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Warehouse automation market set for long-term gains

Market size is expected to be 6% higher than pre-pandemic estimates by 2023, driven by growing demand for microfulfillment in the grocery industry, study shows.

Warehouse automation set for long-term gains, study finds
DC Velocity Staff
By DC Velocity StaffOct 14, 2020
DC Velocity Staff
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The Covid-19 pandemic has increased demand for warehouse automation software and equipment, a trend that will continue over the next three years, according to an Interact Analysis study, released this week. 

The London-based researchers interviewed more than 40 business leaders at automation companies and e-commerce retailers around the world for market insights on demand for warehouse automation technologies. They found that the pandemic has “given a massive and lasting boost to the online-shopping sector, driving warehouse managers to increasingly resort to automation solutions to improve efficiency and productivity, and enable social distancing on the shop floor,” according to a statement detailing the report. 

The warehouse automation market is expected to be 6% larger by 2023 compared to pre-pandemic forecasts, driven by increased demand from general merchandise and grocery industries, the study found. The gains are expected to follow a revenue dip for automation providers in 2020, however, as projects get delayed into 2021, the study also found.

The greatest demand for automation will come from the grocery industry, as firms look to implement microfulfillment centers across their networks. Warehouse automation providers will see less demand from the manufacturing and apparel industries, the study found.

The study also found that software revenues are under threat as online retailers increasingly bring warehouse execution and management software in-house. Researchers pointed to Amazon as well Chinese retailers Alibaba and JD.Com as examples and noted that others may follow suit. They emphasized the need for flexibility and customization in automation software solutions.

“When it comes to the issue of automation software development moving in-house, we found that only the grocery sector will likely continue to heavily rely on existing integrator software solutions,” Rueben Scriven, lead analyst on warehouse automation at Interact Analysis, said in a statement announcing the study results. “The way forward for warehouse automation vendors supplying online retailers is to increase their ability to tailor their software offering to individual customers.”

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