20 minute read
Unlocking the Next Normal
Gold Coast | Nov 9-11 2022
Highlights
The Self Storage Association of Australasia (SSAA) Convention was held from 9–11 November at the Sheraton Grand Mirage Resort on the Gold Coast. The event drew more than 300 self storage enthusiasts from around the globe who engaged, networked and celebrated with each other across three days. In keeping with our abnormal world, this year’s theme was ‘Unlocking the Next Normal’, with thought leaders, industry experts and delegates all looking ahead to the future of self storage.
DAY ONE
Attendees kicked off the first day of the Convention with the TransTasman Golf Tournament and others explored some of Southport’s biggest self storage facilities – Kennards Self Storage and National Storage. The afternoon was filled with workshops - from sales and digital marketing to a full house for the ‘Getting Started in Self Storage’ session presented by RegisBuilt. Each speaker had 15 minutes to impart their knowledge and expertise on everything from feasibility to construction, management and marketing. The first day ended with a spectacular Welcome on the Water, where delegates cruised around the Broadwater sunset. It was the perfect way to celebrate being back together and officially get the self storage event of the year underway.
DAY TWO
A day of speakers and presentations with an economic update from leading commentator Michael Pascoe, followed by Linda Sharkey of Cushman & Wakefield and Makala Ffrench Castelli launching SSAA’s comprehensive industry report, State of the Industry 2022. Expert panellists shared their insights on various topics, from tips when operating at capacity to how new entrants are thinking about investments in self storage. Day two ended with a Women in Storage High Tea at the Palazzo Versace, followed by the much-anticipated Trade Show In Between The Flags, where delegates browsed the booths and discovered the latest innovations and all things self storage.
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DAY THREE
To start the final day, Lucinda Hartley from Neighbourlytics took everyone through lifestyle and community changes impacting self storage. Terry Bagley of Janus International shared the latest insights and trends from across the US. Jo Mason from Work Haven addressed one of the most challenging topics for workplaces – domestic and family violence at work, and the role self storage employers can take in both supporting their staff through DFV situations and supporting customers experiencing DFV within the self storage environment. Local and global panellists then explored self storage trends and insights from around the world. After lunch an esteemed panel of industry pioneers took a closer look at the changes over 30 years in self storage. The final keynote speaker was behavioural scientist Darren Hill, who encouraged us to find success on the brink of uncertainty. With the conclusion of the formalities, there was only one thing left to do – celebrate those leading the way in self storage with the 30th anniversary poolside cocktail celebrations presented by R6 Digital and our glitzy SSAA Awards for Excellence presented by VISY Boxes and More. l
For more information about GC22 and to view the recordings visit the SSAA Member Portal. Find out more about SSAA State of the Industry on page 20-23.
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GC22: Key Highlights
More than 30 speakers and industry experts shared their knowledge and insights with the industry over three days at GC22. Here we share some key takeaways from the self storage event of the year.
Unprecedented times and unprecedented demand
Leading finance and economics commentator Michael Pascoe set the scene for the next normal and provided a brilliant overview of the state of the economy. Michael spoke of the opportunities that lie in challenging times and encouraged us to find better ways of doing things. While the world is largely in an uncertain state, Michael remains optimistic about Australia, stating there is “no better place to be right now.” Linda Sharkey of Cushman & Wakefield and SSAA CEO Makala Ffrench Castelli presented an overview of State of the Industry which saw 2022 deliver another year of record performance right across the industry. l 9.4% of the total adult population in Australia and New Zealand are now using self storage, up from 8.6% in 2020 l Average facility occupancy rates are now sitting at 91% l Perth and Brisbane have been the standout performers, with RevPAM (Revenue Per Available Square Metre per annum) growth of 41% and 21%, respectively The increase in demand has coincided with an increase in supply, but there is still considerable untapped storage demand across both markets.
Know your demographics
The report revealed long-term storage users are now more likely to be part of a younger family, in the 25-45 age category. “The report shows us that for these demographics, safety, cleanliness and technology are all important. There are so many insights that can be used as education in who you appeal to and who you are likely to appeal to in the future.” At our Getting Started in Self Storage workshop, Patrick Mulcahy from Cushman & Wakefield provided an overview of what to look for when understanding the potential of a self storage development. He said knowing your local market and demographics before you turn soil – including population, catchment area and household income – is critical. “A market that in today’s terms may not seem like a great place to develop storage may be a great opportunity down the track,” Patrick said. “Understanding that self storage is a long-term play is critical in recognising where opportunities present themselves in the market.”
Keynote speaker, Michael Pascoe.
Changes in lifestyle and living spaces
Consumer expectations are changing, and so is the way people use self storage, highlighting the importance of the customer experience. Lucinda Hartley from the leading social analytics platform Neighbourlytics got us thinking about how lifestyle shifts impact the location, effectiveness and demand for self storage. “The most significant changes to our lives throughout the pandemic were lifestyle behaviours, and not physical environment or demographics,” she said. “The challenge is using this data to forecast the future of property and places. “People want a local lifestyle experience within 15 minutes of
Linda Sharkey, Cushman & Wakefield.
their house. People don’t want to commute. This has had a huge impact on self storage and how that density changes demand.”
Downsizing, disruption and decluttering
With COVID came changes in how we live and work, including the continued growth of e-commerce, which provided even more reasons for individuals and businesses to use self storage. Moving to homebased businesses, for example, created a need for storage as people moved to operate their businesses more flexibly. Belinda Aanensen from Fiftyfive5 encouraged self storage owners to consider how to best leverage these use cases. “There are many reasons to use storage, and the more we can demonstrate that to customers, the better,” she said. “We need to help people appreciate the value of storage.”
Getting Started Know your calculations (and your council)
While there are multiple types of self storage and ways to utilise space effectively across a site, Javier Rezzonico from Storcad said the traditional model is by far the most popular and most lucrative. He also expressed the importance of building for the future to minimise maintenance costs, with good, energy-efficient lighting essential to making people feel safe. “The customer wants more of a retail feel,” he said. “A lot of bigger facilities have music playing and are very well lit…Light, bright and airy is what people want today.”
“Make sure you first design with traditional storage in mind,” he said, “then try to adapt other areas into any leftover space.” Javier also shared his tips on getting around council requirements, from the impact on neighbours to plant species used in landscaping and how to tick all these boxes early on. “Before you lodge a set of plans, request a pre-lodgement meeting with the council, and they’ll tell you about any concerns they have with the site.”
Design smarter to avoid making your life harder
More operators are looking to make self storage work on smaller blocks of land – and they have to get creative to maximise net lettable space and minimise build costs. Anthony Regis from RegisBuilt provided an overview of new builds compared with conversions, citing design space, financials, demographics and project timelines as key considerations in making your decision. Anthony said operators are trying to maximise vertical space, mainly due to land costs going up. “Twenty years ago, we only built single-level facilities,” he said. “Ten years ago, it was two levels. These days, three levels are becoming more common.”
Maximise your net lettable area
Mark Layton from Storco shared his tips on how to maximise your net lettable area (NLA). “The greater your NLA, the more space you can potentially rent, which means the greater your potential returns,” Mark said. Mark suggested going with a varied range of unit sizes, and getting your customers into the smallest unit they can fit into. “Half the space earns you two thirds the money.”
Maintain a strong visual brand
Mark also provided an overview of smart design choices for building successful facilities, and said an attractive design can improve brand salience, “whether that be custom colours or murals on the wall.”
“There are many reasons to use storage, and the more we can demonstrate that to customers, the better.” – Belinda Aanensen, Fiftyfive5
Value your supply chain
It’s been a challenging few years for the construction industry, with widespread delays leading to few projects being delivered on time, and cost escalations leading to frustration. In his wide-ranging conversation with Makala Ffrench Castelli, Steve Taylor from Total Construction Group told the audience that this difficult period has made the importance of relationships and experienced teams clearer than ever. “The shortage of resources has taught us to value the supply chain and form those strong relationships,” he said. Steve said while supply chains are going to continue to be an issue for the foreseeable future, there is plenty of room for innovation in the industry, with increasing opportunities to source products locally and support Australian manufacturing where possible.
Organised crime is on the rise
Self storage owners and operators have a critical role to play in helping combat the growing rates of organised crime seen across the sector. Roman from BorderForce and Nick from the Australian Federal Police encouraged members to trust their instincts and report any suspicious activity. “You are the subject matter experts within your fields. Go with your gut
feeling. If something doesn’t feel right, make it your business and give us a call” said Roman from BorderForce. SSAA will be working closely with the AFP next year to develop additional resources that address this widespread issue.
Build your facility like a fortress
Jason Keane from Storage Security Group stressed the importance of eliminating vulnerable and unauthorised access areas. “The more investment you can make into CCTV, individual unit alarms, access control and data – the better,” he said. “If you can build your storage facility like a fortress, then do so. The intention is to make it too hard to break into your facility.” Benjamin Parsad from Janus Australia agreed, and said facility automation can help to ensure you are well aware of what’s happening in your facility. “In the past, software stayed on the computer – if you don’t open it, you don’t see it,” he said. “Now with technology in your pocket, if anything happens [within your individual unit or at your facility], you’ll know straight away.”
Protect your online data
Just like any other organisation, self storage operators are at risk from cyber scams. Dr James Carlopio from Cultural Cyber Security took us through the dark web and the challenges around cyber security. His top tips for protecting yourself and your customers included: 1. Use a VPN. 2. Establish a password manager – and change your password often. 3. Implement multi-factor authentication (MFA). 4. Backup and encrypt your data. The SSAA is partnering with Cultural Cyber Security to develop more cyber security resources for members in 2023.
Find the right manager…
Peter Camphin from StoreLocal spoke about the management of self storage facilities, and what you need to know to run your facility. Third party management is one way to generate a good return without having self storage expertise internally. “You need somebody that knows exactly what they’re doing. We go to a lot of effort to make sure we have the right people who make self storage an experience that’s memorable.” Having the right manager with the right skill sets was also highlighted in our expert panel, Close to Capacity, where experienced operators shared their tips and tricks for managing facilities that are full. Structuring the sales process to understand your customer’s needs, being strategic with unit size recommendations and making sure you’re keeping on top of arrears were key learnings from Daniel Stern, Operations Manager at Fort Knox Self Storage. Grant McNamee from iBidonStorage shared insights from his many years of operational management experience, stressing the importance of pricing strategies and providing tips such as taking clear photos, removing personal items from storage units prior to auctions and not telling tales when someone comes to collect an auctioned lot. Mark Greig, Chief Operating Officer of StoreLocal spoke about effective management and clear communication when disaster strikes. With so much inclement weather around, Mark took the audience through his learnings from managing through several flood events and reinforced the importance of planning and preparation.
…and the right management software
Self storage software is integral to operating and streamlining your business, so it’s important to choose the right product that will go on your self storage journey with you. Ben Williams from Storman provided an overview of the different use cases for self storage software and outlined some key considerations to look for: l Will it do everything you need it to do? l Will it grow with your business? l Has the product been made for the market you operate in? l Are the add-ons integrated or do you have to use third-party software? l Who has access to the data and what are the privacy implications?
Lucinda Hartley, Neighbourlytics.
“Look for a software solution that’s all-in-one, and use software that is recommended by SSAA,” said Ben. Miles Davison from Storeganise shared his perspective during the Smarter Facilities panel, where he agreed with panelists Aaron Alsweiler from Safe Store and Jonathan Wildon from Storman that every part of automation is a journey and it doesn’t have to be “unmanned”. Businesses can start with simple processes and basic tasks, then work right through to online bookings, payments and integrating systems. Not every business wants or needs to automate everything - finding a blended experience that works for the business, the brand and the customer is important.
The future is automated
Over in the Owner’s stream, an expert panel discussed what’s driving the trend towards automation from an owner’s perspective. Thomas Whalan from Rent A Space said it’s all about return on investment. “The wonderful thing about self storage is it’s quite a simple business – we’re trying to get more customers, drive more occupancy and drive the rates. If you focus on these things in automation, you’ll drive that return on investment.” Haydn Salvas from Storman agreed, and said the intent around automation from a technology perspective is driving that benefit across three areas: “Customers, stakeholder and people. The challenge is not losing sight of what the original intent was.” Will Debord from Janus International provided an American perspective, and said trying to do more with less is key. “We’re seeing increasingly more after-hours rentals with over 50 percent of move-ins being online and contactless bookings,” he said. “We’ll start to see more IT products with more integrated solutions.” When it comes to integrating the customer journey, Michael Dogger from R6 Digital said he sees potential in automating every single touch point, but a missing piece has been automated ID solutions. “We’ve automated all the pre-sale touchpoints like digital marketing and booking,” he said. “However, with all the recent hacks, customers no longer want to hand over their licence. Now the biggest part for new customers is ID verification. This is becoming integral.”
Damien Gooden, HR Central. “Most businesses hire too late, when we’re too busy. We don’t have enough time to invest and really set them up for success. How are you building the relationship with your new employees as they start? – Damien Gooden, HR Central
Deliver a better customer experience using technology as the enabler
Michael Dogger went on to speak about moving to a model that enables customers to interact with us however they want to – “whether it’s a high touch in-person model, a fully autonomous self service model, or something in between.” Terry Bagley from Janus International said automation was already occurring in the USA, but really took off during Covid. He expressed the importance of using technology to enhance the customer experience. “In a survey of 25,000 active tenants, 87 per cent of respondents said they would rather use a cell phone app than a traditional padlock. Their number one priority was that they didn’t want the hassle of remembering a key or gate code.” Ben Parsad from Janus Australia said implementing smart access through mobile phones can be instrumental in attracting new audiences. “With a smart facility you can capture an audience you wouldn’t have captured before, with move-ins that are after hours,” Ben said. “We’ve seen it can also reduce the number of calls, because customers don’t have to remember anything [like an access code], which is increasing operational efficiency.
Keep marketing, even if you think you don’t need to
Gavan Stilgoe from R6 Digital provided an introduction to marketing for self storage operators, and highlighted the importance of having a marketing plan and budget for your first and second year. Within the first year, Gavan said your efforts should focus on intent marketing – that’s Google Ads, Google My Business, investing in your website, and tracking all marketing leads. After that first year, turn your focus to brand marketing to get the edge over competitors. Stephen Hughes from R6 Digital led the digital experience workshop for larger operators, focusing on the use of personalisation to increase relevance and value across the
self storage journey, which in turn improves conversation rates and yield.
Be an employer of choice
Across the world, ‘The Great Resignation’ has left employers in search of staff. Michael Pascoe highlighted the opportunity for organisations to work smarter, not harder, to find employees. “When there’s a challenge, when there’s no staff, that’s when the opportunity is there to be smarter,” Michael said. “We’re forced to invest in automation, to invest in people and train them.
Find ways to be better
With hiring being such a challenge across all organisations, Damien Gooden from HR Central spoke to us about how to manage people to get the best out of them. Damien encouraged us to think about how we are building relationships with new employees, starting from the moment we hire. “Most businesses hire too late, when we’re too busy,” he said. “We don’t have enough time to invest and really set them up for success. How are you building the relationship with your new employees as they start?” From induction to retention and building a team culture in between, Damien shared practical tips and tools to help keep good operators around for longer. Speaking of investing in staff, Phil Neville from Action OHS took us through the importance of keeping staff and customers safe in the self storage context. Phil shared practical insights and launched the SSAA’s new OHS training modules which will be available online in the SSAA Member Portal early in the new year.
Storage trends around the world
We were joined by local and global panelists who explored self storage trends and insights from around the world. Hans Pearson from StoreLocal said the concept of last mile logistics is one to watch. “The evolution, I think, will be, ‘What role does storage play in the logistics chain, and is self storage part of logistics in some respects?’ I think it’s already there – it’s just whether the investment market can accept it.” From a European perspective, Colin Jeromson from Janus International said the next normal is already with us. “I’ve seen more changes in the last two years than in the last 15,” he said. “Storage is a proven industry with a proven product – but it will look very different in 10 years time. It will be multi-use.” Chris Oosthuizen from Store-Age REIT and Digital First said there has been a fundamental shift in the way we communicate with clients. “Consumers want to speak to us on the platform of their choice,” he said. “A very easy win is just communicating the way your clients want to communicate. It’s not expensive or complicated – you just need to apply it.” Terry Bagley from Janus International shared the latest insights and trends from across the USA. With higher disposable incomes and more reasons to use storage, the American self storage market has boomed. The great thing about traditional storage, Terry said, is that it’s a needs-based or events-based business that will always be relevant – something that needs to be conveyed to analysts and investors. “We’re not tied directly to the housing market, per se; we’re tied to these events that drive our business.”
Darren Hill, Behavioural Scientist.
“We’re in the business of moments. This industry flourishes and does best off of life’s biggest moments. Whether they’re happy or tragic, this industry provides the backbone of life.” – Darren Hill, Behavioural Scientist
We’re in the business of moments
Finally, behavioural scientist Darren Hill encouraged us to find success on the brink of uncertainty. As many self storage operators know, there’s usually a pivotal moment in people’s lives that leads them to use storage – from death to divorce to disaster and displacement (aka “the four Ds”). Darren posed the provocative question: “Is self storage really the business we’re in?” For his moving spoken word piece about moments, visit the SSAA Member Portal. l
