‘We want to build a business and a brand’: Peloton launches £7m ad blitz to bring virtual spin classes to the masses

The $4bn US company that has taken the fitness sector by storm is investing £50m in the UK, including £7m in advertising, as it looks to get its “unique” product and proposition in front of as many people as possible.

Peloton

Peloton has taken the US fitness world by storm, signing up celebrity fans such as Hugh Jackman and Michael Phelps. It has also impressed VC investors, raising $550m in a fundraising round that values the company at $4bn. And now it is looking to replicate that success in the UK with a £50m investment, including £7m in a major advertising campaign.

For those that haven’t heard, Peloton is attempting to disrupt the fitness sector by bringing ever popular spin classes to people’s homes. It has developed an exercise bike that includes a large tablet at the front, so subscribers can livestream or download classes and interact with other members.

The proposition isn’t cheap. The bikes cost £1,990 in the UK, with the monthly subscription needed to access the classes and fitness content then costing £39 a month. With that model, it’s not hard to see why investors love the company, following as it does the razor/razorblade model of selling people some hardware and then signing them up for future purchases through the subscription.

Much of the £50m investment is going into building a 20,000 square foot studio on the site of the old Sanctuary Spa in Covent Garden. It is currently using the site as a “super pop-up”, dubbed Peloton House and created with PR agency Mission, with people able to sign up online for a free trial on one of the bikes, which have been set up as if in in a room in the home.

The plan is to build three studios, its first outside the US, from where instructors will conduct live classes. It is also opening six further showrooms across London in Canary Wharf, Spitalfields Market, St Pancras, Westfield, the King’s Road and Marylebone High Street.

The man charged with leading the expansion in the UK (and then the rest of Europe) is Kevin Cornils, managing director for international. He joined Peloton at the beginning of the year but has previously worked for businesses including Match.com and Glasses Direct.

And he believes the investment in showrooms and Peloton House are key to the company’s success. While Peloton will be looking to sell to people who come in to try out the bikes at its showrooms, their main purpose is as a marketing tool.

“A whole part of our go-to-market strategy is getting bums on bikes and introducing people to what Peloton is. It’s so unique you have to try it,” he explains.

“As we launch in the market the number one priority [for the showrooms is as a] marketing tool. Second is sales. Once people get on the bike and try it out they’ll like it. Our whole sales team is geared up around selling the experience of the brand and the product. Sales we feel will follow.”

Building a brand not just a business

To get those bums on bikes, Peloton needs people to have heard about the company but, unsurprisingly for a company that is new to the market, awareness of the brand is low. That is where the £7m advertising investment comes in.

Created with Dark Horses, the sports marketing arm of creative agency Lucky Generals, it aims to demonstrate what riding a Peloton feels like. Called ‘Inside a Class’, the film shows a Peloton instructor with their face to the camera, then two home riders who the instructor shouts out to while cranking up the resistance while we watch them working out.

“Our challenge was, how can we demonstrate what Peloton is in a way that feels authentic and gets across the message about Peloton and how it works, while maintaining the energy we think the product delivers and the brand has,” he says.

The launch campaign will run for six months across national TV, digital out-of-home, experiential and digital, with media buying done by Essence. It’s a similar strategy to the one used by Peloton in the US, where it invests around $50m annually in TV advertising

We’re unashamedly trying to build a brand, and trying to build a brand with the right attributes.

Kevin Cornils, Peloton

“We’re investing in channels we’ve seen for us in the long-term in the US,” he says. TV is key to driving awareness and reach, Cornils explains, which then drives word-of-mouth advocacy.

“Our challenge is to use advertising to grow the business, the brand and the customer base quickly,” he says.

He adds: “One of the advantages of our US business is you have over one million people who have experienced Peloton and are telling other people about it. But we’re super small here so we’re turbo-charging it. I don’t think we’re necessarily going to be investing at that same level once we get our brand advocates on the bike.”

Peloton has a pretty lean team in the UK of around 50, although there are plans to double that over the next six months. One of Cornils’ first hires was a marketing boss, Marian Holties, who has previously worked at Net-A-Porter, Asos and Activision.

The marketing team is also small, with Holties recruiting for a team of three. It does a lot of marketing in-house, from CRM to social media and email, although it has brought agencies on board for media planning and buying, advertising creative and PR.

Reaching the masses

Given the focus on getting the message out to a mass audience, driving aided and unaided awareness is a key metric. But Cornils says the real measure of success will come in a couple of years’ time because it is looking to build a business for the long-term.

“We’re unashamedly trying to build a brand, and trying to build a brand with the right attributes in terms of people appreciating that it’s a fantastic workout, it’s aspirational, it brings convenience.”

Despite the mass campaign, Peloton is targeting a smaller segment of the population in terms of getting people to buy. It is people that already invest in fitness but are time-poor and want a more convenient way to work out.

The audience tends to skew to adults aged between 30 and 50 with incomes in the ABC1 range. Although Peloton is looking to make its offering more accessible with the launch of financing, which will enable people to finance a bike for 0% APR over three years, meaning they pay £95 a month for the bike and access to the content.

“We don’t think value is the primary thing we’re selling on, it’s just about making the workout accessible,” adds Cornils.

That will be key to really making a success of Peloton. Cornils points to the size of the subscription fitness market in the UK, which is worth around £5bn a year and growing rapidly. So too will creating content that engages users and keeps them wanting to pay that £39 a month subscription fee.

“That is what keeps us up at night, how do we get people to continue using [Peloton],” he concludes.

“The subscription is an important part, financing is important to make it accessible. We would consider ourselves to be a tech company first, content second, hardware third. Tech underlies everything we do and a big differentiator for us. But it’s the content people pay a subscription for.”

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