Digital Disruptors: Peloton

Knowing what the customer really needs and offering personalized solutions accordingly, can take your business to the next level. Learn how an entertainment company that manufactures bikes and treadmills, Peloton, has diversified its core offerings and differentiated itself from the competition.

Emir Lise

Content Editor

22 February 2022

4min read


Peloton Creates A Digital Gym

Is Peloton a fitness equipment company, media company, or service company? The answer changes among their investors, customers, and even employees. Since the beginning, Peloton’s core offering has been an indoor cycling bike equipped with an LCD screen for live or guided workouts.


What’s the Big Deal?

Today, Peloton is an entertainment company that manufactures bikes and treadmills. They have a mobile app for equipment-less workouts, a huge film studio comparable to Hollywood, and most importantly a community of fans who are willing to wake up at 6 a.m for their favorite instructor. Peloton’s growth can be attributed to prioritizing customer experience, design, and personalized offerings.

During the COVID-19 pandemic, Peloton became an essential part of the average home as gyms shut down and public places were no longer a viable option for exercise. New York Times wrote that even as millions have lost their jobs, thousands of others are “panic buying” Peloton bikes to stay fit while gyms remain closed.


The Core Disruption

However, Peloton was chosen over other mobile workout apps or treadmills in the market. Their biggest differentiating factor is a bundle of the equipment, the app, and the experience as one service that can be tailored to each customers’ wishes.

Personalization starts from the website. A potential buyer can provide personal workout information to calculate how much they could save with a Peloton device and subscription. Then, the website offers the bundle with a treadmill or bike that then offers predictive options that potentially suit the needs of the customer: shoes, mats, water bottles; tailored according to your data’s needs.

While the company struggled to keep up with the surging demand, they gave immediate and complimentary access to the Peloton App until the orders arrived, retaining customer loyalty and drawing attention to their truly digitalized capabilities. Peloton also provides a dedicated team of professionals that assemble and set-up your bike, as well as walk you through the app to ensure an optimized experience.

Peloton is ranked 13th in market capitalizations among online service companies, beating names like Ocado, Pinterest, and Zalando. That is due to what comes after a customer has the equipment. With a 40$ per month subscription model, Peloton offers live and guided workouts by instructors through the bike’s LCD screen. Users can see who else is working out in the same session, praise their effort, even open private video chat with friends.

There are thousands of workouts from 40 unique instructors. The platform created a community where Peloton users can track their effort, are understood, supported and feel comfortable interacting with other users and instructors. For users who prefer solo exercise, there is an option to opt-out of the social media component. The customer controls the experience.

This customer centric approach resonates with their marketing strategy. Peloton does not discount. At least, not traditionally. They rely on word of mouth marketing, and the way to get a discount is by referral. Their website statistics indicate that their approach works for them. Last year, Peloton announced that 86.76% of its search traffic was organic.

What are Peloton’s digital superpowers?

Design: Peloton transformed the at home workout experience with customer centricity. By pinpointing customers’ needs and designing a holistic workout experience, the company was able to create their own social media capabilities.

Connectivity: Peloton equipment connects users to their platform through the internet, bringing workouts, instructors, and the community into the customer’s home. Everything about Peloton is a click away. Furthermore, it allows users to create groups with their workout buddies for a collective experience.

Intelligence: The platform collects customer’s workout data and preferences about workout style, music, and preferred instructor to optimize and personalize workouts through equipment. Furthermore, Peloton also connects to your smart wearables and mobile app for more accurate behavior mapping.

Speed: With real time data transfer during live workout sessions, Peloton enables instructors to communicate and even change the users’ workout attributes such as the speed and the inclination.


Lessons Learned

Peloton defies traditional industry barriers. The company used customer needs to create a totally digital at home gym experience. By mapping the end-to-end customer journey to ensure that Peloton is tracking the customer throughout the entire workout experience, they can offer a personalization each step of the way. The takeaway: to know what the customer really needs and offer personalized solutions accordingly.

Moreover, Peloton prioritized customers when it came to operational needs as well. As an equipment manufacturer, it did not have the digital capabilities required to create the holistic workout experience. Thus, Peloton bought intellectual property from Peerfit, a digital workout experience application, and acquired music start-up, Neurotic Media, elevating the Peloton workouts.

Recently, Peloton announced their interest in acquiring Precor, one of the world’s largest suppliers of commercial fitness equipment. While this acquisition certainly would help their operational bottlenecks, Peloton seems to be interested in personalizing the commercial gym experience, too.

Overall, Peloton proves that a company has to offer more than one service that partially satisfies the desires of its customers. To differentiate among the competition, brands fight to capture the whole experience. Peloton wants to befriend its users in every aspect of their workout routine with their equipment, platform, and unique workouts.

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