OpenTech Alliance, maker of Insomniac self-storage kiosks, is off to a record-breaking 2014.
Robert Chiti, president and CEO of OpenTech, said the Phoenix-based company has broken sales records each month this year. During the first quarter alone, sales grew 81 percent over the same period in 2013.
Chiti said advances in technology, growth of the self-storage industry and other economic factors, such as increases in the minimum wage and insurance costs, are driving sales.
“The increase we’ve seen in business and interest can’t just be because we are working harder,” Chiti said.
Insomniac kiosks let customers rent a storage unit 24 hours a day or make rental payments. Higher-end kiosks also sell locks and allow videoconferencing with employees at OpenTech’s call center. The company produces a variety of kiosks costing $1,500 to $18,000 each.
While cutting payroll expenses is a motivation for some self-storage operators to buy kiosks, Chiti said developing a competitive edge is the main driver.
“The primary benefit is additional rentals. We believe that if the facility is open longer, it gets more business,” Chiti said.
The kiosk has given rise to a new type of self-storage facility — one where a manager isn’t required.
Most operators that use kiosks still employ a manager and use the machines as an after-hours service or as an amenity. But the percentage of facilities that are operated solely by kiosk is growing, Chiti said. He estimates about 150 kiosks are running unstaffed facilities.
Sarasota, FL-based Hide-Away Storage has embraced kiosk-only facilities. Of the company’s 10 facilities in Florida, five are equipped with kiosks. Two of those facilities are run exclusively by kiosks.
“We have no managers on-site at those locations,” said Meisha Wilson, vice president of Hide-Away Storage.
Wilson said the two kiosk-run facilities, which are branded as Xpress Storage (pictured in top photo), are smaller than the company’s other facilities — less than 40,000 square feet, compared with 100,000 square feet.
“The economics don’t work for us to have a full-time manager on-site for these smaller locations,” Wilson said.
The company adopted kiosks so it could gain a competitive advantage by offering 24/7 access, she said.
“Customers can walk up and rent a unit or complete a reservation after hours when it’s more convenient for them, versus trying to get to the office before it closes at 5:30,” Wilson said.
While used at a tiny percentage of the more than 50,000 self-storage facilities around U.S., Insomniac kiosks generate a healthy amount of business.
In 2013, OpenTech’s kiosks collected more than $27 million in rental payments. Combined with payments made through OpenTech’s call center and online system, the company gathered $42 million on behalf of its customers. Customers used Insomniac kiosks to rent more than 34,000 units in 2013.
Chiti said about 1,000 of his company’s kiosks have been installed at storage facilities around the U.S. The company sold its first machine in 2003.
Chiti sees the current facility-development cycle as an opportunity to expand his kiosk business. “Sometimes the implementation of our product ties to the building cycle,” he said.
That’s because it’s easier for operators to build in the expense of a kiosk when putting up a new facility rather than to dip into current earnings to add a kiosk at an existing facility.
Chiti said new construction hasn’t affected OpenTech’s sales too much so far, but with facility occupancies growing and dozens of new facilities on the drawing board, “we think we will see more of an uptick in the next two years.”
Bottom photo courtesy of Inside Self-Storage