“On-demand” or “In-demand”?
When my co-founder Joelle and I started My Locker Laundry last year, the “on-demand” economy was starting to warm up in Singapore.
People were beginning to be familiar with the on-demand economy, and the success of Uber and Grab (now they are one company) has motivated many VCs to try to locate the next Uber.
Companies across industries were launching on-demand services in all kind of industries and provide all sort of services. Fast forward to today where a few companies have found success with the on-demand model. However, more have struggled and failed. In the recent months, we’ve seen a handful of well-funded startups with solid teams either going through layoff or shutting down entirely. The natural question to ask is – WHY?
Well, “on demand” is not the optimal solution for most customer needs. They are not necessarily in-demand.
Let’s look at our industry – dry cleaning and laundry industry
Washio, a well-funded on-demand laundry startup that launched in 2013 has shut off all her operations after three years in business. Some may recall that they have raised more than $10 million in funding across four rounds. This announcement led many people to ask the question –
“Is On-demand dry cleaning and laundry dead?”
Well, the answer is YES.
On-demand dry cleaning and laundry has been doomed right from the start. When Washio was launched, it offered the on-demand laundry service that would pick up customer’s laundry at a scheduled time. Then in 2015, after receiving more investment, they launched Washio Now that guaranteed the laundry pickup in as little as an hour of ordering, with a 24-hour turnaround time on clothes.
Closer to home, we see the sudden shut off of My Laundry Box in 2016. The news that the entire team, including the CEO, went missing, shock many.
Ultimately, any business ignores the primary pain points of its customers, is destined to struggle. At My Locker Laundry, our approach from the beginning has been needs-focused and solution-based. We eliminated two key pain points of our customers: inconvenient locations and inconvenient hours.
Unlike other competitors, we leverage on mobile technology and app system to create a simple workflow. Customers are able to send their clothes 24/7 at their own convenient instead of waiting for a shop to open, and they are able to deposit and collect their clothes at their apartment instead of locating the shops nearby or waiting for the delivery man to deliver to their house. In addition, they could do their cashless and secure payment right from their personal smart phones anytime and anywhere they want.
Uber solves a fundamental problem – when you need a taxi, you need it now. Offering an on-demand solution makes a lot of practical sense. However, this pain points isn’t occurring in the dry cleaning or laundry business. An on-demand solution doesn’t make a lot of practical sense. Instead, it will add into the cost of operations and sacrifice quality of services.
At My Locker Laundry, we understand that customers need their clothes cleaned and professional service. Unlike an on-demand model, they need an in-demand model. They need clothes cleaned in a recurring and predictable pattern and always having a high-quality cleaning and great customer service over speed and urgency.
In clothing care, quality and professional cleaning is the key. On-demand model emphasizes speed and fast turnaround time and comes at the expense of quality – you could imagine that when items are pushed quickly into the system, the quality of the cleaning process would drop.
1. Previously: Customers have to follow the opening hours of the dry cleaning service provider
Locker Laundry: Customers can send their clothes 24/7 at their own convenient
2. Previously: Customers’ records is not captured anywhere by the service provider, so no reward to loyal customers
Locker Laundry: Customers’ records is captured in the electronic system, and customers are rewarded for their loyalty – not only their credits will NEVER expire, they also got rewarded financially EVERYTIME when they send in their clothes for servicing
3. Previously: Service providers pay high rental and manpower costs, they transfer their high overheads to the customers
Locker Laundry: We have effectively eliminated the high cost elements (both rental and overheads), and transfer the savings back to the customers
Serving customers needs is key
There are still many startups in the category of “on-demand” economy. The reality is that for any business to be sustainable, business needs to serve customers needs.
Clothing care is a service that everyone needs. It is a huge market that My Locker Laundry is actively expanding by making it more accessible and affordable for all to use. This leads to more customers and more frequent use by each customer. It’s also a highly fragmented industry where there are less than 300 establishments in Singapore. More than 70% of the services are run by small shops that have vary drastically in quality, price and service. By adopting technology and working closely with the condo management partners, we introduce a reliable and convenient solution to get your laundry done within 2 clicks on your personal mobile phone.