The Impact of E-commerce Boom on Warehousing

The Impact of E-commerce Boom on Warehousing

By: Retail CIO Outlook | Tuesday, January 22, 2019

WarehousingThe E-commerce sector is growing exponentially with sales expected to hit $4.5 trillion by 2021. The E-commerce market rose 14 percent in the first quarter of 2018 as compared to the same period in 2017. The retail market is dominated by millennials who make half of their purchases online. Forty percent of male millennials claim that they would buy everything online. E-commerce companies are making this a reality and leading E-commerce companies investing in technologies to accelerate delivery and meet rising customer expectations. Even the fashion industry is seeing a substantial boom in e-commerce sales with expected revenue of $731 billion by 2022.

To keep up with the competition, E-commerce companies are focusing on real estate. However, the limited availability of land has significantly driven up prices, with pieces of land doubled in price compared to a few years ago. With giants like Amazon and Walmart grabbing big chunks of land, small plots are also facing the pressure as small companies are focusing on enhanced delivery experience. The age of old warehouses is also a concern because the average age of a U.S. warehouse is 34 years. Furthermore, they lack basic modernizations necessary to accommodate growing e-commerce demands.

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Robotic equipment is playing a crucial role in E-commerce, and the numbers of automated machines are increasing significantly. Robotics is generally used in more extensive facilities, and Amazon has added a fleet of 55,000 robots doubling its total number of robotic workers. As consumer expectations for delivery timelines increase, a growing number of companies are turning to smaller spaces and seek new ways to enhance productivity. The upcoming trend from this shift is micro-fulfillment is quickly becoming popular among grocery brands.          

The E-commerce giants are creating a convergence of diverse technologies. The demand for efficiency is necessitating new power solutions that can support the robotic workforce. Lithium-ion batteries are an upcoming trend and can dramatically improve the efficiency of supply chain operations. Most importantly, lithium-Ion batteries can safely be charged even in the cold. One of the most disruptive innovations has been wireless charging. Material handling and assembly professionals can automate many of the material and repetitive tasks.

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