Next Big Test of the Peloton: the return of the fitness studios

As the pandemic abates, people are returning to offices, restaurants, stores and gyms.

The latter could be a source of concern for a company that has benefited greatly from the blockages that have forced us to stay at home.

Peloton has seen its business explode for most of 2020 and into 2021 thanks in part to COVID-19 and the accompanying restrictions needed to protect against the virus.

For many, that meant finding an alternative to training. Home gyms have become all the buzz. And companies such as Peloton, Echelon, NordicTrack were more than happy to provide fitness equipment such as spinning bikes, treadmills, and just about any type of machine that could replicate the gym experience for you. your house.

One Peloton competitor who has been slow to switch to subscription models and the WFH craze was SoulCycle. His bike lagged behind the market, giving his main rival Peloton a significant head start.

But now that things are opening up, with gyms and fitness studios once again welcoming members in person, the dynamics are changing again.

In an interview with Yahoo Finance Live, SoulCycle CEO Evelyn Webster said people were coming back “en masse”.

According to the Yahoo article recapping the SoulCycle interview segment:

“The great thing about SoulCycle is [that] the community is our superpower, ”said Webster. “So [riders] really missed being with each other. Fortunately, as we open studio after studio, we celebrate and welcome our runners with us. And thank goodness they are coming back in droves, which has been great. “

Of course, we’d expect the CEO to be upbeat – and Webster took the job just six months ago – because that’s part of his responsibility for any decent PR campaign.

However, it will be interesting to see how things develop.

At one extreme, you have the outright experience of a gym or fitness studio. Here people come together and enjoy not only the availability of machines and halls and various training equipment, but also the social element – reinforced by high energy classes and instructors.

At the opposite extreme, you have the Peloton-type model at home. Members subscribe. And access lessons via tablet, bike, treadmill or similar device. All social interaction is virtual, à la Zoom.

Obviously, in reality, after the pandemic, we will land somewhere between the in-person model and the virtual model. I wonder to what degree? Will he ultimately favor one or the other, or will the market sort of split in two?

Either way, SoulCycle has a devious trick up its sleeve. Well, maybe not that sneaky. Unlike Peloton which only has a few live studios (the most famous, its headquarters in New York), SoulCycle has practice studios located across the country. These have proven to be incredibly popular and engender intense brand loyalty. Paired with his new home bike (powered by the Equinox + platform) and here you can see a powerful hybrid strategy unfolding. SoulCycle could potentially offer a unified membership that combines in-person access to the studios and its in-home content.

Peloton could counter this by potentially expanding its in-person studio network. But it seems to me at least that CEO John Foley is more interested in the corporate and travel fitness segments – bringing Peloton Bikes to those kinds of places that people frequent when they’re not at home. I suspect this is a higher margin business. In addition, it eliminates real estate risks.

Peloton therefore faces another obstacle: the return of the fitness studio.

It has been shown to adapt quickly before. This next chapter in the evolving home fitness war against fitness studios for market share should provide some interesting quarterback and chair analysis.

More info here: People returning to fitness studios “en masse”: CEO of SoulCycle (Yahoo Finance)

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