The National : THE NATIONAL Jan - Jul 2014
28 THE AUSTRALIAN NATIONAL DRYCLEANER & LAUNDERER, JANUARY - JULY 2014 Characteristics of the Existing Retail Drycleaning Market There are fewer and fewer cus- tomers using retail dry cleaners today and the number of pieces per customer is also falling resulting in a shrinkage in this industry being observed throughout the world. Ten years ago there were 40,000 drycleaners in Italy. Today there are 10,000. In the USA, when unemployment was close to 10%, 50 dry cleaning plants closed each month. Several conditions, other than global economic factors, have contributed to these results. • First, there are more garments sold today than ever before that don’t require dry cleaning. TopShop (UK) with 440 stores in 37 countries, require professional dry cleaning for only 7% of their garments. Further, customers looking at care labels prefer to purchase garments that can be washed at home, saving money on the after care market. Manufacturers receive complaints from customers when the care label specifies drycleaning but home washing will perform just as well. • Second, customers come to drycleaners for professional assistance in the care of their garments but are often disappointed in the result. Poor spot removal, odour and the refusal to clean garments or take responsibility continues to push customers away from the retail market. Market Developments and Trends Future consumer demand of the retail drycleaning market will be impacted by a variety of fac- tors including fashion, con- sumer levels of education and disposable incomes. Following a five-year freefall in revenue for the Australian fashion industry, IBISWorld expects the industry to slip a further in 2013, but according to IBISWorld, the next five years is looking brighter, with growth of 1.1% per annum anticipated over the five years through 2017-18. This growth is expected to occur with the least expensive garments, requiring only in home after care, and the luxury end with continued slippage in the middle market. A higher standard of living and education are highly correlated with drycleaning revenues. White collar jobs with higher pay often require a more formal dress code. Improved disposable income allows for going out at night with finer garments, more frequent use, and less price sensitivity. There is also a significant and positive relationship between Income and purchasing behavior of Green Products. High education and high disposable income equates to those that are particularly environmentally conscious as they have the time and income to be selective, to spend more on organically grown food and fair trade items. Multiple studies, going back to 1974 and more through 2011 showed there is a significant and positive relationship between Income and Purchasing Behavior of Green Products. In addition, those interesting in paying for green goods (products friendly to the environment) are willing to pay a premium; up to 5% just for environmentally sound packaging; other studies show up to 20% premiums for the actual environmentally friendly product.1 see footnote. And finally, the consumer is well aware of the perceived or real environmental threats of drycleaning. They’ve read the news headlines. They’ve smelled the chemical odours and frequently “not to dryclean” is the easiest way to avoid these threats. The ReTail Cleaning MaRkeT ChaRaCTeRisTiCs & TRends Overview: This report was prepared by Roger Bancroft, Director of GreenEarth Cleaning Australasia, for CINET, based on primary and secondary research performed by Deborah Rechnitz, independent consultant for a presentation to the Drycleaners Institute of Australia, February 2013.
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