Rinsed, the leading car wash software platform, has released its most recent quarterly industry report. The report compiles valuable data on the car wash industry's performance over the past five quarters, so operators gain clarity into industry shifts and trends.
This quarter, the industry observed 5.2% year-over-year growth in combined member and retail revenue. This metric analyzes the same locations each quarter to determine how revenue has grown on a location-to-location basis. It is not reflective of new entrants into the market that increase the industry’s overall size.
Member revenue continues to grow, showing a 13.2% year-over-year increase, as retail revenue declined 7.1% year-over-year. Member and retail revenue trends reflect the transition from retail sales to membership business models in the industry, a shift that has been evident over the last several quarters.
Conversion rate of retail customers to monthly members continues to vary depending on the size of a location’s existing active membership base. More mature sites, with over three- thousand active members, operate at conversion rates nearing the double-digits. However, less mature locations, with under one-thousand active members, see conversion rates in the low-single digits. To improve conversion rate, operators often utilize sophisticated technologies and implement refined sales processes in the driveway.
The average monthly revenue a car wash receives per member is $30 dollars, with the upper end of the distribution at $35 and the lower end at $26. Understanding the average monthly revenue a car wash receives from their members can serve as a benchmark for determining membership prices.
The report highlights average member lifetime value so operators can understand the cost of acquisition for a new member relative to the revenue they can expect to generate for that member within the first 36 months of their membership. This quarter, the average lifetime value for a member was $434, though this will fluctuate based on the prices and retention at each wash.
Within the first 400 days after launch, new locations are quickly growing their active memberships. In 2023, newly launched locations reached 1,000 members around day 300. In 2021 and 2022, it took much longer to reach 1,000 members. This indicates improvement in growth strategies for newly launched locations across the industry.
This quarter, overall churn increased 6.0% year-over-year with a 8.7% year-over-year increase in credit card churn and a 5.3% year-over-year increase in voluntary churn. This analyzes churn across the same locations, so it is evident how much a location can expect their churn rate to increase on a quarterly basis. It will be important to continue to monitor this metric in subsequent quarters as economic pressures are potentially influencing consumers' choice to terminate their membership.
To view the full report and learn more about the latest trends in the car wash industry, subscribe to Rinsed at rinsed.com/subscribe.
