How Warehouse Automation is Enabling the E-Commerce Explosion – TRANSAMERICA LOGISTIC

Jan 31

It is a well-known fact that e-commerce is growing rapidly around the globe, and this is causing a significant shift in the retail landscape. It’s changing fulfillment paths and requiring retailers, distributors, logistics services providers, and manufacturers to expand and reconfigure their fulfillment operations. These changes are in turn driving growth in sales of warehouse automation systems. All of this I knew from general interest in business and prior research into the global warehouse automation market.

I am now in the process of updating ARC’s Warehouse Automation & Control market study. As part of this process, I reached out to a number of leading warehouse automation suppliers to learn about the changes that have occurred over last couple years. For example, how have the e-commerce demands placed on retailers changed over this timeframe? What are the primary concerns retailers are expressing to warehouse automation suppliers? What operational capabilities are they looking to develop? And what are the characteristics of automation that are in the highest demand, and why?

Today’s Fulfillment Demand

For starters, the shift to e-commerce is happening at a faster pace than many retailers and warehouse automationproviders had imagined just a couple years ago. E-commerce retail sales are approximately $400 billion a year in the US, and have been growing at an annual rate of about 15 percent over the last couple years. This amounts to an annual increase of over $50 billion in e-commerce sales in the US alone. Annual US e-commerce sales have now doubled since 2012. The fast growth of e-commerce has brought about higher direct-to-consumer throughput requirements and many other changes to fulfillment operations.

 

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