer Peleton’s mor expensive items like the Bike+ and the Tread, which are, of course, a stationary bike and a treadmill, respectively.
Shareholders must be crossing their fingers on this deal as Peleton share price is down 70 percent on the year so far; their market cap has fallen from $50 billion last year to just $3.7 billion, today.
