Self-Service - Reinvent to Compete Effectively

By Robert Roman

06/01/19

Up until a few years ago, wand-bay type car wash properties had declined and fallen out of favor with new investors as well as existing owner/operators. Now that the economy and car wash industry are growing again, this may be a good time to revisit the self-service business model.

Wand-bays provide equipment and products to clean, shine, and protect vehicles, and the customer provides the labor. About one-half of self-service locations have an in-bay automatic car wash system on site. Wand-bay facilities tend to capture value from neighborhoods whereas combination facilities are highway-oriented.

Self-service is often described as a 60 percent gross net business.

Most self-service operators face a competitive environment but very few use network effects to deliver more value to customers. Most operators attempt to create a competitive advantage by means of cost strategy and niche market.

There are a number of ways this business model can be improved upon. Experience shows a combination facility has a greater chance to unlock the market potential in a trade area because it attracts a broader segment in terms of users and vehicle types.

However, given consumer and industry trends (e.g., express exterior), self-service operators should consider shifting the focus of the business from wands to in-bay. The reason for this is there are simply more people today who want the convenience, rather than doing the work themselves, and they want a better value for the money.

For example, the traditional self-service model is a facility with four or five wand-bays and one to two in-bays. A different approach would be to build a facility with three or four in-bays and only a couple of wands. The purpose is to increase yield.

 

As shown in the table above, self-service operations that emphasize automatic car washing perform measurably better than those that emphasize wands.

Today, even greater yields are possible with in-bay express machines. In-bay express not only has a higher capture rate of 0.8 percent or more, it can also wash two to three times the hourly volume as compared to a standard in-bay automatic.

Naturally, a more robust approach requires a design objective similar to that of high-volume convenience retailing such as convenience stores, fast food drive-thrus, and express exteriors.

There are a number of tactics self-serve operators can use to create a site that evokes impulse buying. For example, create a unique brand image (e.g., ingredient co-branding). Maximize visibility by designing a pride-of-ownership property that has corresponding appeal to consumers.

Create a good environment that a full-time customer-service employee would be happy to work in. Offer a value significant enough that it helps make the wash a consumer destination.

And finally, devote sufficient time and resources to create a viable virtual store including a website with e-commerce capabilities, customer app, and mobile marketing strategy.

In the final analysis, the pundits are correct. Self-serve isn’t dead; it just needs to be reinvented to compete effectively in an environment where automatic car washing represents over 70 percent of the total available market.

 

Bob Roman is president of RJR Enterprises – Consulting Services (www.carwashplan.com). You can reach Bob via e-mail at bob@carwashplan.com.

 

Factor/Emphasis Wand In-Bay

Wand Rev/Month $1,700 $2,000

In-Bay % of Sales 60% 70%

In-Bay Rev/Month $11,000 $14,000

Capture Rate 0.3% 0.4%

Attended 16% 32%



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