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Industrial Laundry: Attaining Success through Marketing

by Clean India Journal Editor
0 comment

Industrial Laundry is as old as any other business. The famous Dhobi Ghat of Mumbai or vannarpettai (Washermanpet) in Chennai are part of city landscape and culture and have often featured in movies to demonstrate this relationship. Technology, fast paced lives, rising disposable incomes and a general attitude towards outsourcing ‘non-core activities’ has led to mushrooming of localized industrial laundries. Industrial laundry is very much a settled concept in the west and is gaining acceptance in India. R Srinivasan, Director, AIRA Consulting Private Limited, shares his expertise on gaining success through marketing.

Estimates suggest the Industrial laundry business is about Rs. 20,000 Crores and is growing at a healthy clip of 7.5% CAGR. The business is largely unorganized with local stores dominating the landscape. Businesses largely focus on catering to local catchment areas – young couples, working professionals that place premium on time. Of late however, organized players have entered the market, and some have built significant scale.

Few names that readily come to mind are – Uclean, Dobilite, Pick My Laundry, Wassup Laundry, Fabricspa, Tumble Dry, Dhobiwala, The Swiss Laundry, The Laundry Basket and myWash. The opportunity is so large that home services start-ups like Zimmber, Housejoy, Urbanclap, LocalOye, Taskbob have entered the market with various offerings.

Many of these have invested in technology applications to ease customer connect, right from intimation for collection of clothes to payment much like other consumer apps. Any large opportunity also attracts investors and VC funding is active in the sector for a well-differentiated scalable business.

So, the business is widely split between unorganised local players and organised investor funded start-ups that are trying to bring in professional approach to the sector. In this scenario what are the strategies to create differentiation and scale the business? The answer in one word – Marketing!

Creating Marketing Strategy:

The general principles of marketing for any business apply in equal measure to the Industrial Laundry. Some ideas are discussed in the following section.

  1. Identify target customer 

This is possibly the most difficult part of any marketing program. Most programs fail because they are addressed to a wide audience. The hope is that wider the audience, more the business opportunity. Nothing is more fatal than this approach. It is important to clearly define the customer segment – demographics, psychographics, and location.

For example, well-educated working couple in the age of 28-35 nuclear family with an annual income of Rs.10 lakhs living in the vicinity of five kilometres from the laundry. This helps in structuring everything about the brand – service structure, pricing, brand’s look and feel, decor of the outlet, communication strategy and medium, store staff. Each business will have to identify its set of customers that is wide enough to afford a scalable business but narrow to be homogeneous.

  1. Define the proposition

What is the proposition pretty much defining why should the customer pay. The business may have multiple propositions – Hi tech, sterilisation with cleaning, 24-hour service, pick up and drop, one hour service and many such. But what is the USP on offer? Making the best Pizza or delivering a Pizza the fastest? In the former, the customer is willing to wait as she is choosing from a wide range and is looking for taste while in the latter while taste is expected, what is critical is time from order to delivery. Both businesses are different and use different marketing strategies.

It is important to communicate the proposition the target customer values the most and the business delivers it the best compared to the competition. 

  1. Pricing – cost of change is lower than what she ‘pays’ now

Surveys have shown that a family, typically, spends about Rs.2000/- per month on laundry. The elements are as follows:

– Rs.500 to the maid

– Rs.200-300 on the detergents

– Rs.500-700 to the dhobi for ironing

For the customer to shift to the laundry and disbanding this structure is a huge behavioural change. Any behavioural change is a cost and is resisted. Is the pricing addressing this material and non- material cost? Pricing also includes convenience, comfort, hygiene, etc.

A customer does not just look at rupee to rupee comparison but overall cost which is intuitively calculated. The pricing must account for hidden costs and provide hidden value.

  1. Well Structured Communication

Communication is possibly the most important piece of the strategy. Whom to communicate (Target audience), what to communicate (Proposition), who will communicate (Staff, Bot), when will the communication happen (location), how will the communication be done (air cover, personal) and where will the communication be effectively done (customer interface) are critical elements of the strategy.

Aligning the communication with the strategy and ensuring that the communication effectively communicates all that the brand stands for is the most important element. What might have worked for one might not work for other since the structure might be different. So, working on this is key to ensuring differentiation and uniqueness of the business. 

  1. Stay consistent yet relevant

There is an apparent contradiction in this but that will remain. Staying consistent is to say the same things repeatedly till the association is ingrained. If fast delivery is the proposition that customer values and the business is good at it, then every interaction – communication, staff, delivery mechanism – everything must communicate fast delivery. And this must be communicated consistently.

The pricing model should revolve around fast delivery. On the other hand, staying relevant is to refresh constantly so that it addresses the evolving customer and places the business right at the centre of the needs of the customer. Refreshing the communication with new ideas to communicate the proposition, making small changes to the proposition to address newer needs within the overall proposition, tweaking pricing without disturbing the overall architecture, newer models to reach the same customer are methods of staying relevant.

And finally…

Industrial laundry – B2B and B2C are at the cusp of a great opportunity. More players mean more conversations with wider audience, more minds share of the target customers and hence more acceptance of the idea. Contradictorily, this means more options for customers and hence more competition among players.

The market, over a period, will settle a lot of questions about proposition, pricing, and profitability. There is a great case for good marketing effort and creating differentiation.

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