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The Ride to Success for SoulCycle

 4 min read / 

Already well known in major U.S. cities such as New York and San Francisco, SoulCycle can be best described as a mixture of spinning and self-help therapy session with pumping dance music in a dim candle lit room.

Founded in 2006 by Julie Rice and Elizabeth Cutler, SoulCycle has started off as a single studio on Manhattan’s Upper West Side. In recent years, it has undergone a rapid expansion where it now operates over 41 location nationwide. It has gained support from wealthy investors, most notoriously Stephen Ross, the billionaire real estate mogul, who has now acquired a majority stake in SoulCycle in 2011.

A month ago, SoulCycle have made the announcement that sent not only fitness fans familiar with the workout chain in frenzy, but had Wall Street financiers hoping to piggyback the current hype. SoulCycle has decided to go public.

They are drawing considerable attention compared to other fitness companies because they know how to create consumer buzz. It might not be even farfetched to say SoulCycle is the Apple of the fitness world. In the mass consumer market, consumer buzz is the most cost efficient and effective way to promote new products, especially ones that are focused to fashion and faddism.

However, consumer buzz does not come that easily and it does not just happen overnight. Its main drive is through “word of mouth” marketing campaigns that start with the consumer needs and desires. It is only by adding emotion to a combination of factors, such as:

  • Offer is based on an innovative product or service
  • Precise messages that target the right group of people
  • Right social conditions and circumstances to spread their campaign

All of the above helped enable SoulCycle to reach its current popularity.

To best understand how SoulCycle has grown so quickly, one must breakdown their business model and analyse their fundamentals.

SoulCycle is designed for exclusivity. Registrations to their classes the week ahead opens at noon every Monday and devoted riders will momentarily abandon their work commitments to book a ride with their favourite spinning instructors for just 45 minutes.  The reason why their $40 classes can be booked full by 12:01 p.m., is SoulCycle’s avid community, which the riders and the company claim mutually feeding off their “positive group energy”.

In the studio, riders and instructors come early to socialise, but SoulCycle has taken the sense of community one step further and has expanded it outside classes. The company’s “Your Soul Matters” team makes their riders to see and be seen. What that means is they maintain a continual relationship with riders over a diverse range of social media platforms as seen from “mandatory after photos” and shout-outs presented on Facebook, Instagram, Twitter and even Spotify.

SoulCycle again has shown themselves more than just a spinning lesson by selling apparel at every studio of the chain. Selling $52 tank top and $78 sweatpants, along with headbands, water bottles, and other SoulCycle branded products, community members are easily recognised both in and out of the studio. SoulCycle apparel has become the go to uniforms not only because they are “super fit” but the recent development of a cult-like following amongst Victoria’s Secret Models has reinforced the new fashion trend.

Most importantly SoulCycle has been designed to make people feel good. Well trained instructors give out positive reinforcements over the ride and tolerate no boot camp training style! As time is ever limiting in the fast paced world, the 45 minutes ride can effectively burn as many as 700 calories, which is convenient for time crunched office workers. A defining factor for SoulCycle compared to other spinning classes are that each of their instructors has their own technique to inspire, hence the ability to attract a large crowd of followers.

To simply summarise SoulCycle’s current buzz is their ability to modify an old product – spinning, and combine it with a new image that fits with the modern trend in the right place at the right time. According to documents filed with the SEC, SoulCycle has successfully excited Wall Street. The question is, will investors now share the same enthusiasm for the brand along with its consumers?

Though nothing is certain as we still anticipate the results from their IPO in the coming weeks, going public has given SoulCycle a great deal of visibility, reinforcing their status in the main consumer market.

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Companies

H&M to Shut Stores as Quarterly Results Plunge

 2 min read / 

H&M Results

Fashion retailer H&M announced today that it will be shutting down more stores after it experienced its biggest drop in quarterly sales in at least a decade.

Although group sales rose by 4% over the year, fourth quarter sales shrank by 4% year-on-year, to 50.4bn kronor ($6bn), as fewer customers visited its stores. This was far below the retailer’s expectations. Shares in H&M have now hit their lowest level in eight years.

H&M plans to adapt to changes in the market by closing more stores and selling the brand through Chinese online platform Tmall. It aims to integrate its physical and digital stores more, and will give more details on their strategy changes at a meeting with investors on February 14.

The company said:

“The quarter was weak for the H&M brand’s physical stores, which were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry[…] In addition, there have been imbalances in parts of the H&M brand’s assortment composition.”

The company’s rival, Inditex, the owner of high street brand Zara, as well as Massimo Dutti, Bershka and Pull&Bear, has continually outperformed H&M, as it expands more into e-commerce. However, this week, the Spanish giant also reported a slowdown in sales in its third quarter but said sales improved again in November given the colder weather.

Keep reading |  2 min read

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Snap Opens Online Studio

Snapchat Online Studio

The studio will enable brands to build adverts that individuals users can include in their own snaps.

Snapchat is adding another trick to its repertoire by allowing users to add branded animations to the existing arsenal of augmented reality lenses. This is not a wholly new innovation as advertisers can already sponsor lenses, although there is a hefty minimum spend of $300,000 and a current need to work closely with Snap’s design team. However, the new studio will enable advertisers to create their own adverts, which will then need to be accepted by Snap before they are given the green light. The move is part of Snap’s wider efforts to diversify their revenue streams.

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Japan Is Behind Bitcoin’s Rise

Japan Bitcoin

Deutsche Bank released a research note saying that Japanese investors account for bitcoin’s meteoric rise.

Deutsche Bank analysts have said they believe that individual Japanese foreign-exchange (FX) traders are instead moving towards leveraged cryptocurrency trading in the search for astronomical returns. Already, Japan makes up 50% of the world’s leveraged FX trading and Nikkei recently said that 40% of cryptocurrency trading was denominated in yen throughout October and November. Evidently, the Japanese are growing tired of years of ultra-low interest rates and are turning to the blockchain to boost their savings.

Keep reading |  1 min read

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