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The pandemic considerably accelerated the digitalization of the digital economy in Mexico. The market value of e-commerce in Mexico spiked to estimates of MX$864 billion (US$42.8 million) of market value in 2020, a 36 percent increase from 2019 according to Statista. Now, e-commerce is not only about Amazon, Mercado Libre, or other large digital marketplaces. Small and Medium companies (SMEs) have also taken advantage of social platforms to ramp up their business. Once the business is set, efficient logistics operations are essential. For Conejito de Trapo, an online store focused on baby products, self-storage was “a perfect solution”. “When we started Conejito de Trapo one of the challenges was to find a safe place for our stock. In U-Storage I found the perfect solution where I can access my products 24/7 while they adapt to my storage needs as they change,” told Cristina Pedrosa, CEO of Conejito de Trapo to MBN.
E-commerce pressure on last-mile logistics
Think about it. As a business or as a person in a large city space is a luxury. It does not necessarily have to be, and self-storage is precisely raising the challenge of finding additional storage space in urban areas.
“Our added value comes from our strategic location within major cities, particularly Mexico City, close to high-demand and highconsumption areas for e-commerce platforms and individuals looking for additional storage space. The self-storage concept provides flexible spaces in size and rental periods for both residential and commercial tenants. Different types of customers can manage their storage space according to their seasonal demand. Our locations also help digital sales sites develop efficient last-mile routes,” said Diego Ysita, CEO of U-Storage to MBN.
Having all-time access at convenient locations also helps companies increase customer satisfaction through rapid deliveries. “The benefit for us relying on U-Storage is to deliver our product to our customers in less than 24 hours while being reassured that our product is safe. It is more efficient for us having stock in U-Storage as we could react quickly to our customer demands. By having costs per square meter makes the prices competitive,” wrote Alonso Curis from Vinicola Regional de Ensenada.
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Large Metropolitan areas raise a battle for additional space.
The self-storage concept is simple. The space you need it, for as long as you need it, with 24/7 access. For individuals and families, it comes in handy having an extra closet a few blocks away from home. For business, especially for e-commerce and last-mile deliveries, having access to space close to where the customers are is definitely a gamechanger. This case study introduces U-Storage, a Mexican company that is bringing self-storage best practices into the Mexican market. According to the 2020 Self-storage Almanac, while in the US there are 158.8 million m2 of self-storage space, in Mexico there are just 256,000 m2. By taking a closer look at U-Storage’s experience, it is easier to seize the potential of this sector for the Mexican economy.
U-Storage: from Pioneer to Self-Storage Market Leader
Self-storage also opens the door to logistics entrepreneurs like Iñaqui de la Peña, Country Manager of Dostavista, a company focused on last-mile deliveries. “U-Storage enabled us to ramp up operations We set aside large investment projects to have a 100 percent operable place and manage our storage in a matter of hours. ‘All inclusive’ prices help us in our financial plan. Making a single payment is more efficient as it can be linked to a card,” he told U-Storage’sMBN.solutions are flexible not only in time and space but also for different sectors, including chemical sectors. V Trade, a specialized company in raw materials and chemicals, affirms that: “We have had several benefits from working with U-Storage. location is key, and they have a very good reputation among different delivery companies. A benefit is that we have the confidence and trust that our materials are safe and secure,” wrote David Colin, the legal representative of V Trade.
A Logistics Gamechanger Logistics margins are tight. Finding more efficient alternatives in daily activities. Self-storage emerged in the need for flexible storage spaces rather than large warehouses in the middle of nowhere. U-Storage brings strategic location and rental flexibility to logistics players looking for those more efficient “Productivityoperations. has increased by 50 percent during 2020,” wrote Gil Reznik from Big logística to MBN. “We can expand our storage immediately without investing our own resources and without waiting for additional contracts. All are immediate. By having “everything in the same place we were able to reduce our costs while integrating the operation immediately.”
Read the complete article More about this topic As the CEO of U-Storage said: “The pandemic accelerated digitalization and e-commerce by five to 10 years. As a consequence, companies experienced a disruption in their sales processes. Given the nature of U-Storage’s business model, we have become an enabler of both new companies emerging from the pandemic and existing companies that had to evolve rapidly. Our customers can find our nearest location and rent for a month to conduct their delivery process smoothly. The best thing is that they can conduct the entire process on the same day.”
On the Road to Consolidate Market Leadership U-Storage is Mexico’s market leader in self-storage solutions. By October 2020, the company had 11,500 customers 74 percent of which are individuals or families, and 26 are businesses. Among its plans for expanding its footprint in the country, the company is exploring partnerships with real estate developers, e-commerce players, logistics companies, and more segments across different cities. “Our vision is to continue being the reference for the self-storage sector and space solutions in the country. There is a great deal of room to grow. Additionally, urban trends are driving people and companies toward self-storage. Our goal is to be the solution for all the storage needs faced by entrepreneurs, businesses, and other users. We are a socially responsible and sustainable option as we become part of their communities. Our infrastructure has environmentally-friendly features that also add value to our customers while reducing our carbon footprint,” said Diego Ysita.
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Q: What other elements make U-Storage a key player in a constantly innovating logistics market?
U-Storage, access to locationspremiumthroughSelfStorage VIEW fromtheTOP U-Storage | 5
A: Our added value comes from our strategic location within major cities, particularly Mexico City, close to high-demand and highconsumption areas for e-commerce platforms and individuals looking for additional storage space. The self-storage concept provides flexible spaces in size and rental periods for both. Different types of customers can manage their storage space according to their seasonal demand. Our locations also help digital sales sites to develop efficient last-mile routes. We provide 24-hour access, which makes it useful for modal transfers, dark stores and last-mile deliveries, allowing for effective logistics planning.
A: Our product is designed for any kind of company, regardless of its size. This ranges from the largest e-commerce player to the smallest distributor of a particular product. We are democratizing storage spaces to make them accessible to any customer. Naturally, large players will rent more space but both will enjoy the same service, the same amenities and transfer areas. Our customer profiles are diverse, which is an advantage. Other storage concepts are attached to large spaces or specific rental periods that make them unattractive for particular clients.
Q: What added value does U-Storage bring to the logistics market in Mexico?
A: The pandemic accelerated digitalization and e-commerce by five to 10 years. As a consequence, companies experienced a disruption in their sales processes. Given the nature of U-Storage’s business model, we have become an enabler of both new companies emerging from the pandemic and existing companies that had to evolve rapidly. Our customers can find our nearest location and rent for a month to conduct their delivery process smoothly. The best thing is that they can conduct the entire process on the same day. Apart from being cost-efficient, supply chains must be resilient and U-Storage contributes to that by bringing companies closer to their customers. Companies that underwent reductions, consolidation or bankruptcy also have seen in U-Storage a tool to adapt better to a new stage in their business Self-storagecycles.isalso an ally for disruptive concepts and urban trends that are being accelerated, including the sharing economy, same-day deliveries, co-working, co-living and the general mindset of the millennial generation. To be a disruption enabler is key. Once the pandemic passes, we will see which of these trends prevail and which of them do not. Regardless, we are ready. An additional side-effect resulting from the pandemic for residential tenants in particular is working from home. This brings the challenge of organizing already reduced spaces to meet new needs. We support individuals who seek a nearby extension of their home space.
Q: How do you keep your customers and self-storage users safe?
Q: How did U-Storage become a strong ally of companies focused on digital sales?
A: We have recently announced a partnership with 3M to keep our common areas safe for all users. This is part of our effort to create trust among customers. Fortunately, our infrastructure had design Diego Ysita CEO | U-Storage
Demand for self-storage services is driven by major events in a person’s life that range from remodeling a house to moving out of home, getting married or divorced. Almost by definition, millennials are recurrent users of self-storage, for instance. The same logic applies to businesses: when they expand or consolidate operations, they need space. the complete article about this person about this company
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A: The race toward digitalization of the customer’s journey had already begun prior to the pandemic. However, the pandemic is accelerating our strategies to provide an immersive experience. Our website allows the customer, a business or an individual, to find the storage space they need, the location, prices, characteristics, and part of the contracting procedure as well. Our goal now is to provide the customer with digital locks and allow them to manage their access through a digital platform.
Q: What are U-Storage’s strategies to expand its footprint to other cities and regions in Mexico?
A: Through our capabilities and efficient operations, we understand how the market will react in different locations. One of our strategies has been to save all the data that has been generated, from our very first customers back in 2003 to our most recent customers today. The data of more than 45,000 customers has served as a basis for building insights and forecasts to understand how the market will behave.
We are proud of our analytical capacity; that is one of our major milestones. In perspective, the self-storage market in the US consists of more than 60,000 different self-storage locations, which means that there are more self-storage facilities than Walmart, McDonald’s, Starbucks and car dealerships combined. Understanding how the concept works and how it should be adapted to the Mexican market is at the core of our business strategy. When thinking about expansion plans, our data analytics capacity puts us in a really interesting position. U-Storage is looking forward to creating strategic partnerships or joint ventures with real estate developers to create co-development schemes in different markets. We have our own public infrastructure and real estate investment fund (FIBRA) created in 2018 that operates on the Mexican stock exchange (BMV) and makes it easier to make partnerships at the local level due to the corporate governance, accountability and fiscal benefits it brings.
Q: What sectors represent the greatest opportunities for self-storage companies?
features that allowed additional health measures to be integrated smoothly. We also carry out sanitization processes that, alongside the necessary health protocols, are overseen by our employees.
A: We see many opportunities in real estate developments given the reconfiguration of living spaces in large cities. Going vertical has reduced the available space in homes, which can be around 70 or 80m2. Moreover, the pandemic is boosting the living-byrent concept given the flexibility it provides to individuals as this segment requires storage space.
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Q: What has been U-Storage’s experience in embracing digitalization strategies?
Events such as the Hot Fashion, Hot Sale and Buen Fin will put businesses on trial in the coming months. The goal of Buen Fin 2020, to be held from Nov. 9 to Nov. 20, is to match last year’s figures with 100,000 registered businesses and MX$118 billion (US$5.5 billion) in sales. the complete article
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Despite lockdowns, consumers are still looking for their favorite brands to consume their products. However, many have suffered bad shopping experiences due to delays. According to the 2018 Logistics Performance Index prepared by the World Bank, Mexico ranks third in logistics performance in Latin America. Worldwide, the country ranks 51st.
Deliveries in the E-Commerce Era
Self-Storage to Meet Last Mile
Shortening Distances: the New Goal
Nowadays, consumers are far more picky about what they expect from e-commerce as they have become used to services such as Amazon Prime, Uber or Rappi delivering services and products immediately at their door. Opening distribution centers for e-commerce companies is increasingly common in Mexico. As a result, companies of all sizes have opted for services such as those offered by U-Storage. “Our product is designed for any kind of company, regardless of its size. This ranges from the largest e-commerce player to the smallest distributor of a particular product. We are democratizing storage spaces to make them accessible to any customer. Naturally, large players will rent more space but both will enjoy the same service, the same amenities and transfer areas,” said Diego Ysita, CEO of U-Storage in an interview with Mexico Business News. U-Storage has become an enabler of both new companies emerging from the pandemic and existing companies that had to evolve rapidly, providing flexible logistics for e-commerce players. The pandemic accelerated digitalization and e-commerce by five to 10 years, noted Ysita. “As a consequence, companies experienced a disruption in their sales processes. Our customers can find our nearest location and rent warehousing for a month to conduct their delivery process smoothly. Companies that underwent reductions, consolidation or bankruptcy also have seen in U-Storage a tool to adapt better to a new stage in their business cycles,” he added. The logistics challenge companies face in this new normal has not been overcome and will grow in the coming years.
More about this topic
Amid this uncertain global scenario, there is one industry that has grown by leaps and bounds: e-commerce. The increase in online purchases due to the pandemic, however, showed the segments that needed to be strengthened in the Mexican e-commerce market, with logistics being the main Achilles’ heel for almost all businesses. As consumers demand next-day deliveries, companies have come to value logistics even more, becoming one of the key pieces that could drive the growth of the sector in Mexico.
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The space you need, for as long as you need it, with 24/7 access. That is the basis of self-storage solutions for both individuals and businesses looking for valuable extra space within large cities.
Our added value comes from our strategic location within major cities, particularly Mexico City, close to high-demand and high-consumption areas for e-commerce platforms and individuals looking for additional storage space,” says Diego Ysita, CEO of U-Storage.
According to Mordor Intelligence, the self-storage market is expected to reach a value of US$115.62 billion by 2025. This market is mostly driven by the increasing urbanization and the cost of living in big Picturecities.an individual in a large city. Usually living in an apartment building, little space for Christmas decorations, extra furniture or you name it. Self-storage is the solution to have an additional option to save what they value. An extra closet that is closer to your home. Now picture a small e-commerce business. Lastmile deliveries could be a headache and can undermine customer satisfaction. Should the company use strategic self-storage locations, deliveries, and stock management problems can be easily solved.
businessesindividualsaSelf-storagesolutionforand SPOTLIGHT U-Storage | 8
In Mexico, U-Storage is the market leader of this segment with more than 11,500 customers, 74 percent of which are individuals or families, while 26 percent are businesses related to logistics, lastmile deliveries, e-commerce and shared-economy, among others. “We are democratizing storage spaces to make them accessible to any customer.
Available spaces in U-Storage can go from 2 to 200m2 that can be leased through flexible monthly contracts. Users can book their storage space remotely, choosing as much space as they need and signing the contract at the chosen facility. Different companies have shared their experience with U-Storage with MBN and how self-storage has helped their operations.
There is still room to grow for the self-storage market, however. According to the Mexican Association of Self-Storage (AMDAAC), in 2019, the national self-storage industry counted almost 200 locations, and more than 25 percent of them located in the Mexico City metropolitan area. Mexico has only 260,000m2 of self-storage space available, while in the US there are 158.8 million m2. Comparing Mexico City area versus Houston, the former has only 0.01m2 of self-storage per capita while the latter has 0.78m2. As the market continues to grow, U-Storage strengthens its strategies to consolidate its market leadership. The company is partnering with real estate developers, e-commerce players, logistics companies and other key stakeholders across Mexico’s big cities. Pay close attention to what the company does next. the complete article More about this company
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U-Storage seeks to offer investors, operators of existing properties and local developers a formula in which they can participate in the growing self-storage business, through a robust and also growing platform. Under this model, U-Storage operates the asset as one of their own, which includes access to tools such as the company’s website, through which today more than 50 percent of its tenants arrive. The model includes everything from the pre-development and design phase, the construction and the integration into their operational “Third-partyplatform.management in the self-storage industry gives local investors opportunities to partner with us. They can be sure that their assets are operated under the highest quality standards in the industry,” stated Ysita. to Launch Storage Asset
One sector that has been a role model in terms of collaboration is e-commerce, which has leaned heavily on logistics, software and real estate companies. The latter has played a crucial role in providing strategic locations for companies to achieve same-day deliveries, while also supporting individuals looking for more space in their homes to balance their work and personal life.
This market opportunity has led self-storage provider U-Storage to think of a new business model to accelerate the adoption of this service: third-party management. Why Is Third-Party Management Necessary? Diego Ysita, CEO of U-Storage in Mexico, told MBN that the self-storage business might at first glance seem as simple and unsophisticated as “renting brick and mortar.” However, once you understand it, you realize it comes with many complexities. “A platform and a team of professionals in areas including revenue management, marketing, customer service, budget control and even maintenance must be available and focused on generating value in each of these areas,” he explained. “It is like the franchise business. Why do people go into a franchise business? Because they know that their resources are backed by a whole platform or company with manuals, good practices, a proven track record and safeguarded operations.”
In Mexico, the self-storage industry has grown by leaps and bounds. However, according to experts, its potential is even greater. According to the Mexican Self Storage Association (AMDAAC), by the end of 2019, the national industry had almost 200 establishments. Of these, just over 25 percent are located in Mexico City and its metropolitan area. In cities, according to real estate advisory firm Newmark Knight Frank, there should be 25 self-storage establishments per 1 million inhabitants. This means that Mexico City and its surrounding areas, with its more than 20 million inhabitants, could potentially be home to 500 facilities.
Bill Gates, Founder of Microsoft, said in one of his books: “Our success has really been based on partnerships from the very beginning.” After a year of living in a new reality due to the pandemic, one of the keys to navigating troubled waters is to rely on collaboration between suppliers, companies and sectors, be it allies or competitors.
7. We know our team closely, which helps in making decisions that improve their lives and that of their families. We are looking to relocate ops staff to properties close to their homes because we believe this will give them more quality time with their families.
At U-Storage, we decided to make the situation count and go on the offensive. As soon as the pandemic began, we launched a strategic plan to define goals and review elements of our own culture. We put on paper a purpose with which we had empirically guided ourselves over the years: “We don’t just rent spaces; we accompany people during their life transitions.”
Diego Ysita Chief Executive Officer | U-Storage
This statement represents a great responsibility for us, both as a company and as individuals. Going forward, every decision must be consistent with our purpose to the point it becomes impossible to ignore it. Regarding our clients, the main purchase trigger in our industry is often linked to an important life event (relocation, entrepreneurship, changes in the way we do business, travel, divorce, or death). Consistent with our purpose and assuming the responsibility that it represents, we took specific actions:
1. Treat the client with empathy: During decisive moments of their lives, people experience different emotions and have certain expectations.
Purpose
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4. Innovate and be flexible: develop products or services that add value to each stage of our customers’ lives. We have achieved much more than renting spaces: Helping elderly people move their goods to a storage unit that requires less walking; listening to people who had ended their marriage and needed something more than just a space; approaching each client who required it during the pandemic to make plans together and help them move forward. These are just examples of the satisfaction we get from our work. Our associates also go through life-changing events. We want our decisions around growing a company to make them and their families proud: 5. We foster personal growth with programs like U-Storage University, where best practices and success stories are shared. For instance, guards held discussions with a manager who began his career as a guard and shared his experience with them.
Strong Helps Navigate LifeChanging Events
The pandemic drastically transformed the type of decisions that business leaders must make. From one moment to another, our decisions were not only about the business, but also about taking care of the health of our collaborators, clients and suppliers: opening or closing our doors, working remotely, enabling tools, challenging our strategy, deciding what to communicate to clients and implementing protocols in our properties to take care of people, among other decisions. With no background or previous experience to make these decisions, it became the professional and personal challenge of our lives.
3. Accompany our clients during their stay: Maintain close contact to ensure that if their needs change, we adjust accordingly.
6. During the pandemic, we prioritized the health of our collaborators. As an essential activity, we never closed but we reduced our number of operating personnel without eliminating positions by implementing rotation schemes. We provided COVID-19 tests at the slightest symptom and isolated people for more days than recommended.
2. Genuinely understand needs: Ask the right questions to provide the best space solution, meeting current needs and anticipating future needs.
Going forward and being consistent with this purpose, we have defined key projects in areas such as technology (efficient processes), customer experience (improve hiring and use of warehouse times), security (being leaders in technology, protocols and security tools at our properties), strategic growth (anticipating urban trends and being aware of the impact on our planet) and our people (leadership in HR to continue building a culture of sustainable success).
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Leading with purpose has not only helped us successfully navigate one of the most difficult times in our history, but it has also helped us stay alert in times of great uncertainty.
There is a high sense of belonging and alignment with the values and purposes of the Finally,company.weare aware of the impact we have on the communities where we are present. We work to transform communities where we are present, into better communities. We leverage our infrastructure to lead social programs through our foundations. Thanks to our presence in multiple locations across Mexico City, we make it easy for people to donate products to causes they believe in, such as toys for children with cancer, personal hygiene products for homeless people, kibble for a dog shelter, among others.
The results of these efforts are reflected in almost zero personnel turnover in corporate and property management.
