With the self-storage industry expected to grow, here are some of the trends you need to look out for.
There is no need to reinforce how strange a year 2020 was, and so for many, the new year represented a fresh start, and many business managers were also hoping the same. While it’s definitely a chance to reassess certain needs, 2021 has so far presented self storage businesses with similar problems as the year before. Fortunately, the self storage sector has proved to be extremely resilient to the challenges COVID-19 has presented to other businesses, and in combination with moving services the market is being estimated to be worth around US$80 Billion, and growing with a Compound Annual Growth Rate (CAGR) of 6.6% over the next seven years (according to a Global Industry Analysts report).
With that in mind, it’s important for self storage business owners to be aware of where the industry is headed in the new year, as well as trends that will dominate how self storage managers do business through this year and beyond.
As mentioned before, the self storage market remained surprisingly resilient through the worst of the COVID-19 pandemic. The largest market remains the United States, but with other regions catching up. Most notably, Asia-Pacific will experience the largest market growth in the next five years, according to a Mordor Intelligence report. With rapid urbanisation, increasing population density, and growing economic stability, the Asia-Pacific region’s large e-commerce sector has made self storage a convenient solution for business owners, and will continue to do so in the next few years.
With a global pandemic having just put a stop on the entire world for a year, the effects of COVID-19 will not stop because 2020 is now over. It’s expected that both consumers and staff will now turn much of their attention towards hygiene and especially how a business chooses to operate under the circumstances of the pandemic. Operators will have to ensure that they have the correct solutions, plans, communications, and best practices in place to make their tenants and employees feel safe. Things such as hand sanitiser stations, masks, limiting guest numbers and dividers have become commonplace in business operations. On top of that, operators will still have to constantly make sure they’re in line with the latest government restrictions and continuously check their risk assessments as the pandemic enters its (hopefully) final stages.
Read find out more about self storage sanitation in COVID Times
Another major shift in all businesses that took place last year was an increased focus on online channels and automated processes. FEDESSA’s 2020 survey showed that web inquiries generated two-thirds of all self storage inquiries and would-be renters are increasingly looking for options digitally. Further, virtual tours, online bookings, automated payments, self-service kiosks, and automated access should remain heavy parts of your business operation. As such, the competitive advantage of physical locations will decrease and these online channels will allow emerging entrepreneurs to take the market in different directions.
Unfortunately, unemployment rates in 2020 rocketed high and an inevitable consequence is an increase in downsizing. Being one of the 4Ds that drive self storage demand, however, it is good news for the self storage market. Businesses have also experienced more need for self storage, either downsizing to a smaller space or moving to a more remote model for work. With ‘business as normal’ not expected until later in 2021, business downsizing will also provide a steady stream of demand for self storage businesses.
A more unfortunate trend for the self storage industry is the continued decline of personal car ownership. Rideshare apps like Uber and Lyft have eliminated the need for private car ownership, especially in areas surrounding urban cities and as these apps expand their reach, ownership will continue to decrease. Without private cars, previous spaces built for storing them will be freed up and possibly reduce the need for extended self storage space. Whatever the case, this will be a challenge that self storage business owners will need to consider for the foreseeable future. On the flip side, this could become an opportunity for those operators to provide free move-in services and van rentals to their customers.
As seen, there are various trends and directions the self storage market can potentially go in 2021 and beyond. While most are positive, some will require the business to adapt to present challenges. Keeping on top of these trends will allow your business to recognise which areas need more attention.
With an increased focus on online channels, it is more important than ever to automate your self storage business. With our online bookings, automated payment systems and automated workflows, we prepare your business for the year ahead. Feel free to book a demo.
**Related Article: Exploring Technology For Your Self Storage Business **