By James Hafen
As I write this article, I’m looking through my window, admiring a cloudless 65-degree day. I’m not complaining, but it’s midwinter in the Rocky Mountains!
Predicting the future of technology seems easier than forecasting the weather. When I entered the self-storage industry 15 years ago, the state of technology at most facilities was well behind the curve. Remarkable progress has since been made, yet more explosive change will occur over the next few years. Operators need technology to compete and, fortunately, it has become more accessible in cost and usability.
Understanding where technology is headed is critical for self-storage operators as they position themselves for success in our quickly evolving industry. What should you expect by the year 2020? Here are a few predictions.
Connected, Always
By 2020, we’ll be online, period. Most of us already own several perpetually connected devices. Having your home connected to the outside world is already as expected and reliable as running water.
“Always on” connectivity is going global. Hans Vestberg, CEO of Ericsson, a multi-national provider of communications technology and services, claims that in the next five years we’ll see 85 percent of the world population with 3G or 4G coverage and 90 percent of children older than six using smartphones.
Computing mobility changes everything. Standalone computers may maintain their business presence, but the borders differentiating phones, tablets and computers are already blurred. The “Internet of things” will connect people to devices and processes. Applications will span all of these devices, and processes in the back office, front office and consumer interfaces will merge as well. Expectations will be for full functionality, regardless of where the services are accessed.
If ‘Cash Is King,’ Then the King Is Dead
Speaking of going mobile, consumer payments are leading the way. A recent study from think-tank Pew Research Center predicts payments via mobile devices will be the standard by 2020, and they’re already growing by more than 25 percent a year.
The liability and security risks along with the hassle and inconvenience of handling cash will succumb to the multitude of payment options coming at us. PayPal, Apple Pay, Bitcoin and reloadable payment-card options will all but eliminate the burden of processing actual cash.
Data Privacy and Security
Privacy concerns extend beyond credit card data to protecting your tenants’ information from commercial exploitation. It’s a constant topic in the news and on everyone’s mind. If privacy and data security isn’t at the top of your list of concerns today, it will be within the next five years.
Compliance with the federal Health Insurance Portability and Accountability Act, Payment Card Industry Data Security Standard and other standards continue to tighten and push processing liability onto storage operators. Shortcuts will prove costly, and operators must require their technology partners to provide well-defined strategies to protect the data entrusted with them.
Predictive Analytics
Predictive analytics, better known as “big data,” is the theory and practice of making predictions of a group’s future behavior based on the vast amount of data collected in the past. And it’s being used in the self-storage industry today.
From the obvious applications, such as “How high can I raise your rent before you will leave?” to the not so obvious, such as “On which day are you most likely to visit my website?” data is being mined and analyzed in ways that are having a real impact on rent rates and occupancies. Big data is bringing big changes.
The Technology Stack
The most significant change for the self-storage industry will be a move toward turnkey technology stacks: end-to-end solutions that fully integrate operations. From owners and investors and moving through the front office to customers, the need for cohesive data, processes and interfaces will be the new standard.
Gone are the days of purchasing management software based on specific processes or users, as it has become a commodity that does little to help operators improve or differentiate their businesses. Over the next five years, operators will empower themselves with complete solutions that deliver transaction processing, business intelligence, revenue management, customer service, security, online presence and more—all using a common backbone: the cloud. These solutions will remove the need to cobble together components from multiple providers.
Today the cloud still feels new, but by 2020 cloud capabilities will save you headaches and expenses. The playing field will be leveled as technical chores are offloaded to those who can do them efficiently, and the cloud will enable solutions that small storage operators could never before afford.
The future is coming, and the forecast is sunny for all. Find the right partners, hire the right people, and let the promise of tomorrow’s technology help you grow your business, delight your customers and return dividends to your investors.
James Hafen is the self-storage industry principal at Yardi, the provider of cloud-based applications Store Enterprise and Store Advantage. He’s been involved in creating and delivering software solutions to the self-storage industry since 1999. To reach him, e-mail [email protected]; visit www.yardi.com.
