Leading into the holiday season, Peloton launched a new 30 second spot to power sales through the new year. Well, it sparked a fury, first with social media and then picked up by the media. Here’s the full story.
A young mother wakes up to a surprise from her husband on Christmas morning: a Peloton bike (retail value $2,245). She is completely shocked, and then nervous to ride the stationary bike. Soon she falls in love with the bike, riding five days in a row. A year later, her family sits around the Christmas tree watching her series of selfie videos of a year in which the Peloton “changed me”.
The ad, launched by Peloton in November, has since received almost 9 million views:
Backlash Online and in the Media Leads to Stock Drop
Social media latched on to the ad, calling it sexist. Is it the “surprise” fitness gift for a woman (that the man seemingly never uses)? Is it that a woman is “nervous” to ride her stationary bike? Is it that the woman in the video already appears to be in incredible shape? Is it the meek look on the actress’s face throughout the ad, almost seeking her husband’s approval in the end?
We at Channel Signal agree that the ad walks a fine line, but that in this day and age, any ad for a female fitness product would have a hard time pleasing everyone.
The short-term effects are without question. Following the social commentary and subsequent media articles, Peloton’s stock, which just went public in September, plummeted. Much of this was caused by the investment community reacting to the firestorm. The stock fell to 30.19 on December 12th, a 17% drop from the high of $36.45. The valuation of the company fell well over 1 billion dollars.
But Could Lead to a Net Positive for the Company
In a recent Forbes interview, Daniel McCarthy of the Emory University Goizueta Business School stated that “history would suggest that this sort of snafu will be short-lived and people will forget about it in two weeks. If people forget about the ad…but remember Peloton, it might end up being more beneficial than it seems.”
We couldn’t agree more. This type of media buzz is really nothing but short-term fluff and has nothing to do with a product’s performance and whether it meets a consumer need. And at the end of the day, 90% of consumers turn to product reviews (not some social media buzz about an ad) to determine product fit for themselves or loved ones.
Product reviews remain steady and the stock price has now risen to almost $32.93 at the close of Tuesday’s business (Dec 17), up from the low of $30.19. We predict Peloton will have a solid holiday selling season and continue to move past this short PR blip.
The lesson here. Consumers know what they want, believe each other, and consider these short term firestorms as noise.