CX Service Innovation: P&G disrupting the Dry Cleaning Industry

Why would one of the most renowned consumer packaged goods companies move into the services industry? That is exactly what Procter & Gamble (P&G) is doing on the back of its' Tide brand. You may not know it, but, there are now more than 25 Tide branded Dry Cleaners throughout the U.S. in states such as Arizona, Colorado, Nevada, Kansas, Florida, Georgia, Illinois, and Ohio.

P&G Smells a Big Opportunity

There is a lot of risk at play here, right? Tide is a brand with a market value of over 1 billion dollars. It takes a lot of time to build the level of brand equity which Tide has established over time. Leverage the brand in the wrong way, damage its' image, and you take a big dip into the market value of one of the leading brands in the consumer package goods industry. Therefore, if you take on that risk, you must get it right, you have to deliver a top notch customer experience. Is this a risk worth taking? P&G is confident that one of its core competencies "disruptive market innovation" can be applied to the dry cleaning services industry and that it can succeed in this somewhat risky undertaking.

The smell of money must have been what initially drew them into looking at the opportunity of innovating within the dry cleaning business. There is huge opportunity here as the dry cleaning business is at least a $7 billion dollar industry, although, one that is largely fragmented made up of thousands of regional and/or local companies. It is not much different from the "mom and pop" type businesses that existed in the late 1980's when Blockbuster created a name brand and took over the movie rental business. They ended up getting disintermediated themselves a few decades later as you know.

Important that P&G address industry-wide CX Performance Gaps

P&G has done its' homework. They determined thru extensive consumer research that there were several critical Customer Experience (CX) pain points or performance gaps across the dry cleaning service industry: (1) inconsistent quality, (2) inconvenient hours, and (3) prices being rarely displayed. They felt that if they could address these critical CX performance gaps, while focusing on delivering a unique and differentiated customer experience, that they could successfully disrupt an industry by offering a more premium product and service experience than the entrenched local players.

To address the customer pain point of "inconvenience", Tide Dry Cleaners provide a very unique service offering: customer lockers near the entrance allowing customers to drop-off and pick-up clothes around the clock, 24 by 7.

In addition, they offer the ease and convenience of "drive thru" service via a double-lane driveway which customers can utilize during their normal operating hours at each retail location.

Also, when it comes to the issue of "price transparency" or not having any pricing related surprises, all pricing related to dry cleaning services from shirts to blouses to dresses or stain removal or button replacement are clearly displayed near the store counter ensuring that customers are never surprised by their next bill when they come to pick-up their dry cleaned garments.

Furthermore, when it comes to “quality”, they train on and perform a 7-Point Inspection process with each garment being inspected multiple times at 7 unique points in the cleaning process for quality and service assurance. This is to ensure that your garment will not only be thoroughly clean, but will look as good or better than the last time you wore it. They inspect garments for stains, damage, missing or broken buttons, and special instructions from our customers.

And finally, "smell", yes that recognizable Tide smell is big part of its' overall customer experience strategy. They actually test the question of "Can you smell the Tide smell?" on a monthly basis at each of their 25 plus locations. Why? Because it’s that Tide smell which is so cozily familiar to generations of households. Its' part of what customers associate with and expect as part of their the overall Tide experience.

Will P&G they pull it off and disrupt the Dry Cleaning industry?

Only time will tell. P&G obviously has the marketing muscle to pull off something like this and with a franchise-based model there is minimal financial risk to them since franchisees are putting up most of the capital paying roughly $950,000 (according to Bloomberg Business) to own and operate a Tide Dry Cleaner franchise. On top of that, they will start to get the added sales of their market leading Tide product to a newly formed channel of distribution serving even more households. My guess is that they will succeed based upon the strength of the brand and their continued focus on filling critical CX performance gaps of their fragmented competition.