CHICAGO — Many elements contribute to the success of a self-service laundry but it’s hard to ignore the impact that the equipment mix has on a business. While there may be no universal formula, putting together and maintaining the ideal equipment mix will go a long way in ensuring that your laundromat is reaping the maximum revenue per square foot.
American Coin-Op invited representatives from vended laundry equipment manufacturers to answer some questions about assessing washer and dryer choices and what stands to be gained by offering customers what they want in capacity and capability.
Q: When we hear the term “equipment mix” used in our industry, what exactly does that mean?
Matt Conn, Director of Product Development and Marketing, Commercial Laundry at Whirlpool Corporation: Equipment mix is about finding the right machines to help return the most ROI potential to our owners. Based on store demographics and the needs of their customers, single and multi-load equipment, a variety of capacity sizes and even a scheduled replacement system keeping older machines mixed with newer can help ease downtime and potentially increase profit or savings.
It’s an important consideration for owners trying to maximize their profit potential and make best use of their store location and footprint. We offer tools and guides to help the distributor and owner talk through the best mix. When considering replacement, equipment mix should be a priority consideration because new equipment presents an opportunity to provide new features to store customers, including variable pricing or more efficient dry times.
Jason Fleck, Lead Sales Development Manager, Alliance Laundry Systems: To me, it means the precise variety of equipment capacities and type to maximize the usage, revenue potential, flow and customer experience of the store.
Kevin Hietpas, Director of Sales, Dexter Laundry: The equipment mix refers to the range of capacity options that your location offers customers to choose from in deciding which machine to use for doing their laundry.
Joel Jorgensen, Vice President of Sales for Girbau North America: Generally, it refers to washers and dryers and their respective capacities, and certainly the counts, or numbers, of those washers and dryers in the store. Other equipment should be considered as part of the mix because it’s really a staged function in our store spaces, so the conversation cannot be limited to just washers and dryers and has to include changers, VTMs, soap vending, carts, certainly folding tables and counters. It all feeds store design and workflow.
Q: Where would you rank, in importance, having the proper equipment mix related to 1) an existing store and 2) new self-service laundry development?
Fleck: Often, store owners are hesitant to change a layout (of an existing store) because of concrete pads, bases, or pre-existing utility bulkheads. There are efficiencies in buildout when retooling an existing store and keeping the same layout. However, antiquated layouts are worth reimagining when funds permit.
New stores are blank slates; we get the opportunity to utilize everything we know to make the store a market leader.
Hietpas: While not as critically important as making sure the demographics are suitable for a laundry, I would put getting your equipment mix right among the top couple of options to “get right” in updating an existing location or building a new one. First, because changing the mix will be expensive and inconvenient, if you get your equipment selection drastically wrong to begin with, and secondly, because the wrong mix will dramatically impact your revenue-generation potential.
A common mistake we see, especially with investors who are new to the business, is choosing to install too many smaller-capacity machines in order to keep the capital investment below a certain amount. This decision significantly limits the store’s revenue potential, and it’s also costly to remove them and replace them with larger machines, especially once a store is already up and running.
Jorgensen: With existing stores, the equipment mix is critical. And it’s really critical to review the equipment mix on a regular basis, I would say every three to five years. Neighborhoods evolve, competition evolves, traffic flow evolves, and through that transition you really have to rank that review and your ability to address the market needs and transitions through the capacity adjustments in your store.
With established locations, all the other considerations of the location are fixed, so now you’re into maintaining sustainability of your service in that market. That’s why it ranks so high. Mix in capacity options sometimes are limited in those existing stores and spaces due to utilities, infrastructure and sometimes even access. When contemplating a mix change, the whole project scope and all those considerations have to be considered in order to maximize the impact on that change and what it might do to your workflow and space overall.
For new stores, it ranks lower because, in the scope of the total project, you really have to take care of location and site selection first, and that happens with a market valuation and you have to negotiate a lease or a location purchase, so those are certainly going to rise to the top above mix. Once you determine that location and all the qualifiers are done, now your site development takes over and obviously with that the same considerations would come in.
Conn: In an existing store, the proper equipment mix can mean the potential for added revenue for store owners. Between smart use of store space and customer-minded cycle and pricing options, owners can demonstrate an investment in the store and customer experience. Replacing banks, or a group of similar machines, can make it easier to increase vend prices, and the consistency can help with business budgeting and planning. Depending on the size of your store, it can also provide flexibility to adjust machine mix.
In a new self-service laundry development, you can affect store mix not just in a bank of replaced machines, but in design overall. Not all locations or demographics support all available capacities. Designing a footprint around machine sizes most applicable to the area demographic and customer needs means making choices right from the start. This creates potential for new store owners or those doing a complete retool to build for the most potential profit and meet the needs of their customers from day one.
Check back Tuesday for Part 2: factors used to determine equipment mix, and larger equipment’s impact on mix choices