Growth continues to be strong in the self-storage sector, with the market anticipated to reach a value of $71.37 billion by 2027. For investors and operators wanting to benefit from the rising demand for self-storage for personal, and increasingly commercial, use, this is the time to focus on technology as a cornerstone business strategy. As we move into 2023, several trends indicate where technology in self-storage is heading.
While some operators continue to consider the idea of cloud-based software, those who have moved off desktop operations are already reaping the benefits. With so much consolidation in the industry, and few single-operator sites, the ability to manage operations remotely and securely is a growing need.
Allowing for optimum remote management through single-view dashboards, real-time notifications, and multi-site hierarchies, operators have been able to get a total sum picture of site and unit activity for safety and staffing oversight. From an enterprise level, operators can get raw data in real time and make effective decisions on behalf of the business and customers without having to physically be on site.
The Mobile Movement
On the tenant side, cloud-based systems enable customer-facing apps that ease entry and exit from facilities, as well as facilitate payments and communication. These options prove extremely popular with tenants who rely on mobile apps to conduct a wide range of tasks in their daily lives, including managing their self-storage needs. In fact, since launching our first version of a mobile access app in 2017, PTI has seen app usage of this type grow an average of 168 percent annually. Customers are now expecting premium functionality like an app with an easy-to use interface, that can even be branded by the operator. With more new rental activity coming from online consumers, this technology will become table stakes in the next three to five years. Continued monitoring of usage patterns and customer preferences will result in data that drives the development of increased mobile and remote capabilities for both operator and tenant.
Smart locks, owned by facility operators, provide a much higher level of defense than the former standard of a customer-purchased padlock. Operator-owned unit security products not only better protect customer items, but also help reduce operating costs.
Consider this: fewer full-time employees (FTEs) are needed when there is ability to monitor individual units in real time, remotely. One manager who could visit just five facilities previously could increase his or her footprint to manage 10 instead, with the additional tech-enabled security support that allows for remote unit management from a central dashboard.
Unit security also thwarts break-ins and tailgaters by preventing access to units even if the facility is breached. Automated day-to-day operations is where we’re headed, as customers prefer contact-light experiences and operators can minimize management costs with remote-first interactions.
The Sticky New Customer
Technology not only enables more secure and cost-effective management of existing storage needs, but it facilitates the expanding “edge cases” in commercial usage of self-storage.
They are the commercial customers in landscape maintenance, pharmaceutical sales, and product warehousing, to name a few. They sell specialty items like large industrial equipment or luxury goods and use self-storage as their alternative brick-and-mortar shop. These customers are much stickier than the traditional self-storage renter who shows up once or twice every six months. The new commercial customers can shoulder higher rents because rented units are part of their business model. They also have significant cash flow that hinges on self-storage access. This new and growing self-storage customer segment has increased security requirements and demands features like mobile apps, higher security, digital key sharing, and tracking logs.
Delivery services are also increasingly exploring self-storage networks for Final Mile Delivery, reducing the most expensive and labor-intensive aspect of the customer transaction by streamlining the warehouse to home path. In the future these companies may offer the option of consumer pick up from nearby storage facilities with one-time digital keys
To compete for these customers, staying tech-current is essential.
Artificial Intelligence in Self-Storage
Artificial Intelligence has an increasing presence in self-storage facilities and will continue to grow. While it’s unlikely we’ll see robot concierges escorting tenants to their units anytime soon in the United States, a variety of AI methods can further support security mechanisms. Double verification can be instituted with pinhole video cameras in keypads using technology that includes facial recognition. Fingerprint readers are becoming popular for high value storage facilities, for items like rare wines or antique vehicles.
Additional biometric solutions will soon be on the horizon and we will also be seeing new solutions that track individual tenants’ movements at facilities.
The rapid technology updates in the marketplace, and those in development now, can provide added layers of convenience and security and consumer knowledge to achieve maximum occupancy while maximizing net operating income through data-driven decision-making.
PTI tracks 800 different types of events from access control to firmware updates. When applied to facilities, the data provides actionable information about current and prospective tenants. By noting the timing and length of visits of particular tenants, operators can spot trends in the usage of their facility and offer increased customer service during higher traffic times of the day, while moving to remote monitoring during non-peak hours. Event tracking can also alert operators to suspicious activity, like a tenant lingering for an unusual length of time on site or experiencing multiple unknown code events. In addition, event reports can suggest tenants may be open to receiving operator messages with information about staffed facility hours, additional security options, and even bill reminders that coincide with regular visits.
As we build on the advances of the last few years, the focus will be on fortifying security and providing additional layers of smart defense on the unit level. Maximizing visibility and value for each space, unit-based security enhancements provide not only greater peace of mind for tenants, but also give more data points to operators to manage their business more effectively.
Self-storage facilities that take advantage of the power of technology, and the accompanying data it yields, can expand their prospective customer base and effectively meet tenants’ storage and security needs. Using that data to develop predictive actions can also help them achieve greater ROI, both short- and long-term. When it comes to what technology-enabled data can do for the self-storage industry, we’ve just scratched the surface.
About the Author: PTI Security Systems’ Chief Technology Officer Nathan Davenport has spent most of his career developing and managing hardware and software products and solutions. His team’s innovations exceed customer expectations and maximize revenue in the self-storage industry.