Self-Storage in the International Arena

Cesare Carcano Comments
Posted in Articles, Development
Print
The first European self-storage facility was built in the United Kingdom in 1984, though the first self-storage facility in Continental Europe was built in Brussels at the end of the 1980s. At the beginning of the '90s, the first two French facilities were built. The first was built in Nice in 1990, the second was built in Paris in 1991. In Italy, the first facility was built in 2000.

Where Does Self-Storage Stand Now?

There are more than 200 self-storage facilities in Europe, with approximately 40 facilities in Continental Europe and approximately 190 in the United Kingdom. In Europe, more than 80,000 people use self-storage units to store their goods. In Continental Europe, 90 percent of the existing units are occupied. In the same area, the percentage of demand for business storage is 60 percent.

What Lies Ahead

The business sector is very profitable because it uses larger units and rents for longer periods of time. Small businesses, artisans, professionals and institutions in Europe provide great market potential for self-storage, and there is a high demand for commercial storage as a result. The demand for business storage is also due to the high density of businesses that lack a centralized storage area and face high rents. In Europe, small shops and businesses are typically spread throughout downtown and the suburbs. Renting shop premises to satisfy storage needs is becoming increasingly expensive. Small businesses have to contend with higher prices for smaller spaces, which explains why they find self-storage more convenient. The cost of self-storage units is insignificant compared to the price they would pay to rent or lease shop premises.

The demand for personal storage in Europe has a high market potential as well. Houses and apartments located in residential areas and downtown are usually small due to the population density. The European real estate market lacks flexibility. The demand for houses, flats and apartments exceeds the supply. Residential properties are sold and rented at very high prices, especially considering their small size.

Actual trends toward globalization, increased labor mobility and the search for a better lifestyle are changing Europeans' nesting habits. More people are moving to different countries and different areas inside their own country. More of them use self-storage to satisfy their moving needs.

The creation of the universal euro will make it easier for the self-storage business to develop a Europe-wide strategy. At the same time, the Internet is helping to promote the self-storage concept throughout the European public. It helps to support and sharpen people's receptivity to this new service.

In conclusion, Europe has the potential to develop a strong self-storage market. The total population living in Western Europe is 40 percent higher than that of the United States. To better understand the potential of the European self-storage market, one specific example can help: San Diego has approximately 2.5 million inhabitants and 200 self-storage facilities. The United Kingdom has the same number of facilities, but hosts 60 million inhabitants. Supposing the demand for self-storage units in Europe is only 50 percent compared to the demand in the United States, Western Europe should be prepared to build one facility for every 20,000 inhabitants. This means 18,865 new facilities should be built in the next 20 years--that's a rate of 930 new facilities per year.

Educating the Public

In Europe, the concept of self-storage is not as popular as it is in the United States because it is new to most consumers. Being a new concept, it requires a special effort to be understood. The best results are obtained through methods that get directly to the public: distribution of fliers; billboards on buildings intended for self-storage use; radio commercials; billboards on trucks and vehicles intended for self-storage services; direct mailing of brochures to professionals, businesses, institutions and families; and participation in major events related to the target market (local fairs, grand openings, etc.).

Special support is provided by the Internet. This new tool is very helpful not only in describing and explaining self-storage to the European public, but also in providing customers with additional services: online information, online booking, online space and rental estimates, online advice on moving and packing, online sale of packing materials, online truck and vehicle rental, etc.

The staff of a facility plays a major role in explaining the self-storage service to members of the public. Workers are responsible for answering any questions about the service and assisting customers. The sales team also plays an important role in educating the public. A toll-free number should always be made available to consumers.

How Many Challenges Do Foreign Developers Face?

Throughout Europe, people speak different languages, have different habits and cultures, and live in different environments. Developing a self-storage business in Europe requires taking these differences into consideration.

The self-storage service performed in the United Kingdom is very similar to that of the United States, but significant differences exist between Northern and Mediterranean European countries. With respect to architectural and structural matters, northern countries such as Germany are more focused on practical aspects. In these countries, the climate and environment are typically harsh and the demand is for sturdy buildings. In Mediterranean countries, such as Italy, the climate and environment are more mild. In these countries, self-storage service is more focused on amenities and comfort.

Legislation ruling the building sector differs from country to country. Planning permissions are subject to local rules. Plans should comply with local area rules for building.

With respect to promotions and communication, different cultures and languages require different approaches. Mediterranean cultures appreciate more direct ways of communicating (such as door-to-door promotion and other direct-marketing techniques), while Northern cultures are more oriented to indirect modes of communication (such as billboards and distribution of fliers through the mail).

European countries also have different financial systems. Despite the fact that European countries have unified their currency with the euro, differences still exist in the ways they manage their finances. When developing a Europe-wide self-storage strategy, these differences have to be understood and handled carefully.

In general, in order to develop a successful self-storage facility in Europe, a number of requirements need to be satisfied. It should include: a wide range of units in different sizes; a pleasant, clean and secure atmosphere; professional and technical assistance for customers; personalized insurance policies; efficient customer service; a toll-free phone number; and online assistance. To satisfy the demand for business storage, there are a few aspects that cannot be ignored: convenient prices; dry, safe units where papers and documents can be safely filed; 24-hour accessibility; fax and copy services; a flexible payment system; high security standards; and technical, professional customer assistance.

Approaching the European Market

The best approach to the European market is based on a deep understanding and knowledge of Europe and the differences between its countries. Each country should be approached as a unique and peculiar environment, and a dedicated marketing strategy should be developed. Self-storage facilities in different European countries should be managed as divisions totally independent from each other.

Cesare Carcano is a board member for the Varese, Italy-based Carcano Transport and Logistics Group (Carcano Logistica e Trasporti), which operates Casaforte Self Storage. The group has seven logistics platforms operating in Italian cities: Asti, Genoa, Lucca, Milan, Modena, Rome and Vicenza. For more information, visit www.selfstorage.it.

Comments
comments powered by Disqus