Peloton, a fitness equipment company, announced on Tuesday that it will begin selling its high-end exercise bikes at the warehouse retail giant Costco and on its website, aiming to attract affluent young customers.
Under the partnership agreement, Costco will offer Peloton’s Bike+ stationary exercise bike at a price of $1,999 in its 300 U.S. stores from November 1st to February 15th, and sell it on Costco.com for $2,199.
This price is significantly lower compared to the regular price of $2,495 listed on the Peloton website.
According to Peloton’s website, this partnership marks the company’s first seasonal retail collaboration in the United States. By partnering with Costco, which boasts 136 million loyal members, Peloton can showcase its upscale connected fitness experience to a wealthier new customer base during the important holiday shopping season.
Dion Camp Sanders, Peloton’s Chief Emerging Business Officer, stated, “The Costco brand is very strong and respected both in the U.S. and internationally. Costco members know they are purchasing high-quality products from trusted brands and getting the best value.”
“We are excited about our first seasonal collaboration in the U.S. and hope to expand the distribution of Peloton products with Costco into new geographical markets in the future.”
Peloton was founded in January 2012 and is headquartered in New York City. The name “Peloton” in French signifies a group of cyclists riding together in a road race, benefiting from the lead cyclist’s aerodynamic drafting to reduce air resistance and save energy.
Peloton has long focused on growth and is now shifting its focus towards profitability, emphasizing innovation in attracting new users.
Costco provides members with higher value products through bulk packaging and its own brand, making it increasingly popular among consumers.
According to data from analytics firm Placer.ai, as of September 1st, foot traffic in Costco stores had increased by 31% compared to the same period before the pandemic in 2019.
Costco members are also getting younger. These consumers prioritize health and wellness and are willing to invest in it, a trend that the older generation did not possess.
During a financial earnings call at the end of September, Chief Financial Officer Gary Millerchip mentioned that about half of new Costco members registered in the previous fiscal year were under 40 years old.
Additionally, according to Numerator, 36% of Costco customers have a household income exceeding $125,000. Numerator’s sample of 150,000 American consumers is representative in terms of gender, age, and region.
Sanders noted that Costco members “have disposable income and can afford our premium products,” and their lifestyle aligns well with the services provided by Peloton.
Peloton has already been selling its fitness equipment through Amazon and Dick’s Sporting Goods and is working on establishing partnerships with other companies targeting similar customer bases.
For instance, hundreds of Hyatt hotels have Peloton equipment. Starting this month, hotel members can earn points for completing workouts on Peloton Bikes and Rows during their stay.
Furthermore, Peloton announced a partnership with Truemed, allowing Peloton members to purchase certain hardware products, including their Bikes, Bike+, and Tread products, using pre-tax income.