Global Warehouse Automation Market Analysis and Forecast 2019-2028

The global market for warehouse automation is growing significantly with a CAGR of 15% and is expected to reach US$ 38 billion in 2028. Shifting retail behavior and consumer expectations are driving significant demand for incremental automation within warehouses. Given consumer demand for next-day (and even same-day) delivery, there has been an increase in demand for “last mile” urban fulfillment centers, which are typically supported by extremely large distribution centers located in the suburbs. Therefore, the demand for faster deliveries and the need for one-day shipping to play a pivotal role in the warehouse automation market development.

Warehouse automation systems complement the distribution, management, and tracking of products with automated order fulfillment technologies and efficient controls for material handling systems.

Global players like Amazon are not the only ones focusing on developing drones for automation. Walmart introduced a warehouse automation system in June 2016 where drones would be used to check warehouse inventories. The drones would fly over the warehouse and photograph the aisles to check if the products were misplaced on the shelves or if they ran out, effectively reducing the labor-intensive process of checking stocks around the warehouse.

• Key players across the globe are looking to deploy drones in their stores, where the drone would retrieve a product from a non-public stock room and fly it over to a delivery area where staff could retrieve the item, assisting store assistants and removing the burden of searching for and carrying a product across the store.
• In addition, the increased use of robotics has the potential to drive a 25%–30% reduction in average manufacturing costs, predominantly through the potential for savings in labor costs (currently estimated to account for 15%–30% of total supply chain costs).
• However, robotics will not lead to totally automated factories, albeit the labor provision will become increasingly upskilled as highly trained employees will be required to maintain the robots and to make higher-level and strategic decisions.

Covid-19 Impact

COVID-19 has increased the emphasis on supply chains to meet demand requirements which have hastened the pace of adoption of technologies in warehouses both in terms of automation and autonomy. The endless options and solutions for innovative applications overwhelm the selection process.

But to deliver at speed and scale, warehouse executives cannot just invest in any and all automation and autonomy solutions—the right technologies for their company’s strategy, supply chain, industry, and warehouse should be chosen.

Not only will the right level of warehouse automation and autonomy allow for faster, safer, and more efficient day-to-day warehouse operations. Warehouse automation components will also reduce costs and improve delivery times, resulting in a faster, leaner, more scalable, and more sustainable operation that will ultimately provide the end consumer with the loyalty-driving level of service that is expected to fuel the growth of the market.

Growth of E-Commerce is expected to drive the market growth

The E-commerce sector will continue to be in high demand, with “last mile deliveries” to play an increasingly central role in the investment decision process by potential investors across the warehouse automation market. The E-Commerce industry is expected to witness growth in the forthcoming years owing to growing internet penetration and the adoption of E-commerce services across the globe.

The growth in the E-commerce industry is the major driver of the warehouse automation market. This driver itself will increase with broadband and mobile device penetration. E-commerce is growing at double-digit annual rates and is expected to grow with the growth of broadband and mobile penetration.

Robotics and automation are rapidly becoming critical success factors in e-commerce and are poised to significantly impact the logistics and warehouse automation industry. It is a game changer, enabling increasingly faster, safer, and error-free distribution, shorter time to market, and, ultimately, lower costs to businesses and consumers. Amazon Robotics automates the company’s fulfillment centers with over 80,000 autonomous mobile robots, an increase of more than 200% from the end of 2015.

• For instance, Amazon continues to aggressively ramp up its patent applications in supply chain & logistics. The company filed at least 78 logistics patent applications in 2016, according to tech research firm CB Insights. This was an all-time high and more than double the 33 filed in 2012, the year it acquired Kiva.

North America dominates the Global Warehouse Automation Market

North America holds a major share of the global warehouse automation market in 2021 and is expected to maintain its trend over the forecast period. This growth is attributed to the rapid adoption of new technologies and robotic inventions. The North American Warehouse Automation market is also fueled by the presence of key E-commerce players in recent years.

In the Asia Pacific region, the rapid adoption of technologies such as IoT, and robotics in developing countries like India is expected to increase the revenue from warehouse automation in the forthcoming years.

In the Middle East warehouse automation market, e-commerce, Fashion and Beauty, and grocery will be the biggest end-consumers of warehouse automation equipment. Saudi Arabia’s retail spending will continue to be strong, and growing competition, good access to know-how, and improving access to funding are some of the key factors driving Saudi Arabia’s online penetration growth.

In Europe warehouse automation market, traditional bricks and mortar online grocery players have managed to build successful and competitive online grocery businesses. The success of the traditional grocery players can be attributed to early market entry to pre-empt online growth and the right choice of entry strategy.

Market Structure and Competitive Landscape

The global warehouse automation market is fragmented in nature and observes intense competition in the warehouse automation market. Some of the prominent players that contribute significantly to the global warehouse automation market include Dematic Group (Kion Group AG), Daifuku Co. Limited, Swisslog Holding AG (KUKA AG), Jungheinrich AG, Honeywell Intelligrated (Honeywell International Inc.), Omron Corporation, Siemens AG, Zebra Technologies Corporation, Schneider Electric, Jungheinrich AG, Bastian Solutions LLC, and ABB among others.

Product launches, mergers & acquisitions, joint ventures, partnerships and collaborations, and geographical expansion are key strategies adopted by the players in the global warehouse automation market. These companies adopt numerous approaches to strengthen their market share and gain a competitive edge over other competitors in the market. Some of the key developments in the global warehouse automation market include, 

• In September 2019, Shopify Inc. announced that it has reached an agreement to acquire 6 River Systems, Inc., a leading provider of collaborative warehouse fulfillment solutions.
  • This acquisition is a critical step to accelerate its growth, while 6 River Systems will also continue to build and sell its solution for warehouses.
  • With the acquisition of 6 River Systems, Shopify will add a team with decades of experience in fulfillment software and robotics, including experienced leaders from Kiva Systems (now Amazon Robotics).
• In March 2019, Fortna®, The Distribution Experts®, a leading global automation, engineering services, and software company, announced that it has entered into a recapitalization agreement with funds affiliated with Thomas H. Lee Partners, L.P. (“THL”).
• In January 2019, Duravant LLC, a global engineered equipment and automation solutions provider to the food processing, packaging, and material handling sectors, acquired Wulftec International Inc., a North American market leader in fully and semi-automatic end-of-line stretch-wrapping equipment.
  • The partnership bolsters Duravant’s end-of-line portfolio of packaging solutions and extends the company’s integration and automation capabilities.
• In March 2022, Honeywell announced a strategic partnership with OTTO Motors, a division of Clearpath Robotics, giving warehouses and distribution centers throughout North America an automated option to handle some of the most labor-intensive roles in an increasingly scarce job market.
• In December 2021, ARAPL RaaS, a robotic and automation company, raised US$ 0.7 million in funding within two months of its existence as it strengthens its 10-minute delivery in supply management.
  • The start-up, a subsidiary of Affordable Robotic & Automation Ltd. (ARAPL), will use the fresh capital to build a completely automated robotic experience zone for warehouse automation.

Key Market Segmentation

RationalStat has segmented the global warehouse automation market on the basis of component, level, project size, channel, end use, and region.

• By Component
  • Hardware
    • Autonomous Guided Vehicles (AGV)
    • Automated Mobile Robots (AMR)
    • Automated Storage and Retrieval Systems (AS/RS)
    • Automated Conveyor & Sorting Systems
    • De-palletizing/Palletizing Systems
    • Sortation Systems
    • Conveyor Systems
    • Overhead Systems
    • Automatic Identification and Data Collection (AIDC)
    • Piece Picking Robots
  • Software
    • Warehouse Management Systems(WMS)
    • Warehouse Execution Systems (WES)
    • Warehouse Control System (WCS)
  • Services
    • Value Added Services
    • Maintenance, Repairs, and Operations (MRO) Services
• By Level
  • Level 0
  • Level 1
  • Level 2
  • Level 3
  • Level 4
• By Project Size
  • Less than US$ 5 Mn
  • US$5 Mn- US$20 Mn
  • US$21 Mn – $40 Mn
  • More than US$40 Mn
• By Channel
  • To-Store
  • To-Customer
  • To-DC
  • Omni-Channel
  • Micro-Fulfilment (Grocery-Specific)
• By End Use
  • Food and Beverage
    • Manufacturing Facilities
    • Distribution Centers
  • Post and Parcel
  • Retail
  • Apparel
  • Automotive
  • General Merchandise
  • E-Commerce
  • Pharmaceutical
  • Manufacturing
    • Durable Goods
    • Non-Durable Goods
• By Region
  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • Asia Pacific
  • Middle East & Africa

Research Methodology

RationalStat has developed a state-of-the-art research methodology to crunch numbers and provide the best possible real-time insights to clients. We combine a varied range of industry experience, data analytics, and experts’ viewpoint to create a research methodology for market sizing and forecasting.

RationalStat combines a mix of secondary sources as well as primary research to assess the market size and develop a forecast. Key steps involved in accurately deriving the market numbers are:

• Defining the problem by understanding the type of market and data required by the client.
• Data gathering and collection through relevant paid databases, publicly available sources, company reports, annual reports, surveys, and interviews.
• Formulating a hypothesis to create market numbers, forecasts, influencing factors, and their relevance.
• Evaluating and analyzing the data by referring to data sources utilized and leveraged.
• Validating, interpreting, and finalizing the data by combining the details gathered from primary and secondary sources with the help of experienced analysts.

Secondary Sources

• Annual reports, company filings, investor presentations, product catalogs, and company documents
• Industry and market-related documents available in the public domain
• Paid databases including Bloomberg, Factiva, S&P Capital IQ, FactSet, Refinitiv Eikon, ICIS, EUWID, and Thomson Reuters, among others
• Whitepapers, research papers, and industry blogs.

Why Buy this Report?

The report is intended for food producers and suppliers, food processors, government organizations, educational organizations, regulatory agencies, and market research firms, among others. The report provides an in-depth analysis of market size, consumption patterns, ongoing market trends and challenges, and future market opportunities. The report will serve as a source for a 360-degree analysis of the market thoroughly delivering insights to clients to find the right answers to their business questions.

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