Build a Retail Plan
|Copyright 2014 by Virgo Publishing.|
|By: Roy Katz|
|Posted on: 07/01/2002|
For the last 20 years, I've been involved in developing retail products, merchandising programs and displays for the package-shipping industry. As a relative newcomer to self-storage, I've been able to make some observations and draw some conclusions about where retailing is headed in this industry. Self-storage facilities are nontraditional retailers. Your primary enterprise is not the retailing of products, but rather the sale of a service--unit rentals.
To that extent, self-storage is similar to those centers whose primary business is not retail supplies but package-shipping services. Historically, you both have been reluctant retailers and for good reason: Retail is unfamiliar territory and often deemed too difficult or insignificant for a real effort.
However, current retail sales at package-shipping centers, as a percentage of total sales, are fast approaching 10 percent. This was not always the case. Less than 20 years ago, sales represented a lowly 1 percent. What happened? Package-shipping centers began to realize that to grow their businesses and provide additional value to their customers, they needed to develop in-store retail profit centers. This incremental increase in business went directly to their bottom line. For some, it made the difference between having an "OK" year vs. a good one.
In contrast, the self-storage industry has prospered and, as some operators have said to me, beyond their wildest dreams. However, this very success has been an obstacle to developing a retail plan that pushes supply sales to an obtainable 5 percent of gross sales. In some cases, it has created the attitude, "I'm already successful. Why bother with something I really don't understand? I'll just keep doing what I've been doing."
Of course, you can continue to do what you have always done. In the past, the way to sell supplies, if you even cared to do so, was to throw up some pegboard, purchase some boxes and whatever else was available, and hope for the best. It didn't really matter what retail sales were; you already knew they were going to be successful. But I have to ask why you wouldn't want to develop a retail plan for your facility?
Self-storage is still successful and will be for a long time to come; but it's going through a time of transition. As it matures, facilities will cater to changing customer demographics. As you know, some of your best customers are business people, and the college-educated, soccer mom is steadily making more of the storage-rental decisions. Curb appeal has become important. New sites are going up around retail establishments or retail establishments are being built around older sites. Industrial-looking facilities are being upgraded. All of these changes mean your current or potential customers have or will soon have increased market expectations. These expectations are no different than the ones a traditional retailer must address. Here are some things to keep in mind:
Roy Katz is president of Supply Side, which distributes packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies including Storage USA, the U.S. Postal Service, Kinko's and Mail Boxes Etc. For more information, visit www.suplyside.com.