How Closetbox Is Using Location Tech to Disrupt the Self-Storage Industry | Street Fight

How Closetbox Is Using Location Tech to Disrupt the Self-Storage Industry

How Closetbox Is Using Location Tech to Disrupt the Self-Storage Industry

Self-storage is hardly sexy, but the team behind Closetbox is attempting to reimagine the industry using a similar on-demand fulfillment model to hyperlocal heavyweights like Uber, Lyft, and Postmates.

Closetbox uses excess capacity in the existing logistics network to pick up and deliver storage in real-time. When consumers order movers via Closetbox’s mobile app, the company finds the nearest moving trucks with available space, and customers’ items get picked up and stored at private storage warehouses right away.

“Anytime you see a truck on the street, peek inside and it’s usually not full. It costs the same amount to drive these trucks around, so we came up with a technology that routes people to trucks,” explains Closetbox founder and CEO Marcus Mollmann.

By leveraging technology to utilize excess capacity on shipping trucks and in warehousing facilities, Closetbox has been able to lower the cost of full-service storage to the point where it’s comparable to the monthly cost at most self-storage facilities.

In just the last three years, Closetbox has expanded into nearly 80 markets, with plans to expand into 10 more — including Napa, Baton Rouge, Little Rock and Tulsa — by the end of the year. An international expansion in the works, as well. Mollmann and his team have raised $12.5 million in series A funding, built largely on investor interest in the company’s disruptive model.

Rather than hiring its own truck drivers and movers, Closetbox partners with established moving companies, couriers, and third-party logistics firms. That model has helped the company scale quickly, and Mollmann says it also provides an increase in employment opportunities throughout the cities where Closetbox operates.

Most Closetbox customers are do-it-yourselfers who wouldn’t typically be seeking the services of professional movers as they moved their belongings into self-storage units, which means Closetbox doesn’t see itself pulling customers away from established moving companies. According to Mollmann, there’s been a 10% increase in labor hours in the warehousing and storage industry for the zip codes serviced by Closetbox.

“We transfer the use of space from self-storage facilities to warehouses and employ movers, [and we’re] keeping people busy in the winter months,” Mollmann says.

Closetbox has been able to make money in every city it has gone into, but future growth will rely on an increased awareness among consumers. This biggest problem, as Mollmann sees it, is simply that most people don’t know his company exists. Brand awareness of self-storage firms is so ingrained that Mollmann says it’s been a struggle to reach potential customers right before they need a mover, or right before they have a major life event like having a baby or getting married. The average Closetbox customer is a female looking to store anywhere from 9 to 10 boxes, to a couple rooms of their house.

“Once they learn about it, their comment is, ‘What’s the catch? This is great,” he says.

Although Closetbox already has access to automation technology and mobile functionality to update customers with arrival times, the company is working on a technology to help customers create inventory lists and catalog items on their own using video and pictures taken with their smartphones.

“And we will have smart technology behind that to understand what type of items they’re trying to store,” Mollmann says.

Looking forward, Mollmann says the company’s continued success will hinge on his ability to change the perception that nearby storage units are more convenient than warehouses that might be located 15, 20, or even more miles away. When a mover can deliver the contents of a storage unit at the push of a button, the location of the unit becomes less relevant.

“Your stuff is as far as every other truck you see on the road,” he says.

Stephanie Miles is a senior editor at Street Fight.