Is this possibly the "New" thing that will turn the SS industry around?

[Greg Pack]

So Far, So Good

Hey Guys, thought I would update. Robert has been open four full weeks. Results are extremely encouraging. For each of the four full weeks he has been open he has grossed more than his single best week ever pre-conversion. Pollen is falling now, and this past week he almost doubled the revenue he had in his best week pre-conversion. Customer response is outstanding and word of mouth is spreading. It's looking like when all this settles it may easily double his gross revenue pre-conversion. Robert also loves the fact that money collection on site now takes 15 minutes. close to 50% of customers are paying with credit card, too. if this continues to grow this could be a game changer for many operators, and the SS industry.

Robert will continue to collect data and host an educational table on this concept in July at the SECWA Memphis roadshow.

 

[jimbeaux]

My thought would be if all the bays are full, why would customers wait in line to wash, knowing there is no incentive for the person in the bay to leave in a timely manner? I can see this being a problem on those beautiful days after a cold snap or rain event.

 

[robert roman]

I like the idea of a self-service wash with controlled access and one price because it is different.

Here is another approach to consider. Adopt the merchandising strategy used at in-bays and conveyors.

For example, each “wash” would provide customers with a predetermined amount of interrupted time in the wand-bay and would be priced according to the level of products/services it contains.

For example, a “basic” wash is $3.00. The timer would run for 10 minutes allowing for only the soap and rinse functions (e.g. high-pressure rinse and spot-free).

Deluxe wash is $4.00. Timer runs for 10 minutes and customers get soap and rinse functions only and the meter box would dispense a “token” that the customer would use in the vacuums.

Premium wash is $6.00. Timer runs for 15 minutes and the customer gets access to tire cleaner, soap, spray wax and rinse functions and a token for the vacuum.

Supreme wash is $8.00. Timer runs for 20 minutes and the customer gets access to all functions plus a token for the vacuum.

1) No need for site work like a fence or wall, entrance gates or proximity sensors
2) No need for automatic pay stations or attendants
3) Allows for cash and credit card payment, pre-paid/fleet accounts and loyalty program
4) Customers still have choices and can buy what they want, when they want to
5) Cost control is built-in
6) It doesn’t force the economical shopper to pay a higher price

Only one thing would be needed to make this work; adapting the product selector so that it would offer “wash packages” instead of individual functions and dispense tokens for the vacuums.

 

[JMMUSTANG]

Hey Guys, thought I would update. Robert has been open four full weeks. Results are extremely encouraging. For each of the four full weeks he has been open he has grossed more than his single best week ever pre-conversion. Pollen is falling now, and this past week he almost doubled the revenue he had in his best week pre-conversion. Customer response is outstanding and word of mouth is spreading. It's looking like when all this settles it may easily double his gross revenue pre-conversion. Robert also loves the fact that money collection on site now takes 15 minutes. close to 50% of customers are paying with credit card, too. if this continues to grow this could be a game changer for many operators, and the SS industry.

Robert will continue to collect data and host an educational table on this concept in July at the SECWA Memphis roadshow.

Haven't heard anything about this concept lately.
Anything new about this wash or the concept?

 

[robert roman]

What is new is the marketing of the concept.

Over the last several years, there has been little carwash investment in gas/c-store segment and virtually no investment in self-service.

OEM’s are desperate for sales.

When demand for core product is low, firms will prospect and exploit niche opportunities.

Initially, in-bay/mini-tunnel conversion was promoted as way to turn slow in-bay into a dynamic profit center.

Here is an excerpt from csdecisions.com to show how it is being promoted today.

“One of the hottest car wash trends over the past three years is an interest in short car wash conveyor systems, which are being designed specifically for the petroleum and c-store environment which have tighter turning radiuses and smaller buildings,” Wulf said. “Now there is the ability to take a rollover in-bay machine that many gas stations and c-stores have now and put in a short conveyor that could increase the number of cars that can be washed per day.”

Just as self-service cannot compete against express exterior on the basis of price, it will be hard pressed to compete against gas/c-store that has express and discounts gas price with carwash purchase at pumps.

Yes, there is some success with mini-tunnel in self-service, but I believe it is folly to expect mini-tunnel to “save” the self-service segment.

As Roger Pencek pointed out in a recent article, “Remember, there are only so many carwash customers in a 3-mile radius. An additional flashy new-EX doesn’t add customers, it just splits the pie.”

Self-service has to save itself to remain relevant because carwash is now industry-centric.

Considering the alternatives available, I believe self-service has a better chance of survival and growth by adopting the flex-service business model.

 

[Earl Weiss]

As Roger Pencek pointed out in a recent article, “Remember, there are only so many carwash customers in a 3-mile radius. An additional flashy new-EX doesn’t add customers, it just splits the pie.”

QUOTE]

This ignores several factors.

Convenience of this location may:

Increase wash frequency among exterior users

Convert Driveway or non washers.

Convert FS Washers to more frequent exterior washing with FS fill in.

Convert IBA and SS washers who want speed and convenience.

 

[robert roman]

It doesn’t ignore these factors it just doesn’t address them directly.

I said, “Yes, there is some success with mini-tunnel in self-service….”

However, success is not infinite.

Building a new carwash or converting an in-bay to mini-tunnel doesn’t increase the demand for carwash. All the motorists who will buy a carwash at the new wash are already buying all they need somewhere else.

So, the new wash needs to attract or assimilate customers from existing demand in the marketplace.

ICA claims driveway washing has and continues to decline but where is evidence of this when average annual industry wash revenues are said to have declined.

First to market with in-bay conversion may have above average profits but markets eventually normalize - like it did when dealers backed filled wand markets with in-bays.

It’s hard to defy gravity. When something is sold as a low priced commodity, there are usually less firms doing so than more.

 

[JMMUSTANG]

"What's so different about this facility? It's going to be a gated facility. The customer will pay a fixed amount ($5 or $6 ) at a paystation to get into the facility. Once in they will be able to wash and vac till their heart's content."

Robert I understand the differences of the self service, mini express, exterior, flex wash and full service.
My question is about the gated "unlimited" self service car wash.
This concept is relatively new as for as an open parcel of property self service car wash.
I haven't heard anything more about the Savanah wash. It's been 2 years and I was wondering about it or any other washes that converted over to this concept.

 

[robert roman]

I researched and wrote an article about the POP format in August 2011 after I heard comments about a 90 percent or more increase in sales.

The past shows an 8-bay facility that is old, out of date with the curb appeal of a brown bag. After the fact, the wash looks like a new shiny penny (blue and white).

I tempered my judgment about performance increase because 1) baseline revenue was very low and 2) how much of the improvement can be attributed to renovation as opposed to POP format.

There are some signs why POP doesn’t seem to have caught fire.

Besides point-of-sale, there is not a lot of carwash equipment to buy. So, I don’t see OEM’s getting excited when they are trying to sell faster in-bays and in-bay conversions at $200K or more a pop. In fact, DRB, the legacy company in carwash POS, doesn’t mention POP format.

POP value proposition is wash and vacuum all you want, one price. Thus, the more one cleans and vacuums, the longer it takes. Let’s say the average takes 20 minutes.

Express value proposition is average total guest time on site of seven minutes, hand-finished quality, less work, satisfaction guarantee, attendant on site.

What happens to self-service POP advantage if competition offers unlimited washing for $20 a month?

DIY is in decline, DIFM is on the rise.

POP might work for some folks, but I don’t expect to see it become widespread.

 

[mmurra]

jmustang asked for an update. My experience is having a small town 25 year old 6+2 in a very difficult Michigan market. After talking with Bob and others, we made the conversion to gated 18 months ago. We had all the concerns indicated in the previous posts. We also operated an close-by express wash. We staff the gated wash 40 hrs a week and provide cloth dry towels for customers (we did that prior to conversion, for automatic customers).

Our experience is positive. We cannot provide exact figures as we closed the express automatic 100 days after we opened (we planned that), as the gated model with automatics competes nicely against express. The gated took 25-30% of express tunnel volume within 90 days of opening.

I would never go back. The business is much easier to run, busier, more fun to be around, no headaches with payment acceptance (2 ACW POS w/cc). Costs up up 25%, sales up 50%+ (remember:closed tunnel). We charge $6, will move to $7 in near future. We have few problems and many complements from customers. We removed all the barriers to the DYI customer getting what they really want: a clean car fast & easy. We named the wash "EZ Carwash"

Robert Greene, what has been your experience? PS) and thanks for your encouraging words back when!

 

[JMMUSTANG]

Mmurra thank you for the update that I was asking and looking for.
Do you operate the express wash tunnel by you?
To clarify for me, you closed down your IBA or express wash tunnel?
Did you gate your entrance and exit? What gated units did you buy?
Thanks again for your reply.
Happy Thanksgiving.

 

[mmurra]

Mmurra thank you for the update that I was asking and looking for.
Do you operate the express wash tunnel by you?
To clarify for me, you closed down your IBA or express wash tunnel?
Did you gate your entrance and exit? What gated units did you buy?
Thanks again for your reply.
Happy Thanksgiving.

We operated the tunnel express wash adjacent to the 6+2 for 30+ years. Closed it in favor of the gated 6+2. We gated the entrance (2) and the exit (1). We did not fence to lot completely. We do not have problems with trespassers. We use 2 Hamilton ACW's (moved from in front of the automatics). We bought the gates from Automatic Gate Wholesalers. Be sure you get the engineering right. Contact me if you get ready to pull the plug. Our website has pictures. www.adrianimagecenter.com. Mark

 

[MEP001]

Contact me if you get ready to pull the plug.

You probably mean "pull the trigger."

 

[mmurra]

oops - too much turkey!

 

[JMMUSTANG]

Freudian slip.
thanks for the info

 

[JMMUSTANG]

Since both car washes were on the same property did you think about gating the whole property for both washes?
Is the fitness center the old express wash? Did the express wash not do enough volumn?

 

[mmurra]

There is a Mc Donalds and a Burger King between the two car wash locations. Yes, the fitness center is in the old wash.

The local market went from 6,000 customers per competetive car wash production wash unit, to 1,500 customers per wash unit, over twenty years. As well, our community has lost most (if not all), of the many thousands of production jobs that existed here twenty years ago. Those were my customers. Recently, the washes were barely making money and a 5 year plan showed no way to increase the volume to reasonably profitable levels.

I'm better off running one car wash making money, than two washes that required substantial capital investment over time. I could not justify capital investment in the future based upon reasonable projections of wash volume. I am 60 and after 40+ years in the car wash industry, need an exit strategy.

I am all set with the current structure (carwash/tanning/laundry/fitness). I have a business model that makes sense for someone else to buy. I might even hang around longer now with a sensible business model. Today, I'm having fun again!

 

[rph9168]

The "new thing" that will help our industry is a healthy economy and low unemployment rate.

 

[washnvac]

The "new thing" that will help our industry is a healthy economy and low unemployment rate.

And lower gas prices!

 

[dogwasher]

I like this idea. I could see this idea working in the southern states but up here near Chicago when we get a snow fall I cant imagine what would happen when we have that day when there are lines in all 6 of our bays (4 SS and 2 Automatics). These are the money days and having a customer hang out in a bay as long as he wants with customers waiting I may have a nervous breakdown.