Connected Fitness Competition Grows For Peloton

As summer begins and people look to shed their pandemic weight gain, connected fitness companies are ramping up — and when Pitbull gets involved, it’s bound to be a party.

With “Mr. Worldwide” invested in connected exercise bike company Echelon and fitness brand Beachbody going public this week, the competition between companies looking to entice consumers who want an online, at-home workout is getting stiff, with even Facebook is signaling its interest.

And last week, Peloton, anticipating the coming mass transition from the home office to the office cubicle, announced a corporate wellness program, which will bring the company’s content and connected fitness products to businesses and organizations in the U.S., U.K., Canada, Germany and Australia.

To be sure, Peloton — one of the largest companies in the connected fitness space — has seen its share of troubles in the past several months. In May, the company was forced to recall its treadmills after a child died while playing with the home-based exercise equipment, resulting in $165 million in lost revenue. And earlier this month, software security firm McAfee discovered a security flaw in the operating system that powers the Peloton Bike+ that could potentially give hackers the ability to spy on riders or steal their personal data.

According to the June edition of PYMNTS’ Digital Security Playbook: Building Trust and Loyalty Online, consumers are concerned about trust when it comes to connected devices and using mobile wallets for payments when shopping.

That means the bad cybersecurity news for Peloton could be good for Beachbody, Echelon and other competitors, especially in a world where brand loyalty is diminishing; according to McKinsey, out of the 75 percent of Americans who changed their shopping behavior since COVID-19 began, around 40 percent say they have changed brands.

But even with Peloton stumbling, the company managed to add 400,000 new fitness subscribers in the first three months of the year, bringing its total users to a record two million. The company expects that sales will have grown 50 percent year over year to $915 million for the three months ending June 30, its fiscal fourth quarter.

Strategies for Subscribers

The first hurdle for many connected fitness companies is how easy they make it for consumers to subscribe. PYMNTS’ 2021 Subscription Commerce Conversion Index, in collaboration with sticky.io, showed that U.S. consumers value convenience and speed when signing on to new subscription services.

Getting subscribers signed up, however, is only the first leg of the race. Though 81 percent of consumers have access to at least one subscription service — 12 percent more than in February 2020 — only 52 percent of people who signed up for a subscription while stuck at home because of COVID-19 stuck with the service they signed up for.

Beachbody, with the help of new board member and former Disney Chief Strategy Officer Kevin Mayer, seems to have the most focused eye on becoming a must-have subscription, with CEO Carl Daikeler aiming to make the company the “Disney Plus of fitness.”

Beachbody currently has over three million total digital and nutrition subscriptions — with some customers holding onto multiple subscriptions — up from 1.9 million in March 2020. What drives Beachbody, Daikeler told Fox Business, is its content and its ability to find trainers “that influence people to stick with it.”

For other companies, including Echelon, the focus is instead on creating content with names people recognize, such as Mario Lopez and Pitbull. In addition to a financial investment, Pitbull will create an anthem for the fitness company to be released as a single on his new album, release a co-branded bike and merchandise, and have a dedicated Echelon fitness channel to allow customers to “Ride With Pitbull.”

By partnering with celebrities, Echelon CEO Lou Lentine told Bloomberg that his goal is to create an entertainment platform as much as a fitness one. “People can get burnt out on fitness, but if you can entertain them, they’re going to come back,” he said.

It remains to be seen which strategy works best — and whether other tech companies, such as Facebook and Apple, which late last year launched its Apple Fitness+ subscription, could shake up the connected fitness space.

For his part, Daikeler said he’s not worried about the threat of Apple, telling Fox Business that Beachbody has a 20-year headstart on creating content and finding high-quality trainers, which is “just not something you can jump into and say, ‘let’s be experts at this’ right away.”