Peloton May Borrow Ikea’s Most Successful Strategy

Peloton plans to bounce back by taking a page out of Ikea’s book — that is, it plans on letting customers assemble their own fitness gear. In a Bloomberg interview, CEO Barry McCarthy mentioned that Peloton will design its exercise bikes in such a way that they can be unboxed and assembled by customers with an instruction manual handy, eliminating the need for an expert to do it at their home.

The Peloton head added that the company has been working on its plan for a while. “We’ll continue to cost-reduce the hardware and we will engineer it so that you can assemble it so that we can ship it via FedEx,” McCarthy explained. The plans for self-assembling exercise gear to cut costs come at a time when Peloton is mulling a price hike for its current product portfolio. Whether Peloton will pass on the economical benefit of letting customers assemble their own gear is not known. Notably, Peloton’s CEO hasn’t revealed when the first batch of assemble-it-yourself exercise gear from the brand will hit the shelves. In the meanwhile, the company is also targeting a holiday season debut for its rowing machine and also hopes to bring back the premium Tread+ following the ugly recall saga.

While the Peloton CEO has made it clear that cost reduction is one of the core factors behind designing exercise machines customers can assemble on their own, it might have a few other benefits, too. As documented in a research paper that was published in the “Journal of Consumer Psychology,” Ikea’s easy-to-assemble furniture catalyzed a phenomenon called the Ikea Effect. The gist is that when customers put their own time and efforts to assemble an item, the item’s worth goes up in their eyes.