“As e-commerce becomes a larger portion of overall sales, it’s
going to be a bigger part in overall investment for companies.”
Breeze says there’s little doubt that much of that investment
will go into automation. “There’s going to be this need to
improve efficiencies and to get products up quicker.”
While e-commerce has grown dramatically over the past
decade, there was one item some people still were reluctant to
buy—food. But weary shoppers, anxious about becoming infected
with COVID- 19 when visiting grocery stores, have grown more
accustomed to shopping online during the pandemic.
The change in habits was apparent early in the pandemic. OnApril 27, the Brick Meets Click/Symphony RetailAI OnlineGrocery Shopping Survey revealed that online grocery sales grew37% to a total of $5.3 billion compared to March 2020’s record-setting total of $4 billion.
Adam D Roth, executive vice president at NAI Hiffman, thinksthis will be the catalyst for dramatic change down the road.
“You’re going to see a lot of innovation,” Roth says. “This will be
driven by people continuing to do what they’ve started doing now,
which is buying groceries online. They’re going to continue to do
that after this is over.”
As online grocery shopping grows, warehouse operators should
continue to adopt technologies to more efficiently ship food.
“Online grocery pickup and delivery services are a small seg-
THE LIMITS OF AUTOMATION
ment of e-commerce today,” Thompson says. “But it’s one of the
fastest-growing segments, and I think people would agree that the
pandemic has accelerated acceptance and usage of online gro-
Automation could specifically benefit cold storage, where
freezing temperatures can limit the amount of human exposure.
“Cold storage is a classic situation for automation inside the dis-
tribution center because temperatures are so cold,” Thompson
says. “When you have a freezer full of meats and other frozen
food items, you don’t want your people running around in there
with boots and gloves and hats. It’s better to have somebody else
picking that for you.”
Can robots make the cold storage process easier by picking upand moving frozen chicken nuggets and breakfast burritos? Yes,but there are also limits. Even if it’s harder for an automated system to catch a virus (at least, of the human variety), the consensusseems to be that robotics and automation are generally enablingpeople to be more productive.
“Robotics and automation today aren’t going to eliminate
100% of the needs of people,” Thompson says. “They’re aug-
menting and enabling a more productive use of human labor.
Now, at some point in the future, it could be different.”
With something like autonomous robotic robots (AMRs), the
machines can complement what the human is doing. During
e-commerce fulfillment, Thompson says robots can find and
bring the product to the packer versus the packer chasing down
“When you can have robots bringing a product to the pickers,
that’s a huge time savings,” Thompson says. “While not every
company is the same, the rule of thumb is that 20% of operating
costs can be saved through robotics and automation.”
Machines that can limit the most inefficient tasks for humans
have the biggest bang for the buck. “With labor, it’s the walking
around time that’s the most unproductive and costly,” Thompson
says. “A lot of the advances in the last five or seven years with auto-
mation and robotics have been around eliminating that travel or
having the material handling equipment to travel.”
In other cases, some human functions probably won’t be eliminated anytime soon, such as actions that rely on eyes, fingers andwrists. “There are some functions that are very difficult to automate,” CBRE’s Dunlap says.
THE LABOR EQUATION
Before the COVID- 19 crisis, attracting labor had become a hugeissue. With unemployment hovering around 3.5% as recently asearly February, companies had to pay up for workers. That’s whyit was important to find ways to automate unproductive tasks,such as time spent walking.
“Pre-COVID, there was a quiet march toward as much automation as you could have, particularly in e-commerce with Amazon,”
“AS PART OF THIS MAJOR SUPPLYCHAIN EVOLUTION, I EXPECT TO SEECOMPANIES CONTINUE TO OPTIMIZETHE OPERATIONS OF THEIR LOGISTICSFACILITIES, AS WELL AS INCREASEDINVESTMENT IN ROBOTIC SYSTEMS
TO ENHANCE PROCESSES, AS THEYSEEK TO CREATE ENVIRONMENTS THATPRIORITIZE THE HEALTH, SAFETY ANDWELL-BEING OF EMPLOYEES.”
MANAGING PARTNER OF PROLOGIS VENTURES