September 24, 2020

Smelling an Opportunity

Undeterred, Procter Gamble is taking a shot at it, again. Having persuaded Americans to buy synthetic laundry detergent, fluorinated toothpaste and disposable diapers, P. G. believes it has finally cracked the code on the dry cleaning business, too.

Where other dry cleaning entrepreneurs have tried to come up with clever business models for dry cleaning, P. G.’s primary innovation is in the brand name itself: Tide Dry Cleaners, named after its best-selling laundry detergent.

With more than 800,000 Facebook fans and legions of loyal customers, Tide will draw people into the franchise stores, and superior service — which includes drive-through service, 24-hour pickup and cleaning methods it markets as environmentally safer — will keep them coming back, company officials predict.

“The power of our brands represents disruptive innovation in these industries,” said Nathan Estruth, vice president for FutureWorks, P. G.’s entrepreneurial arm. “Imagine getting to start my new business with the power of Tide.”

And the lure of its fragrance. P. G. plans to infuse the stores and its dry cleaning fluids with the scent of the brand that’s been cozily familiar to generations of households.

Among the Tide believers is Rick DeAngelis, a 40-year-old who is planning to open a franchise in suburban Cincinnati next year.

“It’s been a trusted name in laundry for 60 years,” he said. “It’s almost synonymous with laundry.”

Already, some local dry cleaners are complaining about the new gorilla on the block, backed by a corporation with roughly $80 billion in annual net sales.

Robert Tran, who owns Monroe Dry Cleaning here in Mason, said his business was off more than 50 percent since a new Tide store opened down the street at the end of October. Customers are being drawn to the Tide store by discounts and giveaways, like P. G. products and gift cards, he said.

“There is no way I can afford that,” he said. “All my customers just left without giving me a chance to say, ‘Hey, check the quality.’ ”

But for Tide to become synonymous with dry cleaning too, P. G. will have to overcome problems that have undone other upstarts. The dry cleaning industry has been roiled by unemployment and economic woes, and hurt by a continuing trend toward more casual work clothes.

Competition is fierce, and customers can be prickly: woe to the dry cleaner that ruins a favorite dress, even if it was cheaply made and bought decades ago.

Sanjiv Mehra, who oversaw a short-lived effort by Unilever to break into the dry cleaning business about a decade ago, said the key to success was figuring out a way to do it cheaper or significantly better than the mom-and-pop stores that dominate the industry. At the end of the day, Unilever decided that it couldn’t do either.

“It comes back to, are you fundamentally changing the economics of the business?” he said, adding that P. G.’s marketing muscle could be the difference. “That’s where they will make a lot of money if they do this right.”

Payam Zamani, co-founder of Autoweb.com, a site for car buyers, who later founded PurpleTie dry cleaners, said he tried to do for dry cleaning what Blockbuster did for video stores, offering efficient and better quality than neighborhood dry cleaners. He said it was hard for his stores to compete with owner-operated stores with little overhead and low-wage employees.

“People were more interested in cheaper service, not better service,” Mr. Zamani said.

P. G. has dabbled in dry cleaning before. In the late 1990s it introduced Dryel, an at-home dry cleaning product that rattled local dry cleaners, who feared they would lose business. But Dryel was considered a disappointment, and P. G. sold it in 2008.

In 2000, it opened several stores in suburban Atlanta, called Juvian, that offered at-home pickup and delivery of laundry and dry cleaning. The stores were eventually closed.

The idea for Tide Dry Cleaners came from P. G.’s FutureWorks, a unit that comes up with ways to expand famous brands like Pampers, Oil of Olay and Crest.

Many of those brands are experiencing robust growth in developing markets, but finding new ways to increase revenue in saturated markets like the United States is more challenging.

This article has been revised to reflect the following correction:

Correction: December 10, 2010

An article on Thursday about Procter Gamble’s opening of a dry cleaning chain under the name of its Tide detergent brand described imprecisely the cleaning method it uses. While the “Green Earth” technology used at Tide Dry Cleaners is marketed as being environmentally better than perchloroethylene, a common dry cleaning solvent that is a likely carcinogen, it is not necessarily “environmentally benign.” (Some studies have found that silicone-based dry cleaning solvents like Green Earth persist in the environment in detectable amounts and have produced cancer in laboratory rats.)

Article source: http://feeds.nytimes.com/click.phdo?i=bea835efdf7025b5b1392cbb82d376c1

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