Why Are Peloton Rowing Against The Tide?

BackStory: At over $3k, Peloton’s new rowing machine is 3x more expensive than the competition. With falling demand for its premium products, over $1 billion in inventory waiting to be sold, and a cost-of-living crisis, what were Peloton’s latest management team thinking with the launch of “Row”? As Peloton announced its latest product, co-founders John Foley and Hisao Kushi left the company, whilst new CEO admits mistakes with pricing. None of this looks good for the firm worth $58 billion at the height of the pandemic. They’re now worth only $3 billion.

Peloton’s Gravity-Defying Pricing Strategy

After a lot of teasing and hyperbole, Peloton has finally unveiled the “Row”. It’s the latest hardware product to join the bike and treadmill in Peloton’s armoury.

Curiously, the Row is priced at $3,195, plus the $44/month subscription charge. That’s over 3x the market leader in rowing machines!

But here’s the thing: Peloton are in no shape to launch a high-priced premium product!

• Peloton is drowning in inventory it can’t sell. It is sitting on over $1 billion worth of inventory, whilst demand for its bikes and treadmills has collapsed. Peloton’s hardware revenue declined by 55% year over year in the fourth quarter to $295 million.