August 18, 2023
In the recent article "Separating from the Crowd: Use these strategies to thrive in saturated markets," PC&D covered the car wash industry's rapid expansion over the last five years and the risk of market saturation.
Coming off the recent DRB® webinar “Understanding Car Wash Market Saturation,” Senior VP of Sales Todd Davy and Vice President of Product Management Dan Flatley shared their thoughts and data surrounding the issue.
Key Insights from Todd Davy and Dan Flatley:
- A market is considered saturated when introducing a new carwash facility no longer leads to an increase in wash volume.
- Car wash operators should monitor wash volume and membership declines to determine how competition and potential saturation may be affecting their businesses.
- Pricing pressure, which can be indicated by significant drops in car wash prices, can be a sign of market saturation.
- Car wash competition can be good, creating “elasticity of demand" where building more car washes leads to more customers washing their vehicles.
- Don’t underestimate the power of a “network effect” where activity breeds activity. Drivers see people getting their cars washed and are therefore compelled to stop to have their cars washed.
- Opportunities for scaling a car wash business still exist, especially in highly populated and growing states and regions.
- Look beyond raw car counts and population numbers. Important factors to consider include proximity to high-frequency retail, traffic patterns, driver demographics, visibility and ease of ingress/egress.