Finishing Line - November 2010

Self-Service — Rethinking the Format
By Robert Roman

Recently there has been some buzzing on the car wash forums about a new self-service format: one-price, unlimited use with a gated entrance. From what I have been able to find out, it goes something like this.

A barrier is constructed around the perimeter of the property of a self-service facility with, for example, six wand-bays and one in-bay automatic. An automatic pay station with gated entrance is installed. The individual vacuums are removed and replaced with a centrally operated system. Motorists are charged one price, say $6.00, at the entrance gate and then have unlimited use of all facilities, including the in-bay, with the exception of the merchandise vending machines.

Apparently, there are several operators experimenting with this concept and the results, at least those I have obtained second-hand, appear to be encouraging.

I am not about to debate the various pros and cons of this concept — I don’t have all the information, and only a fool would argue with someone else’s success.

However, what I do find interesting is that owners in certain markets have found it necessary to consider abandoning the traditional self-service revenue model and standard operating method.

Arguably, this speaks to a customer base that has made dramatic spending adjustments and self-service owners who face stiff competition from a low-priced, express exterior conveyor. I believe this speaks to a supply side that might not be as responsive to the needs of their customers as previously thought.

In examining the core business, a self-service owner is basically a landlord. The owner rents customers space and the use of equipment, and sells them products including water, energy, chemicals, and vending merchandise.

Today, an owner can embellish a site by loading it up with gadgets that can help increase incremental and total sales like bill and credit card acceptor, swipe card system, foaming brush, hand-held dryer and tire-shine applicator, and modern vending machines.

Moving beyond coin-operated wands, vacuum cleaners, and shampoo/fragrance dispensers, the owner can expand the customer base by installing an in-bay automatic and, more recently, dog washing units. We also find some owners who build a new facility to contain wands, in-bay, and express-exterior conveyor.

So, we have seen self-service evolve from a rental property into something that can contain a combination of car-care services that extends well beyond the traditional wand with in-bay automatic. Now, we find owners that are apparently desperate enough to throw all of this out the window in favor of a format that some folks have described as a one-price, all-you-can-eat, buffet.

Again, only a fool would argue with success, but experience has shown that some all-you-can-eat buffets are having a difficult time surviving.

Considering there would be few barriers to entry, what would prevent other self-service owners in an area from adopting the same model thereby leveling the playing field and the advantage gained. Perhaps there is a different way to configure equipment and technology so that change could be brought to bear to help lift self-service owners out of the doldrums without being dragged down into the lowest possible price.

By different, I mean a model that caters to owners’ desire to minimize labor and yet provides the opportunity to offer a great range of services. This could attract a broad customer base, achieve greater capacities and easier ordering, and facilitate transaction processing regardless of the overall size of a self-service facility.

Self-service washes are typically built in neighborhood settings and are ideal for rural areas and emerging markets. However, I have yet to find a market or trade area during my career as a consultant that was exclusively DIY or DIFM. I find that markets may be weighted more heavily in some cases but virtually all markets have some portion of its demography that coincides with each of the traditional forms — wands, in-bay, full-service, exterior conveyor, and detail shop.

In smaller markets, the car-care needs of motorists are often addressed inadequately or unevenly. Consequently, motorists may have to drive elsewhere to satisfy their needs or stay in their driveways. This makes me believe that a lot of money is being left on the table.

The car wash industry contains a great number of people that are far smarter than I am. However, in light of the fact that some self-service owners have become desperate enough to abandon the traditional self-service format for “pay one low price and get all you want,” perhaps it is time for some of these folks to rethink the self-service car wash.

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

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