ARC Advisory Group’s 2020 update to its global warehouse automation market study is completed and available for purchase (detailed table of contents). I wrote an interim update a couple weeks ago that discussed my analysis of 2019 market performance and the surprisingly strong 2020 year-to-date performance of warehouse automation providers and the market as a whole. The top three providers in this market for 2019, in alphabetical order, were perennial leaders Dematic, Knapp, and SSI Schaefer. I would like to take this opportunity to provide additional details on the structure of the research and the included findings.
E-Commerce Fulfillment Trends Accelerate
The recently released US Census Bureau statistics show that e-commerce sales in the second quarter of 2020 increased 37 percent from the first quarter of 2020 and increased 44.5 percent when compared to the second quarter of 2019. Clearly that is an acceleration that will have wide-ranging effects on the retail landscape, fulfillment processes, facilities, and more. Just yesterday, I read a WSJ article that quoted data from the BDO Bi-Annual Bankruptcy Update stating “In the first six months of 2020, 18 retailers filed for Chapter 11 bankruptcy, with an additional 11 filing in July through mid-August….. Shifting consumer spending habits driven by the pandemic have added pressure for retailers to minimize their physical footprints and move toward more digital and omnichannel customer experiences.”
The most notable and recent publicly stated data point on accelerating warehouse automation demand from e-commerce growth is KION Group’s announcement that the value of order intake in the Supply Chain Solutions segment (Dematic) was “close to €1.1 billion in the second quarter of 2020, an increase of more than 100 percent on the corresponding prior-year period (Q2 2019: €506 million).” The strong order performance was “due in large part to big-ticket orders from e-commerce customers, including companies in North America and Europe.” My confidential discussions with warehouse automation suppliers also revealed that demand for warehouse automation in support of e-commerce fulfillment remains strong. Demand from grocery continued to be especially strong. Flexible, scalable automation is being adopted to meet these growing and changing fulfillment requirements. Most notably, shuttle systems, automatic guided vehicles (AGV), autonomous mobile robots (AMR), and pocket sorters are being deployed for their flexibility, adaptability, sequencing, and throughput capabilities.
Warehouse Automation Research Scope Update
I believe that thoroughly defined research scope and ongoing attention to detail are important determinants of research quality. I placed extensive effort into the scoping process for this study back in 2013. I determined this year that the historical data from then until now is finally adequate to forecast additional market segments. As such, this year’s research includes a five-year forecast for the segments in the table below (note: market share data for these segments has been available for a number of years).
As I have stated previously, I believe the same trends in the global warehouse automation market will occur as if the pandemic had not occurred. However, I believe technology investments are at the tail end of a mild to moderate delay due mostly to implementation disruptions. ARC foresees stability in verticals that provide essential items, expected acceleration in verticals transitioning to e-commerce, and some isolated declines in warehouse automation demand from businesses that have themselves been negatively impacted by the COVID-19 pandemic.
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