While many industrial sectors have suffered major downturns during the COVID-19 pandemic, the warehouse automation sector is seeing a period of rapid growth. The global pandemic has given a massive boost to the online-shopping sector. A boost which is likely to remain long after the pandemic has gone. This has driven warehouse managers to increasingly resort to automaed warehouse solutions. Automation can improve efficiency and productivity, as well as enabling social distancing on the warehouse floor.
It is forecast that COVID-19 will suppress revenues for most business sectors in 2020 as project dates are pushed back to 2021. However, there has been an uptick in online shopping. The social distancing measures and personal protective equipment, as well as the risks of being in shopping malls, has resulted in a significant increase. The rise of online shopping puts added pressures on the logistics and warehousing industry. The market for warehouse automation in 2023 is set to be 6% larger than pre-pandemic forecasts. While some sectors such as the clothing and apparel manufacturing industries are set to see reduced market share, the increase in general merchandise and groceries will be the main driver for the net increase of the warehouse automation market. Ocado is set to become the leading provider of warehouse automation for the grocery industry, with contracts already to build 38 automated warehouses by 2025.
Another finding is that the revenue for warehouse and automation software is under threat. Many online retailers are following the trend of bringing this software in-house. Amazon, Alibaba and JD.com have all led the field in this respect. The main reason cited for this drive is the lack of flexibility from off the shelf software solutions.
The warehouse automation world is on the move. COVID-19 has devastated high streets and shopping malls, but there are already signs that eCommerce retailers are preparing to step in, with grocery retailers taking advantage of disused sites to augment micro-fulfilment centres onto existing stores, bringing the fulfilment process closer to the customer, and attracting customers and jobs back in to the high street. 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. The way forward for warehouse automation vendors supplying online retailers is to increase their ability to tailor their software offering to individual customers.
Rueben Scriven, lead analyst on warehouse automation at Interact Analysis
