In recent presentations on the value of good market research, we’ve discussed the winners and losers of the pandemic and associated lockdowns.
Among the obvious losers were gyms, but conversely makers of home fitness equipment home – such as Peleton – enjoyed incredible growth.
Last summer (2021), we posed the question about what would happen to businesses like this after lockdown restrictions eased. We suggested that businesses that were experiencing changes should consider getting close to their customers to find out what would happen when things returned to whatever normality was to become.
For Peleton, this would have been useful. Having enjoyed record growth in the earlier stages of the pandemic (around 250% in the first quarter of 2020), in November ’21 Peleton slashed its sales forecast by $1 billion dollars, wiping $9 billion off its value.
Yesterday (20 January 2022) it lost 25% again, after announcing that it was pausing production of its fitness products for two months due to a drop in demand. Sales are forecast to be down by up to 19%.
Their CFO said: “It is clear that we underestimated the reopening impact on our company and the overall industry.” Basically, they didn’t see this coming, which is unfortunate given that a relatively tiny amount of money spent on understanding their customers and what they wanted might just have alerted them to the fact that some people apparently no longer wanted keep fit at home.
Of course, just knowing that business was going to suffer would not necessarily have prevented it happening, but it would have allowed them to see it coming, prepare for it and perhaps take mitigating measures.