A Look at the Evolving Full-Service Laundry Business Model
Long before COVID-19 turned many – at least for a while – into semi-reclusive shut-ins venturing out only as far as the front porch to retrieve their latest Amazon packages, numerous companies offering convenient home services had already been ingrained into the daily lives of most consumers.
Instacart for groceries, DoorDash for food delivery and Rover for pet care and dog walking are just a few of the many services helping to ease the burden of everyday chores. And who hasn’t at least occasionally called upon a local lawn service to tidy up the backyard?
“Laundry is one of the few remaining opportunities to liberate consumers from a tedious, repetitive task,” said John MacKrell, CEO of pickup and delivery laundry service HappyNest. “Since wash-dry-fold services are affordable, the opportunities are far-reaching with any and all who are strapped for time – middle-aged suburban families, new families, single families, young professionals, married and unmarried individuals, middle-income households and others.
“And, if we all weren’t busy enough, the pandemic further strapped us for time. Everyday chores became even more difficult to fit in, as we juggled at-home work and children’s remote learning, switched many activities to the virtual world, and learned an entirely new way of living.”
Given this scenario, wash-dry-fold operators have a tremendous opportunity to provide needed help and relief to overextended consumers.
“Laundry owners are collectively realizing that a wash-dry-fold service can sometimes earn more income than their self-service business, and they can have two successful businesses in one,” said Matt Simmons of Curbside Laundries.
What’s Trending in WDF?
According to Eli Aizenstat of Cents, more people these days are opting to pay for quality and convenience.
“Wash-dry-fold is a premium service, and customers want to feel that,” he said. “As more and more customers of all socioeconomic statuses are happily choosing to have their laundry done, as opposed to doing it themselves, a premium experience helps drive adoption. From text message alerts, live order tracking, dynamic delivery options and so on, the key to growing and retaining your customer base is by creating trust and transparency, which is expected along with the proper technology.”
Consumers love the convenience of scheduling any service via an app on their phone and having automatic payments hit their credit card, MacKrell noted.
“Technology is playing a huge role in changing the way families and laundry-heavy businesses tend to the necessity of laundry,” he said. “We are hearing from customers that the more they can do via a mobile app, the better. So, wash-dry-fold operators need to have a true mobile option for consumers.”
Simply using software and spending a lot of money on paid ads is not an efficient or sustainable marketing strategy over the long term, according to MacKrell.
“We’ve learned that using pay-per-click works in the short term, but it becomes more expensive as more local operators start to compete for the same key words,” he explained. “So, understanding your customer segments and building marketing programs that don’t rely exclusively on paid search is necessary for long-term efficiency and growth. Operators need to differentiate themselves from other operators in the same market. Having a software platform used to be a differentiator, but it no longer is. Branding and content creation are becoming much more important for success.”
Additionally, for consumers who are dropping off and picking up their laundry, the slick new look of machines and laundromats in general are changing the overall mindset of what a neighborhood laundromat is and should look like.
“Laundromats are being brought up-to-date, and consumers are feeling more confident leaving their laundry in a laundromat’s capable hands and feeling comfortable spending time in these facilities,” MacKrell said.
One of the most prominent trends has been a complete shift to cloud-based software to manage all aspects of a laundromat’s operations, including its wash-dry-fold service, according to Brian Henderson of Wash-Dry-Fold POS.
“This has led to consistency in team building and managing multiple locations, as well as ease of reporting from a home office for laundromat owners,” Henderson said. “Other advantages of this trend are automated customer text messaging notifications when their laundry orders are ready for pickup and storage of customers’ credit card payment information on file in a secure encrypted manner for use with future purchases.”
For Rick Rome of Wash Club, one of biggest trends in the wash-dry-fold business are the different communication methods being used to reach existing and new customers.
“Offering multiple channels of communication enable laundry owners to reach a much wider audience, which allows them to introduce new or additional products that customers may not have known were being offered,” Rome said.
Rohan Bedi of Clean Cloud indicated that the two main trends he has noticed in the wash-dry-fold segment are increased in-store efficiency and tracking, as well as online innovations with regard to pickup and delivery.
“It’s no secret that collecting as much information as possible can help fuel data-driven decisions,” Bedi stated. “With the latest systems innovations, now more than ever we’re able to see what customers are doing and adjust our business to make the most of this information. After the pandemic, pickup and delivery services have taken off. Not only does it provide an easy way of expanding one’s business offerings, but it also can increase reach with less cost.”
Technically Speaking…
More and more, today’s full-service laundry operators are getting away from hand-written tickets, which naturally leads to a more professional operation and a higher quality service for which the store owners can demand a higher price.
Simmons sees many laundromat owners growing their wash-dry-fold businesses through their online presence. As a result of the increased business, these operators are upgrading from paper tickets to sophisticated point of sales systems designed specifically for laundromats.
“Technology helped build the wash-dry-fold business by steering web traffic to the laundromats, and technology is helping keep that increased business organized,” Simmons said. “Wash-dry-fold is a service business, which is centered around convenience and customer experience. And technology makes this service more convenient for the customer, with regard to factors such as their laundry preferences and payment methods.”
“It’s hard to charge full price for your drop-off laundry services when you look like a pencil-and-paper operation with copious handwritten Post-it Notes and Sharpie markers on masking tape,” Henderson pointed out.
Additionally, reporting is greatly simplified with a computerized point-of-sale system – especially a cloud-based POS system, which can make pulling reports from anywhere for any aspect of your sales and operations for any period of time a quick and simple matter.
“A computerized POS system also leads to more consistency in your team efforts for wash-dry-fold – storing customer notes regarding their laundry preferences on file and having those notes print right on the receipt at the time of drop-off helps ensure that the customer’s preferences are satisfied no matter who is processing the laundry that day,” Henderson explained.
On a related note, automatic disclaimers printed on the receipt when certain “high risk” items are added to an order help to set realistic expectations for customers, Henderson said. An automatic disclaimer will remind the attendant to say something to the customer at drop-off about the potential risk of processing that specific item, as it might not survive the laundering process.
“If the customer agrees and signs the disclaimer, there’s a world of difference in how situations are resolved in the unfortunate event that something gets damaged in the wash,” Henderson said. “This leads to greater customer satisfaction.”
For Rome, today’s technology has had perhaps the biggest impact of wash-dry-fold efficiency and operational output.
“For example, you can drill down to which specific employee is producing the most poundage and determine bonuses based on that production,” he noted. “Or, you can alert customers when their orders are complete, and ask them either to come in or if they want it delivered all with the push of a button.”
“Wash-dry-fold is no longer an old school process,” Bedi added. “If you’re not utilizing modern systems in your stores or online, your customers will move to businesses that do. Convenience and a strong online brand are keys in today’s market.
“Automated notifications when orders are ready, targeted discounting and all the retention tools a modern POS system provides will take your business to the next level. Furthermore, with reviews features and innovations in customer management, there are more ways than ever to promote yourself online and stand out.”
Laundry is a margins business, Aizenstat noted, and technology should be used and leveraged to create the best margins – for both single- and multi-store operators.
“By leveraging the best software systems, operators have the ability to track quality, employee process and the margins,” he said. “Technology optimized to process varied volumes of laundry – across one or many locations – is turning wash-dry-fold into a revenue leader and profit center for operators of all sizes.”
Additionally, today’s highly efficient machines that use less water and energy than home washers or even older commercial appliances are making it possible for laundromats to get laundry done more quickly and cost effectively, while also producing much better results.
“Technology is enabling wash-dry-fold operators to get into commercial services much easier as well,” MacKrell explained. “The laundry needs of the hospitality industry in particular are tremendous. There are significant operations and associated cost with continuous laundering of bedding, towels and table linens – and technology is allowing laundromats to grab some of this business.
“With highly efficient machines, operators can get laundry done within a day – and not combined with others’ clothes and bedding. This is an important point when cleanliness is a top priority today. Laundry is personal and should be treated as such.”
The Growth of Pickup and Delivery
As consumers continue to outsource more of the mundane, time-consuming tasks in their lives, the demand for laundry pickup and delivery continues to grow.
“Customers want convenience and affordability, and they like being eco-friendly,” MacKrell said. “Utilizing pickup and delivery enables them to do that. And technology is allowing us to identify untapped supply and match it with increasing consumer demand, allowing us to reach more geographic areas.”
Additionally, MacKrell noted that his company’s mobile app enables laundry customers to select exactly how they want their laundry processed and packaged – such as on hangers or folded, specific detergent preferences, stain-treatment instructions, etc.
“Our partner operators also appreciate features such as optimized driving routes, estimated arrival times and proof of delivery through photos,” MacKrell explained. “They are looking to track and process laundry end-to-end from pickup through delivery, so we are providing that.”
Clearly, a pickup and delivery service has a lot of moving parts.
“Every customer has his or her own laundry preferences, payment information, unique address and specific notes to the driver – and pickup and delivery dates and times are always subject to change,” Simmons explained. “With the right technology, all of these moving parts are handled by software. In addition to technology helping out with logistics, having the right software makes it easier for customers to place orders online.”
Simmons shared that, in 2016, his company’s own pickup and delivery service grew by 32 percent after customers were given the option to schedule their own pickups online.
“Today, many customers have the expectation that they can place orders themselves, without having to call the laundromat,” he said.
Of course, technology can dramatically impact the possibilities around mobile ordering and logistics for pickup and delivery.
“Through universally accessible mobile ordering, operators can leverage a system that supports the on-the-go customer, while eliminating the friction of order creation,” Aizenstat explained. “When mobile ordering becomes centralized with your in-store operating system, operators can leverage technology to establish new operating models for their stores, such as using the gig economy for their pickup and delivery logistics.”
“Pickup and delivery has been able to scale immensely in the past year, thanks to the automation of communication that technology affords,” Henderson explained. “The primary hurdle to overcome with delivery, aside from actually processing the laundry, is the exponential increase in communication needed to coordinate with the customer, the delivery driver and the team at the store. A computerized system allows that communication to be automated to a large degree, allowing a laundromat to accomplish more with a smaller team.”
The pickup and delivery business is now easier to start than ever, according to Bedi.
“There are a number of offerings you can provide your customers now, from a standard per-pound offering to subscription services,” he said. “In addition, driver management tools have come a long way toward helping operate the business’ backend to make the process as efficient and easy as possible.
“After the pandemic, pickup and delivery services have become more popular than ever and will continue to grow over time.”
“Consumer habits have changed dramatically, and technology is what has helped push that change,” Rome said. “Who ever thought we could get our laundry done while sitting on the couch and ordering it on an app like we would a pizza? In turn, wash-dry-fold operators don’t need ‘location, location location’ as much today, because customers want their laundry brought directly to their doorstep.”
What the Future Holds
Bedi predicted that more laundry owners will begin to utilize services that can expand their businesses with low recurring costs, such as drop-off lockers for laundry.
“Such services can expand your physical presence without much extra overhead, such as staff,” he explained. “If these are well-placed with a convenient offering to customers, they can provide easy revenue streams for a wash-dry-fold business.”
“Investment in computerizing laundromat systems and operations, particularly with cloud-based solutions, allows for easier duplication of those processes across multiple locations,” Henderson explained. “It’s been posited that past efforts at major chains of laundromats failed largely due to a lack of central control, with major pitfalls in communications and local team management. Assuming regional differences are accounted for with pricing and general store setup, there’s no reason that wash-dry-fold operators couldn’t continue to expand their region of influence with more locations, if they continue to invest in technology tools that help keep their team consistent and unified.”
Simmons views pickup and delivery as the biggest wash-dry-fold opportunity going forward.
“Wash-dry-fold customers value convenience, and it’s more convenient to schedule a laundry pickup from their phone than to lug their laundry to the laundromat and then have to go back there to pick it up,” he said. “In fact, in 2016, we had 455 pickup and delivery orders; this year we are slated to pick up more than 10,500 orders. Every year for the last five years, our market for pickup and delivery has grown. We have more competition than ever, but we also are bringing in more customers than ever before.”
Rome concurred.
“The biggest opportunity in the foreseeable future is pickup and delivery,” he agreed. “The world has turned more and more to service businesses to handle mindless tasks like laundry. Life is short, and laundry can become an afterthought when someone else is doing it for you.”
Doing Other People’s Laundry
Here’s what some of those businesspeople who are actually doing a lot of other people’s laundry have to say about the future of the wash-dry-fold business:
Cary Lipman
Roswell Coin Laundry
Roswell, Ga.
Last November, I was brought in to help Roswell Coin Laundry rebuild its wash-dry-fold business, which had fallen off dramatically due to various reasons.
At that time, the store was taking in about $800 per month in drop-off laundry. By the end of this past March, our monthly book was up to just under $6,000 and growing. Currently, this profit center represents about one-third of our overall monthly revenue.
More than ever, it seems laundromat owners are recognizing the fact that many self-service customers are no longer interested in spending two hours in a laundromat on a Saturday morning. During the pandemic, many people were forced to reduce their time in the laundromat to two minutes for dropping off their clothes and two minutes to pick up. The owners of several existing and new stores are now looking to build first-class WDF operations to accommodate these new customers.
One of the most important technological improvements for wash-dry-fold businesses in recent years no doubt has been the modern POS system. Customers place their laundry onto the scale, which is connected to the credit card acceptor, the monitor and the cash drawer. Operators can pull up the customer’s name, showing any special instructions or allergies, as well as his or her WDF history. A ticket is printed with the weight, price and pickup time/date. Moreover, owners are able to send out mass mailings to these customers, offering specials and promotions, as well as birthday and anniversary wishes.
A sophisticated POS system is definitely in the future for all successful wash-dry-fold services, especially if the owner is planning to add additional services, such as drop-off drycleaning or pickup and delivery.
In addition, today’s washers and dryers are larger, faster and more efficient than those of yesteryear. Thus, WDF attendants can process more orders during their shifts.
Going forward, I envision laundry owners installing full front desk control areas to take in, professionally process and display WDF orders – all completed, bagged and hung by the attendants exactly alike and in a first-class manner. These operators will be fully staffing and establishing a huge business within their businesses.
I believe that opportunities will continue to grow on the pickup and delivery side of the business, where operators can venture outside of the standard three- to five-mile radius to attract additional residential and commercial business.
Art Jaeger
Santa Clarita Laundry
Beverly Hills, Calif.
At my business, in-store drop-off WDF services had, at best, remained stable or suffered a decline prior to the onset of the pandemic. During this pre-pandemic period, home delivery services were beginning to eat into that drop-off customer base.
Of course, after the pandemic hit, customers wanted to create as safe a situation for themselves as possible and, thus, switched to home delivery options in ever-increasing numbers – expanding that segment of the business and continuing the erosion of the drop-off WDF customer base.
Businesses already operating home delivery services or getting them up to speed during the pandemic have experienced a large influx of new customers – some being their own former drop-off customers and others being completely new to full-service laundry.
Although it’s possible to provide wash-dry-fold services in-store by using handwritten logs and paper invoicing, most successful operators have been using POS systems for a while to ensure better manage and professionalization. And, of course, for those operators who want to offer home delivery, it’s virtually impossible to perform this service without the backend, logistical technology available to onboard the customers, take in orders, track processing, create the manifest, maximize driver routes, and communicate with and invoice customers. Without investing in today’s new technology, owners would never be able to scale their operations.
In many aspects, operators offering home delivery aren’t in the laundromat business at all. Pickup and delivery requires an entirely different approach and disciplines than operating a self-service laundry or even a drop-off wash-dry-fold operation.
Pickup and delivery requires full-time devotion to making it a success and a far greater use of technology and marketing. Aside from the attention required for customer onboarding to the eventual delivery, operators also must provide an interactive website and app, an intelligent marketing plan that encompasses all the most current features of social media, and an investment in customer service applications. None of these items have been previously required for running a local laundromat. Although the industry continues to make great efforts toward modernization, those tools pale in comparison to what is required to operate and scale a home delivery service.
I’m concerned that some will believe all they need is a van, and they’ll be off and running – similar to how many first-time laundromat owners mistakenly think they simply need to show up at their stores once a week to collect quarters.
I anticipate a rush of new owners, franchises and national brands trying to enter the pickup and delivery space to take advantage of what they feel is an expanding market. Thereafter, you will see the same type of shake out that the industry previously experienced with laundromat franchises and new investors.
Bruce Walker
Wash It Kwik
Denton, Texas
My drop-off wash-dry-fold business represented 11 percent of our overall gross revenue for the first quarter of 2021, and it’s up more than 24 percent. Meanwhile, my self-service business is at 38 percent, up 19 percent. The self-service business is the easy money, but it’s been nearly impossible to grow that number.
However, the real story for us has been in pickup and delivery, which is 50 percent of our total business and has grown by 158 percent in the first quarter. I believe we’ve done more in pickup and delivery this year than my first year’s overall gross revenue in 2002.
I love hearing other owners tell me how it won’t work or that it costs too much or that it’s too much of a hassle, etc. I tell my team all the time that the reason we’re so busy is because we are good at what we do.
The pandemic changed everything. People who never considered having products delivered to their houses now depend on delivery for products and services never before thought possible.
Given that, my pickup and delivery software is hands down the best investment I’ve made to grow my business. All of our vans have GPS trackers so that we can see where everyone is at all times.
Looking ahead, many owners will struggle to hire and maintain quality employees. This will be the deciding factor for success in 2021. The operators with the best staffs will win. Everyone else will struggle or quit.
My team is the best thing I have going for me. I trust them and challenge them to do things they never thought possible, and they consistently amaze me. I feel like I own a financial/spiritual counseling center that operates a part-time laundry business. The people matter. If I can make a difference in their lives, that will make me and Jesus happy. They need help in life, and so do I. We make a great team. We are equally important to each other’s success.
Paul Hansen
Hanco Enterprises, Inc.
Chicago
Our wash-dry-fold business last year represented about 13 percent of our gross, while in the first quarter this year, it has jumped to about 18 percent. I’ve only been doing WDF for about eight years now – prior to that it wasn’t offered at any of my locations, but it has been steadily increasing each year.
The pandemic spurred more people to look into having their laundry done by someone else, rather than spending time in a laundromat. Also, the growth of home delivery for more and more products and services has certainly boosted wash-dry-fold pickup and delivery operations.
Today, there are more POS systems tailored strictly for laundromat businesses than ever before, with more coming online all the time. Prior to this, the best an owner could hope for would be a drycleaning system, which typically was far too complicated for a basic WDF operation.
Also, there are a number of platforms that can be used to implement pickup and delivery now that enable customers to order online or through an app, which is making it easier for operators to break into that aspect of the business. Additionally, having a card-based laundromat allows much better and easier controls on employee usage of the machines.
Since we’re trying to market wash-dry-fold as a premium service, I feel that it’s important to treat it as such. Professional packaging and consistent folding are crucial in this regard.
The biggest opportunity for wash-dry-fold operators no doubt is in pickup and delivery, as society has really moved more toward this type of service, especially since the pandemic. However, this model may not be a good fit for some operators, because it requires a lot of time, effort and the management of several moving pieces. Many owners got into this business due to the self-service aspect, which typically requires little to no staff. So, pickup and delivery is not for everyone.
Daniel Sofranko
CleanDan, LLC
Newport Beach, Calif.
We have a modern, 1,800-square-foot facility with high-speed equipment that produces like a 2,500-square-foot store. We’re high-volume for both self-service and WDF, which are an even split at this time.
Our growth potential lies on the wash-dry-fold side. We could increase our volume with more advertising; however, we aren’t willing to sacrifice our self-service offering for more WDF volume – that will come in the form of expansion. For now, we manage the “turf war” within the store with great customer service.
For years, I’ve believed that the greatest competitor of a pickup and delivery WDF service was an uninformed customer. Once customers learn of this service, they can’t believe they haven’t been using it already. With the pandemic increasing the demand for contactless, on-demand residential services, laundry was bound to end up in the spotlight.
I would say that our full-service offerings lie somewhere between a friendly, mom-and-pop service with a personal touch and the mechanical, professional operations of an industrial laundry. With a great team, modern equipment, and a simple and effective system in place, our operation is both professional and personal. We are small enough to accommodate many requests, and productive enough to serve larger customers such as businesses and vacation rentals at the level of productivity and professionalism they demand.
The residential pickup and delivery segment has an amazing growth potential for the foreseeable future. But it’s important to balance residential growth with the more consistent commercial segment.
Don’t forget that residential pickup and delivery is more of a luxury than commercial laundry, which is often essential to a business’ operations. When the economy inevitably experiences the next business cycle correction – in other words, recession – the residential segment is more likely to cut back on such “luxuries.”
Technology will continue to play an increasingly larger role in the laundry industry. As we embrace it, we’ll take a methodical approach to it, using it to improve on our customer service, which is provided by the best team in the country.
Ultimately, it’s your staff that makes the difference. We use technology and software to allow them to provide the best customer service, while never allowing technology to come between us and our customers.
