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Facing ‘Once in a Generation’ Challenges (Part 1)

Workshop examines past trials of the industry — and future opportunities

CHICAGO — Now into 2022, the previous two years have cast a long shadow over the drycleaning industry, and part of knowing how to proceed to brighter days ahead is to make sure we learn from the past.

That was the theme of a webinar that gathered four industry experts together to discuss “The Industry’s Response to ‘Once in a Generation Challenges.’” The event was part of the three-day WinterFest Expo, a series of virtual workshops staged in January. It was co-sponsored by The Northeast Fabricare Association (NEFA), Pennsylvania and Delaware Cleaners Association (PDCA) and the South Eastern Fabricare Association (SEFA) in cooperation with the Drycleaning & Laundry Institute (DLI).

By the Numbers

The first part of the presentation discussed sales trends of the past three years to better see how much the pandemic cost the industry and where areas of growth might be found going forward. Toran Brown, vice president of product management for SPOT by Xplor, a point-of-sale and computer system provider for the drycleaning industry, led the discussion. Brown is also a third-generation dry cleaner and owns Rytina Fine Cleaners in Sacramento, California.

Brown presented data from 2019 through the beginning of 2022 aggregated from the actual sales data from SPOT customers. He offered data that showed the pandemic’s massive hit on the industry in mid-March 2020 and how sales started to slowly climb again, starting in summer 2020 and continuing to the present.

Still, while Brown says things are trending up, the numbers have not recovered from where they were in pre-pandemic times: “We still remain down from sales on a 20% average.”

Brown’s data also shows that the number of customer visits — counted as both customers coming into the store for drop-off and pickup, as well as delivery routes — were relatively consistent with the sales numbers. What was surprising, he says, is that the piece counts customers brought in during 2021 and the beginning of 2022 are not showing the same amount of recovery as sales and visits.

“So what it tells us is that we still have a number of customers coming to us — they’re just bringing in fewer pieces,” Brown says, “and we are charging more for them to try and make up for that sales volume loss.”

SPOT’s data shows that cleaners, on average, were charging around $6.35 per piece at the beginning of 2021. That had increased to nearly $7 per piece at the end of the year.

Brown found that during the early days of the pandemic in 2020, the demand for route pickup and delivery outpaced retail sales for revenue per piece, especially when it came to items not regularly brought to dry cleaners before.

“At this time, we were hearing a lot about comforters and other household items, when people were taking the opportunity to do some housecleaning and early spring cleaning,” he says. The data showed that revenue per piece hit a high of about $6.75 in May 2020 before falling back to about $6.25 at the end of the year.

Routes were a great way to conduct business during the depths of the pandemic, but SPOT’s numbers show that the increase in route sales was not a permanent change for its clients.

At the beginning of 2019, route sales made up about 39% of the average SPOT client’s total sales. When the pandemic lockdowns hit in March 2020, that number shot up to around 55%. Then, beginning around summer 2020, the number decreased.

“Over the last eight or nine months, it’s begun to trail off and return to the 35-40% range,” Brown says.

When asked if he believes cleaners will move toward charging fees for providing pickup and delivery services, Brown believes there are a couple ways the industry might go.

“It really comes in two forms,” he says. “One is a minimum order, and the other is a per-delivery fee. There are some cleaners who charge a monthly fee to be on a route service, but I don’t think the jury’s quite in on the success of that yet. Gas prices can clearly play a role in this area. I also believe that other industries setting some precedent would make that easier for us. But in a declining industry where we’re down 20%, I think we have to be very careful that we don’t create barriers to having people avail themselves of our services.”

Come back Tuesday for Part 2 of this series, where we’ll examine how dry cleaners can turn the data they have about their business into valuable, actionable information.

 

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Caption: (Photo: © SergeyNivens/Depositphotos)

Have a question or comment? E-mail our editor Dave Davis at [email protected] .