Peloton Rebrands: Now For Everyone With App And Tiers

Peloton's holiday commercial from 2019 showed a husband giving his wife a stationary bike. It got a lot of criticism for being sexist, making people feel like hostages, and a dystopian vibe.

People got mad at the commercial's white, rich family. They thought it was bad for many reasons, like how it shows gender and body issues.

The issue went away, but people still talked about it. The ad made Peloton known as a fancy bike company for rich folks.

The company wants to change how people see them. They are prepared to do this now.

Peloton is launching a new marketing campaign. The campaign says that Peloton is for everyone. This means that age, fitness level, income, and equipment don't matter.

The boss, Barry McCarthy, wants to change Peloton. He wants it to care about the app and subscriptions, not just hardware. He became CEO one year ago. Now he is relaunching the brand.

McCarthy took over from Foley in Feb 2022. The company has been defending itself since then. McCarthy has previously worked at Netflix and Spotify.

The company lowered costs, fixed recalls, and found new ways to make money. People started buying fewer connected fitness products, so the company had to be careful with its spending.

Although the company still isn't profitable, it has stopped losing money. Peloton has a new marketing leader and is ready to reintroduce itself. They want to change how people perceive them after their holiday ad caused controversy.

Peloton's CMO Leslie Berland said that how people see them is not who they truly are. She joined the company in January and was in charge of the relaunch. Berland shared with CNBC that Peloton was once a home-bike company. But now, it has grown bigger and broader over the years.

Peloton App Takes Center Stage

The app has relaunched. It has a new strategy with different tiers. The first tier is free and doesn't require a credit card. The other tiers cost $12.99 and $24 each month.

People's access to content is based on their level, and some old users will have less access after December. At present, people who pay $12.99 monthly can do a bike class daily, but soon they can only do three per month.

The new version has a "Gym" feature. Users can use the app at the gym. They can customize their workouts. The feature is called Peloton.

Peloton is changing its colors. Instead of red and black, they're using purple, pink, green, and a lighter red. The new colors represent the energy of a workout and the afterglow.

Peloton showed a 90-second video on CNBC. The video focused on their app. People of all kinds use it to exercise at home or in gyms. Gym business has been tough for Peloton.

In the Peloton video, they show their Bike, Tread and Row machines. But it takes 30 seconds to see the hardware.

Peloton used to advertise fit athletes using the equipment, but the new message is different.

Peloton's co-founder and chief product officer, Tom Cortese, said in an interview with CNBC that the company is considering the idea that not everyone will purchase their premium hardware. The company is acknowledging that many people have phones and are considering adapting their app to work on someone else's hardware or in someone else's gym.

Peloton wants to sell more subscriptions but still cares about hardware. They are doing both things at once. They are advertising the app because not many people know about it, only 4%, according to their research.

Peloton's chief content officer Jennifer Cotter said that when Covid started easing, the press was hard on Peloton, but they knew their members continued using their products in the gym.

Peloton's strength training content is the most popular type of class for digital members. This is even more popular than cycling or running classes. Among those with Peloton hardware, strength training is the second most popular type of class. Users really like Peloton content that's not related to its equipment.

"We're excited for this initiative. Our members will feel included and new members will feel welcome," says Cotter. "The tiered structure helps us introduce Peloton to more people."

Briana Deserio, who is 32 years old, joined Peloton in the early days of the pandemic. Her reason for buying the Bike originally was because she liked the brand's competitive and aspirational appeal.

She agrees with the new marketing plan to be more inclusive. However, she worries that this may make Peloton less unique.

Deserio said it's like a club. People are joining the club.

Peloton's new head of marketing, Berland, isn't worried about the company losing its power. The marketing plan aligns with what the company already stands for.

The company's members, instructors, classes, and content hasn't changed. The company itself has evolved into all of these things, according to Berland. Berland thinks it's time for the brand and marketing to reflect the company's vibrancy.

Peloton's CFO, Liz Coddington, thinks that making various ways to access the content will help the company grow in the future.

Coddington said they will expand Peloton's reach to new people. These people didn't consider Peloton before because Peloton didn't talk to them.

The aim is to get more people using Peloton in any way they choose. They will then be supported on their journey as they consume our content over time. They can access Peloton for free, or choose a lower or higher tier. They may eventually buy or rent our hardware. This is all said by a spokesperson for Peloton.

The business did not include possible benefits from the app and marketing plan in their finances. They also predicted that some paying app members might switch to the free option.

Churn rates spiked before when Peloton changed prices. However, it went back to normal after a while, according to her.

Coddington said, "We feel positive." However, the certainty is not there yet. We need to wait and see.