Chapter 2

REVIEW OF RELATED LITERATURE AND RELATED STUDIES

Related Literature

Doing laundry is a part of every person’s life. Just like food and

shelter, clothing is one of our necessities. To have fresh clothes every day

that we can readily wear, we allot some of our time and energy in washing

and drying our clothes. There are two basic ways in doing this, i.e. hand

washing and machine washing. However, some people either don’t have

enough time or energy or both to do their own laundry. Thus, the birth of

laundry shops.

In the essence of modernization, there is a continuous improvement

of technologies through invention and innovation. The diffusion of

technological changes helps our economies evolve and this change affects

the lifestyle of every individual. It is clearly evident in the evolution of laundry

machines. In the older times, it usually takes two or more days before we

can take back our clothes from the laundry shops. With the emergence of

coin-operated laundry machines, we can now do a week-load of laundry in

less than hour.

The coin-operated washing and drying machines offer a self-service style of

laundry wherein people may walk-in to the laundry shop, weigh their clothes,

load it in the machine, add some detergent and fabric softener, insert the

coin and press start. Because of this, the customers will be able to decide

how long they want their clothes tumbling in the machine, maximize the

amount of detergent and fabric conditioner that they want to put plus the

assurance that their clothes will not be lost.

In a laundry market competition, it is advantageous to have a more

convenient and efficient service. Therefore, the idea of transforming a typical

laundry business into a coin-operated or self-service type one emerges as

an enticing option. The coin-operated laundry industry has undergone a

revolution. There is a trend toward coin laundries being more comfortable

for the customer. And the fact that old-school laundry owners viewed this as

a passive business has allowed the new era in laundry business to have an

opportunity for this innovation. With this, there will be higher level of

probability for the coin-operated laundry service feasibility. (Satander, 2018)

Operating almost 24 hours per day and 7 days per week, laundromats in the US
help the customers be more flexible with their washing and drying time
schedule. (Brannen 2010.)

Launderette is another alternative word for self-service laundry which is popularly

used in the UK. The first launderette in the UK was found in London by 1949.
The same as in the US, the most of launderette in the UK are fully automated
and coin-operated without the appearance of staffs at the stores. Recently,
launderette industry in the UK has been affected a bit negatively due to the
 increases in utilities and renting costs and the decrease in domestic washing
machine price. However, the demand for self-service laundry are still high
enough to bring attractive profits for investors thanks to the large number of
households having beddings, which are over domestic machine capacity, and the
climb in the number of tourists over years. (Yasmeen 2010.)

Related Studies

The term coin laundry is defined by the American Coin Laundry

Association (CLA)—the only national trade association for the coin laundry

industry—as commercial-grade, self-service laundry equipment placed into

service in a retail space. Coin laundries are unique small business in that

they have no inventory or receivables. Today’s coin laundry industry is a

strong and vibrant one. Even more appealing is the fact that this dependable

public service industry continues to grow and thrive.

Despite the continued fluctuation and instability of the Philippine

currency, there is one thing that remained certain: Everyone has to wash

clothes! With companies downsizing and people looking to create new

identities for themselves, the idea of opening or transforming a typical

laundry business into a coin-operated one emerges as an enticing option.

History of Laundromats

As long as humans have been wearing clothes, they have been

washing them as well. Although our early ancestors lacked the stringent

laundry technologies we enjoy today, they surely appreciated the scent, feel,

and look of freshly laundered clothing and linens.

The very first washing machine was invented in 1858 by Hamilton

Smith. A little less than 20 years later, a man named William Blackstone

invented a household washer as a gift for his wife. While these machines

were incredibly convenient, they were expensive luxuries that most families

were unable to afford. As a result, the Laundromat was born.

In 1934, the first Laundromat, which was known at the time as a

“Wash-a-teria,” opened in the Fort Worth, Texas. This laundry facility

featured four washing machines that charged by the hour. Laundromats

quickly gained popularity, and 15 years later, Bendix Home Appliances

created the first coin operated washers.

Over the past few decades, laundry technology has improved

dramatically. Energy-efficient, low-water washers are gaining in popularity,

and dryers are much faster than they were in decades past. Although many
 machines still rely on coin-operated mechanisms, digital card-operated

payment systems are also available. Because Laundromats typically

operate on a self-serve, automated system, their owners are able to step

back and manage their stores from afar. Many Laundromats include

amenities like free Wi-Fi, TVs, vending machines, and children’s play areas.

In addition, it isn’t unusual for Laundromats to remain open 24/7, an extra

convenience for customers with busy schedules.

Industry Review

The coin laundry industry is approximately 70 years old and has been

growing and thriving over those years. It is especially gaining more

popularity in the recent years because most people now look to simplifying

household works and save time by depending on highly mechanized

machines.

The coin laundries are one part of the self-service laundry business;

the industry is actually comprised of two distinct segments as stated by the

CLA. The first is coin-op laundries, the second is represented by coin-

operated machines

located in apartment housing. This apartment segment of the business is

referred to as the multi-housing laundry business.

Industry growth is based on the demographics of population density,

population mix and population income. The more concentrated the

population, the greater the need for quality coin laundry facilities. National

and regional demographics indicate renters, the primary users of coin

laundries, are the fastest-growing segment in the nation. As of the 2010 U.S.

Census, 34.5percent of the nation’s 116 million households were renter

occupied. The number of coin laundry stores built over the past 70 years has

grown steadily as the population has increased and shifted to more

concentrated areas resulting in a mature, stabilized industry.

According to an industry study prepared by MSG Firm in 2011, there

are some 35,000 coin-operated laundries in the U.S., and they generate $5

billion in annual gross revenue. They serve an estimated 100 million

Americans, the majority of whom live in rental housing. This figure includes

coin laundries and coin-operated machines in apartment buildings. Today,

growth in the laundromat industry is being driven by cities, where density

and multi-family construction are expanding the market for clean clothes.

One more thing worth noting about coin laundries is that they are passive
income generators. The demand for laundry is steady month to month,

meaning that revenue is steady, and accounting is easy.

Meanwhile, in the Philippines, despite the continued fluctuation and

instability of peso, doing laundry is one of the things that is a certain and

constant household duty. At present, the cost of operating a laundry

business depends

largely on the operational expenses. It involves a lot of balancing act of

lowering the cost and increasing sales to keep the business afloat. However,

with economic downturns and market uncertainties, laundry business is

evolving into a dynamic opportunity while maintaining its high rate of

success for today’s investors.

Old-school laundry owners in the country often view this as a passive

business which has allowed to new era of laundry owners to experiment and

come up with the coin-operated laundry business (Kirhat, 2016). An ordinary

laundry shop may offer as low as PhP25.00 per kilo, but the coin-operated

laundry shops offer PhP20.00 or lower per kilo for both washing and drying

plus the added feature that the customer is now assured that their clothes

will not get lost. With both the average family and business establishments

washing between 15 to 25 kilos a week, it is easy to see just how much a

coin-operated laundry business can gross in the same period.

 With all of these industry reviews, it is no wonder that more and more

coin-operated laundry shops are arising especially in populated areas such

as Manila and Makati. Meanwhile, aside from coin-operated laundry

machines, there is also the card-operated. One of which was recently built

in Lucena City, Quezon. This is evidence that the self-service laundry

industry is deemed to thrive not only in the capital region but also in the

provinces and small towns such as in Atimonan, Quezon.

SWOT ANALYSIS

I. Strengths
Using machines with quality and brand

High profitability because it is more accessible to market

Quality output and faster service

The location is on the main city nearest to the boarding houses,

apartments and schools

Location is just a walking distance

Prices are relative, competitive and accords to what the customers

want

Does not need a large amount of capital

Promotion strategies – social networking sites is very accessible as well

Accessibility of the location

II. Weaknesses

Lack of experience as this will be the first time to conquer the market
in the said location
 As the machines with brand and quality is expensive, maintenance will
be quite expensive as well

III. Opportunities

Continuous development of the city with having new establishments

for residential (apartments and boarding houses)

Students, working professionals having lack of time in doing their own

laundry

IV. Threats

Price variations

Future competition

Definition of Terms

1. Tagging - the clothes are firstly tagged with a specific number, mentioned in the
invoice given to customers. This procedure is used for identification of clothes once
ready for collection for customers.
2. Sorting - After tagging the clothes are arranged in different sets. Some people will
sort by color. Other sort by fabric type.

3. Pre-treatment of clothes – soaking in hot water.

4. Washing - The clothes are washed in washing machine using detergent washing
powder and or bleach on white.

5. Drying - The clothes washed are transferred to dryers. (Note: one of the
machines are automatic dry)
6. Packing - Once pressed, the clothes are properly hanged and covered in the
plastic wrap and then tagged so that it can be easily identified.