New DIY Peloton bike… straight from your Amazon cart. Peloton’s stock jumped 20% yesterday after the struggling spin icon signed a distribution deal with Amazon — its first retail partner. Peloton's products are usually sold exclusively through its site or IRL showrooms. Now Pelo-fans can snag its signature bike with an Amazon click (you can even assemble it yourself).
- Making Lulu sweat: Peloton says it also plans to sell apparel and merch on the Zon, like water bottles, yoga pants, and leggings.
- Full cycle deal: Amazon could account for nearly 40% of all US ecomm sales this year, and has reportedly already seen 500K searches for Peloton products.
Rocky road… Peloton had lost nearly 90% of its market value over the past year as consumers opted for gym classes over $3K spin bikes. In January it paused production as unsold bikes piled up. Last month it outsourced all its manufacturing to save on pricey US production and focus on subscriptions. This month it laid off 800 workers (its third round of cuts this year) and raised prices on premium equipment to bolster sagging sales. We’ll see how it’s holding up when it reports earnings today.
Direct-to-consumer brands might go DTR… direct to retailer. Instead of waiting for consumers to return to Peloton, Peloton wants to meet ’em where they are. That means gaining exposure to Amazon’s 300M active customers. Since Amazon manages several supply steps (think: warehouses, drivers), the deal could also help Peloton simplify its operations.