The U.S. self-storage industry is a real success story. Since the 1970s, it has grown to a 30-billion-dollar business with a 10% penetration rate. The number of renters almost doubled between 2007 and 2013, making it the fastest-growing among the U.S. commercial real estate sectors – a constant favorite among investors. Increasing urbanization and raises in disposable income have been among the main growth drivers of the industry. Future growth is predicted to come from the baby-boomer generation downsizing large homes to urban condos for retirement.
In Asia-Pacific, the industry is still in its infancy, but experts predict CAGR of 13% over the next five years. The main driver of growth is a trend to store belongings outside of the home. Hong Kong, Tokyo, and Singapore have some of the smallest average apartment sizes, contrasting increasing affluence and disposable income. More and more consumers rely on self-storage for things that do not fit in their apartments. Commercial use of self-storage is also growing rapidly, driven by eCommerce companies who need to store small stock, mainly in India and Mainland China. The third factor of growth is globalization: few competitive substitutes to self-storage exist for relocating professionals and students, especially those on temporary assignments. While many industries came down to their knees during the 2020 recession, self-storage has continued to perform well. This is in part attributed to offices downsizing their footprint, which drives demand for storage space.
Japan’s self-storage industry is among the smallest of the whole region. With a penetration rate of under 10.2% and 70 billion 260 million JPY in annual revenue. , it is one-third of the U.S. industry level in the seventies. It remains to see how the industry will develop, but the growth rates are promising. The most considerable challenge for growth in the Japanese market is a lack of awareness. Japanese business practices and language barriers also often discourage foreign investors. As land in Japan is expensive, it is more common to convert existing commercial or office space into self-storage units rather than purpose building. This avoids competing with residential developers for space and is a faster way to set up operations, too – a refurbishment usually takes around six months. In contrast, purpose building can take twice as much.
Notwithstanding regional differences, self-storage is a rapidly growing global industry that puts operators before many challenges. The existing complexity from fragmented zoning laws and regulations is often deepened by fragmented, usually old, and custom-made IT systems to run the business. Both for existing players and new entrants who want to harness the full potential of the self-storage business, it is crucial to keep up to date with the latest technology. Despite its fast-paced growth, the self-storage industry is known to adopt new technology slowly. Outdated IT systems carry many risks – security breaches and data leaks are among the most potentially damaging for a business’ reputation and customer loyalty. Even when security is not compromised, these systems are often slow, following outdated standards. A custom system is individualized to the company and more challenging to integrate with other IT solutions.
Consumer trends are apparent across the globe and industries: less paper, more digital, and automated, user-centric designs are what the customers demand and even expect. Do your operations measure up to this? Modern Self-Storage IT solutions, like Storeganise are cloud-based and secure – allowing the managers to perform their work from anywhere with a stable internet connection at any time of the day. From cinema tickets to supermarket checkouts, end-users are familiar with automated processes following prompts. Modern IT solutions translate this experience into self-storage. Gone are the days when a payment past due notice had to be manually typed, printed, and mailed. Instead, the system will automatically send a notification to the user. The manager is free to devote time to marketing, sales, and customer experience. Different groups of customers communicate differently. Marketing is becoming an increasingly time-consuming part of the business. Optimizing all other aspects to make time for this is a crucial ingredient for success. Storeganise integrates with popular customer relationship management platforms, like Zendesk, to provide customers with a well-rounded experience. A satisfied customer is a returning customer and the best brand ambassador a company can have. Modern technology solutions are designed not only with user-friendliness in mind but also to maximize the end-customer experience.
Besides compatibility with other systems and more time for CRM activities, high-tech self-storage solutions also provide the manager with all essential metrics at a glance. These solutions go beyond mere unit occupancy tracking but provide predictive analytics for the revenue plan, marketing strategy, and facility performance. Overall going along with the newest technology can only benefit a business. There is no guarantee of success in life, but lagging behind is a guarantee of failure.
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