Peloton’s rise is losing gas as slow deliveries threaten the hype
Peloton’s relentlessly positive Instagram posts usually attract enthusiastic responses from its 1.2 million followers, who love the company’s charismatic instructors and its $1,900plus bikes and treadmills.
But recently the company’s account has become a beacon for outrage about delayed deliveries and hours spent with customer service representatives. “I know a good Peloton goal … deliver my mom’s bike that was supposed to be here December 21st!” snapped one person in response to a post about New Year’s goals. “I could be close to 900 rides oh but that’s right I don’t have my bike!” another replied to a post about a user’s 900th ride.
After more than quadrupling in value to more than $40 billion during the coronavirus pandemic, Peloton is now experiencing some serious growing pains. Some customers who ordered bikes as far back as October in expectation of having them for the holidays or in time to begin New Year’s resolutions find themselves still waiting for deliveries.
“What we’re finding is that Peloton the idea has grown faster than Peloton the company,” said Simeon Siegel, a retail analyst at BMO Capital Markets. “All companies need to figure out how to grow into their hype. Right now, the hype surrounding Peloton is like no other.”
While shortages of everything from Clorox wipes to sofas have become a pandemic norm, the complaints about Peloton are notable given the buzz surrounding the company and the cost of its luxury exercise products.
The complaints include delivery trucks not showing up when they are scheduled. Some customers have reported getting automated emails pushing their delivery dates out by a month or more, and then receiving little clarity from customer service representatives, who sometimes blame Peloton’s shipping partners.
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 robust daily chat with new buyer woes. Peloton has a customer rating of 1.4 out of five stars with the Better Business Bureau, where 813 complaints have been closed in the past 12 months. And on Twitter, an account called Peloton Lies has been collecting complaints.
It is not simply a case of bad PR for Peloton. While people stuck at home during the pandemic have splurged on the company’s bikes and treadmills (which can cost upward of $2,500) and paid a monthly fee of $39 to participate in virtual classes, the eventual reopening of gyms across the country will pose serious competition. (People can also subscribe to a separate Peloton app that doesn’t require equipment.)
Peloton, which had more than 1.3 million members who owned its bikes or treadmills in September, more than double than a year earlier, has acknowledged its lengthy delivery times. On calls with investors, the company has noted that wait times have been particularly long for the new Bike+, which went on sale in the fall. While the company has said it anticipated its supply chain challenges would “start to abate” between January and March, the delays have put a spotlight on the current window that Peloton has to capture customers.
“We are in that home fitness race to grab member base,” said Siegel, the retail analyst. “That’s versus competition, that’s versus the weather, that’s versus the vaccine, and there’s absolutely a push to lock in members at all costs.”
Jessica Kleiman, senior vice president of communications at Peloton, said the company was transparent about estimated wait times
with customers.
“We acknowledge that this is not the Peloton experience we typically deliver to our members, and getting back to where we need to be is a No. 1 priority for our leadership team,” she said.
Kleiman noted that the “vast majority” of orders had been delivered on their originally scheduled dates, although she declined to provide a percentage.
In pure business terms, the chaos of the past year was good for Peloton, which was founded in 2012. With gyms and fitness studios closed as a result of virus restrictions, Peloton’s revenue nearly tripled between April and June from a year earlier. But the company also dealt with shutdowns and delays affecting factories, warehouses, delivery fleets and ports around the world.
Even as wait times for deliveries grew over the summer, the company continued to take orders and advertise its bikes. In the fall, as the weather cooled and coronavirus cases surged across the country, demand soared and the company found itself unable to deliver all of its orders in a timely manner. (Congested ports and the California wildfires contributed to the delays.)
Many of the stories follow a pattern: After agreeing to shell out for a bike or a treadmill — most buyers are required to begin making payments immediately — customers are given a delivery date of anywhere from three to 10 weeks from purchase. But on delivery day, Peloton either suddenly reschedules or never shows. Customer service representatives offer little clarity, inconsistently doling out $125 refunds or water bottles as consolation. They often blame the lack of information on XPO Logistics and J.B. Hunt, shipping companies that handle a significant portion of Peloton’s deliveries.
XPO declined to comment, and J.B. Hunt did not respond to a request for comment.
Weston Musillo, a 29year-old data analyst in rural Oregon, ordered his bike Aug. 20. His Dec. 13 delivery date came and went, and neither Peloton nor XPO could explain what happened. After several reschedules, he received his bike in the first week of January.
Amanda Carmody, a 31year-old lawyer in Albuquerque, N.M., ordered a Peloton on Oct. 17 and was told she would receive it Dec. 9. The company then pushed the date to Dec. 31, citing pandemic delays. That day, a driver called to say the delivery was en route — but then a warehouse employee called to apologize, saying the bike was not actually available. After hours on the phone with customer service, she was told the bike would arrive Jan. 9. It did not. Her delivery was rescheduled for Feb. 22, but Carmody said she had requested that Peloton cancel her order. She said Peloton blamed XPO for the delays.
“I feel really bad getting annoyed about it — it’s a privilege to be complaining about this thing and to get the bike,” Carmody said. “But the fact they can’t give you a delivery date and stick to it, and that their customer service department is not empowered at all to find solutions to problems is the most frustrating part of this.”
Competitors are trying to take advantage — Soulcycle has been quick to advertise that its bikes are arriving within one to three weeks. Michael Sepso, an entrepreneur in Manhattan, tweeted in late December that the Peloton Tread he ordered in October had still not arrived.
“Clearly they have a hot product with a lot of demand, but the service part of it has just been infuriating,” he said.
Several fitness manufacturers responded to his tweet with messages pitching their products, he said. He canceled his Peloton order and bought a treadmill from a competitor. It arrived in early January.