Big Yellow went public on the London Stock Exchange in May 2000 and is capitalized at approximately £130 million. A major milestone was reached last September when the company reported its first profit. At the time of this writing, company officials expected to meet a March yearend profit target of £1.2 million.
Big Yellow has a broad customer base comprising 20,000 customers. Private individuals account for 80 percent of these, more than half of which are those moving from one home to another. Business customers account for the remaining 20 percent. Approximately 55 percent of customers are male, although there is a growing female market. The majority of customers is between 25 and 50 years old and, typically, lives within three to five miles of their stores.
By pioneering the development of the latest generation of facilities, Big Yellow has become one of the most recognized self-storage brands in the U.K. market. Its stores are known for state-of-the-art technology and high-profile, main-road locations. As part of the company’s strategy to penetrate local markets, stores tend to be considerably larger than those of competitors (60,000 net-rentable square feet vs. the U.K. facility average of 35,000). The stores provide approximately 25 different unit sizes, from 10 up to 500 square feet.
Before Big Yellow entered the industry, the self-storage market was fragmented, with no recognized brand or market leader. The principal strategic change has been the acknowledgement that self-storage is a retail rather than property business. By incorporating the principles of retailing into its market strategy—strong branding, excellent customer service, visible and accessible locations, and clean, attractive store environments—Big Yellow differentiated itself from the rest of the industry.
Specific developments pioneered by Big Yellow include:
- The provision of consistently high standards of customer service through the recruitment and in-house training of highly motivated staff with customer-facing experience. All new recruits participate in a three-month training program.
- Locating stores in highly visible and accessible main-road locations.
- Large, dominant “category killer” stores providing an average of 60,000 square feet of net storage, resulting in lower operational costs and economies of scale.
- Instantly recognizable, well-signed, purpose-built, yellow buildings offering clean, dry, modern storage. No Big Yellow store is more than four years old, and the majority is built by the company’s in-house construction team.
- High-quality security features including individual room alarms, remote monitoring, digital CCTV and personal access-code entry.
- Convenient access, seven days a week, 24 hours a day.
- A 1,000-square-foot dedicated packing-materials shop. Merchandise, insurance and other sales make up approximately 15 percent of Big Yellow’s turnover.
- An in-house call center.
- The creation of a premium brand.
- Consistent and innovative marketing including television, online and radio advertising.
Last year, Big Yellow initiated U.K. television advertising to efficiently reach a large, untapped domestic market. The company’s first TV advertising campaign (also the first of the U.K. industry) launched in March 2003. This was quickly followed by a three-month summer campaign.
Market research concluded the U.K. consumer had little or no understanding of self-storage; and if he did, his impression was the industry was cold and intimidating. Big Yellow wanted to change that image by injecting fun, personality and humor and providing a more human touch. The TV commercial, therefore, featured one of Big Yellow’s stores and used a quirky, light-hearted storyline.
The TV campaign has successfully enabled the company to reach a large, untapped market and generate significant new business. Its fun message educates consumers of the benefits of self-storage. At the same time, the advertisement helped differentiate the company from its competitors and propelled the brand into the No. 1 position in the industry. The next TV campaign, planned for this spring, will spread the word not only about the company’s services, but the general benefits of self-storage.
Big Yellow’s focus on the location and visibility of buildings coupled with excellent customer service has helped to create one of the most recognized brand names in the storage industry.
Stephen Homer is director of sales and marketing for Big Yellow Group PLC, responsible for conceiving and implementing all areas of the company’s sales and marketing strategy. Formally a senior executive at Edge Properties PLC, Homer joined Big Yellow in January 1999, and is a member of the PLC board. For more information, visit www.bigyellow.co.uk.
Self-Storage Growth Factors
It is estimated that the U.K. self-storage market increased by more than 10 percent last year and, based on a number of underlying fundamentals, its growth is expected to continue. The United States has approximately 32,000 stores compared to about 270 in the United Kingdom. This equates to around 4.8 square feet of self-storage per capita vs. 0.2. Even if the U.K. market achieved just a quarter of the U.S. penetration, it would eventually contain more than 1,500 stores.
A number of factors will stimulate demand for U.K. selfstorage over the next few years:
- Public awareness of self-storage as a service.
- Significant pressure on available housing stock in South England and London as a result of central government initiatives and town planning policy, which encouraged housing development on brownfield urban sites.
- A shift toward living in small, high-density housing developments with very little storage space.
- Increased population mobility.
- Rising disposable incomes.
- The expense of entering and trading in residential and commercial property markets.
- Growing leisure-storage needs (skis, windsurfers, bikes, etc).
- A high level of small-business formation.
- High commercial-property occupancy costs.