Like many other direct-to-consumer companies, Peloton did great during the pandemic. Its sales were at an all-time high and the company couldn’t keep up with demand. Peloton sold only through its own retail stores and online – no other distribution channel. This model allowed Peloton to keep a larger portion of the sales price, but the narrow distribution hampered sales and delivery. It just couldn’t keep up with demand.
But now things have changed in retail, and changed for Peloton in particular. In a move designed to expand its customer base and sell more product, its fitness equipment and apparel will now be available from Amazon. This is the first such partnership for Peloton’s distribution channel.
The Peloton bike retails for $1,445 – a pretty large sum for a product on Amazon. Also on Amazon, Peloton will sell its strength product, the Peloton Guide, for $295 plus branded cycling shorts, weights, yoga blocks, and other apparel. (At this time, the more expensive Bike+ and Tread treadmill are not available on Amazon.) Bike customers can now select a self-assembly option instead of having Peloton staff assemble and install the Bike.
Peloton is not the only company expanding its sales from DTC to brick-and-mortar stores. Consider Warby Parker and Allbirds; both companies started by selling products online only, but have now expanded to their own stores and other retailers.
Where will you purchase?
Group Activities and Discussion Questions:
- In order to be successful, companies must be able to physically get a product into the hands of the customers. Discuss how a distribution channel works.
- For Peloton Bike, what distribution channels are used now?
- How can the channel be expanded? What approach could be used?
- Divide students into teams. Have each team draw a flow chart for the distribution of the product.
- View Peloton’s store on Amazon: https://www.amazon.com/stores/Peloton/page/08F7A78F-F893-478F-975C-27223FD08B5F?ref_=ast_bln&pd_rd_w=W3EIN&content-id=amzn1.sym.73ac3f51-c1c2-4951-89eb-8ee3c7bb7bd8&pf_rd_p=73ac3f51-c1c2-4951-89eb-8ee3c7bb7bd8&pf_rd_r=3E7328ME1FKNQGD6VTW8&pd_rd_wg=vNHwA&pd_rd_r=b66f4f9e-6c64-45f2-b2b7-29299228d75c
- View video: https://youtu.be/J1pKZts_K3s
- View Peloton’s website: https://www.onepeloton.com/
Sources: Ovide, S. (25 August 2022). Why Peloton is selling on Amazon. New York Times.; Thomas, L. (24 August 2022). Peloton strikes a deal to sell fitness equipment and apparel on Amazon.
