The scene, once familiar across suburbia, is now rare. “People don’t wash their cars at home in their driveway anymore,” observes Robert Dubinsky, chief executive officer and president of St. Louis-based Waterway Carwash.
On the other hand, he reports, “The size of the carwash market has increased dramatically in the last 20 years.” Dubinsky’s company, one of the nation’s largest family-owned carwash operators, is a leader in that trend. With 29 sites across five major cities, Waterway serves customers in St. Louis, Chicago, Cleveland, Kansas City, and Denver.
Founded by Dubinsky’s father Henry in 1970, Waterway has carved out a distinctive niche. Like other industries, the carwash business is consolidating as chains put up carwash-only sites nationwide. “But we bring a unique combination of carwash, fuel, and convenience store all on one site,” Dubinsky explains.
In addition, “We’re committed to cleaning both the exterior and the interior of the vehicle,” Dubinsky continues. “It’s a ‘flex’ model. Customers can choose a professional exterior cleaning and can also choose a professional interior cleaning.”
Two other commitments set Waterway apart from competitors. “It’s common to say that people are your greatest asset,” Dubinsky relates. “But with us, it’s especially true. To give our customers the best experience, we have 50 to 80 employees at each location. And we have a great development program for store managers and territory managers.”
Finally, Waterway is distinctive for its long-term orientation. “We’re very ‘planful’ with multi-year plans and a ten-year vision,” Dubinsky states. “That’s different from the rest of the carwash industry, where the focus is often more short term and the primary emphasis is on a simple format and growth.”
Being “planful” at Waterway means a focus on execution so that “the experience we provide customers is what differentiates us from other carwashes,” says Dubinsky. “We focus on what’s best for the customer and then build from there.”
While competitors focus on getting vehicles in and out, Dubinsky continues, Waterway has found that combining its carwashes with fuel islands and c-stores “is a great combination for customers. When you look at the new tunnel washes that are going up, the inclusion of food and fuel is nearly zero. Because we offer all three, that differentiates us. And we do all three well, which would be hard for competitors to do.”
Carwash marketing has evolved over the past generation. Twenty years ago, operators debated the merits of touchless versus rollover carwashes and emphasized upselling customers over a basic wash. Today, brushes are made from materials that are safe for vehicles, while marketing focuses on selling monthly subscriptions or memberships.
The Waterway Clean Car Club typifies this approach, offering memberships from $25 to $75 per month. Plans that offer both interior and exterior cleaning include The Whole Thing and Interior Clean; exterior-only plans are Ceramic Express, Hot Wax Express, and Clean Express. And for fleet managers, Waterway offers a variety of volume-purchase options.
Nevertheless, Dubinsky believes that success “starts with being a great operator first, and then we add the marketing. Selling subscriptions is a primary emphasis. But in marketing, the biggest differentiator is the customer experience. The emphasis in the industry is on scaling up. But our emphasis is on operational excellence and delivering a fantastic customer experience.”
In the past, as c-store operators sought additional revenue streams for their limited acreage, many installed in-bay carwashes. Waterway locations, however, feature conveyorized tunnel carwashes. “Tunnels have an advantage over in-bay systems,” Dubinsky explains. “When demand goes up, maybe after cars have gotten dirty from snow or rain, you can scale up a tunnel’s capacity more than you can with an in-bay carwash.”
Today’s customers still need assurance that their vehicles will make it safely through the wash. “So it’s vital that our carwashes are always well-maintained,” Dubinsky relates. Waterway does not purchase its tunnel systems from a single manufacturer but instead chooses the supplier that is best for a given location.
Waterway has also kept up with advances in eco-friendly carwash operations. Water, electricity, and natural gas usage has been reduced. Wash water is treated at or above required standards before entering public sewer systems. Environmental concern even extends to eco-conscious landscaping outside the store and recyclable coffee cups inside.
Because local concern is an emphasis for Waterway, Dubinsky says the company “focuses on relationships between our employees, our customers, and our communities by positioning our frontline employees to be locally involved.”
Over its history, Waterway has donated millions in carwash services. Through its Waterway Fundraising program, local nonprofits, school groups, church groups, and youth sports teams can sell carwash coupons and keep 50 percent of the profits. Also, educators and students are eligible for a discount carwash program. And as a corporation, Waterway supports national organizations such as Mothers Against Drunk Driving and Junior Achievement.
“We’re a committed corporate citizen,” states Dubinsky. “Since we expect to operate each new location for more than a generation, we invest heavily to maintain and upgrade our facilities over time.” Waterway has grown mostly through new construction. With an emphasis on quality, Dubinsky pegs the cost of an average site at about $10 million for land and buildings.
The company works closely with municipalities and elected officials to build relationships that last beyond initial zoning and permitting. And Waterway eschews cookie-cutter sites, instead hiring architects to design individual stores that match the surrounding neighborhood and fit the character of each community.
Alongside the tunnel wash, most sites feature a fuel island, typically with six to eight MPDs. Waterway sites that offer fueling are about evenly divided between BP and Phillips 66 branded products and the private Waterway brand.
Meanwhile, Waterway stores vary in size and offerings. “A lot of our products are the typical c-store mix,” notes Dubinsky. “But we also consider what’s appropriate for each store’s customer base—for example, premium drinks and snacks, even greeting cards and pet toys. And because our customers are getting their cars cleaned, it’s important that our stores have auto care products, a comfortable and relaxing waiting area, and clean bathrooms.” Also, Waterway is working hard to innovate its retail offer, by introducing the option to purchase curbside from anywhere on the property.
Waterway’s unique combination of carwash, fueling, and c-store creates profitable opportunities for cross-marketing and cross-selling. That approach, however, has evolved over the 55 years since Henry Dubinsky opened his first site.
“My father started in 1970 with the idea that the carwash business could be more professional and customer-oriented,” recalls Robert Dubinsky. “At first, he offered a free exterior carwash with a gasoline fill-up. But by the mid 1970s, he moved to full-service cleaning and expanded into more cities and affluent neighborhoods.”
The elder Dubinsky developed the hybrid concept of combining exterior and interior cleaning along with fueling and convenience retailing. For his part, son Robert Dubinsky remembers getting his first Waterway job at age 14. “I came and went with my schooling, and after getting my MBA I joined the family business full-time in 1996.”
By 2005, Dubinsky was named president of Waterway, and five years later added CEO to his responsibilities. Father and son are owners of the family business, while key non-family executives have ownership stakes.
Henry and Robert Dubinsky have been leaders in the industry. Both have served terms chairing the board of the International Carwash Association. In addition, Waterway has been a SIGMA member for two decades. “I really appreciate the quality of the members and the programming,” says Robert Dubinsky. “When we go to meetings, we always learn from other members and learn about the industry issues where SIGMA is advocating for marketers.”
In his ten-year vision for Waterway, Dubinsky sees a bright future. “We’re excited to grow, develop and realize our vision to become the best regional car wash operator in the United States. We plan to double down on our differentiated model, build additional density in existing markets, and then expand into new markets. No other car wash company delivers for the customer our special mix of car wash, fuel, and retail or as great a customer experience.”
