The coronavirus pandemic has taken a significant toll on society. From a public health standpoint, millions have fallen ill, and hundreds of thousands have died because of the disease. But the negative ramifications of the virus extend beyond the domain of public health and are also felt in the economy. Economically speaking, COVID-19 has led to a rise in unemployment and an economic recession. However, for some companies, this is not all bad news. Peloton for example is using the virus to its benefit. Gyms have closed because of the virus, causing individuals to use their homes for fitness purposes.
The turn towards at-home fitness has given Peloton the opportunity to expand its product line and attract more customers. Peloton is an upscale fitness equipment brand, however the company has decided to lower the prices on some of their products in order to attract more customers. In a statement from Alliance Bernstein analysts, “as consumers increasingly work out from home amid the pandemic, these new product offerings should help Peloton expand its [market base]. Particularly as they help reduce the total cost of ownership for consumers.”
The fitness company intends to reduce the price of its spin bike by $350, resulting in the cost of $1,895. Moreover, the Peloton has developed a new treadmill that only costs $2,495 compared to the company’s premium treadmill which costs $4,295.
These reduced prices will hopefully attract more consumers and customers as gyms remain closed or are only operating at limited capacity. In fact, Peloton might even experience more sales as one trade group estimates that nearly 25% of gyms will close by the end of the year if they do not receive congressional aid.
While these successes are great for Peloton at the moment, some speculate that these positive outcomes will be short lived: “at-home solutions, such as streaming classes, Peloton and Mirror are great options for some. Anything to help people be active is a win. But for the most part, the best, most well-stocked home fitness option cannot compete with the sense of community and motivation a club provides, nor can it provide the qualified staff, variety of equipment, and programming options of the neighborhood gym.”
Therefore, while Peloton will likely foresee sizable profits for the remainder of 2020, come 2021, or when a vaccine is developed, it is likely that people will return to gym facilities.