UL: Hello Robert, please tell us about yourself and your company.
My name is Robert Chiti. I am the founder of OpenTech Alliance. I’ve worked for large global software companies and accounting firms in the technology business for many years. I started OpenTech Alliance in 2003 in Phoenix, Arizona. Today we have about 200 employees and five major product lines.
We started our business with full–service kiosks back in 2003. We wanted to introduce the idea to operators, that they could run a self-storage facility without having a manager there the whole time. Our product would integrate with their property management system. It could accept cash checks or credit cards and dispense locks. Each unit had a phone, so that a customer could get help in case they had trouble with the machine. Soon enough we found out, that operators and managers were not using this feature too much, because they had no-one to answer the phone. In response to that, in 2009 we opened our dedicated self-storage call centre.
Our third product line is an auction platform. We bought a majority stake in storagetreasures.com. After a certain grace period, managers can take pictures of abandoned units, post them to the platform and auction them off. An interested customer can bid, and if they win, we collect small fee online and the remainder goes to the self-storage facility. Self-storage operators post on average over 60,000 auctions a month on our platform.
The fourth one is Customer Acquisition Services. We acquired a company that builds websites for self-storage to improve marketing, rent units and process payments online.
Our final product line is called ‘Internet of Everything‘. We were approached by Public Storage, the largest operators in the world, to develop a brand-new access control platform for the self-storage industry. As we started working on this, we realized that traditional access control was just about controlling gates — and most or all were PC-based. We felt that the solution needed to be cloud–based, more of an IoT platform, to connect to all kinds of sensors and devices on self-storage properties.
We’ve added keypads, gate sensors, door sensors water sensors and more to our system. It allows you to remotely control access to the gate, doors, different garage doors, and so forth. And because it is an open platform, you can also track all those other devices we discussed. Many of these devices can be tied to the system’s notification system, which is fairly sophisticated. For example, if someone’s on the property longer than you would prefer or trying to stay overnight, you can receive a text or email alert.
There’s a ton of data coming from these systems, and it allows those storage operators to start understanding more about their tenants: when they come to their property, how long they stay (and at what time, what days of the week), … Many of our clients have used the data to increase rent or optimize revenue management.
UL: Let‘s deep–dive into the data topic. Many self-storage operators are starting to realize how much data they collect, but the full potential of this data is not unlocked. Where do you see gaps in data collection and data usage? Where are they missing out?
I don’t know if they’re necessarily missing out on it, but they don’t always have the tools or time apply it to their operation. With our system, it’s easy to access Business Analytics reports that make it pretty simple to identify these anomalies. It‘s not only about being able to raise the rent. For example, you can identify how many people come to a property and when. Many operators are using the data to optimize their workforce and their facilities to meet tenant demand — a concept we call demand-based staffing. When trying to automate your self-storage facility, you don’t need to go from zero to 100. It doesn’t have to be either/or — there‘s a lot of room in between to settle. You don’t want to eliminate humans from the equation altogether, but you don’t need a manager onsite for every transaction or every hour you’re open either. And you don’t want to lose the valuable man hours you do have to tasks you can automate or manage more efficiently.
The idea is that somewhere in the middle is a sweet spot, and the data can help you find it. Because operators can have sensors throughout their property, they get very accurate data. For instance, we have request-to-exit sensors, like those on automated store doors, that can be placed on facility building or office doors to track when someone approaches the office door. We have a second set of sensors that tell us if someone has walked through the door. So self-storage operators can tell when someone comes to the front door and does not get it. This data provides a great way of creating a demand driven staffing plan. Over time we can identify the behavioural patterns of tenants. The US labor market is a little tough, and storage operators need to use their staff more efficiently. Data can really help them do that.
UL: This is the perfect segway into our third question. The US self-storage market is one of the oldest and most mature. Where is it headed from here? How is it developing?
Well, you’re right; it’s undoubtedly one of the oldest. We’re probably reaching at least 50 years, maybe a little more, depending on how far you want to go back. When I joined in 2003, I thought we had all the self-storage facilities we needed. But in 2005–2006, just a phenomenal amount of development happened. And those cycles have continued and seem like they will continue. I believe the consumers are certainly starting to understand storage more. When I started, around 8% of Americans were using storage; now, we’re well over nine. Our goal was always trying to get to 12%. I believe we can make it. If it‘s simpler to use, more people will prefer storage over their attic, garage, basement, or something out back. In other words, our industry still has a lot of growth in the future.
For example, our system has a mobile app. A customer just needs to install it, turn on location services, and when they approach a gate or door, the sensors will read it and open the door, as long as the phone is on their person. Paying online and renting online are other examples that have made the customer experience easier and better.
We’re going to see more of different types of storage products, like boat and RV storage. City laws say you can’t park these on the street and need to find a parking space, which is pretty expensive. So the boat and RV storage is really starting to pick up.
Automation is another major game changer. Around 2011–12 we had a digital revolution. People started to figure out that digital marketing was much better than print marketing – Digital advertising, being found on Google, all those things. I believe this helped us push up from that 8% and drive demand. There still is some old-school, first-generation self-storage with chicken wire and gated fences. But we’ll start to see some of that evaporate here pretty soon because nobody wants to rent there when they can go to a much more sophisticated place down the street that offers some of the advantages in terms of security and customer service they’ve come to expect.
I think it will tighten up some of the supply, as that first generation starts to shift off, but I am not worried about that. Self-storage started out as what we call ‘land hold‘. Someone owned land, and before they‘d get around to developing it, they would put down some self-storage in the interim. Very few of these self-storage facilities actually got torn down because of how well they performed as an asset class.
The Self-Storage Association is also doing good work supporting operators with legislative advocacy. They essentially helped create self-storage as a standalone category within the storage and warehousing industry, with dedicated laws and ordinances. Cities don‘t always see us as the most favorable addition to their economy because self-storage does not generate a lot of sales tax, but overall we‘ve come a long way since the first days.
UL: Where do you see differences between the self-storage market in North America and the rest of the world?
I’m far from an expert around the globe. Probably not even an expert in the US, so let‘s put a disclaimer on this. I’ve worked with companies abroad, most recently in Canada, and there’s not much difference for me. Some region-typical challenges exist, especially from a regulations standpoint, but overall it‘s the same industry. Same for Europe. We signed a deal with Shurguard, to put our access control system in their properties in Europe. We agree that storage is fundamentally the same, being used for the same reasons, and somewhat operates in the same fashion. We used to do some business in Hong Kong, but that was fairly different. For one, the consumer base was all on foot, and very few were driving. They came in off a local train and preferred storage near their living area. They didn’t need big units, preferring smaller units instead. But overall, the human reasons for using storage: downsizing, moving, and making space –are the same across the world.
UL: Self-storage is increasingly being used for B2B, especially in some parts of Asia. How do you see this business developing?
I think the B2B business will continue to grow, especially as we talk about supply chain issues. People are trying to store their products closer to their location. Historically pharmaceutical reps have always used storage. Life Storage, here in the US, is a pretty big player, and they bought a company called Warehouse Anywhere. They keep inventory in their properties, each equipped with an RFID so clients can keep track of it and nothing gets misplaced or taken out by mistake. Multiple people can come in and out of the unit and retrieve their products. It‘s essentially a chain of mini-warehouses. I think they‘re onto something. Storage will also grow into different types as I said earlier. There will be other ways you can use storage, now that you have automated it. We try to make it more convenient for people to use – and that includes businesses.
UL: To wrap up – tell us about your plans for 2023 and beyond?
We have expansion going on in a couple of different ways. Our strategy is built on three legs. It’s internal innovation, acquisitions, and partnerships. It probably needs a fourth leg – expansion into new regions. Currently, we are taking our product line and expanding across the globe. Entering Europe is a big deal for us. We’ll have full-service kiosks and our access control system, and we think the online auction platform would work there too. And if I have my way, I’d love to build a call center in Europe. I think the challenge of being able to answer in nine different languages – it would be fun to put one of those together.
The same holds for New Zealand and Australia. That would be even easier. We’ve done business in New Zealand and Australia before and saw substantial interest in our products. I think that’ll be one of our next steps. It’ll probably be the middle or late part of 2023. But once we get started, it will take three to five years to get a foothold in those regions.
We’ll also be launching an electronic locking solution. We’ve worked on smart locks for almost eight years now; we’ve got about nine different prototypes and studied and watched all the other players in the space. I am confident that we learned a lot and will be able to deliver a product at a lower price and higher quality. We’re excited about doing that in the first quarter of 2023. We plan to integrate it with our IoT platform. We work with an open system, so the platform will not only accept our locks but also work with other manufacturers’ smart locks. We think the best way to support our self storage partners is to add as much choice as possible.
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