Peloton (NASDAQ: PTON) is currently promoting equipment it may not be able to deliver until 2021 as it battles with an unprecedented amount of new orders due to the company’s growing popularity. Frustrated consumers are taking to Peloton’s customer-service lines for help to cancel orders after waiting months. Others are turning to competing brands such as Bowflex and NordicTrack and sharing tips online on how to recreate the Peloton experience. Peloton shares dropped over 3.5% on Tuesday following reports of such behavior.
The exercise hardware and software company has been a hit on Wall Street during the pandemic, with users forking out $1,895 for a Peloton bike and $2,485 for a treadmill. Its shares have almost tripled year to date, but have recently slid due to positive vaccine news and order delays.
Long waiting times for Peloton products
The company stated that the delays are due to the equipment being manufactured abroad and then being shipped to the U.S. The prolonged shipping times do not come as a huge surprise, as Peloton announced it would be “operating under supply constraints for the foreseeable future” in its earnings report earlier this month. The exercise equipment company stated in the report: “As we rapidly scale our organization to meet the extraordinary demand for our products, we realize that some of our members have faced extended delays associated with receiving our products or having support requests fulfilled.” Peloton owed the delays to increasing demand from users who are unable to attend gyms and sporting events during the lockdown.
Amidst the long delays, Peloton continues to advertise on social media by focusing on promoting the brand and its community in countries outside the U.S. However, the company decided not to run a Black Friday sales campaign this year, which is usually a very popular event for technology companies.
Continued delayed orders could represent a growing problem if Peloton is experiencing months-long waiting times with its manufacturer. A spokeswoman for Peloton explained that port delays are not easy to predict or solve and stated “the wait times right now are not how we want people to experience Peloton.”
Furthermore, a successful vaccine being administered next year could influence some would-be Peloton bike owners to reconsider if their local gym or sports club is reopening. Peloton’s stock dropped 25% earlier this month on news of Pfizer’s vaccine developments.
However, business owners in the fitness industry expect people to return to gyms gradually and predict many others will continue to work-out at home. U.S. gyms are a $40 billion industry, whilst the home fitness sector only brought in $4 billion in annual sales, signaling that there’s still plenty of growth opportunity left for Peloton. If Peloton can solve its manufacturing and delivery issues, it should be back on track to enjoying its previous successes as users continue to enjoy working out at home with Peloton.
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