Top Factors to Weigh When Exploring the Car Wash Business
NATIONAL REPORT — Convenience store retailers are always looking for ways to differentiate themselves from their competitors and offer new profit centers to add to their bottom line. Many who have the space available are turning to car washes. Not only can they bring in additional revenue, but they also drive traffic both to the pump and inside the store.
"One main benefit is increased overall revenue to a location, which is the main reason to add a wash, but it can drive other profit centers like gas and foodservice," said Jim Koch, director of national accounts at Washworld Inc., a car wash equipment company based in De Pere, Wis. "A good car wash with a great customer experience will make it a destination spot."
While a car wash does require maintenance and cleaning, it is "more or less labor-free revenue" as automation increases, and it can operate 24/7 even when a store isn't open, noted Ken Underhill, director of marketing at D&S Car Wash Supply, based in High Ridge, Mo.
Still, just like the c-store and fuel pumps are treated as profit centers, c-store operators must give the same attention to a car wash. Daily maintenance is important to keep it running and keep the experience high-quality, so customers will return again and again.
"Once a day in the morning, run a car through and watch to see what is working or not working, such as a blocked nozzle," advised Martin Geller, owner of Superior Car Wash Systems, a division of Vehicle Wash Systems Inc., based in Weymouth, Mass.
Getting Started
When a retailer is considering entry into the car wash space, there are multiple facets to research, such as space, competition, traffic, equipment, subscriptions and more.
"When thinking about adding a car wash, make sure you have enough space for the type of equipment you want, like an in-bay automatic or a tunnel system," said Kendra Pravlik, car wash district manager at Fremont, Ohio-based Beck Car Wash Systems. "The spot should be easy to get in and out of, and visible enough to draw in customers — and look at the initial costs of equipment, installation and any sitework changes that may be needed."
[Read more: New Features Help C-store Car Washes Keep the Revenue Rolling]
Zoning issues are another consideration, such as being close to residential locations, which could cause problems with the noise that dryers make, according to Washworld's Koch. Necessary modifications, such as making a building longer to keep the doors shut when dryers are running, should be known early on, he cautioned.
Traffic volume at the location and competition in the area are other key things to explore when considering the addition of a car wash. Specifically, looking at what other car washes are in a one- to three-mile radius, as well as their quality.
"Not only the locations, but the level of that competition should be examined. There could be four car washes but if they are all junk, then don't count them," Koch explained. "Don't shy away from an investment if the competition is poor."
Gas volume at a site can help predict the return on investment (ROI) of a location, coupled with the competition in the area. Having customers already onsite purchasing fuel or shopping the store makes it easier for a c-store compared to a standalone car wash.
"If I have 100,000 gallons per month ideally, if I'm looking to get an ROI, I should be successful. But I do have smaller operations with two pumps, and pumping 50,000 [gallons] in a month, they are killing it because there is no competition," said Koch.
To support retailers in the decision-making process, there are AI-generated site selection tools that many car wash manufacturers have access to, which can assist with projections for a car wash, as well as the potential in-store sales increase with its addition, Underhill stated.
Equipment Options
The majority of c-stores install in-bay automatic car washes vs. tunnel systems because they require less labor, and can be run with more ease and less maintenance. An in-bay automatic offers two options: touchfree with nozzles and sprays but no brushes; or one that uses brushes to do the washing, often referred to as soft touch.
"There are advantages to both, and the current sales distribution between the two is almost 50-50, but touchfree has been gaining a lot of traction," Underhill reported. "Touchfree is more expensive to purchase and operate because it requires more water and energy to get a car clean, but it's customer-driven because many are wary of brushes on their cars, especially high-end."
Many c-store operators also are choosing touchfree because it's easier to manage in terms of maintenance and cleaning, according to Koch, emphasizing that when it comes to weighing their options, it is important for retailers to differentiate from their competition.
"If there are a lot of touchfree bays, then go with a friction wash because that could make you stand out," he said. "If there are a lot of friction, then touchfree might be the way to go because there is a huge segment of the population that is afraid of friction."
Koch also pointed out that there are combination machines that enable each customer to choose either touchfree or friction, which he said could provide a unique experience.
Payment Options
In addition to the equipment needed to wash the cars, retailers need to investigate payment equipment — whether selling washes at the pump, via a kiosk or via a mobile app.
"In a c-store environment, many washes are purchased at the pump and then activated at a paystation via a code or scanning a QR code," said Kayla Knudsen, marketing coordinator at Hugo, Minn.-based WashCard Systems Inc., which offers payment hardware and software. "With this method, you are missing an opportunity to get a customer inside your storefront."
Using a mobile app, however, provides the opportunity to highlight in-store offers and even present specials or discounts to drive in-store traffic and capitalize on the car wash customer. C-stores with an app and loyalty program can roll the car wash into what already exists. WashCard offers the option to highlight in-store offers while customers are moving through the wash.
Another company, CarwashFX, offers options such as voice directions, music and sound effects, and pushing digital offers to a mobile device or via text message at the customer's choice.
"C-stores can send a promotion or coupon in a vivid graphic, through voice prompts or via text message or email," explained Sherry Sheffield, senior vice president of sales and marketing for the Lawrenceville, Ga.-based company. "Customers are captive in a car wash, so you can transform their experience with ... lights, sound, music and marketing, and make it entertaining."
Along with offering single washes, subscription plans are becoming more popular.
"Subscriptions are great because they offer a steady revenue stream, helping stabilize cash flow," said Pravlik of Beck Car Wash Systems. "They also encourage customer loyalty as members are more likely to return to use their membership. ... Subscriptions can lead to more frequent visits, increasing the chances of additional purchases from the convenience store."
While the chief concern with subscriptions is losing money if someone decides to wash their car every day, this is a rare occurrence, according to Underhill. "Car wash in general is high profit, but it's even higher profit when you have a subscription model," he said.