Storage Business Owners Alliance
(248) 254-9000
Login  |  Join Now!
Twitter - Follow us on Twitter! Facebook - Look us up on Facebook! LinkedIn - We’re Linked! YouTube -
Key Opportunity Indicator: Market Competition
Posted 8/15/2019
print this article print    Email A Friend email    Share with Twitter   Share with Facebook   Share with LinkedIn   Share with   Share with Newsvine   Share with Reddit   Share with StumbleUpon   Share with Technorati  

Development and investment in self storage is at an all-time high. There are more than 2,500 known projects in varying stages of development across the U.S. right now. Self storage supply is slated to increase by up to 8% in the next two years.

Supply and Demand

Developers and investors in self storage use data to discover and analyze markets in order to make determinations about opportunities that may exist in those areas. Fundamentally, this is all about determining the relationship between supply and demand in any given market. Data on demographics, pricing, inventory availability and derived data such as square feet per capita, saturation and market wealth form the backbone of this analysis process. Ultimately, the goal is to learn if there is an increasing demand that is not being met by current and upcoming supply and therefore, an opportunity to meet that demand.

This is not a simple data challenge. There are nuances and gradations to the answer as well as numerous factors, which often require assumptions, that could impact the determination of the answer. Of course, there are other factors such as the cost and ease of doing business in the market, the opportunity for acquiring or building and the process of getting permission from relevant parties.

Another Indicator

There is another potentially significant market indicator that is often overlooked by most developers as it does not relate or correspond to this fundamental equation of supply and demand.

For example, imagine that Market A and Market B both have 15 stores, a similar demographic profile and similar supply/demand dynamics. But Market A is populated by a group of stores who do minimal marketing. They do not buy search terms, their websites are generally uninformative, they do not have 1-800 numbers or 24-hour live chat and when prospective customers run Google searches they see stores from a neighboring market who have bought those terms. The competition in the market from a supply perspective is one thing, the competition from a marketing perspective is another. In this market the operators do not have the fundamentals in place to capture the customer.

Market B is different. It is populated by REITs and mid-sized professional self storage operators who understand marketing. The first page of Google is a pitched battle of SEO indexing and SEM bidding, the store websites are dynamic, updated, full of promotions and available to be contacted around the clock.

This is not a supply and demand factor. This is about incumbent market competitiveness. It is an important thing to know about a market. Based on the description above, any developer would be more interested in Market A than Market B.

Measuring Competitiveness to Create a Data Factor

How do we create a scoring system that enables us to measure markets side-by-side in this way so we can then use that statistic as another input into the overall analysis of markets?

The answer is both simple and difficult. The solution is to create a weighted scoring index that measures all of the various marketing and competitive activities that a self storage store could perform and then a process whereby each store can be scored across these activities. The difficult part is then automating the discovery of these marketing factors each day to generate a daily score per store, then rolling those scores into market scores.

Learn More

Featured Vendors:
Contact us
News - Storage Business Owners Alliance

Storage Business Owners Alliance
30665 Northwestern Highway
Suite 100
Farmington Hills, MI 48334 USA

Phone: (248) 254-9000
Fax: (248) 538-4327