Laundromats must create strategies to retain customers
The sight of a new apartment building or condo can be a bad sign for coin laundry businesses. With many modern housing structures equipped with in-unit washers and dryers, the need to go a neighborhood laundromat is diminishing. But business owners can still attract customers if they provide reasons for people to spend money in their stores.
Laundromats still a necessity
That is not to say the business has been completely eliminated. In New York City, there are 2,655 licensed laundromats, a spokeswoman for New York City’s Department of Consumer Affairs told The Wall Street Journal. The publication reported that figure is similar to the total for each of the last 10 years, and in 2015, the amount of laundromats in the city actually increased by 100 compared to the previous year.
Across the U.S., nearly 200,000 people worked in the laundry or dry cleaning industry in May 2014, The U.S. Department of Labor reported. More than 5 percent of those workers are based out of the New York City metropolitan area.
The popularity of laundromats is often dependent on the type of neighborhood they are based in. Certain parts of New York City have many older homes, meaning residents there need to go elsewhere to clean their clothes. However, in more modern parts of the city, where the new structures keep popping up, the business doesn’t attract enough customers to justify staying open. That is the reason laundromats are so scarce in specific areas of the city. For example, The Journal found in certain areas of Manhattan, there is only one laundry facility for more than 60,000 residents.
Business owners in other cities can relate to the problems laundromats in New York City face. Even if customers find a place more convenient than a neighborhood coin laundry business to wash their clothes, there are strategies to keep people coming back.
Laundromats have to give customers a reason to use their businesses.Expanding reach by improving accessibility
In areas of the country where rent and utilities are expensive, a laundromat must go above and beyond to make up for those costs and turn a profit. Hoping to earn money based on washer and dryer use is often not enough.
Drop-off and delivery services help alleviate some of the problems that come with a decline in customers. By allowing patrons to have their clothes cleaned while they are away from the physical store, a laundromat caters to busy people who are willing to spend more to avoid doing the work themselves. By bringing the clothes to customers when they are cleaned and folded, the business generates extra money.
Brian Grell, Eastern Funding’s executive vice president, told The Journal a laundromat should set its budget so that no more than 20 percent of expenses are spent on rent and no more than 23 percent go to utilities, which includes the water bill. Anything higher than those two shares will make it difficult to turn a profit.
For businesses in neighborhoods where customers are difficult to find, it can be difficult to hit those marks without improved accessibility.
“To survive in Manhattan, you must do a significant amount of drop off,” Grell said. “That’s the only way to offset the high cost of rent. You have to be using your machines when the stores close.”
By expanding the services it provides, a laundromat can reach customers who otherwise wouldn’t choose to pay extra to have their clothes washed.
Make a business more attractive
Modern living spaces have refrigerators and stoves, yet people who live there still go out to restaurants. There’s no reason those same people can’t go to laundromats despite having in-unit washers and dryers. While cleaning clothes is not the same as buying food, the philosophies for businesses are the same. The key for owners is to give people a reason to go to their stores by offering services and luxuries they can’t get at home.
One way to do this is by offering a higher-quality experience to customers. If laundromats offer top-of-the-line equipment and the best service possible, customers are more likely to come back.
“Hoping to earn money based on washer and dryer use is often times not enough.”
Making the store appealing to a wide variety of customers also has its benefits. Many laundromats offer free Wi-Fi, allowing people to search the Web while their clothes are cleaned. TVs and kid areas are also popular attractions that convince people to return. More importantly are larger machines that can fit more laundry and the ability to use multiple machines simultaneously.
Personal expertise also helps. When people have a problem with equipment or want to know about different soaps and detergents, having a knowledgeable business owner or employee on hand to pass along useful information and making the customers feel welcome is important.
Kenneth Cherry, who has owned a group of laundromats in Tennessee since 1959, said having a constant presence in his stores is an aspect to success and longevity in the industry.
“The key is finding a good location, being a good businessperson and pricing for profit – as well as keeping a clean store and really watching the business,” Cherry told Planet Laundry. “You can’t just open a store and then never come around.”
