National Clothesline

Abe Lincoln owned one. Albert Einstein did, too. Marie Antoinette had many. General George Custer carried his into battle and Napoleon and Josephine Bonaparte actually collected them. In fact, almost every historical figure since the 15th century had one… and it all began with an egg.

The first watch (you guessed it) was nicknamed the “Nuremberg egg” because of its shape. The earliest watches were ornate, expensive contraptions worn more for social status than for punctuality. They had no minute hands, which would have been pointless on timepieces that could barely register the correct hour. But technology improved.

The Swiss watch and clock industry appeared in Geneva in the middle of the 16th century. In 1541, the reforms of John Calvin, which banned the wearing of jewelry, forced goldsmiths and other jewelers to turn to a new craft. Watch making.

The Swiss prevailed for almost 500 years and by the late 1960s, Swiss watchmakers commanded a whopping 77 percent of the world’s wristwatch market, selling about 300 million watches a year.

In 1969, however, the Seiko watch company introduced a new kind of watch. It was digital and used a quartz crystal instead of a mainspring. At $2,100 it was also very expensive. But as production increased, prices dropped and the company soon began pumping out amazingly inexpensive digital display watches that were unbelievably accurate.

Within a matter of months, the Swiss, long dominant rulers of the watch industry, saw their 77 percent “share of the pie” cut to less than 5 percent. Consumer demand for cheap throwaway watches had reduced sales of Swiss timepieces by 90 percent.

For most industries, that would have been the end, but not in this case. The Swiss decided not to compete with the cheap digitals. Instead, they decided to increase the quality of their own product and target just the high end of the market — the small 5 percent of buyers who bought the top quality, most expensive watches.

More than 500 million wristwatches were produced worldwide last year and of that total, the Swiss sold 33 million for a 6.6 percent market share. That may not seem like much until you look at the actual revenue. The Swiss watches generated 12.8 billion francs - half the sales volume of all the watches produced! Yes, believe it or not, the Swiss get more than 50 percent of the world’s watch revenue with just a 6.6 percent market share.

The garment industry has seen its share of market eroding “digital display” technology as well. After all, who can forget the 1970s and the emergence of those evil twin sisters “Polly” and Esther?” With the purchase of easy-to-care-for polyester garments, consumers effectively cut out the need for a drycleaner. Operators closed their doors by the thousands as the once lush green market began to parch and dry up.

Recently, consumers have been encouraged by Procter and Gamble to “just zip it, steam it and hang it.” After all, why pay the drycleaner when you can do your own fine garments at home for about 60 cents apiece? Dryel is marketed as “the safe, easy way to care for dryclean only and special care clothes in your home in about 30 minutes.”

Does it work? It doesn’t matter. Every new technology captures its own niche, thus causing further erosion to the market share of mainstream drycleaners.

The dress-down phase that much of the country is currently in has had a huge impact on drycleaners nationwide. It used to be that professionals dressed for work in a suit, tie and a starched dress shirt but that’s not the case anymore. Showing up at a business meeting in nicely pressed Dockers and a polo shirt is perfectly okay.

And that’s not all. As a drycleaner, you can’t even count on getting any Sunday-go-to-meetin’ wear anymore. I know. I’m part of a large church in an affluent suburb. Weekend attendance is always more than 20,000 — and there’s hardly a suit in the crowd.

Enter the price cutter. Discount and one-price cleaners offering barebones service at rock-bottom prices is becoming increasingly popular and their rapid emergence is having a huge impact on the industry.

In fact, it almost mirrors what happened to the Swiss watchmakers when Seiko started playing real hardball, but with this distinction. The cleaners who have been hurt primarily are not the most expensive, up-scale operators but rather those cleaners who occupy the middle ground in terms of price. Price, after all, is a means of positioning and those who stand to gain most are the operators at each extreme.

In other words, with regard to price, it pays to be either the highest or lowest because you can promote your service from that position. But a cleaner in the middle is unable to promote by price. As a result, many cleaners in the middle, who lack distinction and differentiation apart from price, stand to lose most to an aggressive, cost cutting competitor.

Fortunately, most drycleaners gain the majority of their influence and sales from within a small fixed area (usually a one- or two-mile radius). An exception to this would be a local pick up and delivery service in which the cleaner delivers to a town 10 miles away.

Another example would be a company that specializes in wedding gowns where delivery is done nationally or internationally through UPS and Federal Express.

The advantage of being in a small, fixed area, especially with regard to price, is that you are often out of range of the competition. After all, the nearest discounter might be 30 miles away and you are unaffected.

Profit-restricting EPA regulations, loud and determined environmentalists, easy to care for stain-resistant and wrinkle-free fabrics, along with new hi-tech laundry equipment that allows the homeowner to bypass the garment care specialist, are but a few of the challenges affecting you and your share of the drycleaning market. There are many more but with regard to price.

The lesson to be learned is this: High price and low price can co-exist in the same fixed market.

If you are a full-price cleaner, it is possible to survive and even thrive with just a small piece of the total pie. However, as in the case of the Swiss watchmakers, this share can only be maintained as you continually strive to add value to your service.

On the other hand, if you are a discount cleaner, you have a bright future as well, for you have little to fear from the high-priced cleaner. There will always be a market for professional drycleaning and laundry because there will always be segments of our society who choose not to do their own labor, preferring instead that it be done for them… at any price.

Bill Bishop has been a consultant with the Golomb Group for the past 12 years, designing marketing and promotional programs for drycleaners. He can be reached at the Golomb Group at (800) 679-5856 or by e-mail at billbishop@golombgroup.com.