The only change that's coming to the growing laundromat industry is quarters.
This week's lamest app release might surprise you, yo. Because it isn't Yo—a service that sends a little "Yo!" to your connections and then maybe steals your phone numbers. The worst app of the week is Washboard, which steals your money instead.
For the relatively high price of $14.99, Washboard will mail you a $10 roll in quarters, the kind you find frequently in laundromats or sock-oriented assaults. This is a bad service. It would be cheaper to go to the bank, withdraw $10 in quarters plus three more dollars, and throw away the $3.
Or so it seems. Over at Vox, Matthew Yglesias is working hard to drum up some business for Washboard. As he explains, time is money, and the times when you need money in coin form, the bank is closed. We do lots of lazy things, like buying sandwiches when we could make them for less.
The thing is, we've already innovated our way out of changing bills into quarters. Washboard is too late. This disruptive technology is already decades old.
The real question is: How have we not innovated our way out of doing the laundry? And if we still have to go to the laundromat, why can't we do laundry on credit?
1. Laundry is big business
According to an industry study prepared by MSG in 2011, there are some 35,000 coin-operated laundries in the U.S., and they generate $5 billion in annual gross revenue. They serve an estimated 100 million Americans, the majority of whom live in rental housing. (The figures include coin laundromats and coin-operated machines in apartment buildings.)
As Yglesias points out, most U.S. homes built today come with washing machines and dryers. But of course, that wasn't always the case.
According to the U.S. Census, the 1970s and '80s also correspond to a spike in multi-family housing construction. Many of those buildings (and older buildings) are rental homes today. When it comes to more recent multi-family housing construction, many of these buildings come with coin-operated basement laundry machines.
Today, growth in the laundromat industry today is being driven by cities, where density and multi-family construction are expanding the market for clean clothes.
2. Laundry is a passive business
One more thing worth noting about Big Laundry: Laundromats are passive income generators. The demand for laundry is steady month to month, meaning that revenue is steady and accounting is easy. Expenses are few and fixed—water, of course, but also licenses, insurance, advertising, legal, and maintenance. There's no inventory, no receivables, and almost no employees. There is sometimes mopping. I need to buy a laundromat.
3. Laundromats are obsessed with the dollar coin
The Dollar Coin Alliance argues that switching from paper dollar bills to dollar coins would save the U.S. economy $13.8 billion. The editorial boards of The New York Times, The Washington Post, Chicago Tribune, Los Angeles Times, and USA Today are all on board. This led some laundromats to join the armored-car industry and paper money–printing industry in Americans for George, which lobbied (successfully) to preserve the print dollar in 2012.
It's a divisive issue on Planet Laundry, the world's leading forum for laundromat owners. On the one hand, some laundromat owners fear that the quarter is going to be destroyed by inflation: Soon enough, people will treat it like the penny and simply stop carrying it, or laundry will require so many quarters that the costs associated with capturing them will rise. On the other hand, it could be expensive for owners of older laundromats or laundry machines to convert to machines that accept dollar coins.
A smaller set appears to favor credit cards.
4. Installing credit-card readers is work
Not hard work, no, but some work. To install a WashCard system in a laundromat may require a wall-mounted site management controller, a wireless access point, a wireless reader terminal, a point-of-sale kit, customer-loyalty upgrades, a virtual storefront, and on and on.
Meanwhile, laundromat owners who do none of these things won't be punished by most customers, whose laundromat preferences tend to be framed by convenience and proximity. (So much so, in fact, that there's a market, albeit a small one, in selling people quarters for 37 cents.) If you're not seeing credit card readers at your local laundromat, try the next-nearest laundromat.
Fascard is a popular system for converting coin-operated machines to machines that also accept credit cards without much fuss. Credit card readers may bring the biggest advantages to the little guy: A story in American Coin-Op magazine this week profiles a couple who live in Columbia, South Carolina, but own a Wash World in Charlotte, North Carolina—thanks to the wonders of digital web tech.
The outlook is a little different for larger chains.
5. Laundromat chains are eyeing the global market
The reason big chain laundromats don't take credit cards is the same reason big chain laundromats don't take Bitcoin: People in the most desirable, promising markets worldwide carry neither. Check out this promotional film by Alliance Laundry Systems, which includes a bit about the first laundromat to open in the Philippines:
Dense, credit-free, and lacking access to some basic health services: Manila is an ideal market for laundromat penetration, although, as this investor explains, it took some time for local Filipinos to get used to the idea.
6. There's one place where laundry is being disrupted—on campus
The service eSuds is designed to let students watch their laundry virtually. No more tiresome walking down to the dorm basement to see if a machine's free: eSuds will alert users by text or push-notification when a washing machine is available. Plus, students can pay for their laundry automatically using their student ID or PIN (where colleges support that service, as almost all of them do).
So if you're planning on moving into a dorm some time soon, congratulations! Prepare to see innovation at work. The rest of us will be in line at the bank.