Nowadays, it’s becoming less common for people to spend their weekends at a shopping mall or brick-and-mortar store. Instead, we shop online, making e-commerce more important than ever. In a manual warehouse, about 50% of labor costs associated with e-commerce are spent on picking, making it a perfect opportunity for automation.
Until recently, robotic picking systems were seen as a future technology limited by machine vision, gripping technology, and affordable robots. However, Interact Analysis reported last month that it has seen significant advancements in all three categories in recent years. The research firm said it anticipates this will drive growth in the mid- to long term.
Robotic picking systems can manipulate items, including packages, cases, and eaches, connecting one workflow to another. For example, bin-to-bin picking robots pick items from a storage tote and place them into a delivery tote, whilse a mixed-case depalletizing robot picks cases from a pallet and places them onto a conveyor belt, ready for the next step in the warehousing process.
Globally, Interact Analysis estimated that the annual revenue of the robotic picking market reached $393 million in 2024. By 2030, it predicted that the market will grow to $3.3 billion, with a compound annual growth rate (CAGR) of 42% between 2024 and 2030.
In 2024, Interact Analysis estimated that just over 3,000 units of picking robots were shipped globally (excluding sales to Amazon). The company forecast this number to increase to nearly 27,000 in 2030 (excluding Amazon).
Rueben Scriven, a research manager at Interact Analysis, said he is optimistic about the long-term potential of robotic picking. However, a number of factors still hinder widespread adoption, he noted. After an extensive five-month research period and over 30 in-depth interviews with vendors and end-customers, Scriven said the forecast has been revised downward from previous analyses.
During this process, Interact Analysis also uncovered six key trends poised to influence the demand for robotic picking in both the medium and long term.
1. Supplier instability and customer caution
It’s no surprise that warehouse operators and e-commerce providers aren’t interested in spending a lot of capital on automation when they’re operating on thin margins. Many customers, recalling Amazon’s acquisition of Kiva and its impact on Kiva’s customers, are wary of vendors that could face financial instability or be absorbed by larger firms, Interact Analysis said.
This caution has been heightened by Amazon’s quasi-acquisition of Covariant. The result, according to Interact Analysis, is extended sales cycles and slow market growth.
The firm said it heard from a number of robotic picking companies that their customers are placing far greater scrutiny on their financial health, which is extending the sales cycle and negatively influencing demand.
2. Economic slowdown and global challenges
Economic factors such as high interest rates, reduced warehouse construction, and China’s economic slowdown are dampening demand for robotic picking, wrote Scriven.
In addition, budget constraints and fewer new automation projects are pushing businesses to delay automation investments, underscoring the market’s sensitivity to external conditions.
3. Customers show less interest in RaaS
While robotics-as-a-service (RaaS) offerings were once seen as a game-changer, Interact Analysis said RaaS adoption has declined. Under such an agreement, the robot provider owns and is responsible for the upkeep of the automated system, while the customer pays a monthly or by-usage fee. This allows firms to automate without having to produce large amounts of capital upfront.
Now, however, companies are turning back to capital expenditure (CapEx) models for greater asset control and long-term cost efficiency. Interact Analysis said RaaS remains viable in niche scenarios, but it struggles to gain widespread traction.
Companies that focus exclusively on RaaS models may face challenges, given the disproportionately high growth of CapEx models, the company said.
4. Case picking sees faster adoption than each picking
With automation efforts focused on upstream distribution centers, where pallets and cases dominate, case picking has advanced more rapidly than each picking. Scriven added that each picking is a complex process that is difficult to automate, further slowing its adoption.
Despite its slower start, Interact Analysis still sees long-term potential for significant growth. Each robotic picking company tends to focus on specific workflows. Knowing which workflows will lead to the highest long-term demand is paramount for defining a company’s strategy, the firm said.
5. Stable pricing amid market competition
According to Interact Analysis, pricing for robotic picking systems remained steady in 2023 and 2024. This is despite the entry of low-cost Chinese competitors and the growing similarity between solutions.
The unexpected stability in prices of picking systems reflects a balanced market dynamic and technological maturity, the firm said. It said prices will still need to come down to drive widespread adoption. As a result, higher prices may slow down demand in the short term.
6. Pure-play software providers see growth
With an increasingly segmented value chain, pure-play software providers like Siemens and Fizyr have gained traction. These companies focus solely on software, leaving hardware and integration to others.
Interact Analysis said this trend highlights a shift towards specialization. In long-term, the company said it expects there to be fewer firms offering end-to-end solutions covering both hardware and software.
Interact Analysis finds factors cause for optimism
In all, Interact Analysis said the robotic picking market is navigating challenges such as supplier uncertainty, economic headwinds, and RaaS hesitancy. However, rising trends in case picking, software specialization, and market collaboration indicate a promising future, according to Scriven.
It said adaptability and innovation will be vital as the industry continues to evolve, shaping the next generation of warehouse automation.