I recently received an e-mail inquiry from a gentleman who wanted to know what he and other storage professionals should think about the new box-based, on-demand storage companies that have been emerging around the world. (Here at ISS, we refer to them as “valet-style storage services.”) He said he’d been doing some reading online but hadn’t seen much reaction from traditional facility operators on the topic. “I would really like you to talk about how the entrance of these new players will affect the self-storage industry,” he wrote.
Aside from telling me that he “works in the storage industry,” this reader—let’s call him Joe—offered no information about his particular role in the business or his personal thoughts on the subject. When I invited him to share his perspective, I received no response. Hmm. A legitimate query? Or a probe from an existing or aspiring valet-storage operator?
Regardless, it’s a topic that’s stimulated discussion among our staff, and Joe raises some great questions. They’re similar to ones that have been previously asked regarding the mobile/portable-storage business, on which the jury still seems to be out. Like Joe, I want to know how self-storage operators feel about the rise of this potential competition and how it may affect our industry in the long term.
So this week we posted a poll in the right-side navigation bar of our website that asks the first question: How do you feel about the new “valet-style” self-storage services that have been springing up in the U.S. and abroad? In fact, if you’re reading this blog before Oct. 22, 2014, I’d appreciate if you’d look to the right side of this Web page (you may need to scroll down a bit) and pop in your answer now. If you’re reading after that date, you can post a note in the comments section below. You can participate even if you’ve never before heard of valet services. Simply choose that option.
If you aren’t familiar with valet storage, here’s the gist: A company stores customers’ items in bins, in a warehouse accessible only by its staff (users do not have access). In some cases, the customer can provide his own boxes; in others, he uses those provided by the operator. The bins are shipped to and from the customer, with arrangements made through a website or mobile app. The company charges a monthly storage fee per box (there is no unit or space), and other charges may apply, such as pickup and retrieval fees. Some providers offer additional services, such as apps that allow customers to store and organize photos of their box contents.
Here are some examples of current service providers:
- LoveSpace, based in the United Kingdom, was among the first companies to pop up in our radar. It came on the scene in June 2013 and raised $1.5 million in crowdfunding earlier this year.
- Clutter, which emerged in September 2013, serves customers in Santa Monica, Venice and West Los Angeles, Calif., but plans to expand. It operates via an iPhone app but intends to launch an Android app as well as add a Web-based version of its services.
- Storrage launched with an app-based service in Seattle, also in November 2013. It expanded its warehouse space and service area to more Washington cities in early 2014.
- WeStore also launched in the U.K. in November 2013.
- In April 2014, Boxbee Simple Urban Storage announced it had raised $2.3 million in seed-round funding. The app-based startup said it was going to use the money to scale its business domestically and expand its full-time staff from 13 to 30 employees. Its service area includes New York City and San Francisco.
- MakeSpace Labs Inc. announced that it raised $8 million in venture capital in May 2014, after having received $2.1 million in seed capital in December 2013. The company specializes in storage services in New York City but claims to allow customers anywhere in the world to store and ship their belongings.
- Spaceways launched in London in July 2013 and expanded its services to Paris just last month. The company is backed by Rocket Internet, a Germany-based venture-capital firm specializing in e-commerce and business startups.
Other new companies to emerge this year include ClosetBox (Denver), Cubiq (Boston), Fetch (Boston), Remote Garage (San Antonio) and Vaulted (Ann Arbor, Mich.). I’m sure there are others. These are the ones on which ISS has reported. You can read the releases on our “Valet Storage” topics page.
Unfortunately, I can’t tell you how to feel about valet-style storage or how it will affect our industry. The future of this niche business in unclear, and it certainly depends on your market. Most of the companies launched thus far are local. If they aren’t operating in your area, they can pose no threat to you. The more aggressive companies may aim to serve entire states or even countries, but they’ll face the same challenges as traditional self-storage operators entering new international markets. Not only will they have to educate the public on their service, they’ll have to win the confidence of lenders and investors and prove themselves to customers.
Will these new enterprises succeed? It’s possible. Will they outstrip traditional self-storage in terms of desirability? Your guess is as good as the next fellow’s. Storage customers, as you know, can be a choosy and fickle bunch. What does the emergence of these businesses mean for self-storage in the long run? For now we’ll have to wait and see. Again, please participate in the live poll or post your comments below. I’d love to hear your observations and opinions. I’ll share the poll results in a future post.