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.
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.