The Peloton-Adidas Partnership Proves the Power of At-Home Fitness, But Shoes Are a Tough Sell

COVID-19 forced fitness buffs to trade the gym for their living room in 2020, and the at-home fitness business boomed as a result.

The Sports & Fitness Industry Association revealed in its 2021 Manufacturers’ Sales by Category report that people spent $5.6 billion on exercise equipment in 2020, representing a 40.5% year-over-year increase in sales.

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With gyms closed throughout the country for much of 2020, forcing people to train at home, athletic footwear and apparel brands began to tie themselves to leading at-home fitness companies. For instance, Lululemon made headlines when it acquired Mirror in June 2020. And most recently, Adidas announced a partnership with Peloton in March, which has already yielded a clothing collection.

“Together, we see great potential to delight and surprise our highly engaged communities by multiplying the power of both brands in a number of exciting ways,” Adidas GM of global training Aimee Arana said of the partnership in a statement. “Our shared values are around well-being, inclusivity, community provide an incredible foundation, and we look forward to bringing these brands together.”

Moving Into Next Gear

Adidas aligned itself with Peloton at the right time. In its 2020 annual report, Peloton stated it generated $1.8 billion in revenues last year, representing 100% year-over-year growth, and it ended fiscal 2020 with over 1.09 million Connected Fitness Subscriptions, an increase of 113%.

Matt Powell, senior sports industry adviser with The NPD Group Inc., believes partnerships such as these present industry powerhouses with new, and beneficial, marketing opportunities.

“If you are a fan of one of these companies and you want to show your friends that you’re a part of that group, wearing shoes that have the logo of the company on it makes sense,” Powell explained. “I remember pre-pandemic, I was standing in line at a grocery store and the woman behind me had a pair of Nobulls on and I said to her, ‘Do you like those shoes?’ She went on to tell me she’s a huge CrossFit person and everybody at her gym wears this brand. She was wearing this brand that identified her as a CrossFitter.”

However, Powell believes, that might be as far as footwear can play in this market.

“The affiliation is certainly a merchandising opportunity for brands, but from a footwear point of view, I’m not sure there’s a big opportunity,” Powell explained. “It’s more of an apparel story because most of the activities at home don’t require special shoes, or if they do, they’re highly specialized, like cycling shoes.”

Ready to Ride

Although cycling shoes are a niche category in footwear, they had significant gains in 2020. According to NPD Retail Tracking Service data, sales of cycling shoes increased roughly 10% at retail for the year. And with COVID-19 gym restrictions remaining in place, the shoes are still a hot item.

Nobull, for instance, launched its debut indoor cycling shoe in August 2020. The look arrived via in three colorways — black, white and gray — and came with a $179 price point.

Marcus Wilson, co-founder of Nobull, explained to FN that the brand’s consumers had been asking for a cycling shoe pre-pandemic, and were not anticipating a spike in the activity. He confirmed with FN that most of the sizes of the shoe sold out within a month and were restocked to much fanfare for the holiday shopping season.

“How quickly the shoes sold out was a nice surprise,” Wilson said. “Even though we expected it to be successful, we now have to ramp things up even more because of everything going on.”

More Ready to Run

While Powell believes partnerships with indoor fitness brands might not be highly lucrative for footwear, he does see some openings for athletic sneakers, particularly where it comes to running.

“Running shoes would be the logical lead in [for shoe brands],” he said. “Many people wear running shoes when they’re on a treadmill, so for those people on a Peloton treadmill, for example, as opposed to the bike, you would find a direct use there. And it needs to carry the logo so if you’re wearing it on the street, people know you’re a Peloton user.”

The running boom of 2020 was the athletic market’s biggest story, with three brands — Hoka One One, Brooks and On — helping to fuel a resurgence in performance sales.

Even Nobull, a brand primarily associated with CrossFit, said that the running shoe boom was not lost on them.

“The training side [of Nobull] grew very much in line with what we expected, but the running category definitely exceeded our expectations,” Wilson told FN. “Because of this, we were inventory constrained for a good portion of last year and were sold out of running shoes quite a bit.”

He continued, “People working out at home still like to wear shoes, but the big difference in training shoes from running is: Training shoes are great when there’s more weight involved, but if you’re doing bodyweight workouts at home or in your garage, running shoes can be used for that, as well as [for when you’re] running. We certainly saw that there was a relationship in growth in running and COVID.”

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