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Afaan Oromoo Business News Dec,02/2019 |etv




Peloton bike ad controversy is reminder to think before buying




A week ago while winding down from Thanksgiving weekend, I turned to my husband shortly after seeing what’s now turned into a firestorm of a TV commercial and quietly said: “Don’t get me a Peloton.”

His quick response: “Here is the good news: It never crossed my mind.” 

The exchange between us seemed so funny that I immediately tweeted it out on Dec. 1 and have since gotten 19 likes. Who knew that a simple exchange between two people who have been together for more than 25 years could be so telling? 

And really, who knew that America would get so worked up over a Peloton commercial? 

Peloton Interactive made big news when its stock dropped 9.12% on Dec. 3 to close at $33.48 a share, down $3.36.  The stock fell 1.55% on Dec. 4 to close at $32.96 a share, down 52 cents. 

The stock appeared to take a hit after social media exploded about the latest lush holiday Peloton ad featuring a gorgeous young woman who tells the story of her harrowing year-long journey to get up at 5 a.m. and ride that exercise bike that her husband gave for Christmas. Spoiler alert: She’s still in great shape. 

More on Peloton: The Internet reacts to Peloton’s ‘unsettling’ holiday ad

Secretly, of course, much of America would love to be as wealthy as the couples in these ads, which show the high-end exercise bike set in a House Envy-worthy home with rich wood floors, lots of open space and art work. No dirty jeans or ratty sweatshirts hang off these bikes. 

You can imagine the ad folks writing some Peloton commercials tongue-in-cheek. The public has been mocking these ads on Twitter for more than a year already.

Now, though, the latest ad hit a real #MeToo nerve, triggering accusations of sexism. 

One woman tweeted: “I think what bothers me about the Peloton ad is the look on that woman’s face throughout the commercial, like she’s apologizing for her very existence on this earth.” 

Yes, it is just a commercial for an overpriced exercise bike. Yes, we’ve seen this nonsense before. Remember, those Carl’s Jr. ads a few years ago that used busty blondes to sell burgers? 

Crossing a line

Even so, the timing for Peloton remains tone-deaf, like an advertising story board pitch presented in a board meeting long before movie producer Harvey Weinstein became synonymous with sexual misconduct, long before Larry Nassar went to prison for the sexual assault of minors, long before Kid Rock’s drunken tirade against Oprah Winfrey at his bar in Nashville went viral, crossed the line and caused a few more people to say enough is enough. 

Face it, Victoria’s Secret has even canceled its slinky holiday runway show this year, months after it was learned that Leslie Wexner, CEO of L Brands, was a close friend of the late convicted sex offender Jeffrey Epstein. 

Somewhere along the line here, you wonder when women will be treated with more respect. 

The Peloton ad — while tame — still leaves you questioning what just happened there.

Did we just watch a commercial for a luxury brand that featured a man who was somehow dictating how a woman should feel about herself? Why does he get to tell her how long she should be able to sleep? Or even suggest how she could work harder to look better?

Really, yet another message that helps to erase the self in self-esteem? 

Merry Christmas. Happy holidays. 

Smart husbands, of course, will stay as far away from this one as possible.

It’s wonderful to be able to be there for your spouse. I am personally spoiled rotten by a husband who frequently drives me a few miles to my nightly exercise classes. Some nights, I might not go if I didn’t have door-to-door service. I’m close to racking up 230 classes in 2019. A record that will make our family Christmas letter. 

Even so, there are limits here. 

There are some things husbands shouldn’t buy

When we first married, I once told my husband to never, ever buy me a vacuum cleaner or blender for a gift — even if it somehow seemed like I wanted one.If taken the wrong way, you could end up paying for years.

The same is true with the Peloton deal. You’ll be paying for it long after the tree hits the curb, one way or another.  

More: Paying for the holidays in six easy payments. Here’s what to consider

To afford a Peloton bike, you’re likely going to need an installment plan.

You could pay $2,245 upfront for the indoor exercise bike that can stream a live gym experience into your home. Or you could pay by the month, like you would for tires or appliances. 

Peloton has a “Ride now, pay over time” plan at 0% APR. No money down. 

The plan enables you to break those payments into 39 months — a bit longer than a three-year car loan — at around $58 a month. The price does not include taxes or accessories. 

The Peloton membership fee will set you back by another $39 a month.

Sexist or not, it’s a whole lot of money. 

Not on many wish lists

One bike is more than most families will spend during the entire holiday season. 

On average, consumers plan to spend $1,048 on holiday gifts this year and other items, according to estimates by the National Retail Federation. The estimate breaks down into $659 for gifts for family and friends, $227 for food and decorations, and $162 for non-gift items for yourself or your family. 

What do people want for the holidays? According to the industry trade group’s research, here’s a breakdown: 

  • 52% of adult consumers want clothes or accessories
  • 35% want books or other media
  • 29% want consumer electronics or accessories
  • 18% want sporting goods or leisure items
  • 24% want decorative items for the house
  • 17% want tools or home improvement items
  • 23% want jewelry
  • 59% want gift cards
  • 21% want beauty products
  • 7% want other items

Many people, of course, do want fitness-related gifts, Lululemon pants, Manduka yoga mats, Bowflex weights, you name it, maybe even soon-to-be-released “Christmas” Nike LeBron 7 sneakers. 

And yes, many will be thrilled to be treated to a luxury exercise experience, such as a Peloton bike — especially if you’ve got an ocean view outside the backroom window. 

Yet it may not be as easy selling four-figure exercise bikes as you might imagine, and maybe that’s playing into the stock selloff, too. 

“Fitness equipment sales will be challenged for Holiday, as consumers are choosing clubs over ownership,” wrote Matt Powell, senior industry adviser for sports at the NPD Group, in a November blog.

He predicts a “challenged holiday season for sports retail.” 

Powell noted, though, that NPD doesn’t measure Direct to Consumer businesses like Peloton.

In general, Powell told me that the target customer for Peloton is an upscale city dweller. And he could see the Peloton bike being given as a gift. 

Even so, he too thought the Peloton ad “seemed tone deaf to me.” 

Beyond buzzwords

Social media experts will quickly tell you that tone deaf doesn’t work in what’s become a “cancel culture.” But really, it’s far more than dwelling on buzzwords here. 

It’s about treating people with respect and building long-term relationships. 

Peloton’s earlier message has been: “On the most basic level, Peloton sells happiness.”

Happiness is good; body shaming, not so much. 

Simply ask this: Would you want your daughter or sister living with that guy in the Peloton ad? 

Contact Susan Tompor  at 313-222-8876 or Follow her on Twitter @tompor. Read more on business and sign up for our business newsletter.

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Safaricom unveils savings platform in war with banks





Safaricom unveils savings platform in war with banks

M-Pesa has around 20 million active users in Kenya. FILE PHOTO | NMG 

Safaricom #ticker:SCOM is rolling out a new savings service on its M-Pesa platform in the telco’s latest onslaught on the banking sectors.

The company has started testing the new product that will allow M-Pesa users to invest and earn a 10 percent annual interest, which will accrue daily.

The new product, which caps savings at Sh70,000, will be known as Mali (Kiswahili for wealth) and aims to allow subscribers to invest easily without exit restrictions.

Savers will be able to invest money through USSD code *230 # or via a PayBill number. To qualify, one will be required to be a registered M-Pesa user for over three months.

“The product is supposed to encourage savings where you can put in money and withdraw the next day, but you will have earned something on the money since interest is calculated per day,” said a top Safaricom executive, adding that other partners are involved in the firm’s latest savings product. At 10 percent, Safaricom will be offering nearly double the current interest that banks are paying on savings.


“We view the combination of lending and wealth management services as a further boost to earnings from financial services,” Standard Investment Bank said in reference to Mali product. “The product which is yet to be launched officially, possibly includes a partner bank and a fund manager.”

Started 11 years ago as a service to allow Kenyans without access to the banking network to transfer money via mobile phones, M-Pesa now offers loans and savings in conjunction with local banks, as well as merchant payment services.

Safaricom launched the new overdraft feature called Fuliza on January 7 this year.

Fuliza is underwritten by Kenyan lenders KCB Group #ticker:KCB and NCBA Group #ticker:NIC, which already had partnerships with Safaricom to offer short-term loans on the M-Pesa platform. Fuliza lent out Sh140 billion in the first nine months, but part of the earnings from the service are shared with its partners.

“The current revenue sharing formula for the Fuliza product is 40:40:20 for Safaricom, NCBA and KCB respectively. KCB earned Sh484 million in the first half of 2019 in revenue from Fuliza, thus tota;ling Sh2.4bn for the entire product to end of June 2019, by our estimates,” Standard Investment Bank said in a note to investors.

It is not clear if the deposits in the new savings product will be used to back loans akin to the mode of operations in banks.

M-Pesa has around 20 million active users in Kenya and it has become the principal driver of Safaricom’s profit growth, as revenue from traditional voice and text services has flattened off. Safaricom currently offers a savings product in partnership with NCBA through M-Shwari with those saving up to Sh20, 000 earning annual interest of three percent, four percent for Sh50, 000 and five percent above Sh50, 000.

But the funds must be locked in for between one and 12 months and accessed after maturity. The new savings product does not have lock-in restrictions. It comes at a moment when banks have cut savings rate to 39-montth low, reflect the ongoing impact of removal of the floor interest rate last year that has seen lenders ride on cheap deposits for record profits. Official data shows average savings interest fell to 4.58 percent in September compared to 6.33 percent in the same month last year when Parliament made changes to the banking law and removed a clause that compelled banks to pay depositors at least 70 percent of base lending rate.


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Rate Cut By MPC Almost A Given Today & Auto Sales Stuck In The Mud For Months Now



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