Peloton has gone all-in on their new executive leadership—and they are making significant changes to their stationary bike business model. Today they announced testing a pricing strategy that pivots the core foundation of their company: rental packages. That means consumers can access bundled subscriptions between $60-$100, including both the bike and classes. So what does that mean for the iconic, high-priced workout bike brand?
A serious shift to consumer usership from ownership.
It comes down to a demand for ultimate flexibility in the fitness and wellness space. Consumers expect high-quality digital workout options and easy-to-access interfaces. They want pricing models that feel accurate and competitive (and sometimes paying for a $1,500 bike plus delivery and a digital membership just doesn’t cut it). They don’t want to find excuses to deprioritize their wellness—or barriers to prevent their workouts and wellbeing.
In a COVID-adapted environment, there has been a forever shift to connected fitness. Yes, consumers crave the four walls of your studio, but whether we want to admit it or not, they found a way to find fitness in the comfort of their own home when studio doors were closed. And that is something, as business owners, we can’t reverse. We can only evolve and equip ourselves with the best tools and tech to support this need for budget-friendly, premium fitness that offers freedom and flexibility to fit their lifestyle.
When I co-founded Walla at the beginning of 2020, I saw firsthand how studios were at the precipice of pivoting their business models in hopes of keeping and converting clients as we navigated a never-before-seen fitness and wellness landscape. While many studios touched video on demand and virtual classes, the likelihood of confidence in their software provider was slim at best. Watching mega-brands like Peloton (one of the biggest pandemic success stories) lay off a large percentage of staff and gamble all their chips on this rental model reflects how volatile consumer demand can be.
I knew we had to build a modern, intuitive, digitally-driven platform that could adapt to consumer expectations while supporting ever-evolving studio retention and revenue strategies. We had to execute a customizable, mobile-friendly software that would empower both the consumer and studio owner to make educated decisions, further capitalizing on this monumental usership versus ownership mentality.
A dynamic pricing model built for profit: Peloton’s new strategy speaks directly to this. It understands the shift from consumers paying to own something towards paying to use something. It’s about flexibility and independence in the consumer journey. That’s where credits come in. As a top feature in Walla, credits directly address a consumer's perceived view of class value (on-demand virtual classes vs. in-person using all the equipment)—while maximizing studio profit. They aren’t a revolutionary idea but rather a much-needed solution to help studios fill empty spots and accurately price and sell classes because, let’s face it, a one-size-fits-all pricing model just doesn’t work anymore. From practicing yoga six feet apart to exercising from an online, on-demand library and successfully executing hybrid class plans, credits enable you to not only address evolving client safety concerns but give them a choice of how and where they want to get their movement on. And since hybrid fitness isn’t going anywhere, credits offer endless pricing combinations that match how (and where) workouts occur.
A high-quality, efficient digital class experience: Peloton’s rental model move ties back overhauling their online interface. From a direct Zoom integration that eliminates extra costs to being able to price livestream classes and hybrid plans individually, fitness businesses not only can maximize and optimize their workout choices but give their clients the ability to buy and book exactly what they want when they want. Creating a more streamlined virtual integration in Walla saves studio owners time and equips consumers with a consistent virtual experience that positively impacts retention and revenue.
An understanding of client data (and how to sell to them): Peloton is banking on reaching a whole new demographic. Knowing who your clients actually are can be a retention and revenue game-changer. And while Peloton is hoping to learn more about their consumers through their rental model, we built behavioral psychology straight into Walla. That’s one main thing that gets me so excited about our software. We aren’t talking about what their favorite color or food is, but rather an easy-to-understand personality quiz that dives into their why and motivators, enabling studio staff and owners to have educated engagement. By better understanding who a client is based on their personality type, targeted communication becomes even more clear so you can offer the classes, packages, and plans that best fit their specific needs.
At the end of the day, Peloton helped sell this idea of “community” during the height of the pandemic without consumers being in the same room together. But now that hybrid classes are a hot item, studio website traffic is on the rise, and studio owners are reevaluating revenue numbers as we return to a “new normal,” clients have the opportunity to discover and ultimately “use” their workouts their way. Consumers now have the power to connect with their favorite fitness business like never before, thanks to the constantly pivoting Peloton.