Monday, March 1, 2021

Peloton’s rise, “Netflix fitness”, is threatened by slow delivery


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Positive posts from Peloton on Instagram often attract enthusiastic responses from its 1.2 million followers, who love the company’s charismatic instructors and their more than $ 1,900 bikes and treadmills.

However, recently, the company’s account has become a center of outrage, with late deliveries and hours spent with customer service representatives. “I know of a good goal for Peloton: to deliver my mother’s bicycle that should have arrived on December 21st!”, Fired one person in response to a post about New Year’s goals. “I could be close to using mine for the 900th time, but it’s true: I didn’t get the bike!”, Was one of the responses to a user’s post about the 900th time he rode.

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After more than quadrupling in value, to more than $ 40 billion, during the coronavirus pandemic, Peloton is now experiencing serious growth pains. Some customers who ordered a bicycle in October in the hope of having it by Christmas or in time to start New Year’s resolutions are still waiting for delivery.

“What we are discovering is that the idea has grown faster than the Peloton company. You need to find out how to follow your moment of success. Now, Peloton’s success is unique, ”said Simeon Siegel, retail analyst at BMO Capital Markets.

Although the scarcity of everything from baby wipes to sofas has become the norm in the pandemic, complaints about Peloton are notable, given the buzz surrounding the company and the cost of its luxury products.

Complaints include delivery trucks that do not appear on the scheduled day. Some customers have reported receiving automated emails postponing the delivery date by a month or more, without clear information from customer service representatives, who sometimes blame Peloton’s delivery partners.

PELOTON MAHESHWARI BSPR 2 1 Peloton's rise, “Netflix fitness”, is threatened by slow delivery Arianna Sinclair in the room where she wants to put her Peloton

Arianna Sinclair in the room where she wants to place her Peloton (Audra Melton / The New York Times)

A Facebook group dedicated to discussing delivery issues has more than 8,400 members and includes Peloton employees. Reddit’s Peloton forum also has a daily chat with new buyer issues. Peloton has a customer rating of 1.4 out of five stars with the Better Business Bureau, in which 813 complaints have been closed in the past 12 months. And on Twitter, an account called Peloton Lies collects complaints.

It is not simply a case of bad public relations for Peloton. While people trapped at home during the pandemic spent a fortune on the company’s bicycles and treadmills (which can cost more than $ 2,500) and paid a monthly fee of $ 39 to participate in virtual classes, the reopening of gyms across USA will represent serious competition. (You can also subscribe to a separate Peloton app, which requires no equipment.)

Peloton, which had more than 1.3 million members who already owned a bicycle or treadmill in September, more than twice as much as a year earlier, recognized its long lead times. In calls to investors, the company noted that waiting times are being particularly long for the new Bike +, which went on sale in October. Although he said he anticipated that his supply chain challenges would “begin to diminish” between January and March, the delays highlighted the current moment Peloton has to capture customers.

“We are in this fitness race at home to build a member base. This is against competition, against time, against vaccine, and there is pressure to retain subscribers at all costs, ”said Siegel, the retail analyst.

Jessica Kleiman, vice president of communications at Peloton, said the company was transparent to customers regarding the estimated lead time. “We recognize that this is not the experience that we normally deliver to our members, and getting back to where we need to be is the number one priority for our leadership team,” she said, noting that the “vast majority” of orders had been delivered on time. originally scheduled, although it did not mention a percentage.

In business matters, last year’s chaos was good for Peloton, founded in 2012. With gyms and fitness studios closed as a result of virus restrictions, Peloton’s revenue almost tripled between April and June compared to the previous year. But the company has also dealt with shutdowns and delays that have affected factories, warehouses, delivery fleets and ports around the world.

PELOTON MAHESHWARI BSPR 1 0 Peloton's rise, “Netflix fitness”, is threatened by slow delivery John Foley, co-founder of Peloton

John Foley, co-founder of the Platoon (Audra Melton / The New York Times)

Despite the increase in waiting times for deliveries in the northern summer of last year, the company continued to take orders and advertise its products. In the fall, as the weather grew colder and cases of coronavirus increased in the United States, demand soared and the company found itself unable to deliver all orders in a timely manner. (Congested ports and wildfires in California contributed to the delays.)

Many of the stories follow a pattern: after agreeing to pay for a bicycle or a treadmill – most buyers are required to start making payments immediately – customers receive a delivery date three to ten weeks after purchase. On the day of delivery, however, Peloton suddenly reschedules the date or doesn’t show up. Customer service representatives offer little clarity, sometimes giving refunds of $ 125 or bottles of water as a consolation. They often blame the lack of information from XPO Logistics and JB Hunt, transportation companies that handle a significant portion of Peloton’s deliveries.

XPO declined to comment, and JB Hunt did not respond to a request for comment.

Weston Musillo, a 29-year-old data analyst from rural Oregon, ordered his bicycle on August 20. The December 13 delivery date has come and gone, and neither Peloton nor XPO has been able to explain what happened. After several markdowns, he received his order in the first week of January.

Amanda Carmody, a 31-year-old lawyer in Albuquerque, New Mexico, ordered a Peloton on October 17 and was told she would receive it on December 9. The company then postponed the date to December 31, citing delays with the pandemic. That day, a driver called to say delivery was on the way – but then a warehouse worker called to apologize, stating that the product was not really available. After hours on the phone with customer service, she was told that the bike would arrive on January 9th. Did not arrive. The delivery was rescheduled for February 22, but Carmody said he had asked Peloton to cancel his order. She said the company blamed XPO for the delays.


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Peloton's rise, “Netflix fitness”, is threatened by slow delivery