Peloton has launched a partnership with TikTok.
Courtesy: Peloton
Peloton launched a partnership with TikTok on Thursday as part of its strategy to change its public perception and attract a wider range of customers as sales and profits decline.
The partnership will create a new fitness hub on the social media platform called ‘#TikTokFitness Powered by Peloton’. It will include short-form fitness videos, longer live classes, content from Peloton trainers and collaborations with TikTok creators.
Peloton shares rose more than 15% after the news broke and closed about 14% higher.
It comes about six months after Peloton rebranded itself as a fitness company “for everyone” and launched a tiered pricing strategy for its app. The changes were designed to position Peloton as more than just a bike company and bring in new customers who might not have been able to afford its expensive connected fitness equipment but might be interested in a monthly subscription for its content.
“On the one hand, there’s a long-term goal of changing perceptions of who Peloton is across many different types of audiences, and I think one of the real strengths of TikTok… is that it’s increasingly reaching everyone, including younger audiences .” Oli Snoddy, Peloton’s vice president of consumer marketing, told CNBC in an interview. In the short term, the partnership will seek to build on what Peloton says has been a successful relaunch, boosting metrics like app downloads and conversions, Snoddy said.
During the Covid-19 pandemic, Peloton became a Wall Street darling as gyms closed and consumers flocked to buy the stationary bikes and treadmills at home. But demand plummeted when the virus subsided and consumers returned to normal.
In the three months ended Sept. 30, Peloton lost 30,000 members and revenue fell to $595.5 million, from $757.9 million three years earlier at the height of the pandemic.
Peloton CEO Barry McCarthy, who replaced company co-founder John Foley in February 2022, is working to legitimize the business and set it up for long-term growth and profitability. It has focused on boosting Peloton’s subscriber base and opening new avenues to acquire Peloton gear by offering a rental service and refurbished options.
While the initiatives are showing early signs of progress, Peloton still isn’t monetizing its members, partnering with companies like TikTok and Lululemon critical to its long-term success.
“We have over a billion users worldwide across all demographics,” Sofia Hernandez, TikTok’s global head of business marketing, told CNBC. “People from 16 to 60 are on the platform even when I think about it [Peloton’s] campaign of ‘anywhere,’ there’s no better place to reach that level of audience that we have, that level of a diverse audience.”
Hernandez noted that the partnership will go beyond workout videos and include “behind-the-scenes” videos like “get fit with me” clips and other fitness-related content that gives people on TikTok an inside look at Peloton and his trainers. Initially, the content will feature well-known trainers like Cody Rigsby and Ally Love, but the partnership also hopes to introduce some of Peloton’s lesser-known trainers to a wider audience and grow their following.
“We know that when people experience Peloton, they really understand it, they fall in love,” Snoddy said. “It’s really about taking the trainers and the content that we have and scaling it to a wider audience on TikTok.”
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