Self-Storage History

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The first form of self-storage was born in England. These first generation self-storage warehouses were created due to the overcrowding of British banking institutions and were utilized to store and protect valuables for clients embarking on lengthy voyages ("Self Storage History."). In the 1850's, self-storage warehouses were built to hold household and personal items, which led to the creation of a warehouse design consisting of a two-story building with packaging on the bottom and personal units up top ("Self Storage History."). This design led the industry for the next 60 years. However, the development of the Interstate Highway System in the 1950s and a spike in real estate prices became catalysts for change and the self-storage industry evolved again ("The History of Self Storage."). With the increase in transportation, companies shifted away from offering moving services and instead focused on assisting do-it-yourself moving services such as renting out moving trucks ("The History of Self Storage."). To hold the items to be moved, the self-storage industry incorporated palletized warehousing, which replaced the original two-story design ("Self Storage History."). Goods were now crated and stacked and transported with forklifts. Despite the functionality, the process was inconvenient and costly to the customer.

Today's version of self-storage, known as "second-generation" self-storage, emerged in the 1960's in Texas by a group of entrepreneurs who capitalized on the consumerism that was infiltrating American society ("The History of Self Storage."). Despite this shift in consumer mindset, the majority of previously built homes had limited storage. Such gap in the American crave for new products and lack of in home storage, led to the increase in self-storage facilities across the country. The immediate success of the first self-storage company spread the new design to the west coast and then throughout the entire United States ("The History of Self Storage."). This layout includes typical row buildings, multi story facilities and conversion of older buildings ("Self Storage History."). The "third generation" self-storage, to which the industry is moving, is typically built in family or residential neighborhoods rather than the traditional industrial sector ("Self Storage History."). The newer facilities emphasize aesthetics and aims to blend in with the surrounding neighborhood. They also aim to add storage places within strip malls to localize the companies. Currently, there are 50,000 facilities in the USA, 1,000 in Australia, around 800 in the United Kingdom, 100 in Germany and 380 in France (Tribolet).

There are currently 3 general categories of self-storage market segmentation including: Class A, Class B and Class C. Class A facilities are segmented toward the highest rent payers in the market. The facilities typically have high aesthetic quality, offer climate-controlled storage units and have top-of-the-line security complete with on-site managers ("The History of Self Storage."). Class B facilities offer cheaper rent options than Class A facilities as well as fairly high security. A major difference is that they do not always have on-site managers ("The History of Self Storage."). However, facilities in Class B sometimes compete for some of the customers in the Class A segmentation ("The History of Self Storage."). Class C on the other hand includes less desirable units that typically have limited access and visibility. They typically have minimum security and almost always only have off-site managers who may not be fully competent or comfortable with industry standards.

Despite such consolidation among industry practices and segmentations, the self-storage industry remains highly fragmented. Nationally within the United States, the top 10 operators own 16% of the industry facilities and 77% of the lower tier facilities are owned and managed by independent operators ("The History of Self Storage."). Such fragmentation presents an opportunity within the self-storage market sector for well-capitalized and business savvy entrepreneurs to gain attractive portfolios and become major industry players. Therefore, although there are currently strict industry categories, there is room for innovation and further industry evolution.

Work Cited

  1. "Self Storage History." An Introduction to Self Storage (n.d.): 1-15. Self-Storage Association. Web. 2 Sept. 2014. .
  2. "The History of Self Storage." The History of Self Storage. Uncle Bob's Self Storage, n.d. Web. 02 Sept. 2014.
  3. "Self Storage Association Fact Sheet". SSA. N.p., n.d. Web. 11 Sept. 2014.