NEW YORK — Peloton will sell deluxe stationary bikes at Costco this holiday season as the struggling connected exercise company looks to expand its customer base.
Peloton Bike+, an exercise bike that allows riders to take online classes and work out with a virtual community of friends, will be sold at a discount online and at 300 Costco stores from November through mid-February, the companies said. It was announced on Tuesday.
This model sells for $1,999 at Costco stores and requires self-assembly. That’s about $500 cheaper than buying a new bike directly from Peloton’s website. Purchase includes shipping and setup. Costco will sell the Peloton Bike+ on its website for $2,199, including shipping.
“Costco’s brand is incredibly strong and respected in the U.S. and abroad,” Deion Camp Sanders, Peloton’s chief emerging operations officer, said in a news release. “Costco members know they are buying quality products from brands they trust at the best value.”
Angeli Gianchandani, an adjunct lecturer at New York University’s College of Professional Studies, said the partnership with Costco is a way for Peloton to cast a wider net and make its products more available.
“Costco may be known for its low prices, but it also doesn’t shy away from carrying high-end items,” Gianchandani said. “And this is consistent with that strategy and how we select our products to really appeal to a wider range of affluent customers who value quality and value.”
Peloton, once marketed as an upscale and aspirational brand, has begun rebranding itself to be seen as a more approachable brand as it grapples with declining sales and a plunging stock price. In August 2022, the company made its stationary bikes and other gear available for purchase on Amazon in the US.
“Terrible footprints”
The Peloton Bike+ is a step up from the original Peloton bike, as it features a rotating touch screen and a resistance knob that automatically adjusts to your instructor’s recommendations. To attend classes, riders purchase an all-access membership for $44 per month. This also includes classes in meditation, strength training, yoga, and other disciplines.
Peloton’s choice to sell at Costco “seems to be based not only on Costco’s size and formidable store footprint, but also on the nature of the demographic that shops at warehouse clubs,” said the University of Virginia associate professor of business administration. Kimberly Whitler says. “In particular, they seem to be trying to reach young and affluent people, who are likely to be a key demographic group.”
Costco Chief Financial Officer Gary Millerchip said on an earnings call in September that about half of the retailer’s new members this year were under 40.
Sales of Peloton bikes soared early in the coronavirus pandemic, when gyms were closed and many people were stuck at home to reduce the risk of catching and spreading the virus. The company’s stock price exceeded $150 at the end of 2020.
However, as pandemic restrictions began to ease, growth became unsustainable and slowed. Peloton also said it was one of approximately 125,000 treadmills linked to the death of a child and dozens of injuries in 2021, and more than 2 million that had seatposts that could break during use. announced harmful recalls, including a recall for bicycles.
In the face of these challenges, Peloton’s stock price began a long decline. It trades at below $7 per share through 2024.
In May, Peloton cut 400 jobs and CEO Barry McCarthy resigned. Peloton also sells refurbished bikes on its website, with a standard used bike priced at $1,145 and a used Peloton Bike+ priced at $1,995.
