By Lelsey Green-Rennis
- Beyoncé and Peloton team up on content and support for HBCUs that produce nearly 20% of all African American graduates
- The home fitness equipment market is expected to reach $23.27B by 2025
Queen B and connected fitness company Peloton (PTON -0.86%) have teamed up to deliver curated content along with support to Historically Black Colleges and Universities (HBCU). The brand has typically targeted those with the discretionary income to spend on fitness. However, this partnership may position Peloton to expand its customer base to HBCU graduates who earn an additional $927,000 over their lifetime because of their credentials. HBCUs produce nearly 20% of all African American graduates, making them the perfect demographic for Peloton to attract, in effort to gain a larger share of the home fitness equipment market that’s expected to reach $23.2 billion by 2025.
Why This Matters: Although enrollment into HBCUs have been struggling in recent years, they generate $14.8 billion in economic impact annually. With Beyonce, a Peloton member herself, and the most requested artist on the company’s platform putting these institutions in the spotlight, their economic value and Peloton’s revenue will continue to rise. The company’s stock has surged even higher in the past nine months, and has gained in price roughly 251% year to date, as COVID-19 forced many exercise enthusiasts to find safer alternatives to crowded fitness centers.
HBCUs generate $14.8 billion in economic impact annually
While this partnership is unlikely by itself to be the company’s next big growth driver, it’s a strategic branding move to connect with current clients and attract similarly minded fitness-oriented millennials. Included in this multi-year partnership are themed Homecoming workouts and sponsored memberships for HBCU students. The workouts seek to “extend Homecoming to Peloton members” and span categories including cycling, running, yoga, and meditation. Peloton has also committed to building long-term recruiting relationships with these esteemed institutions to diversify their new employee talent pipeline.
Situational Awareness: The fitness market could be facing permanent change in consumer behavior. If this is true, the return on Peloton’s investment in HBCUs with this Beyoncé partnership will prove to be a strategic branding move that both attracts fitness-oriented HBCU graduates, and actual economic viability by converting students into long-term customers, who have high earning potential.
CBx Vibe: “Welcome” Beyoncé