Peloton’s Stationary bikes will soon be on sale for Costco’s Peloton will make the announcement in stores and on its website on Tuesday as the embattled fitness company looks for new ways to attract young and affluent customers.
Under the terms of the deal, Costco will offer Peloton’s Bike+ at its 300 U.S. stores for $1,999 and on Costco.com for $2,199 from November 1 to February 15. Great discounts on typical prices. It’s unclear how that price compares to any holiday promotions Peloton plans to offer.
The new partnership comes during a transition period for Peloton, which is being led by two board members after former CEO Barry McCarthy resigned earlier this year.
Peloton, long focused on growth at all costs, has now turned its sights on profitability and must become more creative as it tries to attract new users.
As sales decline and losses mount, Peloton is looking for cheaper ways to attract new customers. Peloton chief emerging business officer Dion Camp Sanders said in an interview with CNBC that Costco is one way to achieve this goal.
“We have been able to reach an agreement with Costco that meets our needs for profitable, sustainable unit economics while delivering strong and clear value to Costco members,” said Camp Sanders. “We have reached an agreement with Costco that both It meets our need for profitable, sustainable growth and gives us access to Costco’s huge net incremental audience.”
Camp Sanders said Peloton’s partnership with Costco is limited because fitness is a seasonal category for the company, but Peloton hopes to continue to strengthen the relationship and potentially expand it to future locations in the U.S. and overseas.
The Costco deal puts Peloton on the shelves of a retailer with a large following and wealthy customers. The members-only club is growing in popularity as shoppers of all incomes prioritize value and try to get more out of bulk packages and private label merchandise.
According to Costco statistics, as of September 1, Costco store customer traffic increased by 31% compared with the same period before the epidemic in 2019. placer.aiis an analytics company that estimates visits to a location based on smartphone data.
Costco’s members are also getting younger and younger. These consumers prioritize health and wellness and are willing to invest in it, whereas older generations were not.
Costco Chief Financial Officer Gary Millerchip said on an earnings call that about half of Costco’s new member signups last fiscal year came from people under 40, and the average age of its 76 million members has increased since the Covid-19 pandemic. decline.
According to the numeratorThirty-six percent of Costco customers have household incomes over $125,000. Numerator has a panel of 150,000 US consumers, a balance representative of the country’s population.
Camp Sanders said Costco members “have the disposable income to purchase our premium products” and their lifestyles align with what Peloton offers.
“Many Peloton members are affluent, often owning larger homes in the suburbs, and Peloton living situations fit their specific needs,” Camp Sanders said. “Many Costco members are juggling families, They may have busy careers … and they have the space at home” to build their own gym, he continued.
Claudine Adamo, Costco’s executive vice president of marketing, declined to comment to CNBC.
Peloton already sells its fitness equipment through Amazon and dick’s sporting goodsbut has also been working to develop relationships with other companies that cater to a similar customer base.
For example, hundreds of Hyatt Regency There are Peloton devices in the hotel. Starting this month, hotel members can earn points for completing Peloton Bike and Row workouts during their stay.
It also announced a deal with Truemed - PayPal Part of the world of health savings accounts and flexible spending accounts – allows Peloton members to use pre-tax earnings to purchase certain hardware products, including Bike, Bike+ and Tread.
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