Press commentary on how Peloton and other fitness brands are strategizing offline retail. Read the full article here.

On Peloton’s growing brick-and-mortar footprint and what it says about the company’s strengths and weaknesses:

Physical retail expansion has been key to Peloton’s success. The company has 74 showrooms globally, where it allows customers to try out its internet-connected fitness bikes and treadmills, and its president said earlier this year that it plans to open 100 more showrooms by the end of 2019. But opening these showrooms came at a cost — Peloton has raised nearly $1 billion in funding to-date. According to startup funding database PitchBook, a record $2 billion in funding went to fitness startups in 2018.

“Frankly Peloton had a much harder job because there wasn’t really any other example of this [internet-connected workout equipment],”said Richie Siegel, founder and lead analyst of Loose Threads. “I think Peloton did a lot of pioneering there and so it’s frankly a lot easier to explain what these things are now then call it five years ago.”

On why Peloton competitors like Hydrow are forging a physical retail footprint through wholesale:

For a newer brand like Hydrow, the biggest benefit of selling through Best Buy is that the brand doesn’t have to yet invest in its own physical spaces, according to Nancy Smith, chief marketing officer of Hydrow. She said that while Hydrow’s first expansion into physical retail — a pop-up it did in Boston in November — was successful, it taught the brand that it wasn’t quite ready to invest in building its own spaces and hiring employees to manage them.

[…]

“I think the mindset a lot of these brands are in at this time is, ‘We need to get as many customers as possible,’” Siegel said. “And instead of trying to get them to come to our own stores, which carries a lot of operational debt and just sucks a lot of money up, let’s go where the customers already are.”