Interact Analysis: Warehouse automation market for 2020 stronger than previously expected

While the global pandemic made 2020 a challenging year for warehouse automation providers, the strength of consumer online buying patterns, and demand in sectors such as general merchandise, food & beverage, as well as parcel delivery, helped the overall warehouse automation market grow by 6% in 2020, according a recently revised study from Interact Analysis, a U.K.-based analyst firm that tracks the warehouse automation market.

In a recent blog post, Rueben Scriven, senior analyst for Interact Analysis, stated because of the continued rise of online shopping and strong demand for general merchandise, Interact Analysis has adjusted its warehouse automation figures for 2020 upwards from its previous 2020 estimate, made in September 2020. In that earlier study, the prediction was for a -2% decline for the market in 2020 compared to 2019, but now with further analysis and data from vendors, Interact figures the market had 6% growth for the year. The main reasons were higher than anticipated demand for warehouse automation in the general merchandise, food & beverage, and parcel delivery sectors.

The demand for warehouse automation in these sectors offset constrained demand for warehouse automation in sectors such as the durable and non-durable manufacturing. In these sectors, especially in Asia Pacific, issues including factory shut-downs and hesitancy to invest in capital equipment during a pandemic, dampened the market. However, the strong demand for general merchandise and many types of consumer goods, increasingly bought online during the pandemic, drove the need for automation, which more than offset the negative effects of the pandemic on the warehouse automation market. Under Interact’s revised 2020 figures, warehouse automation experienced 9% growth in the general merchandise sector in 2020 (Interact places Amazon in this sector), and 11% growth for warehouse automation in parcel delivery, which played into the overall 6% growth.

Scriven noted in his post that while there have been significant challenges for warehouse automation in the durable and non-durable manufacturing, “the pandemic had the converse effect of boosting economic activity in some sectors as people stayed safe and online shopping boomed. As a result, the parcel and general merchandise sectors contributed the most to revenue growth in 2020.”

Additionally, the post notes that prospects for growth over the longer term are now looking healthier than previously forecast, resulting in a market size of just over $60 billion in 2024, 13% higher than Interact’s previous forecast.