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In-bay Automatic

Presenting a... "Remarkable Journey," Part 1

April 24, 2012
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Nothing is more important in 2012 for the in-bay market than operators building a larger customer base, washing more cars and making more money.

This is a clear and unmistakable message and challenge which suppliers and operators alike must fully acknowledge and embrace now.

In 2012, carwash revenues in the field, at operators' sites, will be seen not only as the most important predictor of success for both the operators and their suppliers, but they will also be recognized as the vital and necessary lifeblood of the entire industry.

A glorious past
Twenty years ago, when in-bay carwashes were in a strong growth cycle (see chart below, "Stages of In-Bay Development at Retail Petroleum Sites"), the biggest problem operators and suppliers encountered was an obvious one.

They faced a daunting task: Once the carwash was installed properly in a large and dedicated bay or building, how would they keep this strange looking and expensive piece of equipment working?

For technical training and assistance, the operators looked, understandably, to their equipment suppliers. They knew best the electrical, mechanical and plumbing requirements of the machine and how it could be kept in an optimum operating state.

In short, operators were not abandoned to their own devices. To better serve their customers, carwash manufacturers developed technical manuals with schematic diagrams and helpful explanations. The local distributors helped too as they built service organizations and became skilled in maintaining the manufacturers' washes in the field.

As the in-bay market exploded during the 1990s, an exciting decade of unsurpassed growth, the "great debate" in the in-bay market then was palpable: Which type of carwash system, touch-free or friction, was best?

To answer that ubiquitous question, it is quite clear today that good operators can be successful with either a touch-free or a friction carwash.

In many cases, the purchase decision, quite frankly, came down to one of personal choice: Some owners preferred touch-free washes, while others favored the friction units.

The passions and perspectives generated by the "touch-free vs. friction" debate, fortunately, proved quite useful, and the industry clearly benefitted from the heated discussion. For instance, touch-free manufacturers became ever more conscious of wash quality issues, and they also greatly improved upon the operating efficiency of their units.

Not to be outdone, the friction companies designed and built safer washes with more forgiving side wash arms and softer foam washers, which polished the surface of the vehicle.

Distributors and chemical manufacturers did their part, too. This was indeed the "Golden Age of the In-Bay Automatic," and retail petroleum operators recorded exceptional revenues and profits.

Though NACS (National Association of Convenience Stores) does not report "carwash sales" at c-stores, these emerging "profit centers" easily would be one of the top five category contributors to gross profit margins.

The new reality
In spite of this encouraging start, however, in-bay wash counts and revenues have spiraled downward in recent years. It is disappointing to report that not only operators, but also their suppliers, seem to have lost their mojo, and this proven performer faces today a very uncertain fate.

It is important to note that the design, quality and performance of these carwash systems have not failed the operators. There are some 25,000 in-bay washes in the field, and many of them have hundreds of thousands of wash cycles recorded on them.

The industry has struggled mightily in recent years, instead, because the operators and suppliers have not "broken the in-bay code." Regrettably, they have failed to develop and execute new ideas and services in the field designed to help operators wash more cars and make more money.

It is ironic indeed that never have such good carwashes washed so few cars! This stunning insight reveals an old, outdated and potentially fatal mindset which must be corrected; in-bay washes at retail petroleum sites are no longer impulse purchases.

Even without the specter of $3.50 gas or higher, many c-store operators face an incredible challenge today just to maintain their current carwash revenues.

Hopefully, operators and their suppliers will respond to this new challenge with the same 'can do' attitude that enabled the equipment suppliers in the 1980s and 1990s to install their customers' washes and then to keep them working.

Change creates new opportunities
In 2012, the new "great debate" in the in-bay market concerns the important and emerging role of the carwash supplier to help their customers — the in-bay operators — achieve the maximum possible benefit from their investment in carwash equipment and services.

As noted above, in an earlier day, the distributors and suppliers earned their keep by properly installing and then servicing their carwash systems. They also sold soaps, protectants, drying agents and waxes to improve the "wash quality" of their washes and to help the in-bay operators make more money.

But in today's constricted economy, the "new normal," most operators need more support than this in the field.

This inconvenient truth has been recognized by a few industry leaders for many years. For instance, in discussing the changing role of equipment suppliers, an important topic which merited much attention at the 2009 International Carwash Association™ Leadership Summit, Paul Fazio, SONNY's CEO, noted that selling hardware and performing routine maintenance simply is not enough.

Later, in a December 2009 interview, Fazio told Professional Carwashing and Detailing, "anyone can offer equipment, but if you can also package … education, marketing and automatic supply fulfillment, I think you deliver much better overall support. … I didn't say it would be easy," cautioned Fazio, "but I do believe it will be necessary and better yet — valued."

More recently, in October 2011, an in-bay CEO stated most emphatically to me that he was "in violent agreement" with my fundamental thesis, which is that operators need to make more money before they will buy new equipment.

It is inconceivable that any carwash executive would disagree with this sobering assessment. One industry source published a survey recently which indicated that carwash revenues in the field have declined for five consecutive years. Simultaneously, equipment orders at the factories have also plummeted. Who can't connect those dots?

But knowing what the real problem is and then doing something specifically to correct that problem are two very different things. Even established and reputable companies with experienced and resourceful leaders may not have the vision, commitment or wherewithal to chart and navigate an innovative new course.

And in a stagnant market, every change creates unexpected opportunities. Not every carwash company, however, will be able or willing to respond positively to this menacing challenge. As in any competitive market, there will be a few forward-looking winners and many other near-sighted manufacturers who will play catch up.

The biggest winners of this exciting new debate, of course, will be the pro-active operators who are smart enough, and fortunate enough, to seek out value-added suppliers and partner with them. Working together, operators and suppliers will create, implement and fine-tune results-based marketing programs, which will strive to wash more cars, serve more customers, capture more market share and make more money.

This year will make for a remarkable journey.

Editor's Note: In the second part of The Remarkable Journey next month, Perry proposes a compelling argument for a new business model to compensate for sagging carwash revenues in the field. According to him, creating and implementing a strong marketing program for operators will lead to higher carwash revenues, which surely will strengthen the in-bay market segment at every level.

Mike Perry has more than 30 years' of experience in retail marketing and in business-to-business sales. He can be reached at 770-330-2490, or at

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