As Peloton adds products, rivals flex their marketing muscles
Amid cooler temps, it’s time to break out the jeans—but after a summer of barbecues and work-from-home snacking, some consumers might be having a little trouble zipping up. Enter home fitness brands, which have been ramping up their marketing in an effort to attract exercise-eager loyalists at a time when few are visiting the gym. Even Peloton, which has been so popular during the pandemic that it dialed down its marketing, is introducing new lower-priced products for more mass appeal.
While last year Peloton was the only marketer breaking ads between May and September, this summer has seen the likes of Bowflex, NordicTrack and Mirror—the home fitness startup recently acquired by Lululemon—as well as Peloton run new TV ads, according to Ace Metrix, which tracks advertising.
“The pandemic created opportunities for people to try out these products,” says Jake Matthews, a senior intelligence analyst at CB Insights. “I don’t think these at-home fitness products are going to wipe the gym off the earth, but they will play a larger role in the fitness ecosystem and they will certainly start to take market share away from traditional gyms.”
In a recent report, CB Insights highlighted the investor attention that digital and at-home wellness solutions are receiving amid coronavirus lockdowns.
While many gyms across the country have reopened—and the International Health, Racquet & Sportsclub Association recently ran a report that found only 0.0023 percent of positive cases from 49.4 million health club visits—consumers are still leery of working out in a shared indoor setting until a COVID-19 vaccine exists. In addition, some consumers might have already reinvested the funds that would normally go into a monthly gym membership into a home fitness product.
Such products are typically prohibitively expensive—Peloton’s original bike exceeded $2,000—but are easier to justify without a monthly health club fee as well.
“Moving forward these companies are going to take greater share of the fitness market,” says Matthews, noting an opportunity for connected fitness players to use data to create a personalized fitness program for users. “You’ll start to see a lot of these companies like Peloton or Mirror build products that are more affordable.”
Lower prices, more products
Indeed, with more competitors on the market, home product prices are getting lower. Earlier this week, Peloton said its original stationary bike will sell for $1,895; the company announced a lower-priced treadmill product, selling for $2,495, a steep decline from the $4,295 cost of its original treadmill, will arrive early next year. The New York-based brand, which saw revenue grow 66 percent to $524.6 million in its most recent quarter, reports earnings Thursday afternoon. While it has been doing less advertising than usual, the brand switched up its marketing structure last month with the hire of Carbon Chief Marketing Officer Dara Treseder to lead brand marketing and the promotion of Karina Kogan to head product marketing.
Meanwhile, many rivals have introduced similar stationary bikes. Bowflex, which late last year ran ads featuring real people, in contrast to Peloton’s unrealistic holiday campaign, is marketing a new indoor cycling product—the VeloCore bike, which leans and wobbles as it would on a real road, but without tipping over. In late August, Bowflex debuted two new spots highlighting the product. In one, window-peeping neighbors are drawn to the turns and twists of the Bowflex bike. In another, a voiceover highlights the benefits of the VeloCore: “Get less stationary, more bike.”
Lululemon is also ramping up the marketing of Mirror, which the Canadian fitness retailer bought in July for $500 million, as executives try to introduce the four-year-old offering to new customers. On an earnings call with analysts earlier this week, Lululemon Chief Executive Calvin McDonald said the brand is on track to offer the Mirror product, a display screen that streams classes to users, in 10 to 15 retail stores in the fourth quarter. He noted that Lululemon will increase its marketing and advertising spend in the second half of the year for Mirror to gain traction during the holiday season and into 2021.
Already, the product is proving fruitful for Lululemon: Executives said Mirror will generate $150 million in revenue this year, 50 percent more than initially expected.
“We made the strategic decision to increase marketing spend for Mirror in the second half to take advantage of current trends towards spending from home and capitalize on the opportunity to drive business during the holiday season and into next year,” said Meghan Frank, senior VP of financial planning and analysis at Lululemon.
Familiar branding and a lawsuit
One fitness brand aiming to steal market share from Peloton bears a striking visual similarity to the popular company already. Chattanooga, Tenn.-based Echelon Fitness also sells smart bikes for the home. Echelon’s red and black branding, as well as its sans serif geometric typeface, is likely familiar to customers, even though its lower prices might not be. Late last year, Peloton sued Echelon, alleging a copycat product. A Peloton spokeswoman could not comment about the status of the lawsuit. For its part, Echelon says it has countersued Peloton for false advertising and asserts that Peloton’s patents will be judged invalid by the court.
Echelon bikes retail for as little as $840, less than half of a Peloton bike. Next month, Echelon plans to begin selling a new stationary bike, rowing machine and its first treadmill, according to a spokeswoman, who noted that sales are up 600 percent so far this year over last year. Echelon, which is growing a retail partnership with Dick’s Sporting Goods, has also staffed up its marketing department with the recent hires of a CMO, chief content officer, and three new sales and marketing executives.
While many fitness brands are investing in marketing to spread awareness, their products have built-in promotions already. Several Peloton users, for example, post about their home workouts on social media, effectively doing the advertising for the brand. Peloton executives have spoken about such loyalist assistance on calls in the past.
Given the surge that these companies are experiencing, it reduces the need to create broad-based awareness,” says Matthews. “There are so many community elements tied into the product that helps facilitate word of mouth awareness.”