As the self-storage industry evolves with advancements in technology and business practices, the profile of the typical self-storage customer is also changing. Understanding who your customers are is crucial for effective marketing, offering the right features and amenities, and ultimately succeeding in renting out your storage spaces. The Self Storage Association (SSA) plays a vital role in this process by conducting national demand studies, which provide valuable data on customer trends. The most recent study, released in 2023, offers significant insights into how the self-storage customer base has changed since the pre-pandemic era.
Understanding National and Local Trends
While national trends offer a broad overview, it's essential to recognize that self-storage is a local business. Knowing who lives and works within one, three, and five miles of your facility is critical. Local data, which can often be obtained from realtors, provides insights into the number of households, income levels, poverty rates, and other useful statistics that can help tailor your services to meet local demand.
Tenant Mix: Stability and Change
Self-storage customers traditionally come from four main groups: residential, business, military, and student. In 2023, residential renters continued to dominate, representing just over 80 percent of the customer base. This proportion has remained relatively stable since 2019, with only slight decreases in business renters, likely reflecting a decrease in the overall number of businesses in operation. Facilities near military bases or universities may see higher percentages of military or student renters.
A strong small business community in your area can increase the number of commercial tenants, who are particularly valuable due to their tendency to pay on time, often through autopay, and to stay longer, increasing customer lifetime value. Marketing strategies to attract these customers can include forming strategic alliances with local businesses that are likely to need storage, such as realtors, small businesses needing inventory space, and service providers needing to store equipment and supplies.
Demographic Shifts Among Renters
Where Renters Live
Most self-storage renters are suburban dwellers, though this demographic shrunk from 51.2 percent in 2019 to 48 percent in 2023. Urban renters also decreased slightly, from 36.4 percent to 34.7 percent, while rural renters saw a significant increase from 12.3 percent to 17.3 percent. This shift indicates a growing need for self-storage solutions in rural areas.
Regional Distribution
The Sun Belt states continue to lead in self-storage rentals, representing 42.9 percent of all renters in the U.S. This regional trend has remained stable over the past four years, highlighting the continued demand for storage solutions in warmer climates.
Gender and Generational Trends
Gender Shifts
Since 2019, there has been an 8 percent shift in the gender distribution of self-storage renters, with fewer female and more male renters. This trend is more pronounced among older generations, where a significant majority of renters are male. Additionally, data collection now includes non-binary renters.
Generational Changes
The self-storage industry, once dominated by baby boomers, has seen a generational shift. Millennials now make up the largest demographic at 38.1 percent, with Gen-Z accounting for 13.9 percent. Together, these younger generations represent over half of all renters. They use storage differently, viewing it as an extension of their living space rather than just a place to store items they rarely access.
Younger renters, compared to older generations, are more likely to be:
Female
Racially diverse, particularly Hispanic
Living in rental properties
Residing in urban areas, though the majority still live in suburbs
These younger customers tend to rent smaller units, visit their units more frequently, and value features like temperature and humidity controls, security, and convenient access. They also prioritize flexibility in contracts and payment methods.
Features and Amenities
Renters today are more willing to pay for features such as 24/7 access, pest control, and advanced security measures, including alarms and fire sprinklers. Automation and convenience, such as online payments and autopay, are increasingly important. Despite these preferences, price remains the most significant factor across all generations.
Income and Employment Status
Income Distribution
The largest group of self-storage renters, at 21.4 percent, have household incomes exceeding $125,000. Over 47 percent of renters have incomes above the U.S. median income of $74,300. At the lower end, about 10.6 percent of renters have household incomes below $20,000, falling within the poverty level.
Employment Status
Most renters are full-time employees (46.7 percent), with a stable distribution across other employment categories. There has been a decrease in retired renters and an increase in those not currently employed outside the home, likely reflecting pandemic-related shifts.
Marital Status and Dwelling Type
Marital Status
The majority of self-storage renters are currently married (almost 52 percent). The percentage of never-married renters has increased, while those previously married have decreased slightly.
Dwelling Type and Home Ownership
Most renters (72.4 percent) live in single-family houses. There has been a slight decrease in those living in apartments or condominiums and an increase in those living in "other" dwelling types, likely due to households combining during the pandemic. Homeownership among renters has increased from 55 percent in 2019 to almost 60 percent in 2023.
Education Level and Items Stored
Education Level
The education level of self-storage renters has remained stable, with those holding a college degree representing the largest demographic.
Items Stored
The range of items stored has broadened, with more renters storing a variety of belongings. The most common items include clothing and indoor furniture, both of which have seen significant increases since 2019.
Reasons for Renting and Length of Stay
Reasons for Renting
Long-term storage needs are primarily driven by a lack of space at home, accounting for 46 percent of rentals. Surprisingly, 16 percent of renters store items they no longer want or need. Short-term needs, such as moving and remodeling, also drive significant demand.
Length of Stay
Length of stay has remained stable, with about 25 percent of renters staying one to two years and 24 percent staying over two years. Renters often stay longer than they initially intend.
Frequency of Visits
Approximately 28 percent of renters visit their units once a month. Younger generations tend to visit their units more frequently, reflecting their use of storage as an extension of their living space.
Conclusion
Understanding the evolving profile of self-storage customers is crucial for adapting business strategies and meeting customer needs. As the industry continues to change, staying informed about these trends will help self-storage facilities attract and retain a diverse customer base.
MMCG, a company specializing in self-storage feasibility studies, continues to monitor these trends to provide valuable insights for the self-storage industry. By staying ahead of these changes, self-storage businesses can better serve their customers and thrive in a competitive market.
Comments