Peloton Interactive Inc.
What Happened: CNBC reported that Peloton disclosed its collaboration with TikTok on Thursday to reshape its public persona and appeal to a broader customer base amid declining sales and profits.
The partnership will launch a new fitness hub on TikTok named "#TikTokFitness Powered by Peloton," featuring succinct fitness videos, live classes, Peloton instructor content, and collaborations with TikTok creators.
This alliance comes six months after Peloton's rebranding as a universal fitness company, which included a tiered pricing strategy for its app. It targets customers who may not be able to afford Peloton's premium connected fitness equipment but could be interested in its app's monthly subscription.
Oli Snoddy, Peloton's vice president of consumer marketing, explained that the partnership aims to alter perceptions of Peloton's target demographic and utilize TikTok's extensive reach, particularly its younger audience. According to Snoddy, the collaboration also aims to boost app downloads and conversions, contributing to Peloton's successful relaunch.
Why It Matters: Peloton has been grappling with decreased demand as consumers have resumed normal activities following the pandemic, resulting in a loss of 30,000 members and a revenue drop to $595.5 million in the quarter ending Sept. 30.
This partnership aligns with Peloton's ongoing efforts to increase its subscriber count and make its equipment more accessible. It follows a similar partnership with Lululemon announced in September last year, making Peloton the athletic apparel company's exclusive digital fitness content provider.
However, it has not been all smooth sailing for Peloton. The company faced a significant setback in November when its 10th annual "Turkey Burn" event was marred by technical glitches, preventing many members from joining the event. CEO Barry McCarthy subsequently apologized for the mishap.
