The past 18 months have seen some of the best results in years for the car-wash business. Statistics gathered through International Carwash Association’s (ICA) Wash Count program show significant increases in wash volumes and ticket averages (the average amount spent by a consumer for each car-wash purchase).
For sure, some of this success is driven by a recovering economy and, in several areas, exceptional weather results. The year 2015 also looks to be on pace to be one of the best for new vehicle sales, widely believed to positively affect consumers’ car-wash frequency.
Another encouraging trend is the ongoing and consistent trend in consumer preferences.
Every three years since 1996, ICA has conducted a national consumer study. In its first year, less than half (48%) of motorists reported going to a professional car wash as their primary way of washing their vehicle. That figure has steadily increased, with the most recent results (from 2014) showing nearly 72% of motorists preferring a professional car wash vs. doing it on their own.
So while the external circumstances benefit us, we would be mistaken to ignore the critical internal improvements taking place in the car-wash community, including subscription programs and improved merchandising.
Subscriber Benefits
Subscription programs have been around for many years. These programs allow for a customer to pay a flat price for a usually unlimited number of visits per month. The evolution lately has been both technological and strategic. Automated payment systems, the use of vehicle recognition technology (e.g., RFID) and the increasing prevalence of “express lanes” dedicated exclusively to monthly subscription customers have added significant improvements to speed and ease of use for the customer.
As important, the strategy behind subscription pricing has shifted from one of defensive pricing (i.e., guarding against high-frequency users that will “abuse” the program) to a more opportunistic approach. This strategy usually incorporates an aggressive price point primarily focused on the medium-to-infrequent user, with the goal of moving someone who may visit twice a year—spending perhaps $15 to $25 annually—to an annual spend of 10 to 20 times that amount through a monthly subscription.
This changes the thinking from visit frequency to annual revenue, with the added benefit of creating a steadier, more predictable revenue stream for the car-wash operator.
Theater of Wash
The second trend is in merchandising—specifically, how the car wash is presented and experienced. Increasing attention is being paid to the visibility and appearance of the entire car-wash building, not just the prevalence of signs or marketing messages.
Building architecture and lighting, for example, are being used to catch the attention of prospective customers and communicate the concepts of cleanliness, speed and convenience, as opposed to merely stating those attributes via the written word. In short, the customer’s experience is far more sophisticated now than a few years ago.
And as we’ve seen in the increasing theater of foodservice, more car-wash retailers are inviting customers to view the actual wash process, particularly the top-package features, before purchasing the wash or entering the facility. This can include the use of video in a payment terminal, signs that describe what is happening at each stage of the process or see-through washes that often stoke an enthusiastic reaction.
Get Committed
While the results from adding a car wash to a convenience-store site can be very attractive, with operating margins in excess of 40% not uncommon, “commitment” is frequently cited as the most significant hurdle.
Managing and maintaining a car wash is very different from that of other c-store revenue streams. It is simply not, to borrow a famous retail slogan, “Set it and forget it.” The most successful operations have integrated the car-wash purchase into pump sales, feature washes prominently on the lot, have employees dedicated to the wash, and partner with vendors to deliver a great product and consumer experience.
For those of you who are interested in learning more about the car-wash business, there is no better place to start than International Carwash Association. You can request additional information through our website (carwash.org), or learn from and network with existing operators at our trade shows (The Car Wash Show and Car Wash Show Europe) or other educational events.
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