Here’s a Look at Four of the Industry’s Leading App-Based Players
Last month, I touched on the growth of app-based, on-demand laundry businesses, along with the general public’s increased awareness of such services. In this column, I’d like to discuss a few of the larger players in this emerging field, while highlighting the nuances of their specific business models.
It all started about nine years ago in San Francisco with a company called Prim. This venture was established by a few technology entrepreneurs who came up with the on-demand wash-dry-fold idea. Clearly, they were a little bit ahead of the game. However, where they ultimately failed was in not being able to deliver a consistent finished product to their customers.
This was a tech-based company run by techies, who didn’t truly understand the wash-dry-fold business, because they had never operated their own laundry. In fact, in a post-mortem interview, the owners admitted that not owning their own laundry facility was a huge mistake.
Today, we have an entirely new generation of business ventures bringing this service to many markets across the country. Of course, the one that has received the most publicity from the media is Washio, which raised more than $10 million from an IPO to start the company.
Washio’s original app-based, home-delivery model was to own and operate its own laundry facilities. However, it has since outgrown the ability to do so and now subcontracts the work to others.
If you’re in a town where Washio operates, you’ll either compete with them or you’ll be a supplier to them. They’re not looking for partners or interested in franchising their product.
The company is building a strong brand and marketing heavily in the areas in which it operates. What’s important for all laundry owners who offer wash-dry-fold services is that Washio and the other on-demand companies are creating not only brand awareness for themselves, but also product awareness for the entire industry.
Another app-based company that has experienced massive growth and success of late is WashClub – a business headquartered in New York City by laundry operator Rick Rome, who saw the advantage of integrating technology with his own operation. Unlike Washio, WashClub is more of a quasi-franchise, where self-service laundry owners can choose to operate as WashClub partners within their specific marketplaces.
One of the big benefits of partnering with WashClub is not having to create and develop a brand from scratch – the branding is already there for you. All a laundry owner needs to do is launch the app.
Different from some of the other models, WashClub offers its partners a marketing platform as part of the agreement. It includes web-based marketing and market research to help build the business. In other words, it’s more than just an app to run your wash-dry-fold service; it also involves brand recognition and marketing to help develop that brand within the marketplace. Plus, it’s a great add-on to help laundry owners manage their businesses.
In Chicago, another newcomer to the app-based laundry sector is Starchup. Like Prim, Starchup’s developers are techies who are not truly in the laundry or drycleaning businesses. Its technology is available to any wash-dry-fold or drycleaning operator in any marketplace; the Starchup app can be used in conjunction with other software or run by itself. Additionally, through the company’s licensing agreement, the end user can maintain his or her own brand and continue to bring that brand to the marketplace, simply utilizing the Starchup technology.
The Starchup software product also features an online marketing element, including search engine optimization for on-demand laundry services, designed to drive consumers to the Starchup website, where they can then find a local partner to handle their laundry needs.
Starchup recently received public funding through an IPO and is the developer of the on-demand software for Tide Spin, which is Proctor & Gamble’s experimental new venture that is aimed at grabbing its own piece of the home delivery wash-dry-fold market.
A different kind of on-demand business is the locker-based model. To explore this type of app-based business, we need to go back to San Francisco. In fact, one of the older players in the industry is Laundry Locker, which rose to prominence after the home-delivery failure of Prim.
Today, Laundry Locker is an international company that sells its software and patented laundry delivery system – including its lockers – to self-service laundries and drycleaners throughout the world. Its model is one of density and convenience.
Unlike Washio and some of the other app-based home-delivery services, the Laundry Locker business model doesn’t involve personal interaction with the customer. For example, as part of Washio’s branding, the delivery driver actually hands the customer a cookie with his or her finished product. Of course, this means the customer has to be present and there has to be a specific connection time.
By contrast, the Laundry Locker concept assumes that consumers are busy and don’t want to wait around for a delivery. More importantly, from a business standpoint, there’s no waiting on the customers either.
You don’t have to schedule hot runs to pick up or deliver laundry. You can route your delivery vehicles more efficiently and, theoretically, be more profitable because you’re picking up multiple orders from each location.
Originally, Laundry Locker got into the business as a wash-dry-fold operator with its own laundromat. Over time, it found that its drycleaning business far outweighed its wash-dry-fold business. Therefore, the company not only developed software to track every part of its wash-dry-fold business, but it also created a drycleaning software program to manage all of its drycleaning operations.
Today, Laundry Locker operates its own drycleaning and wash-dry-fold facilities. It also decided to market to drycleaners through a franchise model called Bizzie Box.
With regard to the wash-dry-fold business, Laundry Locker has sold licensing agreements to entrepreneurs and laundry operators, giving them the ability to put their own brand on a locker-based, app-based pickup and delivery business. (In the interest of full disclosure, it’s important to note that I’m currently a licensee of Laundry Locker.)
As you can see, there are several different variations of app-based services. However, all of them are designed to increase consumer awareness of wash-dry-fold services. Clearly, you need to choose which option is best for you, based on your particular marketplace and specific business model.
I believe the laundry industry as a whole will benefit from the companies I’ve outlined above and others – as their campaigns, their marketing and their messages to laundry customers (and consumers in general) will help grow the wash-dry-fold business through the increased conversion of more and more home loads. As a whole, the on-demand laundry movement will – and already is – changing our industry.