Determining Your Retail
According to the responses in the 2020 NOLN Operator Survey, quick lube services make up 62 percent of gross annual sales. So, where does the other 38 percent come from?
It’s those extra, add-on services and retail items. There’s an array of add-on items your shop can offer, from wiper blades to tire rotations, all of the way to fuel-injection cleaning services, but which ones will give you the best bang for your buck? Just ask Steve Berkman, owner of Foothill Car Wash and Detail. While his business still offers quick lube services, that side of the business has shrunk quite a bit.
The chemical pour-ins weren’t working for his business as the overall quick lube side of his business shrunk and he put his focus more on the car wash. With this, he puts a big focus on his retail—especially with the abundance of accessories offered in the car wash lobby.
For Justin Alford, co-owner of Benny’s Car Wash, business is about even between the three different profit centers—quick lube, car wash, convenience store—at various locations. Over the years, however, the operation has put a focus on simplifying their services and putting an emphasis on overall convenience.
Here’s how each operation determined which items were the best fit for them and what buyer trends they’ve seen in their shops.
Is it better to have more or less retail available? Obviously, if you are on a shoestring budget, you don’t want too much retail and services that you can’t return. But on the other hand, you want to make sure that you are able to adhere to people’s buying impulses.
To do this, focus on items that sell themselves, like consumables. Items like beverages, snacks, lottery tickets, even greeting cards are easy to sell and never go bad. They could sit on the shelves for a long time. In fact, greeting cards are one of his top sellers. It’s an item people frequently buy on impulse if they need it for a certain occasion.
Other items to focus on are ones that can be bought back. The company Berkman gets all of his auto accessories from sells to multiple car washes around the nation, so if the product isn’t a big hit, he can easily send it back for a full refund.
“As long as an item has a guaranteed buy-back, it doesn’t matter,” Berkman says.
As a quick, 10-minute service shop, Alford’s quick lubes don’t have lobbies. Same goes for Berkman. The quick lube waiting area is small and not a lot of customers come through there. Instead, he concentrates his retail items in the car wash’s lobby, which resembles a convenience store and has a lot of foot traffic coming in and out. On average, he has about 100 to 200 customers walking through this area each day. Without the space to store items and the foot traffic grazing the items 24/7, Berkman wouldn’t carry any of these items.
As the saying goes, it’s always about location, location, location. The retail items you sell depend on the market you serve. Berkman’s operation resides in a very urban area filled with young professionals. Compared to a more rural area, the market is extremely different.
In his demographic area, right outside of Los Angeles, customers don’t keep their cars for more than a few years, while those in more rural areas hold out for much longer. Berkman provides the example of deciding to have diesel fuel enhancers stocked up in your shop or not. In his operation, they wouldn’t sell a lot of these items with the type of vehicles he services—maybe one every tenth oil change, if that. But for those out in the more rural areas, they’ll sell one almost every service.
Ten years ago or so, Benny’s Car Wash was a full-service car wash. But since then, they’ve been looking for ways to simplify their processes—not only because trends have been changing, but also because labor is limited. Before, the full-service car wash had about 75 employees working within. Now, each location has about 15.
Back in 2000, Alford says they started noticing the changes, which led to their first full-exterior car wash experience opening in the same year. Over the next 20 years, the business slowly transitioned from the interior experience to an exterior, with COVID-19 finishing off the business’s last interior car wash experience.
Instead of the indoor retail experience, Benny’s Car Wash now has replaced this with a big vending machine presence. Everything from the typical drinks and snacks, to air fresheners, wet wipes and towels are all available within the vending machines outside of the car wash’s walls. Alford explains that these aren’t the typical quarter slot vending machines, they’re heavy duty, taking all cash and holding at least 50 items each. At some locations, the car wash has a minimum of two vending machines, going all the way up to as many as four.
While Alford does miss a little bit of the customer interaction involved with the interior car wash, they realized it’s all about convenience.
“Times have changed,” Alford says. “Customers live in the vehicles and don’t want to get out of their cars. What used to be about the service is now becoming commoditized.”