5.4 Place: Delivering Value through Distribution Strategy

Time

Place

Form

Possession

Apple’s mastery of all four components of distribution utility not only boosts sales—it creates an effortless, premium buying experience that customers are willing to pay extra for.

Instead of selling STAINMASTER through every flooring retailer, they handpicked dealers who were willing to do the following:

• Support premium pricing. To capture the value generated by the brand’s strong competitive angle—the first branded carpet that delivered on a promise of exceptional durability and cleanability—stores needed to be willing to support premium pricing.

• Invest in in-store kiosks and comparison tools. Success hinged on the kiosks. When shoppers could directly compare STAINMASTER’s stain resistance to a leading competitor’s carpet in a live demonstration, they were convinced of the benefit and the brand promise.

• Train sales associates to explain the benefits of stain-resistant technology. By handpicking dealers, DuPont also handpicked trusted spokespeople who could demonstrate the product, reinforce the brand promise, and maintain premium pricing.

DuPont’s team (including STAINMASTER’s marketing leadership) knew that selling through every outlet would dilute the brand. Price competition could force retailers to discount STAINMASTER alongside generic options. Worse, untrained sales staff at low-service stores might fail to explain why the product was worth paying more.

By choosing selective partners, DuPont ensured the following:

• The shopping experience reinforced the premium image.

• Customers were educated about the technology and the long-term value of investing in stain resistance.

• Retailers were motivated to maintain pricing integrity and avoid discounting wars.

STAINMASTER quickly became the #1 premium carpet brand in the US, commanding higher prices and strong customer loyalty. Its success not only transformed the carpet industry but it also proved that distribution strategy can be as important as product innovation.

DuPont’s selective distribution wasn’t just about controlling where the product was sold—it was a strategic move to protect premium pricing, reinforce brand positioning, and ensure customers understood the value behind the higher price.

• Sold direct-to-consumer through its website, controlling the full customer experience and keeping high profit margins.

• Opened branded showrooms in upscale shopping centers where trained staff could explain features, demonstrate the bike, and sell the lifestyle.

• Limited third-party partnerships to retailers like Dick’s Sporting Goods and Amazon—but only after the brand was well-established and pricing integrity could be maintained.

Peloton knew that mass retail could dilute the brand’s exclusivity and force discounts incompatible with its premium pricing (bikes started around $2,000+).

Peloton built a loyal customer base, maintained pricing power, and expanded into a full ecosystem (subscriptions, apparel, accessories)—all while staying in control of its distribution strategy.

• Early Growth (2014–2019)

  Peloton focused exclusively on direct-to-consumer (DTC) distribution. They sold bikes and subscriptions directly through their website and a small network of showrooms located in upscale shopping malls and urban centers.

  • By 2019, they had 74 showrooms and over 1 million subscribers.

• Why Showrooms?

  The showrooms provided hands-on experiences for a premium product that was difficult to evaluate online. Sales associates explained the value proposition, set up financing options, and often converted high-consideration shoppers into customers.

• Third-Party Retail Expansion (2022 onward)

  Peloton delayed partnerships with third-party retailers until 2022. It then began selling select equipment through Amazon and, later, Dick’s Sporting Goods.

  • Even then, Peloton limited the product selection and maintained premium pricing.

  • This move came as the company shifted strategy post-pandemic to expand reach without fully abandoning its DTC pricing and customer experience controls.