Warehouse Automation Market Size

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The Warehouse Automation Market size was valued at USD 16.25 billion in 2023 and is expected to reach USD 61.46 billion by 2032 and grow at a CAGR of 15.93% over the forecast period 2024-2032.

The Warehouse Automation Market has been growing significantly due to the development of technologies and the need for efficient logistics and supply chain operation. Such automated systems as robotics, automated guided vehicles, and warehouse management software have been utilized in automation, encompassing the fulfillment of orders and the enhancement of accuracy, productivity, and cost-efficiency. Smart warehouses equipped with the Internet of Things and Artificial Intelligence technologies are disrupting the industry through the utilization of real-time data for enhanced productivity and cut costs. Amazon takes the lead in this by possessing more than 11,000 smart warehouses in North America, with a 40% increase in the deployment of over 750,000 robots in 2023 over the previous year. The expectation of the rise of automation and robotics is predicted by 52% of warehouse managers, and significant investment is made in response to the demand.

One of the major factors driving this trend is the growing popularity of the e-commerce sector to the requirement for accurate and fast order fulfillment. E-commerce is thriving globally, with over 2.71 billion shoppers and 2024 sales expected to exceed USD 6.3 trillion. More individuals opt for online shopping as 34% of them buy weekly, and 99% rely on reviews to select goods and services. These data are reflected in the growing share of online retail purchases, set to reach 22.6% by 2027. The trend is affected by 26.6 million online stores in the world and consumers’ growing interest in international shopping. In addition, the use of technologies enables warehouses to employ less space and workforce to the same efficiency level. The perspectives for the Warehouse Automation Market involve the further development of AI and machine learning technology.

MARKET DYNAMICS

Drivers

• E-commerce Surge Fuels Warehouse Automation Market Growth

Warehouse automation has been qualitatively influenced by the process of the e-commerce market growth. It is difficult to argue with the fact that the development of online business projects is closely associated with the evolution of shopping worldwide, and, thus, it has led to the necessity of order delivery systems improvement. For the e-commerce market, such principles of work as order placement, receipt, and delivery remain the basis; however, they require ultimate reasonable performance for the e-commerce companies to remain in demand for the audience. Nowadays, an array of automation options has been developed specifically for the e-commerce sector, such as storage and retrieval complex automation systems, conveyor types, robotics, etc., which allows them to handle a large influx of orders in the shortest possible time and at a minimum error rate. Given the customer orientation on speed and perfection of order delivery, it is logical that e-commerce companies are the main customers and the warehouse automation sector will develop proportionally with the development of the e-commerce market.

• The IOT is a key driver shaping the dynamics of the warehouse automation market.

IoT technology has significantly impacted people’s lives and daily labor by helping machines do heavy tasks and providing routine to automate the whole working process. Broadly using IOT at work and daily life stimulates market growth and provides organizations with innovative performance and security solutions. This technology helps to constantly keep an eye on both digital and physical infrastructure. Ensuring the possibility of automated storing assists in cutting operational and labor costs, which leads to a more efficient customer supply chain performance.

Restraints

• Regular maintenance is essential for the smooth operation of automated systems in warehouses.

The automated systems require maintenance and load support. Maintenance is required to find and resolve any issues that the system has and to prevent possible disasters. An automated system that needs to be taken down for maintenance for a few days or even weeks will increase the costs and time required to keep the system operational. Moreover, automated systems cannot be used during maintenance, which can cause significant losses, as the system is often responsible for most or the entirety of the activity of the warehouse. Downtime and malfunctions require developing an entirely new plan of action and learning to work with a secondary, usually manual, system that will be used to pick up the slack. These concerns make companies wary of complete reliance on automatic systems.

KEY MARKET SEGMENTS

By Component

The hardware segment held a major market share of more than 58% in 2023.  Warehouse automation uses a wide range of hardware to improve efficiency, accuracy, and productivity in warehouse processes. Important hardware includes automated storage and retrieval systems, robotic picking, automated guided vehicles, conveyor systems, and sensor technology. Automated storage and retrieval systems are used in modern-day warehouses to stack and pull goods from warehouses.

The software segment is accounted to grow at the fastest CAGR during the forecast period 2024-2032. The software component of the warehouse automation system serves as a solution capable of significantly improving efficiency, accuracy, and productivity in modern warehouse management. This system segment is realized through a complex of programs the unfolded functionality of which is focused on the efficient control of inventory, order fulfillment, and real-time performance monitoring. Technological systems related to the software level are based on the use of such capabilities as Artificial Intelligence, Machine Learning, and the Internet of Things.

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By Technology

The retrieval systems & automated storage (AS/RS) segment led the market in 2023 with a market share of more than 30%. AS/RS are highly automated systems that leverage advanced robotics, conveyors, and software to optimize goods storage and retrieval. Automated storage and retrieval systems are used in modern-day warehouses to stack and pull goods from warehouses. Implementation of AS/RS increases space of the warehouse by up to 40% and 99.9% order picking accuracy. Besides, this technology allows the processing of many orders at the same time. For example, some systems can make over 1000 picks per hour, which is essential given the exponential growth of rapid order delivery in e-commerce.

The automatic mobile robots (AMR) segment is to have the fastest CAGR during 2024-2032. the implementation of AMRs in warehouses is determined by the growing need for faster order processing and the desire to cut labor expenses. In the United States, their utilization allowed for achieving a 30% decrease in operational costs and a 25% increase in order procession. Such prominent industry representatives as Amazon and Walmart have implemented AMRs in their supply lines for the improvement of their logistics capacities. At the same time, with the need to manage their representatives’ workloads, the employer’s implementation of AMRs has seen significant growth.

REGIONAL ANALYSIS

North America dominated the market in 2023 with a market share of about 41%, owing to advancements in technology such as artificial intelligence and machine learning leading to enhanced efficiency and an increase in productivity. In North America, warehouse automation is gaining a significant increase as the demand for efficiency in the logistics and supply chain field is on the way. The major factor leading this industry’s growth is the technology innovation. Emerging systems of automation such as robotics, artificial intelligence, and the Internet of Things devices are getting integrated at an increasing rate. Adopting Automated Guided Vehicles, conveyor belts, and robotic arms systems in this sector is becoming more popular to make operations more efficient at a lower cost.

The Asia-Pacific region is to see a gradual growth in the CAGR during the forecast period. The expansion of the e-commerce and retail industry in the broader market leads to drive the need for warehouse which is efficient and cost-effective. Countries such as China, Japan, and India are the first to mind when thinking about adopting and implementing warehouse automation. Chinese warehouse automation will go beyond USD 5 billion by 2025 against the background of the development of such industry giants as Alibaba and JD.com. Japan, in turn, has long been a dominant player in the field of robotics, and various automated systems often become a part of the practice of warehouse work aimed at increasing efficiency.

Key Players

Some of the major players in the Warehouse Automation Market are Jizhong Energy Storage, Viastore Systems, Kardex Remstar, Interroll, Honeywell Intelligrated, Aeologic Technologies, Kiva Systems, Grey Orange, Swisslog, Geek+, Yaskawa Electric Corp., KION Group, ABB Ltd, Fanuc Corporation, Fetch Robotics Inc., Jungheinrich, ATMOS, Amazon Robotics, Daifuku Co Ltd, SSI-Schaefer, Kuka AG, Omron Corporation, Bastian Solutions LLC, Schneider Electric, Siemens AG, Dorabot, and other players.

RECENT DEVELOPMENT

• November 2023: Warehouse automation has grown significantly over the past year, with companies increasingly investing in technologies to create smart, connected industrial sites. Jessica Nian, lead analyst for manufacturing technology at Omdia said the development of warehouse automation has entered a stage of “steady growth” set to continue.

• October 2023: Industry 4.0 Spurs Explosive Demand for Warehouse Automation Technologies. Warehouse automation technologies play a pivotal role in streamlining operations, eliminating manual, time-consuming tasks, and allowing employees to focus on more critical duties. With the advent of Industry 4.0, remote operations, and enhanced worker safety, the market has witnessed extensive expansion.