Tonal Adds AI To New Pilates Feature

Bloomberg

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00:00There is a strategy now, right? A different environment to, say, 2020 through 2022.

00:06And I'm trying to make sense of what links it all. You seem to want to look at the high street a

00:11little bit and retail. What is your big strategy? Well, yeah, just in the past year, we've actually

00:17rolled out from 19 locations to over 100 locations for distribution. So now we have more places for

00:23people to see and touch and feel a total product, which is incredible because we have 75% NPS and

00:28some of the lowest churn in the category. So giving people an opportunity to actually experience

00:33the system means that people end up buying. And so we want to really focus on that.

00:37Tonal systems are still higher end. And if we learned anything from a couple of weeks ago when

00:42Peloton had its latest change in strategy, people are still very sensitive to pricing.

00:48They want more for less. What's your strategy for pricing?

00:52Yeah. We feel like we've got the world's leading strength training system. It's a personal trainer

00:58on your wall. It's a full gym. You don't have to think about it in the sense that we personalize

01:02all the weights for you. So there isn't anything out there in the market like what we do. So the

01:08fact that we can personalize the workout, we can adjust weights in real time, we'll move weights up

01:13by one pound or decrease it by one pound if you're not doing well. And you don't have to think about it

01:17at all. And from our perspective, because of our platform and the way it's built, which just sits on

01:22top of AI, it's not just entertaining you. It's really a strength training system that works with

01:27you. And you are offering more to those that already have one with reformer Pilates options

01:33being built in, Darren, and unfolded. But I'm interested in the artificial intelligence part

01:37of it that has been being baked into everyday workouts on the Tonal. How are you embracing it?

01:42Yeah. Well, as you said, Carolyn, we're super excited today to announce the fact that we're

01:47working with Kristen McGee, and we're announcing our Pilates system. You know, what's really great

01:52about it is that what we see on our platform is that almost two thirds of our members are

01:56interested in Pilates, but only 17% of them are actually doing it. And the reason for that

02:01is pretty clear. You know, we've got people who have difficulty getting into classes, they're

02:05inaccessible, you have to drive to them, the classes are often difficult to find. And so we rolled

02:11that out on our tonal system. We have force curves that are very similar to what a reformer looks

02:18like. So as you move further away from the machine, it actually increases in resistance as well.

02:23It's really unlike anything that's ever been offered out there. So now a greater part of our

02:28community is able to actually interact with something like Pilates. And so you add that to

02:32strength, you add that to yoga, you add that to the cardio work that we do. And so to answer your

02:39question around the AI component of it, we think we have the world's largest strength database.

02:44So we have nearly 300,000 members lifting nearly 300 billion pounds. It's a tremendous data set. So

02:51as we learn about you and who you are, we can look at our cables and say, you know, somebody is lifting

02:56certain amount of weight, a certain amount of reps, force, velocity, range of motion, all of those

03:00things, which helps us to define what outcomes could look like for somebody. So people get stronger

03:05on Tonal than any other system. It is a premium offering. Would you ever think about having

03:11cheaper offerings or just the application as we've seen with Peloton, for example?

03:16Yeah, we don't have anything to announce today, but we're certainly looking at alternative

03:19opportunities for our hardware. I mean, we could move upstream, we could move downstream. But again,

03:24I would just refer back to the fact that nobody has anything quite like what we have.

03:29Just very quick before we let you go, you know, you've raised money in the past.

03:32Would you raise money just to keep growth going? Or what would the rationale be?

03:37Sure. I mean, we're always looking to fuel growth. So, you know, in terms of developing new hardware,

03:41in terms of acquiring new customers, expanding any new modalities, as we're announcing today,

03:46we think there's an opportunity for us to keep that keep that going.

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