Valet Storage: The New Space Race
WHY YOU SHOULD CARE
Because you don’t have to hire a van and do it all yourself. Unless that’s your thing.
Michael “Mitch” Mitchell is a militant organizer. The former British Army officer works at what he calls the Storage Fortress, a warehouse north of London. Armed with management skills, labels and scanners, he and his team oversee logistics in the Luton-based facility of valet storage company Lovespace, keeping track of huge stacks of brown and black cardboard boxes containing the trinkets, sports gear, Christmas decorations and seasonal clothing of thousands of customers.
The Storage Fortress is just one outpost of a new ministorage industry spawned by the box-size living spaces of modern urban life, one quickly carving out its own space in the market. In this realm of the sharing economy, customers with small storage needs share space, paying by the crate or box instead of renting full units. Here’s how it works: Customers fill boxes delivered to their homes; company reps return to document the contents (which are trackable online) and – for around $5 to $7 a box per month and sometimes with free delivery – whisk the stuff away to secure facilities, usually in underutilized warehouse space nearby. Whenever clients want to reclaim their ski jackets, bowling balls or that ugly sweater Granny knitted, they simply reach for their smartphones; the firms pluck the goods from the warehouse and return them within hours.
Typical clients … use the firms “like an extension of their closet that they can order on their cellphone.”
Think of it as self-storage’s rebel teenager, a tech-savvy offspring with a knack for logistics that’s sprouting up in cities like London, Hong Kong, Vancouver, New York and Paris — and hell-bent on biting off a chunk of the traditional self-storage and warehousing market. That industry, comprising 60,000 facilities globally, is expected to make nearly $500 billion in 2017, and is predicted by Lucintel to grow 6 percent annually over the next five years. Angel investors like Google Ventures and Floodgate Fund are taking notice of the valet boom, according to trade publication Inside Self-Storage. The big question for the valet vanguard: Can they do to storage habits what Netflix did for video, or will their disruption make a permanent dent?
Some shifting dynamics are on their side: More people are flocking to crowded urban areas, while apartments are getting ever smaller — a 220-square-foot studio, anyone? — and more expensive. Young people steeped in the sharing economy and happy to do all their business by phone are a ready market. Rob Buchanan launched Alluster in Vancouver last year in response to a condo boom that left many residents with little extra room. With customer growth of more than 50 percent monthly, Buchanan expects his client base to expand from the hundreds to the thousands late this year, and he has his eye on expanding to London. There, he’d compete with firms like Lovespace and Boxman. The former launched in 2012, and now offers next-day collection or delivery anywhere within the U.K.
Typical clients — students, small-apartment owners, fashionistas needing space for 500 pairs of shoes — use the firms like “an extension of their closet that they can order on their cellphone,” Buchanan says. Other clients include carnival operators (you pay extra for bigger items, like fortunetelling booths, as long as one person can lift them) and art collectors — not to mention the guy one firm helped after he found his belongings on the sidewalk … and divorce papers in his hand.
As the market grows, there’s a race to innovate. Scott Sinclair started Box Butler in New York City in 2008. To stay ahead, he now offers a one-hour turnaround. Other services, like Alluster, let clients set up Web pages and virtual garage sales to sell items, and deliver them to the highest bidder. Livible, based in Seattle, helps put stored items to work, facilitating their rental, loan or donation. But there’s not enough space for everyone; some services have already disappeared. Unlike the self-storage industry, which is property-heavy, these firms need to be lean and nimble. They may own their vans and trucks, partner with other firms to gain access to them or simply rent a fleet. Renting underutilized warehouse space, meanwhile, is key, allowing for cheaper rates than most self-storage rentals. The young industry’s biggest enemies are outdated software and poor organization: Lose track of a single box and lose a customer.
So why aren’t most traditional self-storage companies leaning in to this market? Charlie Schneider, manager of Viking Self Storage in Bedford, England, says it’s because valet storage is viewed as an entirely different business. “We tend to look after the whole house,” he says. And because his customers do their own heavy lifting, he can serve hundreds of clients each month with just two employees. Still, the biggest hurdle for the new industry is getting on potential clients’ radar.
Yet converts like Susan Danielson, a New York City teacher and mother of two, are helping spread the word. After using Box Butler for seasonal wardrobe storage, Danielson now stows away baby toys, camping gear and sports equipment. She’ll be keeping the firm on speed dial, she says, because “where else will I store all the things my children bring home from college?”