Ecommerce is the biggest driver of Warehouse Automation-True or false?


Indeed E-commerce is the primary driver of the warehouse automation. It is a type of driver which itself will increase with broadband and mobile device penetration. Millennials, those most likely to shop online, will soon enter their peak spending years. Global eCommerce sales have grown at a CAGR of 20% over the last decade, reaching ~$3 trillion worldwide in 20186 and are expected to grow to ~$7 trillion by 2025. The share of online retail sales has gone ~2% of the total to ~12% and is further expected to reach ~23% by 2025 

Six of the top 10 fastest-growing e-commerce countries hail from the Asia-Pacific region, led by India and the Philippines at more than 30% growth and rounded out by China, Malaysia, Indonesia, and South Korea. Latin America boasts the top-growing overall eCommerce market—Mexico at 35.0%—and No. 8 Argentina. Even more mature regions for eCommerce like North America (Canada, 21.1% growth) and Europe (Russia, 18.7% growth) claimed spots in the top 10

The virtual world is also subject to physical constraints. Autonomous Mobile Robots Online is now at an all-time low in the U.S., and land availability for warehouses is already a problem in London, where 60%–70% of industrial sites sold are “lost” to residential development. Online business models need 300% more warehousing space compared to store-based fulfillment. Based on Euro monitoring forecasts for global e-Commerce growth, over 2.3 billion square feet of new warehousing space will be required by 2035. Road traffic is a challenge too — kilometres travelled by light goods vehicles in the U.K. were 47% higher in 2015 than 2000, while kilometers travelled by passenger cars were only 5% higher.

The adoption of technology is by no means uniform. While one-hour delivery is available when buying online in some parts of the U.S. and Europe, the average promised delivery time in Brazil is nine days. While e-Commerce penetration is 87% in the U.K., it is only 18% in Romania. By the end industry, penetration is highest in clothing and sporting goods. U.S. companies employ 2 million people to do stock and order fulfillment work, and over 90% of warehouse picking is currently done by hand.

Migrating to automated picking gives productivity gains of 2x–3x compared to pick-to-conveyor operations and 5x–6x compared to manual pick-to-pallet fulfillment centers. The boom in e-commerce is compounding the significant labour challenges faced by the $5trn global logistics industry. Not only are shipment volumes proliferating, but online retail also typically requires more logistical work per item than brick & mortar retail. Indeed, online purchases require individual picking, packing, and shipping instead of the bulk transportation models of traditional brick & mortar retail. 

It is putting tremendous strains on supply chains, from freight to parcel handling to last-mile delivery, perhaps well reflected in UPS’ recent announcement of delivery surcharge fees for black Friday and Christmas orders to recoup increases in labour and infrastructure costs during the busiest periods. Indeed, U.S. parcel delivery and postal services companies have all struggled to meet deadlines and control costs during each of the past five year-end holiday seasons. 

Meanwhile, the $24trn traditional retail industry is undergoing a significant transition as it strives to respond to the Internet, social media, and mobility-driven change in consumer buying behaviour. Today’s overwhelming trend is Omni-channel marketing, which seeks to integrate physical and digital channels to offer a unified customer experience and meet demand from every channel (web store, ERP, point-of-sale, call center, mobile app). All brick-and-mortar retailers and online retailers expanding their brick-and-mortar presence upgrade their supply-chain operations to provide better inventory visibility and deliver high-level consumer experience.

From the above-shared information, you might understand the driving force behind the enhanced demand for Autonomous Warehousing Solutions Online. E-commerce is changing the companies’ game plan; now, they invest in order fulfillment and automated warehouses. This is the reason why market trends have shifted toward e-commerce. As the online sale has grown, the demand for the warehouse automation developments and how companies handle industry supplies and order fulfillment alter.