Peloton plans to explore a bike subscription plan under various pricing models in select U.S. markets as it seeks new avenues for growth and a path to profitability.
The company said it has created a limited pilot program to explore pricing and options for new members, but did not disclose details about the plan.
According to The Wall Street Journal, which first reported the move, select Peloton stores in Texas, Florida, Minnesota, and Denver will offer a bike subscription service to include workout courses for a monthly fee for between $60-to-$100 for a limited time beginning March 11. Upon cancellation, the company said it would take back the bikes at no charge, according to the report.
Peloton’s business model has traditionally focused on selling high-priced, screen-equipped stationary bikes and treadmills with a $39 per month subscription fee to its connected services.
“There is no value in sitting around negotiating what the outcome will be,” Barry McCarthy, who last month replaced co-founder John Foley as CEO, said of the test in an interview with the WSJ. “Let’s get in the market and let the customer tell us what works.”
Peloton spokeswoman Amelise Lane said Peloton created the limited-time pilot to explore various pricing models and options for new members.
“This aligns with Peloton’s belief that intuition drives testing and data drives decision making as the company sets course for the next phase of its evolution and growth,” Lane said in an e-mailed statement to CNBC.
McCarthy, the former chief financial officer of Spotify Technology and Netflix, told the WSJ that he plans to reshape his executive team, consider manufacturing simpler bikes and upend the company’s capital spending strategy.
Peloton also announced the hire of Andrew Rendich, former chief operating officer of the e-commerce company Grove Collaborative, as its chief supply chain officer. It also said that its current global head of people, Shari Eaton, had been promoted to chief people officer, reporting directly to McCarthy.
