The convenience store industry is shifting: Total c-store customer transactions, including both fuel and merchandise, were lower for each month in 2018 compared to the same months in 2017, which led to an annual drop of 2.3% fewer customer transactions. Specifically, cigarettes, typically the largest in-store category by dollar sales, declined 3.1%, and sales of hot dispensed beverages dropped 4.5%.
“The gas, Cokes and smokes model—it’s done,” said a presenter at the 2019 NACS State of the Industry Summit. “You’ve got to continue to innovate.” One overlooked category that may be a performance driver for c-stores is on-site car washes. The car wash industry is up almost 4% year-over-year and total revenue totaled $12 billion in 2018, according to IBISWorld.
However, there is no shortage of car wash options for consumers, so c-stores should dedicate resources to differentiate their own from local competition. An initial investment on special features and fixtures could mean a quick return on the investment and uptick in car counts. For example, one car wash that spent $35,000 to refresh its facility’s tunnel lights, signage and arches was able to increase their revenue by 79% and their car count by 120%. Another operation spent $35,000 for a similar car wash makeover and were able to increase per-car revenue from $5.12 to $6.97 for a total revenue of $1.2 million a year.
These car wash “facelifts” are effective in three ways. On one level, updated signage, lights and entry and exit arches promote the car wash menu and the site’s unlimited car wash plans or clubs that foster customer retention and new customer acquisition. Second, prominent and well-lit signage serves as a confirmation to the customer that they are receiving a specific car wash service, such as triple foam wash, and hot wax extras that they purchased. Last and certainly the most fun, special color-changing lights and features transform the wash into an entertaining and thrilling experience—one that’s specially requested by kids in the car. Car wash upgrades could mean blue-hued LED lights shine through jet sprays and a deluge of water cascades down in a waterfall rinse for maximum effect.
By elevating the experience inside the tunnel, sites can charge more per car, sell more of their top packages or unlimited plans and attract drivers passing by. And while increasing fuel prices may inspire drivers to drive less or be less dependent on fuel (with the help of hybrid or electric cars), there’s no sign that drivers’ interest in a clean car is waning. The International Carwash Association found that in the U.S., the percentage of drivers that report most frequently washing their vehicle at a professional car wash has increased from approximately 47% in 1994 to 72% in 2014. C-store retailers looking to replace lost business at the pump or at the counter should look into adding some bells and whistles to their car wash.
This post is sponsored by National Carwash Solutions