CHICAGO — Many businesses regularly undergo a SWOT analysis.
This process looks at the strengths, weaknesses, opportunities and threats a company faces to improve the probability of success for various projects and important decisions.
After the challenges of 2020, American Laundry News thought it would be beneficial to do a SWOT analysis of the laundry and linen services industry in the hopes of helping businesses making positive steps in 2021 and beyond.
TRSA, the association for linen, uniform and facility services, the Association for Linen Management (ALM) and the American Reusable Textiles Association (ARTA) answered the call to examine the state of the industry to help it move forward in the coming years.
OPPORTUNITIES
So, what opportunities are there for laundry/linen services in the coming year? One is enhanced customer relationships.
“When overall profitability is threatened, accounts difficult to serve profitably are shed,” says Joseph Ricci, TRSA’s president and CEO. “This results in more mutual support with remaining customers as relationships are strengthened through great service.
“The cycle perpetuates as operators become more strategic about selecting and acquiring prospects and think more strategically about re-evaluating their business with growth in mind. They select customers more effectively, expand or explore different markets that could generate additional sales, and increase brand awareness and marketing.”
Similar to scrutinizing customers, the value of serving different geographic areas and refocusing lines is assessed. Shifts in demand are examined and companies anticipate where future demand will lie, says TRSA. Options are likely to include:
- Reusable linen, table linen and personal protective equipment (PPE).
- Cleaning, sanitizing and janitorial supplies.
- Healthcare—Medical and dental sales, garments.
- Industrial and cleanroom services as factory work returns onshore.
- Converting facilities with on-premises laundries to outsourcing.
- Capitalizing on more employers recognizing garments that should not be taken home or worn in public places.
TRSA also says laundry operations have an opportunity to revamp branding efforts at this time.
“As mergers, consolidations and closures occur or competitors fail, remaining competitors can position themselves as prepared for pandemic scenarios,” Ricci points out. “Marketing messages for clients and prospects can focus on creating and building trust, i.e., ‘hygienically/professionally clean and green’ or ‘survivor.’”
This is also a good time for operations to undergo internal restructuring. Staffing and roles must be re-evaluated to build better customer relationships or for market expansion or branding, says TRSA. Such re-evaluation has occurred in reducing workforces because of COVID-19.
“This experience has strengthened management’s expertise in optimizing staffing levels,” Ricci says. “Other means of improving internal operations sparked by the pandemic beyond addressing and reacting to inefficiencies have included improving staff/leadership engagement and providing leaders the opportunity to experiment with new processes and products.”
ARTA points out that infection control will be top of mind for years to come.
“The laundering of isolation gowns and related items will remain a priority,” says Gabriel Boardman, president of ARTA and vice president of Product Development for MIP Inc. “Laundry operations must continue to feature their process and how it ensures of maximum disinfection process.”
ALM says the pandemic has brought the industry an opportunity that was once believed to be lost forever to the disposable/single-use market—recognition by clinical professionals of the value of reusable textile products such as non-surgical isolation gowns.
“We must do this right and provide the consumer/end-user with the assurance that these gowns will perform as expected without an overbearing economic loss to the laundry,” says Linda Fairbanks, ALM’s executive director.
Boardman also sees many association-related opportunities for the industry. For suppliers, using platforms provided by diverse associations (newspapers, conferences, webinars) to promote their products and services. For operators, engaging in association offerings is a key opportunity.
“Webinars and other online events should remain as an alternative for individuals who may not be able to travel,” he says.
Finally, ARTA sees an opportunity for younger people to join the industry (suppliers and operators).
“We need to listen to new ideas, new methods to communicate, new approaches,” shares Boardman. “Injecting new ideas and energy.”
THREATS
TRSA says that laundry operations face threats in several areas.
“Customer service must be redefined as accounts’ delivery demands change, possibly necessitating excessive increases in service costs, such as technology investment,” shares Ricci.
“Supply chains may produce inconsistent quality and reliability. Social distancing and other policies in production may have implications on finished product quality.”
Another threat to laundry businesses, according to TRSA, is regulatory effects.
“Operators are likely to initiate unfamiliar efforts to influence government policy,” Ricci says. “They must be prepared to adapt to regulatory and legislative action, including understanding and implementing increased environmental, health and safety requirements.
“State and local governments seem certain to increase business regulations ranging from taxation to minimum wage as governments attempt to recoup lost tax revenue.”
Also, customers will face the same pressure linen and uniform services will bear: higher costs from complying with their customers’ increased safety requirements as well as their own for transportation, taxes, and health and safety, TRSA says.
“Those with fleets will see new transportation restrictions, including drivers and emissions,” points out Ricci. “All will bear the cost of paying for greater infrastructure projects and the assistance programs and other borrowing related to COVID-19.”
“For textile suppliers, many new entries in the market took advantage of the industry’s growing need for reusable masks and gowns,” Boardman says. “What will be their place in the coming years, will they have an impact on our business?”
While the interest in reusables has grown, ARTA points out that services still have to overcome some well-established habits of healthcare personnel with certain disposable products.
Long-term customer shifts are anticipated due to societal, economic and cultural changes, likely including a smaller customer base, reduction in overall demand and market share loss to competitive products. TRSA members believe the following may erode their business to some degree:
- Shift to disposable equivalents of linens.
- Linen treated as a commodity.
- Uncertainty whether consumer spending will increase or decrease.
- Decreased reliance on office buildings for business functions.
- Less large-group interaction.
Labor is always a challenge for laundry operations, and the pandemic has increased this threat.
“Managers not previously recognized for empathetic qualities need new appreciation of the value of their best people,” recommends Ricci. “Outreach to team members must be added to build morale around a safe working environment and recognize their personal roles as essential service providers.”
Identifying, supporting and retaining the best people and creating a positive work environment to drive recruitment will be more difficult, according to TRSA.
“A sluggish workload would require more part-time help, likely difficult to find and retain,” adds Ricci. “Looming as potential profit drains are the impact of unemployment payouts and employees’ fear of returning to work.”
“Competition for filling laundry jobs (processing, drivers, distribution, etc.) is driving hourly wage expectations up at the same time as hospitals and hotels are seeking price cuts to stabilize their business in a post-virus economy,” adds Fairbanks.
ARTA points out that 2020 was a difficult year for some laundries and suppliers and could prevent some in 2021-22 from attending or participating in key education events.
“This could pose a handicap to struggling firms who won’t benefit from exposure to what’s new in the marketplace,” says Boardman.
No list of threats to the laundry and linen services industry would be complete without mentioning the uncertainty of the length of virus impact.
“Customers especially, in food service and hospitality, are uncertain as to the rate of recovery, reconfiguring internal processes and preparing for subsequent waves of the virus,” Ricci says.
“Historical models used to predict par, for example, may no longer apply. When combined with supply chain uncertainty, it becomes very difficult to create accurate models of product supply or determine required plant capacity to serve the customer base.”
MOVING FORWARD
When COVID-19 impacts first gripped consumers and businesses in early 2020, TRSA says it anticipated members’ need to revise strategies for serving customers and recruiting and retaining staff.
TRSA leaders enlisted input from a diverse group of members in the linen, uniform and facility services industry through a variety of forums, including nearly 50 webinars, town halls, roundtables and performance benchmarking surveys.
Highlighting this information-sharing and networking was the adoption of a Strategic Change Initiative to guide TRSA programming, including 10 weeks of facilitated discussions with association subject matter experts.
In early summer, the Initiative culminated in a Strategic Industry Town Hall with more than 120 linen and uniform services professionals and the publication of “Looking Forward: Linen, Uniform and Facility Services Industry Challenges,” a report compiled from quantitative and qualitative research, which was used for much of TRSA’s input for this SWOT analysis.
Fueled by members’ positive attitudes and resilience despite the uncertainty, as well as their dedication to employees and customers, TRSA says growth opportunities across the range of industries the industry serves are in its focus.
“By leveraging the public’s increased emphasis on image, hygiene and sustainability, TRSA is leading industrywide longer-term planning post-COVID-19,” Ricci says.
ALM says that laundry operators need to utilize reliable data to drive sound decision-making and to identify best practices.
“What a business doesn’t know can, and most likely, will hurt them,” says Fairbanks.
Boardman concludes, “I see challenging years ahead, but we will find ways to get through this together.”
Miss Part 1 on strengths and weaknesses of the industry? Click HERE to read it!
Have a question or comment? E-mail our editor Matt Poe at [email protected].