Many self storage facility owners have managed to cope with the changing economy by expanding their services. Some facilities have begun to offer related services, such as specialized storage (including wine storage, for example), moving services, retail stores that offer packing materials, and truck rentals. Self storage facilities in some areas have also expanded by adding post offices or delivery services such as FedEx or UPS, conference rooms, Internet access in various forms, and coffee vendors. Now some non-storage-related businesses are using the same strategy, expanding the services that they offer in order to bring in more business. Some convenience store owners, not satisfied with branching out into selling gasoline and adding lunch counters and coffee bars, are also adding self storage facilities.
Adding self storage makes sense to many rural business owners, who may have the space to expand and the money for new construction, but who do not have a budget for any additional inventory. Convenience stores usually are open long hours, if not overnight, so convenience store owners can add self storage without necessarily having to add staff members. Convenience store cashiers can be retrained to rent storage units, or store owners can add a self service kiosk enabling customers to take care of the rental details themselves.
One of the first convenience stores in the nation to add self storage to its offerings may have been Reilly's Dairy (originally Meadow View Farm Dairy), of Sauquoit, New York. Reilly's Dairy added a self storage facility to its business in 2000. Reilly's Dairy began, as the name suggests, as a dairy farm that processed milk and made home deliveries. That was in 1942. Over the years, the business has morphed to survive a changing business climate. It expanded, opened a retail store, and added self service gasoline, a bottle recycling center, a carwash, and some fast food options. Reilly's is a retail dairy store, not a convenience store, but it is becoming ever more convenient in order to thrive in a changing economy.
Now that convenience stores and gas stations are struggling to make a profit, it is becoming more common to see retail businesses adding services such as self storage. "There are days where...we're selling fuel at or below cost," Scott Zaremba, the president of Kansas' Zarco 66 Earth-Friendly Fuels, told Mark Fagan of the Lawrence Journal on Monday. "You can't keep the doors open if you're selling below cost, so we need to have other products in our locations that customers are asking for."
While the convenience store business, like other businesses, has been suffering the effects of the recession, store owners are also facing competition from mega-stores and warehouse-stores that sell groceries, department store items, electronics, office supplies, and gasoline. Instead of trying to be simply the smaller, nearby, more expensive version of a mega-store, many convenience store and gas station owners are trying to customize their businesses by adding services that make them distinctive and give their businesses more personality.
"You need those little nuances, those little differences," Tom Palace, of the Kansas Petroleum Marketers and Convenience Store Association commented in Fagan's Lawrence Journal article on Monday. Fagan also interviewed Sammi Sangam, the owner of Speedway Shell, who began the customization of his business by offering homemade Indian food at a lunch counter inside his gas station. "We call it 'Curry in a Hurry,'" Sangam told Fagan. "When you're in a hurry, buy some curry....Nobody makes money on gas," he went on. "It's the inside sales that really help....There has to be something unique to your store: discount offers, or something not sold by somebody else. You need something unique."
It is likely that the self storage industry will continue to see the evolution of different models for running a self storage business. Larry Jenkins, the president and CEO of Store-N-Save Self Storage, argued in a 2007 Inside Self-Storage article that the industry would slowly evolve, becoming more and more heterogeneous. Instead of choosing from among various facilities all made of standard self storage units with rolling garage-style doors, Jenkins argued, consumers would choose a storage facility based on their specialized needs. Some renters might need climate-controlled storage for wine, antique documents or linens, or various kinds of business inventories. Others might need small locker-sized spaces located in businesses that they already include as part of their regular shopping or commuting routine. Still others might need facilities that can double as office space, with Internet connections and conference rooms. Jenkins also predicted that self storage facilities would become architecturally distinct, as owners customize their facilities in order to appeal to different segments of the market. Jenkins' predictions have proved prescient, as new facilities increasingly are targeting specialized markets.
"Our research," Jenkins wrote, "indicates that tenants have developed a preference for facilities that address their lifestyles and business needs....Now the trend is toward developers investing more money to build facilities targeting tenants with specific storage purposes in mind and the features they want. Innovation isn't limited to operations either. Structurally, storage buildings are giving way to architectural enhancements that add a sense of visual interest as well as utilitarian function. This trend is likely to stick."
Sources used:
Fagan, Mark. "Stations pump up the retail: convenience stores add goods, services to entice customers to buy more than gas." Lawrence Journal. April 19, 2010.
Jenkins, Larry. "Toward a tenant-driven model: a provocative look at the future of self-storage." Inside Self-Storage. Nov. 1, 2007.
"Reilly's Dairy Inc.: History." Reilly's Dairy, Sauquoit, NY.