For Peloton, 2022 has been a tough ride
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2022 has seen highs and lows for retail – an industry that has been uprooted during the COVID-19 pandemic and has seen e-commerce rise.
This year has seen a decrease in pandemic restrictions, showing that brick and mortar still holds power. Consumers are also returning to in-person gatherings, with data from market research firm Mintel in March showing that just 15% of users felt digital fitness platforms eliminated the need for in-person gyms. And 2022 has also brought a new set of challenges in the form of inflation as consumers shift their focus away from discretionary purchases.
These new trends are causing problems for home gym brand Peloton. The business flourished at the start of the pandemic, when consumers needed to exercise at home as gyms were forced to close. Some people even had a little extra cash to spend from stimulus checks, which helps a brand like Peloton that sells high-priced gear. This sent its stock price up – temporarily.
However, the recent economic shift has resulted in lower revenue, higher net losses and lower membership for Peloton. This expensive piece of equipment seems even more expensive for a consumer who cares about paying for his groceries. Faced with these facts, the company has attempted to grow its customer base, including moving away from its direct-to-consumer sales model. The company also changed its rates, appointed a new CEO and laid off workers throughout the year.
“Unfortunately for Peloton, the business reshuffle is taking place in a very competitive environment,” GlobalData chief executive Neil Saunders said in emailed comments earlier this year. “Big brands like Lululemon are more course and service oriented. And smaller upstarts like Tonal are also taking bites out of the market. In this environment, Peloton is going to have to work incredibly hard to stand out, especially now that the general market trends are not blowing in its favor.
Here’s a look at the growing number of changes the brand has made in 2022.