Features

The Lobby - Revenue and Profit Source

By Alex Student

04/01/14

For many years the proposition of owning a car wash has been identified by the small business owner or entrepreneur as a very promising venture.

When embarking on this endeavor, there is so much to plan, consider, and pursue when it comes to owning and operating a car wash to ensure that it remains a profitable venture. At the inception of the idea of buying or building a car wash the owner’s mind begins to brainstorm, thinking of a wide variety of issues: Should I buy or lease my land? How long of a tunnel? How many vacuum stations? Full service, express wash, or flex? What kind of detail packages should I offer? Who will supply what brand of chemicals? And so on and so forth.

Of course, these are all very important questions that need to be answered; the problem is most owners forget about a properly merchandised showroom or lobby, and the value it has.

On the other hand, some owners may know the potential of a great lobby. Then the problem exists in their lack of experience or market research that is required to turn an average lobby into an excellent one. The result is a lost opportunity to enhance the customer’s experience, and the loss of potential profit.

As we all know, with a bearish economy there is no room for the small-business owner to leave dollars on the table. With this in mind, I must admit the solutions are endless and individualized.

 

THE BASICS

For starters, there are a few small but important changes that can be implemented immediately by any owner or manager that will increase the sales in any showroom or lobby.

Organize

To begin, it is always recommended to keep an organized area. As simple as this seems, it is overlooked a great deal of the time. If someone spent five to 10 minutes every day or so to make sure that your merchandise is properly organized and in the right place, it allows for browsing customers to find things much more easily. I call this the “clutter-free” rule.

For example, on a showroom level it is as simple as making sure candy is near the candy, and air fresheners are near other air fresheners. On a department level, vent-stick air fresheners should be placed near other vent-stick or vent-type air fresheners.

Lighting

The next suggestion that is made to all car washes is that the lobby should be well lit. The purpose behind having a well-lit lobby is that it is easier to identify objects from further distances and gives the product packaging a chance to stand out and tell the story of the item. The packaging serves as a tool to sell the items without the need of a sales person. Also, nobody likes shopping in the dark.

Cleanliness

Lastly I would also suggest that at the same time employees are organizing the merchandise, they take the time to make sure the showroom is clean and free of debris and dust. If a product is dusty, it looks like it’s been there for a long time. Most impulse buys take place because something looks new, fresh, and catches the attention of the consumer. If the item is old or dusty, it looks less desirable.

Further, ensuring the showroom is clear of trash, old wrappers, and other rubbish makes it more comfortable for a customer to spend the next few moments browsing, rather than subconsciously quickly passing by an area without any regard for what is actually there because it is cluttered and dirty.

 

A STEP UP

More intermediate level techniques and tactics that create more sales are the next steps to take, moving beyond the basics mentioned above.

Resets

The first step should be to do regular resets. Full-service suppliers will offer this by request, or you can do it yourself. This means that the merchandise is all pulled off the walls, and moved around. It creates a “re-model” effect that breaks up the routine of your regular customers. It will cause them to spend a few more minutes looking around to see what you have done to the place.

By doing regular resets, it breaks up regular purchase patterns of customers, giving them a chance to find something a little better instead. If a customer has to walk to a new spot for the same item they usually buy, they will now see other items they previously overlooked because of regularity in their behavior. Thisis a technique utilized by all major retailers.

When doing a reset, keep in mind this is a good time to make sure your product selection is ideal. Some of the questions you can ask yourself or your sales rep that takes care of your lobby are: What are the staple items that I must continue to carry? Are there new products that are outperforming the old? Are there any discontinued items that I should return to the vendor? What are the latest best sellers? Are there any new styles, fragrances, or designs to existing products?

By having answers to all of these questions, and the data to back up the answers, the decision process is much easier on how to merchandise your show space.  Some vendors can provide that data for you, some cannot, in which case you must track it on your own.

Product Mix

Keeping a wide variety of different styles of air fresheners is recommended, e.g., paper, cans, vent, aerosols, and diffusers. Remember, the overhead to ring up one item is the same, whether it is a $1 air freshener or a $4 air freshener. It makes sense to carefully guide your customer to select an item that you will make two or three dollars profit rather than one dollar.

Carry this same notion over to categories other than air fresheners. The result is magnified when the product categories are well mixed. Imagine having the proper car-organizer or cell-phone-accessory line in stock to grow your business as well. The result is increased sale frequency, sale amount, and profit margin. It can be the difference of making $3 or $4 on a cell phone case or making $6 to $10.

In Stock

Last, but certainly not least, is the importance of being properly stocked. No, you don’t want the lobby or the car wash to become a warehouse of merchandise; it goes against the “clutter-free” rule. The idea is to have an amount of merchandise on hand that makes re-ordering on a three to four week basis sufficient. This can be time consuming, but if you have a full-service distributor, they can manage this process for you.

If you are out of stock on an impulse-purchase item, you’ve lost the sale. There is no “next time.” So it is important to make sure your display’s capacity and stock levels are carefully coordinated with your order and fill frequency.

This can be a tricky feat when minimum order quantities are usually 12 or 24 per item, but some companies permit purchasing of individual units.

 

SUMMARY

The car wash owner’s primary concern of course is to make sure they are washing a lot of cars. They should not, however, disregard the potential of adding significant dollars to the bottom line every month by offering a wide variety of impulse purchase merchandise in the showroom or lobby.

When customers take a half hour out of their day to take care of their vehicle, it makes sense to cater to their mindset. Since customers are already spending the money to have their vehicle washed or detailed, it follows that when they walk through a properly merchandised lobby, they can easily impulsively decide to buy another item that will further enhance their decision to take care of their vehicles — and, most importantly, their entire experience at your car wash.

 

Alex Student, Sales and Marketing of Sylmar, CA-based Superior Auto Extras. You can visit the company’s website for more information at www.SuperiorAutoExtras.com



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