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Phoenix, AZ

Carwash News

The shift from full-serve to express models

PHOENIX — A case study of Phoenix shows how competition is affecting the marketplace.

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PHOENIX — According to www.azbigmedia.com, the carwash industry is shifting from the traditional, full-service carwash to value-driven express washes, and this trend is especially apparent in Phoenix, which boasts over 100 express locations in its metro area alone.

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As such, competition is becoming intense among operators to get more land and build more units, the article continued, and customers are getting more of what they want: choices, convenience and value.

The reasons for this shift, the article stated, include the following:

  • Labor: The minimum wage has increased and will continue to do so. Coupled with stricter hiring practices and E-Verify, this has caused an economic and labor shortage crisis for those running full-serve carwashes. Furthermore, since tunnel cleaning technology has improved, there is less call for labor.
  • Customer experience: Express units currently outnumber full-serve units in Phoenix two to one, and many full-serves are adding express lanes to their carwashes to stay competitive. In addition, many operators are adding conveniences for customers such as pet washes, quick lubes, convenience stores, gas and more.
  • Subscription services: Subscription services allow for competitive pricing, and the monthly fee is the cost of one full-service carwash while providing more convenience and affordability. This illustrates that while the pricing model has decreased, services have increased, providing more value, which is what customers ultimately want.

There have been concerns that there is a bubble coming, the article noted, and this can be seen in some areas of Phoenix where two or three different carwash companies operate within blocks of each other.

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Despite the benefits of competition, such close proximity to one another will ultimately cause disruption and that market share will transfer as inferior and older locations will either be rebuilt by their owners or close, the article added.

This elimination will become more prevalent as the newer units come with state-of-the-art facilities that draw in more customers, the article stated.

As for what’s next, operators will continue to look for new sites or older carwashes to remodel, and those that embrace change and focus on providing lower prices with higher value and convenience will rise to the top, the article concluded.

Read the original article here.

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