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Peloton isn’t concerned about losing its momentum in 2021, despite gyms and smaller boutique fitness studios reopening as the world moves toward a post-pandemic future.
The fitness giant is riding high in the face of a series of recent setbacks, including a massive treadmill recall and supply chain issues that caused lengthy delivery delays throughout 2020. Last month, Peloton reported fiscal third quarter revenue of $1.26 billion, up 141% from the same period a year prior, an upward trajectory the company is prepared to continue.
According to Chief Financial Officer Jill Woodworth, Peloton has “solved the problem of getting around port congestion” and alleviated production woes. Peloton announced this week that delivery times have dropped to pre-pandemic levels of to 1 to 3 weeks, a pace achieved largely thanks to Peloton’s $100 million investment in expedited shipping.
Now, the company’s focus shifts to redesigning its recalled Tread+ that was tied to 38 injuries and one death, according to the US Consumer Product Safety Commission. It also intends to bring the lower-priced Peloton Tread model to market by the end of the year, while ramping up customer acquisition and new product development.
“Nothing has changed about our thesis,” Woodworth said, speaking at the Bank of America Merrill Lynch 2021 Global Technology Conference on Tuesday. “We believe that the future of fitness is home connected fitness. It’s a better experience and better location — which is even more relevant as our lives get busier coming out of COVID — and better value.”
Doubling down on marketing
After Peloton took a pandemic-induced hiatus from advertising, Woodworth said the company is looking to get in front of new users with a series of strategic marketing efforts.
“We started marketing again several weeks ago as our bike order delivery time frame went down,” she said. “We were off air for several months due to supply constraints. We’re really excited to get back to it. That was really the DNA of our company, we’re performance marketers.”
According to Woodworth, 80% of pre-pandemic Peloton customers were not in the market for exercise equipment before purchasing a bike or treadmill from the company. Even as investors begin to question the longevity of the at-home fitness boom, she said she’s confident Peloton will remain an attractive workout alternative for Americans.
“180 million people around the globe at least pre-pandemic belong to a gym, but we think it understates the opportunity,” Woodworth said. “Many people, we know from our members, were not comfortable or the gym didn’t work for them. They weren’t comfortable in the gym environment. And so we actually think the addressable market is a lot bigger.”
With Peloton’s supply chain issues now at bay, the company is continuing to ramp up production by steadily bringing operations in-house. Woodworth said this effort will be aided by the recent addition of Peloton’s first domestic factory in Ohio set to open in 2023 and the forthcoming use of Precor facilities to make its products, after the company acquired the fitness-equipment maker in December 2020.
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Source:: Business Insider