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Kiosks Kick Up Self-Service

May 1, 2006

5 Min Read
Kiosks Kick Up Self-Service

The first U.S. self-service kiosk was installed in 1971 at the Citizens & Southern National Bank in Atlanta. Now every bank has an automated teller machine. Last year, ATMs numbered more than 396,000 in the United States alone.

After Sept. 11, 2001, the airline industry moved quickly to install self-service kiosks at check-in counters. Now, almost every airline has kiosks, which activate more more than 65 percent of check-ins. Hold on to your hats folks, because a similar self-service phenomenon is occurring in the self-storage industry.

24-Hour Service

Many consumers now prefer do-it-yourself to customer service. Just why is self-service so attractive and inviting? To understand, its worth taking a look at several trends in human behavior. Some say weve been trained by ATMs, fast-food restaurants and the Internet to do things ourselves. Others claim customer service has gone downhill and they would rather not be subjected to a customer-service representative with a bad attitude and no regard for their welfare. And some people are simply more comfortable with machines than human interaction. Add it all up, and it seems most of us prefer to go it alone.

Besides the do-it-yourself factor, businesses are turning to self-service kiosks for another reason. I recently listened to a presentation by Paul Orfalea, the founder of Kinkos, in which he revealed the companys individual store revenues jumped 10 percent to as much as 50 percent once the business stayed open 24 hours. Although late-night sales were pretty low, customers liked knowing they could go into a Kinkos whenever they wanted, Orfalea explained. Round-the-clock convenience was a key differentiator from the competition although the majority of customers never used Kinkos services outside of regular hours.

Kiosks provide the same appeal. Think about it: Your foot traffic might be low during off-hours, but customers like knowing they can patronize your facility anytime day or night. With a kiosk, they can make payments and rent and visit units 24/7.

A Premium Advantage

Consumers are willing to pay for the convenience of anytime storage, as many in the industry are discovering. Storage Solutions, a management firm operating a number of facilities in Phoenix, charges a base price for access during office hours and a premium for extended access. Tenants pay an even higher price for anytime access.

This trend is similar to ATM customers willingness to pay that extra $1.50 or so for money when and where they need it. The fact is consumers want convenience and are willing to dig deep for it. Its like going to a convenience store, using one-hour photo processing or opting for FedEx. The extra cost is worth the convenience.

Kiosk Price Tag

The attractive part about comparing ATMs and self-storage kiosks is the price difference. The average cost of an ATM is about $30,000. Add to that an additional $12,000 to $15,000 per year for maintenance such as cash replenishment, servicing, telephone lines, and you can end up with a whopping bill. Fortunately, self-storage kiosks are much lower in price, running between $10,000 and $20,000 each. The monthly maintenance and warranty services fee to cover replacement of parts, kiosk monitoring, marketing help and other services is less than half that of an ATM, typically running between $1,800 to $5,000 per year.

Usage Patterns

With self-storage kiosks across the United States and Canada, we now have a detailed understanding of usage patterns. About 54 percent of transactions occur during 9 a.m. to 6 p.m. The number remains consistent even when a manager is on site and available. When questioned, most managers chalk this up to customers being in a hurry and not wanting to take the time to chitchat with office staff. To consumers, self-service is faster and more convenient.

Looking more closely at the data, another trend pops out. Many new rentals are made through kiosks on Saturday morning between 5:30 a.m. and 9 a.m. This makes sense when you consider most people start their moving process on Saturday mornings by getting a truck and finding self-storage. Which would you choose: the facility that opens at 9 a.m. or the one with a self-service kiosk available anytime?

If we look at the hours of self-storage kiosk usage (see graph: Typical Self-Storage Kiosk Hours), they tend to parallel those of ATMs. Kiosk usage rises throughout the day, peaks about 5 p.m., and falls off as midnight approaches. Noteworthy, too, is transactions occur at all hours of the day. Some facility owners may assume anyone who rents at midnight is probably a criminal. In this way, the chart is a little misleading.

What we really find in reviewing kiosk data from the last three years is there have been exactly zero rentals between the hours of 10 p.m. and 5 a.m. Instead, typical nighttime activity entails payments by people working graveyard shifts or early hours (i.e., landscapers, construction workers and commuters). These people value the ability to make payments outside regular hours.

Access Control

Operators still concerned with midnight rentals should remember kiosks dont control access to the property. Access codes are assigned by the management software or security system and follow policies you assign. If a customer rents a unit through the kiosk during off-access hours, you can provide them with an access code that only works during standard hours. A few facilities take an extra step and require new tenants to come back during office hours to get access codes so the manager can meet them personally.

Self-service is a growing trend in almost every business sector, including travel and retail. It makes sense that self-storage should get on the bandwagon too. Kiosks have proven to be great attractions at storage facilities across the United States and Canada. Theres a reason Public Storage, Shurgard and numerous other operators have implemented kiosks: Consumers love self-service. 

Curtis Sojka is vice president of marketing for OpenTech Alliance Inc., makers of the INSOMNIAC line of self-storage kiosks. For more information, call 602.749.9370; e-mail [email protected]

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