The car wash industry has seen a significant transformation in the last few years. More people choose a professional car wash over DIY washes than ever before, which has opened up business owners to growth and new opportunities. As the industry has matured, many new practices are arising to help car wash operators stay competitive and save time and money.
Here are 10 car wash business trends we saw in 2020 and will no doubt continue to see in 2021 and beyond.
1. Ceramic Treatments
Ceramic technology is a car wash chemical newbie, but it’s already seeing amazing results. A ceramic add-on treatment system promises to be a revolutionary profit center. Traditionally, ceramic protectant technology used polysilazane fusions and heat lamp curing to preserve a washed car by preventing water from beading and pooling on its surface. For many years, it took hours to apply, making it a service exclusive to auto dealerships and detailing shops.
JBS Industries has pioneered a new chemical technology, allowing arches and automatic in-bay car washes to apply this treatment in minutes. The simplified silicon dioxide (SiO2) formula enhances hydrophobicity, meaning water is displaced even faster. The technology has a self-cleaning effect, where the ceramic adheres to the car’s finish and repels negatively charged dirt and grime. It’s guaranteed for 30 days and produces a similar shine and protection level as a hand wax.
We’ve seen car washes charge around $4 per ceramic treatment upgrade. Customers love this new product for its superior protection and shine. They’re so popular that many facilities increase their average ticket revenue by more than one dollar per customer.
Automation is changing the way we work across every industry. While car washes can be slow to adopt newer technologies, automation is taking root as one of the biggest car wash industry trends. New technology helps car wash businesses cope with rising labor costs by speeding up processes.
First, car washes use Radio-Frequency Identification (RFID) chips to recognize monthly membership holders. Convenience is so important to customers, and RFID chips remove friction from their visits. When the driver arrives at your facility, a scanner reads the RFID chip on their windshield. Your system lets the driver through and charges their credit card. The customer gets their car washed without having to hand over a membership card or verify their identity, meaning they can get in and out faster.
Another automation technology that serves a similar purpose is a license plate reader. While the technology isn’t as accurate as RFID, a license plate reader can read every customer’s information, whether they’re a loyalty cardholder or not. You’ll learn more details about your entire customer base, which you can use to enhance marketing.
Automation is also helping car washes reduce tunnel collisions. More advanced anti-collision systems automatically sense where cars are in real time rather than predicting where they should be. When it senses a potential collision, the conveyor shuts off to avoid it. This system keeps customers happier and their cars safer. It reduces damage to the facility and cuts out costly downtime.
Incorporating Internet of Things (IoT) sensors into your wash bay or tunnel equipment is another application of automation. With these sensors, your equipment monitors itself straight from the control system. It watches to make sure all equipment is running correctly. When it detects any malfunctions, real-time alerts notify the operator, letting them know to service the equipment before it breaks down. This tool can help you save on maintenance costs. Rather than waiting for a breakdown to make an expensive repair, you can solve the problem before it occurs, saving time.
At JBS Industries, we’re also using automation to help you improve your business. Our Compass® Hyper Concentrates use the ACUVU® Chemical System to collect data on your chemical usage and spend. It lets you use real-time data to manage your chemicals and use the correct amount for every wash type and weather condition.
3. Membership Programs
Membership programs are among the growing trends in the car wash industry because they help sway customers to come more regularly, spend more money and choose a particular facility over the neighboring ones. Meanwhile, they help car wash businesses achieve consistent revenue.
Membership programs take many forms, with one of the more popular being an unlimited wash club. Customers can join the club and receive a bundle of wash and detailing services as often as they like. Many car washes offer tiered membership options, ranging from a basic wash to the full menu of detailing services.
Another way to manage this is with a loyalty program. Under this setup, customers accrue loyalty points with every wash. They’re incentivized to spend more money with the promise of free washes in the future. This program also encourages them to stick to a single business to earn the most points.
4. Sonar Technology
Sonar profiling, a type of automation, can improve a car wash in many ways. The technology senses cars and automatically adjusts equipment to the size and shape of the vehicle. Then, the tunnel uses only the amount of water and soap needed for each car. The brushes adjust themselves, allowing better access to hard-to-reach areas and a more thorough clean. They can automatically shut off chemicals so they don’t spray onto open pickup truck beds.
Sonar profiling cuts operating costs by reducing waste. It has the added advantage of providing a more environmentally friendly wash, using less water.
5. Customer Tracking
RFID chips and license plate readers have opened the doorway for car washes to track their customers. Customer tracking helps you streamline the customer experience while gathering critical data to improve your business. Monitoring subscribed customers, for example, can help them get their cars washed faster, with less effort.
A Customer Relationship Manager (CRM) can also help you analyze who your customers are and what services they prefer. With this information, you’ll expand your reach, improve your marketing tactics and offer more of the services your customers love most.
It can also help you increase profitability. When you know who your most loyal customers are, you can send them customized offers. One struggle in the car wash industry is that busy weekends bookend slow weekdays. When business is booming, customers have a longer wait, which limits revenue.
With CRM software, you can send your loyal customers limited-time coupons to encourage them to come on slower days. This lets you accommodate more visitors during your busiest times and improves business on typically slow days.
Car washes have begun adopting mobile apps and online booking services to increase convenience for tech-forward customers. When customers book services online, they can skip the wait and get right to the wash when they arrive. Car washes are also becoming equipped to accept mobile payments. In an increasingly cashless society, not processing virtual wallet payments can be a deal-breaker for some customers. Car washes with more payment options than a credit card reader appeal to more customers and can grow faster.
On the other side of the spectrum, car washes struggle to keep up with some shifts in technology. As self-driving cars become more popular, the collision avoidance part of their artificial intelligence (AI) often mistakes a car wash for a traffic hazard. A vehicle that arrives at a facility without a driver may have issues navigating the layout if the car cannot read signage or follow an employee’s directives.
Many self-driving car manufacturers also require their vehicles to be hand washed. Leftover soap residue could blind a car’s visual sensors, and automated brushes could jostle the car’s calibration, making it less accurate. As a result, some car washes have considered banning self-driving vehicles. As the technology becomes more widespread, such a ban could limit some businesses and present a growth opportunity for others.
Self-driving car owners tend to own nicer vehicles and are willing to spend more to keep them spotless. What’s more, self-driving cars must be kept cleaner than other automobiles. Any dirt, bugs and even water spots can disrupt the car’s visual sensors and make it less safe. Manufacturers or innovative car wash companies may solve the issues with washing self-driving cars over the coming years. As of now, self-driving car cleaning solutions are still emerging. Whatever resolution arises will be an industry game-changer.
7. Industry Growth
Analysts expect the global car wash industry to achieve a compound annual growth rate of 3.2% from 2019 through 2025. The industry’s 2019 market size of over $34.19 billion will reach $41 billion in 2025.
In general, more people are choosing professional washes over at-home services. The International Carwash Association (ICA) has tracked a consistent decline in consumers washing their vehicles at home. In 1996, 52.4% preferred home washes, while in 2014, that number shrank to 28.4%. During the same period, the percentage of consumers who favored a professional facility grew from 47.6% to 71.6%. In 2019, that percentage grew even larger to approximately 77%.
Those trends have continued in more recent years, owing to changing consumer attitudes. Customers are keeping their cars on the road longer. In 2002, the average vehicle on the road was 9.6 years old. In 2020, the age jumped to 11.9 years. When caring for older cars, consumers are more concerned with proper maintenance, which a professional detailer can provide. They are also turning to professional services for their speed, convenience and water efficiency. They have more spending money, and modern car washes give them more payment options through membership packages.
The car wash industry, segmented into tunnel, in-bay and self-service locations, will see continued growth across categories. The fastest-growing segment, which currently holds the largest portion of the market at 49.7%, is roll-over or in-bay facilities. These facilities have lower operating costs than tunnel washes, using just 10-50 gallons of water per car compared to a tunnel’s 14-60 gallons. This segment is performing best because they cost less time and money on the customer’s end. However, every facility type is enjoying growth because they appeal to different customers.
8. Lower Gas Prices and COVID-19 Impacts
After peaking at an average of $3.62 per gallon in 2012, fuel prices have declined and stabilized in recent years. In 2020, the average price dipped to just $2.17 per gallon, which was on par with 2016’s average prices. While coronavirus-related impacts certainly brought down fuel prices, they’ve remained relatively low in recent years.
In the past, these lower gas prices were excellent news for car wash operators. When gas prices are low, people travel more. When they drive more, their cars get dirtier faster. When spending less money to fill up their gas tanks, customers have more discretionary funds to afford car washes. These factors have helped car washes earn new business and steady growth over the last decade.
COVID-19’s impact has lowered gas prices, dipping to $1.87 per gallon in April 2020, but the pandemic also prevented motorists from driving as they usually would with such rates. Stay-at-home orders and interstate travel challenges have kept more cars parked in the garage and their drivers off the roads. However, the industry has also seen new opportunities emerge. Car washes can provide cleaning services for essential vehicles like ambulances and even offer sanitation and disinfection services to regular consumers and commercial clients alike.
9. Growth of Smaller Companies
Unlike many sectors, the car wash industry’s major chains haven’t monopolized the market. None of the companies with the largest market shares have captured more than 5% of the market. In the conveyor belt market segment, the largest company owns just 2% of locations, and companies with five or more locations hold only 15% of all tunnels. Another estimate indicates that the top 50 conveyor car wash chains own just 5.5% of wash sites.
Meanwhile, companies with five to 15 employees make up 90% of car wash facilities across segments. Car washes continue to be an excellent investment for prospective small business owners. They come with fewer risks and a lower loan failure rate than some other small businesses. These factors allow small companies to stay competitive and turn a profit.
10. Increased Competition
With small businesses making up most of the industry, it has a lower barrier to entry, sparking increased competition. As of 2019, 24% of car washes compete with six to 10 other facilities in their service area. The market is made even tighter by the fact that a convenient location is critical to success. Car washes must congregate around main roads and busy commercial areas because most customers choose their service provider based on what’s closest. In the conveyor wash market segment, 78% of operators report having another conveyor within 4 miles of their location.
The competition is only getting tighter. While small businesses dominate the market now, experts predict the top 50 car wash chains will capture more of the market in the coming years. Over the next decade, forecasters expect the top 50 chains to secure anywhere from 30%-50% of the market. While this will reduce competition at the top, it will create more competition for independent operators.
Still, in an industry with a long history of small business success, car wash owners can stay competitive. The most important strategy is to optimize pricing in your area based on your nearest competitors and your target market. Independent car washes have the distinct advantage of the human touch. Car owners see the same detailers at every visit, and small facilities can use that to their advantage in a way big chains can’t.
Besides training your team to provide the best clean, use efficient tools and cleaning chemicals. These investments help you offer the same speed and convenience as your competitors alongside a superior clean.
Prepare Your Car Wash for Future Growth With JBS Industries
As new car wash industry trends emerge, one thing will always remain the same. Your customers want their cars clean. As a car wash operator, you can provide the cleanest exteriors and the shiniest finishes with JBS Industries products. Our solutions are hyper-concentrated, allowing you to complete more washes with fewer chemicals and achieve a brilliant shine for every customer. They also use real-time data to help you stay up-to-date with the latest trends and optimize your operating costs. Our Shine Time® ceramic formula offers your customers a 30-day shine, on par with hand wax jobs.
To learn more about the latest innovations in car wash chemicals, or start using them in your facility, contact us online or give us a call at 888-745-0720.