Cars, planes and drycleaning
any industries are in a state of change right
now. But, truthfully, change is constant. In the 35 years
I’ve been involved in the drycleaning industry, I
can’t remember a time when change wasn’t a topic of
concern. From coin-op drycleaning, to leisure suits, to
wash-and-wear, to environmental concerns, to perc reduction, to
the alternative solvents of today.
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Sometimes it’s easier to understand
what’s happening to ourselves, and our industry, by
looking at the changes that have taken place in other
industries.
Complacent car makers
In the early 1970s, “cheap”
Japanese cars began appearing in the American marketplace. They
were small, fuel efficient, and “ugly.” The only
problem was that they were extremely dependable. This was a
problem to the U.S. automakers.
At first, the Big Four (General Motors,
Ford, Chrysler and American Motors) dismissed these new entries
into the auto market, believing that Americans would never give
up their love for large, high-powered cars and that the cost of
fuel would never be a major factor in the customer’s
choice of vehicles.
And they were right to an extent —
to a small extent. Many people, many more than the Big Four
ever dreamed, were lured by these smaller, less expensive, more
efficient cars. So many, that today, American Motors no longer
exists and Chrysler has been bought out by Mercedes Benz.
General Motors and Ford, fortunately, had
the assets to continue operations while they developed smaller
models.
Meanwhile, the Japanese, and other foreign
automakers, have stolen a share of the U.S. auto market, which
may never be fully recaptured. All because the U.S. companies
turned a blind eye to what was happening and refused to accept
change.
Full-price fizzle
Currently in the news is the plight of six
of the largest airline carriers in the U.S. – Delta,
United, American, Northwest, Continental and US Airways. They
are having considerable difficulty making themselves more
efficient — efficient enough to compete with the low-fare
airlines.
Some industry observers say even that may
not be enough to save these carriers because of their size, the
low ticket prices people want to pay and the government’s
refusal to bail out carriers like United.
These large, full-priced airlines have
been building on the same business model for over 50 years.
Southwest Airlines introduced its newer, more nimble, discount
model over 20 years ago.
Did these big carriers take the Southwest
threat seriously enough to alter their business models? No!
They would meet Southwest’s lower prices on a
city-by-city basis, but they refused to adapt to the changes
that were obviously coming.
Why? Because they were “fat and
happy.” It wasn’t until they woke up one day and
saw red ink all over their bottom-lines that they realized
changes had to made. In fact, while they dawdled, numerous
other discounters like, Spirit, ATA, and JetBlue established
themselves in the marketplace.
While the big carriers struggle to lower
their costs, in the not too distant future, there will be fewer
full-priced, full-service airlines.
How do they do it?
As a full-priced drycleaner, for over 30
years, no one had more contempt for the
“discounters” than myself, especially after one
opened up directly across the street from my main plant some 15
years ago.
I tried to figure out what they were
doing, and how they could afford to process clothes for 99
cents, while I had to work hard to make a profit charging $4.50
for the same garments.
I soon found out that this chain, like
most of the others, was a scam. They were shell businesses
designed, not to make a profit drycleaning clothes, but to earn
big money for the owners by tricking young men and women,
desperate to own their own businesses, into working 60 to 80
hours per week for little or no pay.
When one manager (pawn) would burnout,
they would simply find another and continue their scheme.
That’s the way it was back then and, in some cases, may
be true today.
Forced to change
As the head of the Golomb Group, I have
the privilege of talking to dozens of drycleaners, from around
the country every week. Most of these are very astute business
owners who have a keen sense of how to make money in any
situation.
Some of these business owners have been
forced into becoming one-priced or low-priced drycleaners,
either because of competitive conditions or the condition of
their local economies.
Many have turned their businesses away
from the brink of destruction to again being the major players
in their markets.
I have, indeed, been impressed at how
these men and women have taken the bull by the horns and not
only saved their businesses, but also are amassing tremendous
profits, while charging unbelievably low prices. These are
legitimate business owners that pay fair wages and produce a
level of quality which is acceptable to a large number of
people.
As participants in this industry, we need
to look at the operational innovations being employed by these
“new kids on the block.” We need to see which of
these techniques can be use to make our own businesses more
efficient and better able to compete in today’s economy.
Full-price or discount?
As is happening in other industries,
gradually a small number of “full-priced”
dry-cleaners and a large number of “discounters”
will dominate the drycleaning industry. There is still time to
position, or re-position, your own business.
However, it is becoming increasingly
imperative to select which direction you want to grow your
business. And it is even more imperative that you market
yourself to your customers and prospects as the type of cleaner
you wish to be known as. The survival of your business depends
on beginning this process immediately.
Ultimately, the consumer will decide what
businesses will survive and which will perish. They’ll
vote for the ones that fill their current needs. And
they’ll vote with a mighty big weapon — their
pocketbooks.
Dennis McCrory is president of The
Golomb Group Inc., a firm that
designs marketing programs for drycleaners. Contact him at The
Golomb Group Inc., 7664 Plaza Ct., Willowbrook, IL 60527.
E-mail: dennismccrory@golombgroup.com
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