Warehouse Order Picking Market Analysis Report By Solutions, By Deployment, By Application, By Region And Segment Forecasts From 2019 To 2025

Industry Insights

The global warehouse order picking market size was accounted for USD 5.84 billion in 2018 and projected to grow with a CAGR of 10.2% over the forecast period, from 2019 to 2025.

The rapid growth of the e-commerce industry has led to an increase in the number of order fulfillment centers across the globe. The increasing trend to adopt new technologies to improve productivity and efficiency among warehouse owners is expected to drive the demand for order picking systems. In addition globalization of supply chain networks is anticipated to increase the adoption of lifting technologies across warehouses.

The order picking process accounts for around 50 to 55% of the total warehouse operating cost. Over the past few years, the warehouse industry is reshaping due to the adoption of semi-automated technologies which required a few laborers. Several benefits of order picking systems such as increasing efficiency and productivity, reduction in training and labor cost, and reducing marginal lifting errors are anticipated to play an important role in adopting by warehouses across the globe. Additionally, these systems allow single as well as multiple-piece orders at a time. This factor is expected to increase the adoption of picking techniques in warehouses. 

Distribution centers and warehouses are an essential part of commodity maintenance and storage globally. In the rapid globalization of the economy, logistics and transportation play an important role to supply goods to cross-border businesses. In addition, distribution centers and warehouses improve the supply customer’s different needs and work with several suppliers and several distribution channels which is encouraging end-user organizations to adopt new technology solutions to improve their productivity and efficiency. As a result, order picking systems are expected to gain traction over the forecast period.

Few concerns regarding warehouse management by end-use industries include maintaining the average warehouse capacity, addressing fill rate, and on-time shipments. To overcome these challenges, market players operating in the order picking industry are introducing such systems that help to ease lifting operations. Increasing adoption of IoT, artificial intelligence, and big data technologies is expected to provide new opportunities for market growth. 

Lack of skills to operate order picking systems among operators is one of the major challenges faced by this industry. This scenario led to an increase in process time and fewer processes orders, thereby, reducing the overall productivity. In addition, hiring skilled laborers who are trained by experts helps to increase the human capital investments of the industries. 

Solution Insights

Based on solutions, the warehouse order picking market has been segmented into paper-based, barcode scanning/RFID picking, and others. In 2018, the barcode scanning/RFID picking solution segment held the largest market share and projected to continue its dominance throughout the forecast period. Several benefits such as management of inventory with better accuracy, ability to scan code printed on products, and ease of use associated with barcode scanning/RFID are expected to drive the segment growth. These tags are also used for reducing product counterfeiting and tracking inventory shrinkage. 

In another segment, pick-to-light augmented reality, and voice-directed are included. These solutions are at the nascent stage and expected to witness considerable growth with a CAGR of around 20% during the forecast period. These solutions are used for navigation to employees working in warehouses with hassle-free operations. For example, AR technology is a combination of vision and voice-based solutions to enhance the speed of operations along with accuracy.

Deployment Insights

Based on deployment, the market is segmented into on-premise and cloud. The cloud segment is expected to register higher growth over the forecast period.  This growth is attributed to the fact that most of the activities include contemporary technologies like pick-to-light and voice-based are carried out by using cloud solutions. These solutions help manufacturers to track their logistics in real-time as well as helps to reduce the risk of errors, thereby, increasing the productivity and efficiency of the warehouses. To minimize the time, large and medium warehouses deploy cloud-based solution which uses advanced RFID picking techniques.  

The on-premise segment held a significant market share in terms of revenue. Conventional order picking techniques like paper-based and barcode scanning picking are operated within the premise, as these solutions need manual workers to handle inventory. Moreover, SMBs prefer the low operational cost and hence they deploy cost-effective solutions for their warehouses, thereby, expected to contribute positive growth over the forecast period. 

Application Insights

By applications, the market is fragmented into healthcare, pharma, manufacturing; e-commerce; retail; and cosmetics; transportation & logistics; construction; and others. Among applications, the e-commerce segment is estimated to witness the fastest growth over the forecast period. The e-commerce sector is expected to have unprecedented growth due to the expansion of distribution networks. This is due to the emergence of new technologies that enable order processing with minimum time and enhanced accuracy.  Therefore, operators in e-commerce warehouses are adopting advanced technologies in their businesses.

In 2018, the manufacturing segment has dominated the market and is expected to retain its position over the forecast period. Growing foreign trade activities are projected to boost the deployment of solutions in logistics and transportation warehouses. Therefore, the transportation & logistic segment is projected to gain significant market share.  

Regional Insights

In 2018, North America dominated the global warehouse order picking market. High adoption of this technology among various industries operating in manufacturing, retail, and e-commerce is expected to surge the regional market growth. In addition, the presence of key market players such as Sales Warp and American Barcode & RFID is expected to witness a positive impact on regional market growth. The U.S. is the second largest e-commerce market across the globe, after China. Thus, growing demand for warehouse order picking in the U.S. e-commerce sector will boost the market growth in this region over the forecast period

Asia Pacific market is estimated to grow with the highest CAGR from 2019 to 2025. This growth can be attributed to rising e-commerce and retail sales coupled with rapid digitalization in these industries. Further, the growth of manufacturing and logistic industries along with favorable government policies to increase domestic production in developing nations such as India and China are major factors expected to influence the market growth in the Asia Pacific.  Due to the presence of online retail sales and foreign trade in China, the transport & logistic industry in this country is expected to augment the market growth during the forecast period in this region.

Impact of COVID-19

During this COVID-19 pandemic, warehouses are playing a vital role to dispatch products. Every country is striving to distribute essential household goods, pharmaceuticals, and food products. Hence, order picking systems are used to manage and control warehouse management systems. This solution is integrated with IoT technology which has reduced the workforce and risk of spreading virus infections.

Owing to lockdown and some restrictions online orders have gained traction. As a result, an increase in demand for grocery shopping, food orders, and other essentials through e-commerce portals is forcing producers to manage warehouse capacity and supply chains, thereby, expected to drive the demand for warehouse order picking systems.

Warehouse Order Picking Market Share Insights

Mergers, acquisitions, collaborations, and new product launches are some business strategies implemented by market players to strengthen their position in the competitive market.

For example, KNAPP AG partnered with VOLA which is a configurator of the modular design system to improve its storage & distribution processes by using the automation solution of KNAPP AG, in 2019. Moreover, AB&R entered into a strategic alliance with RAIN RFID to integrate the latter’s system with cloud and UHF RFID, in 2018. This integration aims to manage, share, and stockpile its RFID-based data with the help of the internet.

• The major players operating in this market are:
• Bastian Solutions, Inc.
• AB&R
• Sanderson
• Barcodes, Inc.
• KNAPP AG
• QC Software, LLC

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For this study, Million Insights has segmented the global warehouse order picking market report based on solution, deployment, application, and region:

• Solutions Outlook (Revenue, USD Million, 2014 - 2025)
    • Paper-based
    • Barcode scanning/RFID picking
    • Others

• Deployment Outlook (Revenue, USD Million, 2014 - 2025)
    • On-premise
    • Cloud

• Application Outlook (Revenue, USD Million, 2014 - 2025)
    • Construction
    • Manufacturing
    • Retail
    • E-commerce
    • Healthcare, Pharma, and Cosmetics
    • Transportation & Logistics
    • Others

• Regional Outlook (Revenue, USD Million, 2014 - 2025)
    • North America
        • U.S.
        • Canada
    • Europe
        • U.K.
        • Germany
    • the Asia Pacific
        • China
        • Japan
        • India
    • Latin America
        • Brazil
        • Mexico
    • Middle East & Africa