Reasons Grocery Warehouse Automation Is Increasing and Tech Trends to Watch October 18th, 2022
Rapidly increasing demand for online grocery order fulfillment requires new solutions and technology for warehouses.
Data suggests the warehouse automation market will reach $41 billion in the next five years, and the grocery market is responsible for much of that growth. Consumers who turned to digital channels to place more of their supermarket orders during the pandemic fueled a boom in the e-grocery business.
The continued demand has companies scrambling to invest in automation technologies to unlock efficiencies in their fresh, packaged food and nonfood warehouse facilities. Businesses in the grocery sector must meet the moment by adding solutions to quickly dispatch grocery orders to customers while protecting their bottom lines. Fortunately, solution costs have fallen since warehouse automation first came to market. This lower barrier to entry means more warehouses can explore how to streamline grocery fulfillment processes and improve order accuracy and customer satisfaction with technology-based approaches.
Address Labor Shortage Challenges
Another warehouse automation driver is the number of vacant positions grocery warehouses are trying to fill. With employers fighting to recruit and retain talent, many grocery businesses now see increasing automation as a solution to the shortage of workers who can reliably staff their facilities. Labor costs have been another headwind as workers continuously seek higher pay and better benefits. Moreover, a recent surge in inflation is sending those salary and payroll averages even higher.
Likewise, grocery stores on the receiving end of deliveries should look for solutions that automate goods movement and accurately manage the large variety of products sold in grocery stores, from fresh items to packaged foods to general merchandise.
Warehouse Automation Solutions in Micro-Fulfillment Centers
To efficiently fill e-grocery orders, many businesses have shifted to a micro-fulfillment model. These smaller-footprint facilities are often inside an existing store or larger warehouse. They give grocers the capacity to rapidly fill orders and offer same-day delivery, curbside pickup and similar innovative service options. The micro-fulfillment center is where a high SKU count meets single picks and small order sizes, making automation indispensable to speed, efficiency and accuracy. Self-driving robots can quickly shuttle items from point A to point B inside a micro-fulfillment center to meet the fast-paced demand of grocery fulfillment.
Grocery Warehouse Continuous Improvement Through Analytics
In addition to deploying warehouse automation, grocers are implementing advanced analytics software to optimize storage configurations, track workforce productivity, and streamline workflows. As a result, grocery companies that add analytics to their tech stack typically see healthier shrink rates, less stock on hand and stronger service levels. Analysts predict a growing demand for analytics solutions for warehouse grocery operations as a part of the broader retail analytics market, which they expect to grow at an impressive 17.7 percent CAGR to reach $18.33 billion by 2028.
Automated Workforce and Transit Management
Grocery businesses are also turning to innovative platforms to smartly manage their workforce and transportation needs. Companies are using new supply chain solutions to optimize staffing in line with the demand that may rise and fall as the seasons change. This helps better manage expenses and reduce unnecessary overtime costs that can affect a grocery business’s financial health.
Transportation-specific software attacks the problem of inefficiency in moving grocery goods from one facility to another. Automating this process unlocks smarter routes that can save time and reduce fuel consumption, thereby trimming costs. Companies use route optimization software to ensure fresh foods arrive in the store in peak condition, maximizing sales and minimizing products destined for trash bins.
Modern grocers have opportunities to put automation to work in their operations. The technology advantages are clear, and the barriers to entry grow lower by the day. Investing in business-building capacities with advanced logistics automation is the intelligent choice for grocers hungry for market share in a highly competitive sector.