COVID-19

Competition for indoor exercise sector heats up as cold weather approaches

Erika Beras Sep 9, 2020
Heard on: Marketplace Morning Report
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A Peloton stationary bike sits on display at one of the fitness company's studios. Scott Heins/Getty Images
COVID-19

Competition for indoor exercise sector heats up as cold weather approaches

Erika Beras Sep 9, 2020
A Peloton stationary bike sits on display at one of the fitness company's studios. Scott Heins/Getty Images
HTML EMBED:
COPY

Peloton, the exercise company, is dropping the price on its original bike to under $2,000. It’s also launching a more expensive bike, checking in at nearly $2,500. The company reports earnings Thursday.

Before the pandemic, Peloton’s pricey interconnected exercise equipment appealed to a certain demographic. Then came stay-at-home orders.

Peloton sales grew and grew, and now according to Landon Luxembourg, an analyst with Third Bridge, Peloton is essentially saying, “we’ve already captured the people that we were able to capture during the pandemic. Now let’s expand our base even more. And one way to do this is to provide a lower price piece of hardware.”

Peloton also offers subscriptions for exercise streaming classes, but now lots of gyms and studios have live online classes as well.  

Walter Thompson is the former president of the American College of Sports Medicine. He said the competition is heating up as the pandemic heads into the fall.

And these sports-tech companies may realize that Americans are thinking, “I know it’s going to be cold. I’m not going to want to go outside so I need an alternative,” added Thompson.

For those customers, Peloton and other companies may be betting that interconnected exercise equipment is that alternative.

COVID-19 Economy FAQs

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

Are we going to see another wave of grocery store shortages?

Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products. But they can’t rely totally on predictive modeling. People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. So, grocers are going to have to trust their guts.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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