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FutureScoop (Dry Cleaning in the year 2022) (Part 1)

Come future-casting about the shape of our industry to come

CHICAGO — Where were you in the summer of ’22?

That’s 2022.

We’re talking in past tense about a point in time five years from today. But by that time, changes in the fabricare industry that are already forming on the horizon will come to pass. You’ll have evolved your business and adjusted with the market.

That’s not mere time-travel talk. It’s, in fact, what dry cleaners have been doing since cleaning began: adapting with their times. Changing. Creating new dynamics.

Suddenly you’re feeling wobbly...

You grab hold of whatever’s close as you morph into a dream-like state, just like the movies, spinning and dissolving, only this one is so real. You are losing touch with your world, being stretched through a psychedelic time-hole and then somehow, impossibly, you’ve reappeared, and you find it’s summer in the year 2022...

“With rents rising at a rapid pace — along with higher wages, strict environmental regulations and declining sales — the number of plants will drop significantly,” says Bobby Patel, owner of Orange, Calif.-based Kona Cleaners, the business he bought with his family in 1995 and has since expanded to 14 locations.

“I think we will see more of a hub-and-spoke model, central plants serving multiple drop stores and locker locations,” adds Patel, past president of the California Cleaners Association (CCA) and current Drycleaning & Laundry Institute (DLI) board member.

“There will be a shrinkage of cleaners,” he soothsays. “Current owners are getting older and looking to retire. There are fewer buyers wanting to get into the business.”

And this: “With millennials flocking to urban areas, we will see more growth in dense urban areas.”

American Drycleaner reaches across fabricare for opinions to help us scoop our future.

“We will continue to see the bifurcation of the industry between the ‘discount cleaners’ and the ‘full-service specialists’ as consumers select their preferences based on continually evolving demographic factors,” says Tim Maxwell, president of Kansas City, Mo.-based GreenEarth Cleaning.

“Fashion, income, age, societal trends toward urbanization and asset ownership will continue to play a role in shaping the demands of our customers toward professional garment care.”

Maxwell’s company was founded by three dry cleaners with the stated purpose of providing an alternative process to perchloroethylene—better known as perc—by offering a line of environmentally non-toxic, pure siloxane (silicone), drycleaning fluids.

“The market for ‘rental clothing’ has grown beyond traditional ‘formal wear’ such as tuxedos and designer gowns, and ‘work wear’ such as uniform rental, to include a variety of options that encompass the entire spectrum of clothing from casual wear through office and evening wear,” Maxwell says.

“While the requirement for professional care of consumer clothing will always exist, the potential for a portion of the consumer wardrobe to arrive through online subscription services appears to be a market of interest to a subset of consumers.”

Web-based platforms and apps leading to fingertip ordering, tracking, pickup and delivery, he means.

This flavoring of our industry services toward the app-happy youth of today gets to the heart of the matter. We need to serve the young leaders of tomorrow in their garment care needs.

“I certainly agree with most pundits that the industry is shrinking but is becoming more specialized,” says Henry Parker, co-owner (with wife Jan) of Safety and Environmental Compliance Consultants Inc. (S&ECC), a Riverside, Calif., consulting firm started in 1993. “We do for the industry what OSHA and EPA require the business owner to do,” he adds.

“Personal laundry will bring new challenges as millennials come to need services but not in the traditional marketplace,” Parker says. “They will need more personal service. Some will begin to care how their clothes look on them as they progress within their work environment, and those individuals will become drycleaning customers.”

We all recognize a change happening. But is it fair to say it is “revolution” or merely “evolution” we face?

Enter Frank Dubasik, director of U.S. operations for Metalprogetti, situated in Phoenix. The company, which he’s been with since 1999, is owned by an Italian family, and the founder has 50 patents related to conveyors for garment-on-hanger applications.

“Like many of us in the business, I grew up in a family in which dry cleaning was the source of our living. This experience has proven so helpful,” he says.

“In my experience, there seems to be a consolidation occurring in the industry. It is becoming very difficult for the traditional small operator to remain profitable and, as a result, the larger companies are acquiring many of these smaller operations.

Technology will continue to change the industry landscape, Dubasik says, and he believes that 24/7 kiosks will become more and more common.

“Self-service applications are growing in all different consumer markets. Our technology on the plant side will continue to allow operators to gain efficiencies and improve their overall profitability,” he notes.

Here in the year 2022, we are seeing market consolidation — but certain segments growing, too.

“I witness home pickup and delivery routes improving across the country for many of our customers,” asserts Dubasik. “In addition, I believe new, creative and innovative ways to service customers are essential to keeping dry cleaners from losing market share.”

He indicates that providing consumers unattended pickup and drop-off of dry cleaning in parking lots of major retail developments is an example of progressive thinking. “Realizing customer habits are changing and evolving. It is essential operators are willing to think out of the box.”

FORWARDED

We’ve pulled you forward five years in time, and here you are.

Let’s review what we’ve heard so far. Things you expected: consolidation; more self-service; expanding “personal laundry” convenience. Things you probably didn’t expect: growth in millennials in urban areas; need for even faster adaptation.

So what’s the real challenge of 2022?

“There are fewer pieces to clean, so, in turn, there are fewer companies. More of the individual, ‘mom and pop’ owners will struggle the most. The multi-chain cleaners will be the survivors,” indicates Tim Rees, CFO at Dependable Cleaners in Denver.

Casual care garments are an up-and-coming market due to millennials wearing more wash-and-wear clothing, he notes.

What about perc phase-out? In California, it goes into effect as 2022 comes to an end. Will it spread to other states?

“Yes,” Rees opines, “other states will follow, but slowly. It will happen over time.”

The challenges for the industry will be in finding pieces to clean, since people are not dry cleaning as often, declares Rees. He goes on to suggest that the opportunity for dry cleaners will be in finding more ways to be convenient and accessible to customers, whether that is via an app or through home delivery.

Evaz Fanaian is an electrical engineer with a master’s degree, an entrepreneur in the computer industry since the early 1980s, and owner of Alpharetta, Ga.’s, ScanQ, which delivers point-of-sale software to the drycleaning industry. He believes dry cleaners will need a strong method to engage their customers and create a sense of community to help “future-proof” them.

“People expect their phones to do a lot more than just five years go. Going forward, the public will expect to interact more with their dry cleaners from a mobile device,” he says.

Fanaian thinks that as the marketplace gets more competitive, customer loyalty will play a large part in how dry cleaners engage their customers.

Also of importance is how the typical dry cleaner will adapt to the mobile era.

“There are dozens of new companies that have emerged globally that offer drycleaning services solely through a mobile application,” Fanaian notes. “There is no storefront, and many hardly have any human interaction.”

He alludes to the fact that these types of services are often competing directly with the typical dry cleaner. “The opportunity lies in this same change, he says. “Dry cleaners who have mobile apps and are engaging their customers are more likely to be able to thrive.”

Change means finding your way. Refreshing your business model. Again, that word: adaptability.

“For most cleaners, the days of waiting for business to come to them are fading,” relates David Cotter, CEO of the Textile Care Allied Trades Association (TCATA), based in Fairfield, N.J. The Association founded in 1920 represents the interests of manufacturers and distributors of drycleaning and laundry equipment and supplies, as well as related trades.

He notes that to capture business from the younger generation, cleaners will need to offer pickup and delivery services and apps for mobile devices. Also, “Cleaners will find ways to work jointly with coin-ops.”

Cotter says many industries remain concerned about labor costs, particularly with many states raising the minimum wage. “This will likely accelerate the trend toward labor-saving automation and other technology such as bar codes or radio frequency identification technology (RFID).

“Dry cleaners will also find opportunities by branching out,” he adds, “to offer other services such as rug or blind cleaning, and storage services.”

Cotter believes we will likely see a continued decline in demand for professional dry cleaning.

“The Millennial Generation simply does not consume drycleaning services nearly as much,” he says. “Also, today’s technology allows more people to work from home, with no need to dress up for an office environment.”

He says that the apparel industry is producing more items that can be laundered at home, such as wrinkle-resistant shirts and machine-washable pants.

As a result, “We’ll see more cleaners close or consolidate their central plant, using other locations as drop stores. Drycleaning prices may increase as dry cleaners, with less pieces, will have to stay profitable in order to stay in business.”

However, he also notes that the better cleaners understand how drycleaning services in the last 25 years have changed from a necessity to a luxury.

“A cleaner does not necessarily need to lose those items that can be washed at home, but, like many other services such as car washes and lawn care, the operator must show the consumer that they are saving both time and effort by bringing them to the dry cleaners.”

Check back Thursday for the conclusion.

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(Image licensed by Ingram Publishing)

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