One of the worst years in memory is finally coming to a close. The year 2020 was supposed to be the year of the white mouse signifying good fortune. Instead we got the black bat that completely ransacked the globe. At first we all hoped COVID will wane as the temperature rises but it proved itself to be an all-season pandemic. Just like that, a whole year melted away.
Fortunately we already have at least 3 vaccines with over 95% effectiveness. For comparison, flu vaccines are usually 70~80% effective. CDC expects 100 million Americans will be vaccinated by the end of March. Once we develop an effective medicine, COVID-19 will become another “flu” in the history book.
The world before and after COVID is certainly everybody’s concern. Many are concerned work-at-home will stay after COVID and it will gravely affect dry cleaners’ recovery. Even though many project that work-at-home will become a new “normal,” many offers the opposite projection. The questionable efficiency of work-at-home aside, people who have been cooped up in the house will crave to go outside and meet people. After all, we are a social animal. Also the companies will never shake off the suspicion that work-at-home will breed laziness.
As we stand at the end of year 2020, we need to think our survival strategy. Pizza and liquor stores had incredible sales, let alone Amazon and other online businesses. Well, it’s not us. Even though it is true that a dry cleaning service will never go away, we need to ask ourselves some questions to stay alive.
1. Is your cleaners clean?
Our business is called cleaners but I haven’t seen that many stores very clean. In the past, we could use busy work as an excuse but that won’t do any more. COVID-19 has heightened consumer’s hygiene standards and we need to clean up our act. Not just front windows and counter area. We need to go into the production area and do some serious cleaning. Get a good supply of Gu-Gone and roll up your sleeves. No need to hurry. A rush job won’t do.
2. When was the last time you increased your prices?
With costs of everything going up, dry cleaning prices are incredibly stuck in the past. With the age of $15-minimum-wage coming fast, we need to make some changes. Especially when COVID-19 cut our revenue by half, raising prices is not an option but a necessity. Let’s see what kind of change price increase can bring.
Let’s assume a store with $5000 weekly sales is now doing $2500. To simplify calculation, let’s also assume 500 pieces per week @ $5/piece. If we raise our price by $1, weekly revenue becomes $3000. That 20% increase means we are at 60% of last year. If we increase by $2, revenue goes up to $3500, putting us at 70% of last year. What is more interesting is we can have this revenue growth without increasing our volume.
Of course, someone will say price increase will drive away customers. That is possible. But piece count can go down to 417 and still come out ahead (417×6=2502). With $2 increase, piece count can go down to 358 and we are still doing better.
Let’s not forget COVID-19 gave us the perfect excuse to raise our prices. If you put up a sign that explains a small price increase was inevitable due to difficulties caused by COVID-19, most of our customers will understand.
3. Have you considered service diversification?
The first additional service we should add is “smartphone app.” Most of POS systems offer this feature so if you are not sure, call and ask your POS company.
If we tie smartphone app with pick-up & delivery service, customer response will be even better. Thanks to COVID, demand for “untact”(contactless) service is going through the roof.
Wash & Fold service will attract younger customers. Remind them that high-pressure steam pressing kills all germs and viruses. Hygiene-conscious young professionals will seek Wash, Fold AND Pressing service.
We can also offer UGG cleaning, leather cleaning and sneaker washing service without much investment.
4. How many cleaners have closed in your area?
Many experts predict the economy will come roaring back after COVID. Last Black Friday and Cyber Monday have renewed all the sales records. Consumers who have been waiting for the biggest sales of the year are unlikely to have bought cheaper, washable clothes. And if they did buy clothes of their dreams, they will dry clean them.
As many stores are closing up after a long depression and COVID-19, those who survive should enjoy better market share. Compared to 5 years ago, more than 6000 cleaners are gone. This estimation is roughly based on industry publications’ subscriber numbers.
If that is true, the dry cleaning market is back to where it was before the boom in the 80’s. Even though the size of the market has shrunken a lot compared to that good-ole days, each cleaners’ share of that market should be quite respectable.
The year 2021 is the year of the cow. 2021 will be better than 2020. Guaranteed. So ask yourself these questions and decide what you need to do. Then press ahead like a cow. You will not only have survived the worst of the years, you will also have the best of the years.