Gym Owner Monthly

Peloton peddles bike rental scheme for £99 a month……

Peloton peddles bike rental scheme for £99 a month High-tech exercise company tries to recreate pandemic boom when it had seven million members by offering lower-cost option to lure subscribers…..

Few companies did better out of the pandemic than Peloton. Before Covid struck, few Britons had even heard of the American brand but once lockdown began, demand for its futuristic exercise bikes and upbeat video classes soared as people looked for ways to stay fit from home.
Between January 2020 and March 2022, Peloton went from two million global members to more than seven million.

The rise in the company’s share price was even greater, jumping nearly 500 per cent to a peak of $163 over the course of 2020.

But as with every boom, there was an inevitable bust. When the world slowly began opening back up, people began remembering the joys of going out to exercise, and over the course of 2022, Peloton started losing members.

With the media beginning to describe redundant Peloton bikes as the most expensive clothes hangers in history, the company’s share price also collapsed. As of this week, it remains 97 per cent below its 2020 peak.

But the company is now embracing a new strategy to revive its flagging fortunes: rentals.
From May 22, customers will be allowed to rent Pelotons for £99 a month, a price that will include access to all the live online classes and back catalogue. The price, while steep when compared with most gym memberships, will mean the bikes are much cheaper to access compared with their purchase cost of £1,995 plus the £39 a month subscription to online classes.
Taking into account the £200 set-up fee for the rental service, a Peloton customer choosing to rent would need to retain the bike for nearly three years for it to have been cheaper to buy. Customers who choose to rent can cancel their membership and return the bike at no cost at any time.
The company says the new service provides an “accessible and convenient way to experience Peloton”. Analysts say Peloton is trying to attract younger and less well-off households because the upfront purchasing costs are a deterrent to many.
Peloton is just the latest upmarket brand to embrace the rental economy to drive growth as the stigma about renting disappears, particularly among young people.
Department store chain John Lewis recently launched a rental service for designer dresses, allowing customers to borrow items from brands such as Queens of Archive, Olivia Rubin and Lirika Matoshi for as little as £20 at a time.
Brompton offers a rental service allowing customers to hire one of its British-made folding bikes for £5 a day from one of more than 70 lockers nationwide. The cheapest Brompton bike costs £950 to buy.
Other industries have been transformed by the growth of rental services. Few people, for example, buy physical music any more because they can access any songs they want from streaming subscription services for as little as £10.99 a month.
The motoring industry has also been transformed by personal contract hire, which allows customers to drive cars they might not previously have been able to afford.
Research conducted by Censuswide certainly seems to show Britain is becoming a “nation of renters”, with two-thirds of people renting some items.
The study found that one in five of the population viewed the rental market in a positive light but this rose to nearly half of people aged 25-34.
It found that young people were drawn to renting because of the flexibility, convenience and affordability.
Whether Peloton’s rental scheme will help return the company to its glory days of the pandemic remains to be seen. But in the company’s latest shareholder letter, it said bike rentals, which it has already launched in America, had “outperformed our internal expectations”.