Updated: January 20, 2025
The global shift toward warehouse automation isn’t happening by chance. Businesses across industries are embracing automation in response to pressing challenges like rising costs, workforce constraints, and shifting consumer demands. Let's dive into the data behind the six key factors driving this transformation.
Automation Driver #1: Space Scarcity
With the e-commerce growth boom, warehouse space has never been in higher demand. According to Custom Market Insights, Online retailers have increased warehouse use by 614%. Combined with a constrained supply of industrial space and increases in building costs and land prices, Cushman and Wakefield report rental levels have reached a new record high across the European market. A recent 3PL Benchmark Report sighted nearly 60% of U.S. warehouses operate at more than 90% capacity, leaving little room for flexibility.
Why automate? Automation optimizes space utilization, allowing businesses to maximize every square meter of storage in increasingly scarce and expensive facilities.
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Automation Driver #2: Labor Shortages
Finding and keeping talent is a growing concern asd reported in the Collaborative Supply Chain Report from MHI. Labor shortage is among the top 5 company challenges rated extremely or very challenging. In fact, 38% of supply chain professionals cite hiring and retention as challenging. Vecna Robotics reports warehouse staffing gaps ranging from 10% to 25% with material handling and forklift driving roles are particularly hard to fill.
Why automate? Automated solutions reduce reliance on manual labor, improve working conditions, and support employee upskilling—helping businesses stay ahead in an era of labor shortages.
Automation Driver #3: E-commerce Boom
In 2025, nearly a quarter of all global sales are expected be made online according to McKinsey & Company, with Oberlo reporting the e-commerce market expected to hit $8 trillion by 2028 with a CAGR of around 7.6% from 2022 to 2028.
The number of warehouses worldwide has increased by 19% in the past five years (Statista) underlining the boom that online shopping is undergoing. However, what makes life easier for consumers sometimes does not for warehouse and logistic managers. E-commerce fulfillment requires more logistical work per item when compared to traditional retail fulfillment reports Global Trade Magazine. Furthermore, studies show that e-commerce customers’ expectations focus on both reliability and speed according to McKinsey & Company - a hard set of expectations to live up to if your order fulfillment processes are not optimally streamlined.
Why automate? Automation enables efficient goods-to-person picking, streamlining order fulfillment while enhancing accuracy and inventory tracking.
Automation Driver #4: Supply Chain Disruptions
From geopolitical tensions to third-party failures, supply chain risks are escalating. MHI reports 50% of organizations prioritize supply chain agility to counter geopolitical risks and supply chain shocks. Furthermore, according to BCI 43.6% of organizations experienced supply chain disruption due to third party failures. These disruptions not only lead to delays but also create ripple effects across industries, increasing costs and reducing overall efficiency. As businesses seek to mitigate risks, adaptability and speed in logistics have become critical success factors.
Why automate? Warehouse automation strengthens supply chain resilience by ensuring adaptive, efficient operations, even amid uncertainty.
Automation Driver #5: Sustainability Focus
Sustainability is no longer a choice—it’s a priority. Consumers increasingly favor products with ESG-related claims according to a recent article from Deloitte Insights, with some willing to pay a 27% premium for products that deliver on sustainability promises according to a recent Deloitte Insights article. At a global level, organizations are aligning with the United Nations’ Sustainable Development Goals, emphasizing responsible production and climate action. These trends are putting businesses under growing pressure to reduce their environmental footprint, optimize resource use, and adopt greener operations.
Why automate? As sustainability expectations rise, automation plays a crucial role in helping companies meet these demands while maintaining efficiency and profitability.
Automation Driver #6: Global Competition
Staying competitive means embracing new technologies. According to McKinsey, AI, robotics, and cloud services will shape the next wave of business transformation. As industries evolve, businesses that fail to adopt these innovations risk falling behind. Automation is no longer just an efficiency tool — it’s a strategic necessity for maintaining agility, reducing operational costs, and enhancing decision-making through data-driven insights. Companies that integrate automation effectively will be better positioned to scale, innovate, and stay ahead in an increasingly digital and interconnected marketplace.
Why automate? Automation provides the foundation for leveraging AI, robotics, and cloud-based solutions, helping businesses gain a lasting competitive edge.
Why Automate Now?
The rapid pace of warehouse automation is driven by necessity. Businesses looking to thrive in today’s fast-changing landscape must adapt to constraints in space, workforce availability, and supply chain reliability. Automation isn’t just about efficiency—it’s about future-proofing operations for long-term success.