Four trends in the self-storage sector that deserve your attention
Over the past decade, the self-storage sector gained popularity and has become a competitive industry. Moreover, thanks to its recession-proof nature, the sector has enjoyed an uninterrupted influx of capital. As the sector grows, trends often emerge. Below, we discuss four trends that we observe today.
1. Supply and demand
Before the coronavirus pandemic, the self-storage market in the United States had an oversupply in certain cities or even in entire states (see e.g. Texas, Sacramento, Atlanta and Charleston). Oversupply leads to lower rents. However, the pandemic caused new building projects to be postponed or cancelled, which inhibits oversupply (source: Inside Self-Storage). In addition, more and more cities are imposing restrictions on building a self-storage facility. Such restrictions also have their effect on the supply side (source: Forbes). The evolution of the (pending) oversupply in certain regions in the United States is something that deserves attention in the coming years.
In Europe, the situation is quite different. Demand for self-storage is still far exceeding supply. Europe may have seen a significant increase in the number of new facilities and self-storage space in recent years, but demand remains higher. In Europe, the average area of self-storage space is 0.02 square metres per person. The United Kingdom has the highest percentage with 0.068 (source: Fedessa 2020 survey). By comparison, in the United States in 2018 the national average self-storage storage space per capita was 5.4 square feet, or 0.50 square metres. We do not anticipate an oversupply of self-storage any time soon in Europe. .
In the future, the demand for self-storage units will be driven by the baby boomers who are about to exchange their larger homes for something smaller and more practical. Rising property prices are also causing people to live smaller today. In addition, the demand for self-storage is also increasingly fueled by companies who are discovering the benefits of self-storage.
The fastest growing geographical market for self-storage is (South) Asia. The region has many metropolises with a high population density and extremely expensive square metres of living space. Countries in the region have a growing economy, so inhabitants earn more money and spend it on non-essential items which creates a lack of space in their homes. In addition, because the wider society is familiar with digital developments, the region has a strong e-commerce sector. The companies active in this sector as well as the many start-ups focused on efficiency are turning to self-storage for their storage needs (source: Storeganise).
2. Online channels
Gone are the days when consumers were forced to physically visit their self-storage facility to inspect it as a possible option. The new generation of tenants are increasingly looking online for their storage options. The corona pandemic has only accelerated the transition to online storage. Today, however, there are not many self-storage operators that offer the service of 'booking and paying online'. This requires an optimized website with an integrated payment system.
Book Your Box therefore offers a plug-and-play solution for self-storage operators. As an online marketplace for self-storage, Book Your Box connects self-storage operators and people looking for storage space on the internet. Book Your Box makes sure that your online presence increases without charging advertisement fee or website costs . An additional online channel can be seen as an opportunity for emerging self-storage innovators and providers to take the industry in a new direction and differentiate themselves from non-innovative self-storage providers.
3. Technology and automation
At first glance, the self-storage sector is not considered to be technologically advanced. Only a few components seem necessary to make renting out storage space a success story. "With a vacant property and electricity supply I can go a long way, right? Think again! The standards within the self-storage sector, as well as the expectations of tenants, have evolved rapidly. Investing in technology is one of the ways to distinguish your self-storage from those of your competitors.
In addition to an increased customer experience, technology also allows for the automation of a series of administrative or repetitive tasks that are involved in running a self-storage unit. Through automation, savings can be made on personnel, which in turn increases your competitiveness.
Read more about the technological developments in the self-storage sector in our blog on technology.
The location of a self-storage unit will continue to play an important role. A busy city center or industrial areas that are easily accessible via motorways will always score well in terms of occupancy.
In addition to the location, however, the 'look and feel' of the self-storage facility is becoming increasingly important. Facilities that look good, catch the eye. Develop a house style. A sleek façade with matching fencing and entrance gate creates a tough image, which is associated with security. The same applies to good lighting. Your building will stand out in the dark and at the same time it will give a feeling of security.
Also, don't be afraid to use a little color! After all, self-storage has the bad reputation of being drab and grey (literally and figuratively). Discover here some tips for the use of colors.
Do you have a unique location? Then do not hesitate to let your self-storage blend in with that location. It would be a pity not to play off the uniqueness of the location in the design of your storage. Do not forget to extend the corporate identity of your facility to the interior design. As an extension of the home or a business, a self-storage must also present itself in this way. This all contributes to the customer experience.
Moreover, price is not the all-decisive criterion for the tenant. Factors such as a good location and a ditto image carry weight too. A modern establishment with cachet gives a secure and inviting feeling, which is an important factor for many prospective tenants.
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