Industrial robotics market is expected to grow rapidly in the coming years. According to Zion Market Research, it was worth about $41.7 billion in 2021, and is expected to nearly double to $81.5 billion by 2028. A large share of this growth should come from retail – companies in this industry plan to increasingly automate processes. The use of robots is expected to extend not only to warehouses, but also to stores and the distribution of goods.
Automation to the rescue of retail
As we can read in the Robotics in Retail 2024 report prepared by Rethink Retail, interest in the solutions that robotics offers is growing rapidly among companies – and this doesn’t just apply to global leaders, but also to smaller companies or even start-ups. One industry that should increasingly invest in robotics is retail.
According to a Reuters report, the use of industrial robots in 2021 increased by 31% y/y, while their sales increased by up to 37% y/y, and the retail industry contributed significantly to both of these increases. Meanwhile, according to a Connected Retail Experience survey conducted last year, retailers plan to automate 70% of routine tasks in stores by 2025. This is expected to help reduce costs in the face of a global recession and geopolitical uncertainty.
The scope for action is huge, as the level of automation is currently not high, even if we consider only warehouses – according to a DHL study, only 15% of them are automated. Some market experts say that the retail industry is at a less advanced level in this regard than one might have thought 10-20 years ago.
Investing in solutions that robotics offers is encouraged by rising labor costs and falling prices for industrial robots. According to the authors of the Robotics in Retail 2024 report, in 2007 the cost of such a robot was about $46,000, while in 2025 it is expected to be less than half of that. Another factor expected to encourage the development of automation in companies, is the growing popularity of artificial intelligence. Robotics is seen as a great complement to AI, which is being used more and more widely.
There is also no doubt that the use of robots in retail will increasingly “shift” towards the end consumer.
In the warehouse, in the store and… in the air
The authors of the Robotics in Retail 2024 report have singled out three areas of retail where automation is playing or will play a very important role.
Distribution centers / warehouses
Although robots have been “working” in distribution centers for a long time, the current development of technology allows for their wider and more precise use. Especially since, with the development of e-commerce, the function of warehouses has strongly evolved. Previous solutions – which were responsible for the processes of storage and picking, as well as sorting – were stationary. I.e., they had to be installed in one specific location and often took up a lot of space.
Nowadays, it will become increasingly popular to use mobile robots in warehouses, which will move goods from point A to point B. They will not require integration into existing infrastructure, and can be moved between different distribution centers. They will also be useful for providing security (as mobile alarm systems) and cleaning.
It’s also worth mentioning that these modern mobile robots are designed to work among people and disturb them as little as possible.
Stores
While robots have been used in warehouses for the past decades, they have only recently (and only as occasional cases) appeared in stores – they allow retailers to manage the assortment offered by the store much more efficiently. Integrating the data, collected by the robots that monitor inventory, with the systems that control delivery, makes it possible to reduce costs, optimize orders and better manage the placement of individual products on store shelves.
Of course, the use of robots in stores does not refer only to helping replenish assortments. There are already robots being developed that can work in direct contact with customers. For example, greeting customers, showing them where certain products are located, answering questions (including those from staff). They can also help with security issues, such as detecting weapons and notifying security and store staff about it. Some companies are already using the presence of robots in stores to build brand awareness or encourage impulse buying.
It’s also worth mentioning that the cost of maintaining such robots is much lower than wages for store personnel.
Delivery
Robotics can help retailers deliver goods on the last mile. There are several ways to do so. The first is automated robotic pods (small automated vehicles). Moving on sidewalks (which has its limitations), they deliver orders in a small area – within a two-mile radius of a warehouse or store.
Another way to automate deliveries are self-driving cars, including trucks. They can operate continuously, do not make so-called human errors and can provide fuel savings through automation. This solution is being developed all the time and we can expect it to become widespread in the near future.
Delivering products to the customer with drones is also possible. Some retailers such as Amazon, Walmart and Tesco have already tested drone order delivery. The global market for drone deliveries in 2027 is projected to be as high as $28.9 billion. Drones are great for low-density residential areas or hard-to-reach locations.
The development of robotics also presents challenges
Retail automation will continue to progress more rapidly, and without it, it will be extremely difficult to succeed in the market. However, the solutions that some companies are already using are still not ready to be used on a larger scale. Autonomous drivers, for example, are still not the best at handling more complex tasks, such as driving trucks in city centers. Numerous technical and legal challenges must be overcome before automated solutions become commonplace. And before deciding to invest in any of them, one should identify one’s needs very carefully and only on that basis choose the right ones for oneself. It will also be crucial to find the right technology for your specific area of operation.