Struggling Peloton Fails To Attract Consumer To Expensive Sydney Brand Store
There is nothing like throwing money at a dead brand, in the hope that one day consumers will actually start buying your products.
This is no more so, than with pricey US exercise bike Company Peloton, who after investing hundreds of thousands into their own start up retail network in Australia, which included a big expensive brand shop in Martin Place Sydney, David Jones as well as in Bondi are still struggling to get consumers through the door in Australia.
“we get a lot of tyre kickers” said one staff member in Australia recently.
Take Martin Place Sydney where the biggest crowd yesterday was a demo against what is happening in Tibet.
Gone due to COVID lockdowns and a move to working from are the executives who use to stroll across Martin Place, a once perfect audience for the overpriced Peloton who are fighting globally to survive.
I sat drinking a coffee outside their expensive Martin Place store yesterday and in a space of 30 minutes, only one person walked into the store which would have cost tens of thousands to fit out.
Local Peloton CEO Karen Lawson describes herself as a transformation leader in the technology industry so it will be interesting to see how she transforms a struggling brand into a success in Australia.
The Martin Place store is as much Peloton branded clothing as it is exercise bikes with large 23″ LED screens.
Lawson claims her core skill set is “Driving reinvention and transformation to help the world’s biggest brands to stay ahead of disruption”.
Peloton share value has fallen 80%, their global CEO quit, and handling disruption appears to be a daily occurrence.
As the market deserts the brand and them peddle machines the Company has been forced to look for new ways to go to market.
Overnight the Company was forced to explore new pricing models in select markets, as the exercise bike company looks to attract more customers and return to profitability.
At this stage it’s not known whether the business will introduce their new pricing strategy in Australia
The company said it has created a limited pilot program to explore pricing and options for new members but did not reveal details about the plan.
According to the Wall Street Journal, which first reported the move, select Peloton stores will offer a bike and subscription to workout courses at a price between $81 and $136 a month for a limited period starting today.
Shares of Peloton fell another 2% on the news.
The pricing experiment aims to find a price proposition helping the company return to profitability without hampering growth, the report said.
If a consumer cancels Peloton will take back the bike with no charges.
Last month, the company reported a bigger-than-expected quarterly loss and slashed its forecast for full-year revenue, saying the lowered outlook was to adjust to changes in demand brought on by the reopening of economies.
Barry McCarthy, who took over as the company’s chief executive last month, told said that he plans to reshape his executive team, consider manufacturing simpler bikes, and upend the company’s capital spending strategy.
One insider said that the loss-making Australian operation could be closed down.
What’s not known if this happens is the cost of exiting expensive leases such as Martin Place Sydney which is among some of the most expensive retail in Australia.