Industry Insiders Recap the Past Year – And Look Closely at the Factors Shaping the Laundry Business in 2023
[This is the second of a two-part feature article reviewing the year in laundry and taking a glimpse at what 2023 and beyond might hold for store owners. You can read Part 1 here.]
In the first part of this feature article, we asked an industry panel which headlines from this past year would shape the laundromat business going forward. In Part 2, the panelists share their thoughts on industry trends, growing concerns, and reasons for laundry owners to be optimist about the coming year.
Our panel includes:
- Kevin Butorac, owner, Triad Laundry Equipment, Akron, Ohio
- Matt Conn, global director, commercial laundry product development and marketing, Whirlpool Corp.
- Daniel Duckworth, president, Laundry One, Canal Winchester, Ohio
- Jason Fleck, vice president of vended sales, Laundrylux
- Mike Hand, vice president, direct distribution, Alliance Laundry Systems
- Paul Hansen, owner, Hanco Enterprises Inc., Chicago
- Joel Jorgensen, vice president of sales, Girbau North America
- Mark Vlaskamp, managing partner, The Folde, Houston
What new trends do you see taking hold in the laundromat industry in 2023?
Matt Conn: There are a couple main trends of note. One is that laundromats are adding wash-dry-fold and pickup-and-delivery services. That gives customers more options when they head to the laundromat and allows an owner to get better utilization out of existing equipment.
Another trend is laundromat owners exploring and implementing technology options, such as going cashless or partnering with vendors that have digital options.
Daniel Duckworth: In addition to the software management and pay platform growth, the current housing market is slowing, which will create demand for rental properties, which is the laundromat industry’s target market. Less disposable income will mean home washer and dryer appliance sales will slow, thus driving laundromat revenue.
However, less disposable income means that wash-dry-fold services could tame. In addition, inflation is still a concerning issue, so owners waiting too long to purchase new equipment may find themselves spending more than they had envisioned.
Paul Hansen: The big trend will continue to be more new money coming in, and larger, more professional operations being developed or expanded.
Kevin Butorac: I believe the topic of payment systems has been and will continue to be a major discussion in 2023. With costs increasing, I think we’re going to continue to see a large push to minimize the use of the quarter. I don’t believe quarters will ever disappear entirely in a laundromat environment; however, we will continue to see new technology and options in terms of payment systems. We have already seen some great products, and these options and systems only continue to get more advanced and user-friendly.
Additionally, social media will play a huge role in 2023 and beyond. We are a digital society, and everything is – and needs to be – at our fingertips. Laundry owners will continue to recognize the value of advertising on various social media platforms. I think we will see this only increase as time goes on, especially for owners who want to run successful operations and differentiate themselves from the competition.
Mike Hand: Pickup-and-delivery service is hot. As time continues to become more valuable, consumers will seek to be more efficient and look for convenience. This will be the big push in 2023.
Joel Jorgensen: There will be fewer self-service-only stores and more multi-purpose laundries designed with wash-dry-fold and full-service commercial laundry processing in mind.
We will see store owners increasing vend prices and services rates to overcome inflation, rising utility costs, and greater payroll costs.
Jason Fleck: Technology and services are becoming more valuable to store owners. Specifically, I’m seeing store-level marketing services, all-inclusive technology that works with everything in the laundromat ecosystem, expanding services beyond the self-service customer, and a continued desire to tighten up on labor and utility costs using technology.
What should laundromat owners be concerned about heading into next year?
Hansen: Equipment prices will continue to increase. Those who are not keeping their pricing current will continue to fall by the wayside, as more sophisticated operators enter or expand within certain markets.
Duckworth: Labor issues, operating costs, and product shortages will continue to be a concern. Additionally, owners wishing to finance new equipment purchases will face higher interest rates until inflation cools.
Jorgensen: They will be concerned about volatile energy costs and the government’s increased restrictions relating to permits, impact fees, and fossil fuels. Store owners will be looking for new ways to lower utilities via more efficient technologies and equipment performance. They’ll also be concerned with real estate and rent costs.
Hand: The unknown. Are utility costs going to continue to rise? Are interest rates going to continue to increase? Did owners prepare for this by retooling their stores? More than ever, this is the time for laundromat owners to lean on their distributor partners for help in navigating these challenging times.
Fleck: We see inflation affecting not only interest rates, but also startup costs. Rising utilities and labor costs also are a headwind. However, there are solutions out there to help you deal with those issues. These economic times shouldn’t dampen anyone’s desire for entrepreneurship and financial freedom.
Conn: One concern is that the challenges from 2022 will persist into 2023. Operating cost increases can cut into revenue gains made by owners over the last couple of years. Owners should be mindful of economic developments and work to save where they can.
Also, store operators looking to upgrade their laundromats with the latest equipment need to be mindful of how supply-chain issues have impacted lead times and plan accordingly.
Butorac: I think the concern of costs continuing to rise, the potential of a recession, and the continuing supply-chain constraints all should be in the back of store owners’ minds. However, these shouldn’t be a driving factor in making short- or long-term decisions. A more important aspect to focus on is whether or not you’re operating to the best of your abilities. Are you positioning yourself where you may be creating an opportunity for a potential competitor? I believe running a strong, modern, clean, updated laundromat always needs to be a concern. Don’t give your competition a reason to compete with you. More than anything, I would be most concerned with making sure I set myself apart from my competition.
What should store owners be excited about as 2023 approaches?
Jorgensen: History shows that economic downturns drive more families into apartments and rental properties, which creates a greater need for the public vended laundry. Renters are an historic demographic that’s dependent on public vended laundries, because they often have limited or no access to laundry equipment where they live.
Also, because inflation is all over the news and well understood by the public, laundromat owners won’t experience much pushback from customers when they increase vend prices and services fees.
Lastly, in 2023, there will be further opportunities for owners to expand services, process commercial work, and provide pickup and delivery to their customers.
Hansen: The cost of natural gas has come down quite a bit over the last few months, and hopefully that trend will continue.
Fleck: We’re all excited to have in-person meetings again, and I think the Coin Laundry Association’s Excellence in Laundry Conference in San Diego next May will be a great networking event for our industry. As continued COVID recovery is expected in 2023, I think we’ve all experienced enough COVID-fatigue, considering the sacrifices we’ve had to make to get to this point.
Butorac: Technology. We are seeing major changes in technology in store management, equipment, payment systems, pickup and delivery, and more. This will only improve. This is a great time to enhance your operation and make running your store easier on the backend. It’s an awesome time to be a laundromat owner and to take advantage of these new features that only are getting better daily. Of course, all of this comes with a cost, but investing in this technology will allow you to grow and scale your laundry operation.
Duckworth: Manufacturers are continuing the drive for innovation. Whether it be utility savings or technological advancements, owners can expect more exciting product developments to come.
Conn: Owners are keen on reinvesting in their stores by replacing outdated equipment with new machines. Newer washers are more energy-efficient and can reduce water consumption, thus helping save on utility costs.
In addition, the volume of options in the card space is exciting for owners to have at their disposal. There is no shortage of possibilities as owners continue to advance and progress with their stores to keep up with the technological growth trend.
Hand: The laundry industry remains essential, and customers still need clean clothing, linens, and other items. As long as the stores are clean, we will not see a reduction in business, as has been proven many times during the past.
