In this article the business model of Laundry on Demand is analyzed through the perspective of B2B customer segments that professional textile care companies service. The key take-away of this article is focused on the opportunities of increasing market share for PTC by upselling to existing B2B segments and capturing new B2B segments that currently aren’t being serviced by professional laundries.
Laundry on demand defined
As described in the article ‘Modern Retail textile cleaning concepts…’ laundry on demand (LOD) is the label used to refer to an online laundry service where customers use an app on their smartphone to place orders and get their laundry done. The advanced laundry on demand platforms are much more than a simple app that enables customers to place an order (static process). They can cope with dynamic ordering (maximum flexibility) and focus on optimized, automated logistics and operations management. The system constantly calculates the best routes are based on real-time information (such as traffic) and available drivers. The focus of LOD is currently on B2Cmarkets but the first successful examples are observed in b2b markets as well. For instance, in some B2B segments the flexibility is of huge value, this will be elaborated below. Besides this flexibility the interesting part about the technology behind this platform is that the order process can be initiated by the actual wearer / end-user of the service in an automated manner. Lastly, every interaction on the platform is analyzed by using analytics so the user experience and marketing campaigns can be optimized. In this article the opportunities that are identified by players in the market will be described.
Laundry on demand in B2B
Market demand in B2B sectors of industrial laundry moves in the direction of mass customized services, delivering services to the needs of individuals in a fully automated way. For B2B it means meeting the needs not in particular of the company but of the individual end-users (the wearer or the person that uses the linen). Within the technology it is possible to organize logistics based upon GPS locations and automatically include personal preferences based on account settings (like wash temperature or folding/hanger delivery). Within these B2B segments there are numerous opportunities to grow the market and the technology of laundry on demand can provide solutions to capture that market share. The main challenges are:
Figure 1. main challenges for LOD in B2B market segments
The main challenge for industrial laundry is to develop added value for customers so pricing can go up. This is done by offering added value for instance with textile management services, distribution of textiles up to a complete in-closet service, offering additional functionalities to the wearer (bacteria repellant for instance) or extra comfort upon request. In line with offering new services laundries can use modern technologies which enable companies to service existing customers in a better way and service new market segments that used to be impossible to cater to. A good example are construction workers which need mobile textile services as they move around a lot. Another example is the market of elderly people that live longer at home or in small care wings with joint living formulas. These are currently not (really) being serviced by textile service providers but there are examples of experiments to develop and capture these kind of fragmented markets as well. In some segments this brings the larger industrial laundries closer to the small laundries and at times in direct competition. The suppliers in the textile care sector are continuously working on development of new technologies to enable mass customized services in the laundry. In a combination of data usage, individual batch tracking, machine learning, robotics and automation the smart laundry will increasingly be able to process according to exact customer specifications.
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