LAS VEGAS — The car wash industry is booming, said Todd Davey, senior vice president of sales at DRB Systems LLC, Akron, Ohio, at a 2022 NACS Show education session. Margins, simplicity of operations and the number effect are three reasons the car wash industry is growing, according to Dan Flatley, president of Suds Creative, Ada County, Idaho, who spoke at the event.
The variable cost of car washes is low relative to the revenue that they bring in, said Flatley, because an operator does not need to add staff after a certain number of employees running the wash. The more washes a store has, the better the margins, he said. Operations are simple, not because they are easy to run, but because they are scalable, said Flatley.
The number effect within a chain plays off this scalability.
“As you grow your number of car washes, you make each one of them more valuable because they have a sister store down the street,” said Flatley.
Car washes also generate more spots for the convenience store to promote deals, Dante Pierangeli, car wash supervisor at Casey’s General Stores, Ankeny, Iowa, said during the session.
Incorporating car wash information on the store’s app exposes it to customers using the app for different reasons. Just as store shoppers are exposed to the car wash through the app and signage, the car wash line can include signs that promote offers inside the store—it works both ways. Deals that allow a customer to get a discount on fuel or integrate a wash with an in-store experience, like a free sample, help get car wash customers to the pump and into the store, too.
Including car wash options in a store’s app also gives customers the chance to make their purchase ahead of time, which flows with the recent popularity in ordering food, groceries and other items online since the pandemic began. It also draws customers to an interface that can promote other retail products.
Compared to fuel customers, it is easier to gain loyal car wash customers, said John Shalbey at the event, owner and operator of Rojo Co. Inc., Norwood, Mass.
“If a customer buys an unlimited membership from you, they won’t go anywhere else,” Shalbey said in the session. “At that point, they are going to get gas, they are going to go in your c-store, and that creates overall growth and different profits around your site.”
Offering a membership presents opportunity for customers to become one-stop-shoppers.
While it might be instinctual to worry about membership holders who take advantage of it and come to the wash a lot, retailers should welcome that type of customer because they are going to drive the most profit over time, said Flatley.
“Maybe they come an additional time per month over your average customer, but that person is going to stay with you for 16, 18, 20 months, and the lifetime value of that customer is enormous, especially when you consider the relative amount you had to pay to acquire them,” said Flatley.