Peloton’s ambitions in the apparel market might run deeper than just a way to use your referral credits.
According to the Wall Street Journal, Peloton is seeing massive growth in their apparel operations.
Style, once secondary for a company that was built on tech-y convenience, has come to the fore at Peloton. As it rides high on the success of its biggest year yet—in September, the 8-year-old company posted its first profit, with revenue for the 2020 fiscal year topping $1.8 billion—it is looking for ways to grow even further. To be perceived as a “lifestyle brand” rather than just a bike purveyor, it must expand its reach through clothing. While the company does not disclose what proportion of its business is apparel, co-founder and CEO John Foley delegated the apparel business to his wife and vice president Jill Foley. She now has 24 people working under her. “Just this year I hired eight more people because of our growth and I think the greater Peloton brand realized, ‘Oh, geez, we need to invest more in this apparel,” said Ms. Foley. “They’re selling like hot cakes.”
Up until now, Peloton has been selling products from other brands with the Peloton logo on it, but that appears to be changing.
Although it has a history of collaborating with establishment players like Nike and Lululemon, the brand is moving toward making more of its own gear. Ms. Foley said that in the early days, “we would just buy goods and slap our logo on it, but we’ve evolved into much more than that.”
As we reported a few months ago, Peloton hired away a former SVP from Merch by Amazon. This hiring signals they plan to produce more of their own merchandise in-house instead of reselling merchandise from other brands.
As Peloton’s brand continues to grow, it’s clear they can capitalize on their growing (and rabid) fanbase.
For many fans, buying the gear directly from Peloton makes them feel like they’re on the pulse of a buzzy movement. Ms. Sanderson, who dressed as Robin Arzón for Halloween, often checks the Peloton site for new apparel drops. “If it’s cute, I’m going to buy it real quick because other people will beat me to it,” said the former college athlete who works in merchandising at Nike. “So it’s almost like this competition thing.” Emily Parsons, a 27-year-old tech-company employee in London, owns 39 pieces of Peloton-branded apparel and said, “It’s definitely a community and a bit of a cult kind of thing.”
Peloton’s single goal at the moment is growing its subscriber base, but as they add subscribers, selling merchandise is an easy way to increase average revenue per user. If they can sell an average of two or three clothing items per year to its base, it will certainly move the needle financially over time. We’ve seen them recently release Grateful Dead shirts to go along with their themed music rides.
As a brand, Peloton has never been hotter, so the time to strike on expanding merchandise operations is now. I believe there will come a time when you can buy the workout gear an instructor is wearing during a workout.