Remember that craze for those pricey Peloton bikes? And those catchy TV commercials? People were scrambling to get their products, and they couldn’t ship fast enough—especially at the height of the pandemic. It reminded me that timing is everything. Whether it’s stationary exercise bikes, snazzy new cell phones or the latest in waterproof flooring, being able to beat others to the market is usually a winning strategy. At the time, it certainly seemed like a hit for Peloton.
Then the U.S. Consumer Product Safety Commission issued an urgent warning about the Peloton Tread+ back in April, urging users with small children or pets at home to stop using the product immediately. The CPSC said kids could become entrapped, pinned and pulled under the rear roller of the equipment. Scary.
Next thing you know, the stock is in the toilet, production temporarily halted. Of course, it doesn’t help that Chris Noth, playing the fictional role of “Mr. Big,” (spoiler alert) had a sudden heart attack and died after riding his Peloton in the new “Sex And The City” reboot. I remember hearing this and thinking, how unlucky can a company get? Or…as P.T. Barnum famously said, “There’s no such thing as bad publicity.”
So, what’s happening? Peloton has been saying the slowdown is because they are asking customers to pay an additional $250 for delivery and an additional $350 for its Tread+ beginning Jan. 31. Peloton said this increase in price was the cause for the slowdown. (Did Peloton ask why the customer bought the product in the first place?)
Marketing wisdom dictates that consumers buy products for their reasons, not ours. Here are some assumptions I believe Peloton made:
- Not being able to go the gym is the reason alone to build a product that could substitute for the gym.
- Higher-end customers are less fickle and more predictable. They have money, and this is an impressive product.
Many might say this is a good marketing strategy. You know, “Strike while the iron is hot, and timing is everything.” Being a student fascinated by marketing, I think it’s possible that Peloton missed another critical piece. Had they thought about it, they might have gone for a lower end of the market or not stocked up on a warehouse of these expensive toys.
Early in the pandemic, Peloton produced a product that helped their customer connect to other humans. If they had done some market research about consumer preferences, they would have realized that their product might be short lived. The pandemic has forced retailers and manufacturers to try to get closer to the consumer—to better understand her wants and during the purchasing journey. Perhaps the better question Peloton might have asked is, “If you get the chance, would you prefer to stay home on your Peloton or head back to the gym?” The answer seems obvious to me.
The takeaway we should all glean from Peloton’s experience is to remember that when it comes to creating marketing strategies designed to generate more consumers, it’s important to look beyond the short term and past the current fad or trend. Market research is a powerful tool; it takes time and money, but in the long run it can head off costly mistakes.
Lisbeth Calandrino has been promoting retail strategies for the last 20 years. To have her speak at your business or to schedule a consultation, contact her at firstname.lastname@example.org.