Digitizing Self-Service - An Added Category for Success
By Robert Roman
The use of smartphones is so prevalent today there are laws on the books in many states prohibiting their use while a person operates a car. On the other hand, there are still self-service operators using tokens and mulling over the decision to accept credit card payment.
This underscores how far the self-service segment is lagging behind as well as how far it can go in the future.
For example, according to Auto Laundry News self-service surveys, 17 percent of operators plan to add credit card acceptance. Eighty-six percent have Internet access but only a third have a website. Operators spend an average of only $300 a month on advertising and promotion.
The good news is in-bay automatic revenues at self-service sites have increased by 43 percent over the last two years. Arguably, this says something for consumers’ transition from DIY to DIFM as well as the strength of the economy.
The bad news is wands remain greatly underutilized. Based on average monthly gross income per bay and price per minute, the typical wand would be occupied less than 1.5 hours during an eight-hour time period.
Consequently, it’s no surprise the survey shows 60 percent of revenues at self-service sites come from in-bay automatics.
Where does self-service stand to gain the most?
Arguably, besides accepting credit cards and offering a responsive website, self-service operators should consider the future of mobile payment.
Mobile or contactless payment is a secure method for consumers to purchase products or services using a debit, credit, or smartcard (chip card) or by using RFID technology or near-field communication (NFC).
Why is mobile payment so important?
First of all, 81 percent of us now own a smartphone (up from 35 percent in 2011) and 77 percent have a credit and/or debit card.
According to researchers, in-store mobile payments reflect a compound annual growth rate (CAGR) of 80 percent between 2015 and 2020.
The number of in-store mobile-payment users in the United States is predicted to reach 150 million by the end of 2020. This will represent 56 percent of the consumer population at that time (Mobile Payments World).
What kind of results can be expected with mobile payment? According to RetailDive.com, the average number of boxes of cookies sold per transaction by the Girl Scouts increased from four to five when using a mobile payment solution. That is a 25 percent increase in sales volume just from accepting a different form of payment.
Self-service operators can jump on the digital bandwagon by retooling the business model. For example, in most markets, Millennials account for up to 30 percent or more of an area’s population and almost 40 percent of the working population.
Twenty-five percent of Millennials spend an average of five hours a day using their smartphone. Some check their phones 100 times a day; they spend about one hour a day on social media, and 36 percent (and rising) of their total purchases are made with mobile devices.
So, if a car wash operator doesn’t have a website or one that renders well on a smartphone, it’s difficult to communicate with this generation. If you can’t communicate with consumers, it’s less likely you will be able to turn them into customers.
Of course, there are significant numbers of Gen-X as well as Baby Boomers who also favor mobile payment. For example, a friend of mine recently completed a survey of his car wash customers. The results showed people overwhelmingly prefer to communicate by text and e-mail. Over 60 percent indicated a preference for digital payment, and 55 percent would like a customer app.
Consequently, self-service operators stand to gain from adopting a mobile marketing strategy that target-markets the younger generation and others that like digital communication and contact-less payment. Fortunately, there are a number of companies available to assist self-service operators in transforming their car wash businesses.
With a cashless system, there would be no need for bill changers, coins, dollar bills, tokens, or coin counters, and there would be much less vandalism and a lot less germs.
There would also be no need to spend $125,000 or so to upgrade and retrofit a site for a “pay-one-price, wash-all-you-want” business model.
Instead, money would be better spent on converting a wand bay into an in-bay automatic or adding a second in-bay automatic. After all, 90 percent of industry car wash revenues are generated by automated washes.
The digital technology involved with accepting credit cards and mobile payments also supports marketing, loyalty, and customer engagement.
Historically, car wash success has been categorized by quality, cycle time, innovation, and other factors directed at improving customer service and satisfaction. Arguably, we can now add digital technology to this list.