For all the recent talk of minimalism and eliminating clutter, demand for self-storage is still going strong. It turns out, people aren’t ready to completely let go of their stuff yet—they just want a place to store it. In fact, industry experts predict that revenue for this sector will grow at a rate of almost 3% per year through 2020, pushing total revenue for the U.S. self-storage industry to $32.6 billion. Over the same time span, about 3500 new facilities are expected to open. Here’s a look at some of the trends for the self-storage industry that influence growth and how to make the most of this opportunity.
What’s Driving Demand Storage Space?
- A recovering economy means people can buy more material goods—and they need a place to put these items.
- Baby Boomers are retiring and downsizing their homes, and they want a place to store what won’t fit in their new space.
- Many people are relocating for work, creating a need for temporary storage.
Competition for Consumer Dollars Is Steep
Even though overall growth in the industry is expected to remain strong, rental rates and profit margins aren’t expected to follow suit. In fact, as more facilities are built, competition is going to become fierce. Storage facility owners must get creative to attract and retain customers. approaches may include:
1. Offering Promotions and Discounts
No one really wants to haul their belongings from one storage facility to the next just to save a few bucks. That means getting customers in the door in the first place is essential. Enticing new customers with low rates for the first few months will continue to be a favorite strategy.
2. Providing Online Technology
Millennial customers expect to be able to book a storage unit from their smart phone and manage their account online with little to no human interaction required. As this group grows in buying power, it makes sense to cater to their expectations for convenience.
3. Implementing Automation
Electronically controlled access, security cameras and self-service kiosks can all cut operating costs by reducing the amount of on-site staffing while engaging customers who want 24/7 convenience. But automation doesn’t stop there. With storage modules that are brought to the customer right at the loading dock, every unit in a multi-story facility is equally accessible and customers don’t have to drag their belongings down long hallways or onto cramped elevators.
4. Delivering Valet Service
On-demand has reached a new level for today’s self-storage customers with the advent of valet storage options that include home pickup and delivery of stored items. Facilities built in more remote locations where real estate is cheap are luring customers away from local storage options in areas like Manhattan where self-storage is highly expensive.
5. Building Additional Space
Large and mid-sized operators are continuing an aggressive strategy to buy up smaller operations and invest in new construction. At the same time, there is also opportunity for smaller operators to expand their existing facilities and open additional locations.
Storage facility companies of all sizes are using pre-fabricated steel to cut costs, save time in construction, and provide top quality storage units that meet the needs of today’s consumers. To see examples of self-storage units built by Peak Steel, browse our gallery.