Well, I’ve gazed into my crystal ball and consulted my dusty but trusty Magic 8 Ball, and all signs point to this being a year of operational focus for the self-storage industry. With the cyclical ebbs and flows of the business, we’ll likely start to retreat a bit from the fervor that’s driven recent investment and development as well as record-high demand and rental rates. This isn’t because the industry has lost any luster as an attractive investment or consumer service, but simply a natural progression of order.
I have no doubt the industry will continue to attract outside interest and dollars at a healthy clip, but as more parties enter the business, it becomes more difficult to find viable avenues for success. Experienced investors, including those who are leveraging off-market deals and small properties, have a real advantage in navigating the terrain under current conditions. Likewise, large operators and investors on the prowl for portfolio acquisitions have the inside track.
Similarly, as we closed out 2022, there were signs that rates were coming down and occupancies beginning to loosen. When this happens, the operational margin for error begins to narrow. With the economy still teetering along a difficult-to-predict tightrope, the operators best positioned to flourish are those who have embraced tools and resources that elevate the customer experience as well as those that increase efficiency and insight.
As more independent owners integrate elements of remote management and automation into the mix, it allows them to grow a portfolio and manage scale effectively. Even if you operate a single location, technology investment is critical to maintaining a competitive edge while also meeting new customer expectations.
Moving forward, this means going beyond contactless services, smart locks, mobile access and similar measures that really took hold in the midst of the COVID-19 pandemic. In my mind, the driver that will continue to push operations forward the most is artificial intelligence (AI). If you’ve been following industry trends and keeping up with management-software updates and website improvements, chances are you already have some forms of AI at play, but this is an area that’s rapidly advancing in sophistication, with the potential to impact many important areas of the business including:
- Customer service
- Lead generation/conversion
- Marketing content creation
As helpful as dynamic pricing already can be, improvements to rate management are likely to become a key focus as demand fluctuates. Similarly, lead generation and security applications are bound to evolve rapidly with widespread adoption. Predictive analytics and data mining will bring deeper insight to decision-making, while the platforms operators use to recruit and hire staff will become more refined in helping to pinpoint qualified applicants. Customer-service tools, such as chatbots, will become further integrated with backend systems and better equipped at providing frontline help to prospects and tenants.
AI has received a great deal of mainstream media attention in recent weeks, and as industries increasingly deploy it in consumer applications, the more the public will grow accustomed to interacting with it. This, of course, accelerates expectations, which means self-storage operators need to be prepared to supply it in some fashion to keep discerning customers satisfied. Other applications that improve decision-making and increase efficiencies and productivity simply make sense in a more complex and nuanced business world.
All of this will take time, certainly, but the initial pathways are already built, deployed and being enhanced. It makes sense for operators to pay close attention to what’s occurring in similar retail and service environments as well as self-storage. While there are a lot of options available and more no doubt on the way, make sure you consult with all of your relevant service providers to learn what capabilities you may already have at your disposal as well as the areas they’re looking to improve in the short term.
If you haven’t already begun to leverage modern innovation into your service and administrative mix, now’s the time to determine how you’ll move forward. Let 2023 be the year you jump on the fast track to success and set a course to thrive with the times, now and well into the future.