2023 and beyond: what’s next for warehouse automation

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After tremendous growth in 2021, the warehouse automation market currently finds itself in a different situation. Short-term growth has been limited due to a number of global economic issues. Will this downward trend continue or will the market pick up again? And what is there to be said about the rising popularity of robotic solutions? Find out in this blog.

Author

Erik de Jonge

Sr. Manager Strategy & Market Insights

There’s no doubt that 2021 was a record year for warehouse automation. At Vanderlande, we estimate that the market grew by 33%, mainly due to the strong growth of e-commerce during COVID-19 lockdowns. In addition, a lack of labour drove warehouse operators to install new automated systems.

Food is the largest segment for warehouse automation. Digging a little deeper into the data and we see that consumer spending in food e-commerce doubled during the pandemic. In response, retailers invested in warehouse automation, such as our robotised, end-to-end automated case picking (ACP) solution, STOREPICK, and solutions for fast and efficient online grocery fulfilment, including HOMEPICK.

The fashion e-commerce sector grew by almost 50% during the pandemic, and again there were corresponding increases in investment in warehouse solutions to handle consumer demand, such as our goods-to-person order fulfilment system – FASTPICK – and our pocket solution, AIRPICK.

How things have changed in the past year, due to the conflict in Ukraine, rising interest rates, scarcities in the supply chain and high energy costs. The knock-on effect was that, in the short term, companies became more conservative with their plans to invest in automation.

Solid, steady growth

Looking forward, what can we expect in the medium to long term? In collaboration with Tilburg University, we have improved our market models used to predict growth in the warehousing sector. We expect to see a high single digit growth rate – around 8% – for warehouse automation, while, Interact Analysis expects an even healthier rate of growth of between 10 and 15%.

A range of factors will help drive growth – the same factors we have seen over several years, in fact. These include the scarcity of space for building new facilities, high labour costs and a lack of reliable labour resources. Interact Analysis research shows a very tight, positive correlation between labour costs and rates of automation – the more expensive the labour cost, the greater the automation spend. In addition, the e-commerce market continues to grow, and will need servicing. Statista expects 12% growth per year for e-commerce until 2027.

At Vanderlande, we’re well placed to make the most of this situation. In fact, STOREPICK, FASTPICK, AIRPICK and HOMEPICK can address customer challenges centred around scarcity of space and labour, while supporting long-term growth thanks to the innate scalability of each solution.

The robots are coming

Looking at the type of automation that will be in demand over the next few years, we can see a move towards flexible infrastructures, including robotics and autonomous mobile robots (AMRs). These technologies have improved and provide increasingly reliable solutions for transportation, picking and sortation.

Business research company Gartner has observed a significant and growing interest in flexible automation and intelligent robotics. By 2026, 75% of large companies will have introduced some form of smart robotic solution into their warehousing logistics. Sixty-six percent of supply chain organisations state that a lack of labour availability is the main driver behind their investments in robotics.

Vanderlande is well aware of the increasing value of robotics in warehouse operations, and continuing to integrate them into our solutions is a top priority. We have tested the world’s leading robot-picking solutions, which will enable us to make the best fit-for-purpose recommendations to our customers. We offer a number of world class robotic technologies from innovative companies RightHand Robotics, ABB and Smart Robotics.

In summary, steady growth is on the horizon for the warehousing sector. Add to that the introduction of effective robotic solutions, and automation becomes an increasingly attractive option. So I believe the future is looking bright for warehousing companies! What do you think? Feel free to reach out if you want to talk about future-proof warehouse solutions.

Resources and further reading

Market guide for Intralogistics Smart RoboticsGartner, April 2022

Warehousing sector poised for 5% growth up to 2027 –  Interact Analysis, August 2022

Warehouse/DC Operations Survey 2022: Recalibrating operations and spendModern Materials Handling, November 2022

Sales of Robots for the Service Sector Grew by 37% WorldwideInternational Federation of Robotics, October 2022

Warehouse AutomationInteract Analysis, October 2022

Digital Market OutlookStatista

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