As the self-storage industry evolves into a more retail-style business, it’s only natural that facilities expand their offerings beyond unit rentals. Although some properties have employed ancillary profit centers for many years, more and more operators are putting emphasis on business extras. Rather than simply stocking boxes and locks, many are dedicating prime office space to create a robust retail store. The end result is twofold: more profit and a greater customer experience.
“A retail store provides multiple benefits. The major one is it’s an opportunity to provide potential renters that ‘just right feeling,’ which will lead to more rentals and profit. It can be the factor between renting now and checking with another facility, which often leads to a lost rental,” says Marc Goodin, president of Storage Authority Franchising and the owner of three facilities. “Also, many people who come in just to buy boxes will remember you when they need self-storage. Of course, product sales will add profit to your bottom line as well.”
If you’re thinking about adding a new, bigger or better retail area to your storage facility, there are several factors to consider. Whether you’ve dedicated 80 or 800 square feet to this venture, the key to success is a well-rehearsed sales approach and the quality and quantity of inventory. Read on to learn how to bring in more bucks and become the moving and packing shopping destination for your community.
Of course, the primary objective behind any retail store is to make money. However, most retailers also aim to provide the ultimate shopping experience. Think about your favorite store. It probably has artful displays and signage, perhaps streaming music and soft lighting. The idea is to create an inviting atmosphere that leads shoppers to linger and buy. The same can be true for a self-storage store.
“As with any retail setting, the No. 1 benefit is building customer rapport. Having retail merchandise in your facility will not only benefit the property’s sales and profit, but also give the customer more time in the office, thus creating more opportunity to build the relationship between the customer and the employees,” says Danielle Campbell, district manager for North Carolina and Virginia for Storage Asset Management Inc., a self-storage management company. “Creating a memorable experience will increase the chance of the customer remembering that instance and sharing it with others as well as create customer loyalty.”
Part of creating this “ultimate” experience is anticipating customers’ needs. Someone who’s moving needs supplies. With your business, he now has a place to store his belongings as well as buy the products that will help him transport and store them safely. It’s one-stop shopping at its best.
Facilities built 15 or more years ago generally don’t have large offices, while more modern sites sport large lobbies complete with lounge areas, spacious workstations and ample retail space. “The larger, the better,” says Goodin, noting that a 1,200-square-foot office devoting half of its space to retail is ideal.
Even so, a property with a smaller footprint can still capitalize on product sales. “A tiny office can simply display a photograph of moving boxes and supplies and store them in a unit,” says Nancy Martin Wagner, vice president of Chateau Products Inc., a supplier of locks as well as moving and packing supplies. Some operators have even retrofitted a small unit near the office into a retail store. Shelving, baskets and bins can easily be added. Campbell suggests using slat walls and peg boards, the wall behind the manager’s desk, or another small spaces to promote products.
Product and Displays
What should you stock in your store to generate the best return? Your No. 1 seller will likely be locks. “More than 80 percent of my tenants buy my lock. I have somewhere between a 200 percent and 300 percent mark up on them depending on the model,” says Kevin Leebrick, area manager of Advantage Self Storage in Indian Trail, N.C. “In any given year, that’s about 320 locks with a profit of about $10 a lock. Do the math … It’s not bad. They’re also the thing that take up the least amount of room.”
The easiest way to make a lock sale is at the beginning of the rental process. “Let them know the lease requires their unit to be locked at all times and most renters choose a self-storage specialty disk lock,” Goodin says. “With a pair of scissors and a lock in hand, we simply say, ‘Would you like me to cut it open for you?’”
Basic moving and packing supplies are also a must, including boxes in all sizes. Wardrobe, mirror and dish-pack boxes are great, Leebrick says. However, think beyond boxes to other items such as permanent markers, tape, mattress and furniture covers, and moving blankets. “Other items like moving straps, plastic wrap, lights, shelves, tubs, etc., can be provided to give the office a retail feel, as long as the area doesn’t become cluttered,” Goodin adds.
The key is to marry similar products and catch customers’ attention with artful designs. For example:
- Display tape and dispensers in baskets or on a slat wall.
- Place a tape/dispenser combo on top of each box stack.
- Create a “packer’s pack” consisting of tape and dispenser, a utility knife, and a marker.
“We’ve developed a combo-box package of 10 boxes and one tape dispenser with one roll of tape wrapped together,” Goodin says. “It’s perfect for people who can’t decide on what box to buy. They fly out of the office with the right promotion.”
Also demonstrate how various products will be useful. For example, hang some clothes in a wardrobe box, or put a dish-packing set on display using some inexpensive dishware.
The objective when building your displays is to always think “retail.” Displays should be eye-catching but easy to access. Keep your signage professional, clear and concise. Always have your customer’s needs in mind. Finally, keep the displays super clean. If the product appears dusty, damaged or dirty, sales will suffer.
When it comes to pricing, think generous markups. You have a captive audience, so they’re willing to pay a few dollars more for the items they need instead of traipsing all over town looking for a better deal. “Nearly all product can have a high markup. On average, our stores can mark up at a minimum of 100 percent,” says Diamond, adding that you must consider your market and how readily available the products are from nearby retailers.
Pricing for your products will ultimately depend on what the market will bear. For example, Leebrick pays less than $4 for a standard disk lock but resells it for $17.49. He also enjoys a generous markup on packing tape, which he buys for 61 cents a roll and sells for $1.99.
One of the biggest mistakes many operators make when launching a new retail center or revamping an existing one is purchasing more product than they can successfully sell. “Overstocking is a big pitfall. When introducing a new product, start with low stock … test the waters as they say,” Campbell says. This ensures you’re not stuck with 50 vehicle de-icers or 30 pairs of moving gloves.
Understocking your store will also be a customer turn-off. No one wants to see empty pegs and bins. “Never run out of key items,” Martin advises. If you do find yourself without product, tell the customer you’ll custom order it and offer him a small discount. He’ll appreciate the effort.
While a retail store offering a variety of choices is ideal, don’t go overboard. There’s no need to sell eight types of locks, 12 colors of permanent markers or 10 box sizes. “Providing too many choices can actually reduce sales. People typically only make one or two major choices a day and don't always have the energy to decide between too many options once they’ve decided to rent a unit,” Goodin says.
“Make sure your store is clean and well-stocked and prices are clearly marked,” advises Wagner, adding that the best way to do this is with a large and easy-to-read menu board. Customers who have to hunt for a price will usually go without rather than ask how much something costs.
In addition to presenting an attractive display, you need to drive the sales. “Good sales folks won’t say, ‘Is there anything else you need?’ Instead they’ll say, ‘What else do you need today?’ Simply assuming they need something is more likely to make them buy,” Leebrick says.
Goodin suggests you create a well-written script and then practice what you’ll say and when. You can also share moving and packing knowledge during the presentation, for example: The average home move takes 30 boxes.
“There are a ton of ways to double and event triple retails sales,” Goodin says. “Self-storage operators need to learn from the retail world. Go to the mall and notice what signs they have, and what the great managers are doing and saying.”
Finally, include information about your retail store in your marketing collateral. “When you market the facility, you should market the retail products as well. In turn, this will increase sales and profit,” Diamond says.