In August 2019, Equinox announced a new connected spin bike and treadmill, along with a digital app, to compete directly with Peloton—the most significant threat to Equinox in its entire 29-year history, since there is little reason for a customer to have subscriptions to both services. Equinox believes this is an extension of its retail club locations—an “and” option, not an “or.” While this allows Equinox to sell a club and connected fitness membership in a bundle, which should minimize cannibalization of its core business, it will also have to sell stand-alone subscriptions that will cannibalize its core business. 

Earlier this month, news leaked that Equinox was looking for a significant investment from the private equity firm Silver Lake to help fund its expansion, proof of how serious and costly efforts to compete with Peloton will be.   

The most interesting philosophical difference between Equinox and Peloton is their respective branding approaches. Peloton is monolithic: The company’s brand name proceeds every offering it has (Peloton Bike, Peloton Tread, Peloton Digital). Equinox’s approach, however, is polylithic: The company is bundling its various brands (Equinox, Precision Run, SoulCycle, Rumble, Y7 Yoga) into a single service. 

The move aligns with an ongoing debate about the strategy of sub-brands, most recently driven by Glossier launching Glossier Play and Everlane launching Everlane Tread: Are brands better off building one brand that everyone knows and identifies with or splintering their offering into multiple ones to appeal to more specific demographics? 

Peloton’s approach is simple and gives the company a branding architecture to follow as it moves into more products like a cheaper treadmill and a rowing machine. The challenge is that Peloton’s brand is still relatively new, with low penetration in the U.S. (it has sold under 1 million connected fitness products to date), while Peloton believes it has an audience of 65 million members in this country alone. It reported over 560,000 subscribers (which includes multiple people in a household) and 1.6 million members in Q1 2020.  

Equinox, on the other hand, had over 350,000 members globally as of 2018; SoulCycle reported 350,000 members in its 2015 S-1 filing; Blink, its lower-end offering, had 400,000, on top of Rumble and Y7, the two smallest companies in its portfolio. That’s a huge base of customers to market to, but it could have a harder time than Peloton getting these customers to buy into the connected fitness experience. Many members might not know that Equinox owns or invested in SoulCycle, Blink or Rumble, so the brand affinity for Equinox is weaker since members align with those sub-brands. Or it’s this affinity for the sub-brands that will be compelling enough to get members to convert—these companies have credibility in their respective activity fields. The challenge will be managing all of the different brands in the messaging, and there is a lot to account for between Equinox, Precision Run, SoulCycle, Rumble, Y7, and hardware that carries  SoulCycle or Woodway’s brand (the bike and treadmill, respectively).  

But at the same time, Equinox already earns between $1.5 and $2 billion in revenue from it’s one million plus total subscribers. Any incremental revenue from the new connected fitness offering is gravy in the short term, but essential in the long-term to fend off Peloton.  This will be an entertaining duel to follow, as a technology-media-software-product-fitness-experience-design-retail-apparel-logistics company goes up against a retail fitness company that is trying to modernize for fickle consumer preferences and spending—with two different branding approaches on display. Right now, Equinox needs to be really careful to minimize brand confusion so new and existing customers sign up as quickly as possible.