Driven by the need for flexible and efficient ecommerce fulfillment, more than 50,000 warehouses worldwide will include commercial robotics by 2025, up more than 12-fold from the 4,000 in existence in 2018, according to ABI Research, a market research firm.

In the United States alone, the number of robot-powered warehouses will increase to 23,000 by 2025, up from 2,500 today in 2018, says Nick Finill, senior analyst at ABI. Growth in ecommerce is the primary reason for the increase, he says. Other factors include advances in technology that have made robots better and smaller, lower costs and a shortage of labor in some places.

With more retailers offering same-day and other fast delivery options, retailers and others have an increasing need to turn orders around quickly and manage their warehouses efficiently. The new generation of sophisticated robotics, such as autonomous mobile robots (AMRs), are ideally suited to meet those needs, Finill says.

“Robots enable warehouses to scale operations up or down as required while offering major efficiency gains and mitigating inherent challenges associated with labor and staffing,” Finill says.

Unlike conveyors and other kinds of fixed machinery, the new, smaller robotics systems can be quickly moved, stored and redeployed to handle seasonal surges in orders, Finill says. For that reason, modern robotic systems are used to replace older kinds of automation, or to make workers more productive and not to replace workers, he says. But labor shortages have been a problem for warehouse operators.

“We are not talking about removing humans in the warehouse any time soon, or even in the long-term future,” Finill says. But the growing volume of ecommerce orders and customer expectations for fast deliveries are requiring warehouse and fulfillment center operators and their suppliers to be innovative, he says.

Improvements in technology have led to the creation of commercial robots that are affordable and more versatile than setting up traditional fixed mechanical automation or hiring more staff—assuming warehouse operators could recruit the staff they needed in the first place.

Because retailers often build fulfillment centers and warehouses outside major urban areas, it can be difficult to hire and retain staff, Finill says. Another complication can be the need to hire temporary staff for peak periods, such as the holiday shopping season, which is risky in a tight labor market.

A growing number of retailers and shipping companies are adding robotic technologies to their fulfillment infrastructures to increase productivity. Sometimes, the robotics are built into stores, enhancing retailers’ ability to enable stores to do double duty as omnichannel fulfillment operations. As an example, Finill points to the 109 highly automated Freshippo (also known as Hema) grocery stores operated by China’s Alibaba Group.

Freshippo, launched in 2016, merges online and offline shopping, using a mobile-first approach. In stores, shoppers use a mobile app to scan items as they shop to get product information and purchase them using Alipay, Alibaba’s mobile payments platform. Consumers also can use the app to order groceries for delivery. Each store serves as its own fulfillment center for online orders, allowing it to deliver in as fast as 30 minutes to consumers who live within a three-kilometer radius.

Here in the United States, Walmart Inc., No. 3 in the Internet Retailer Top 1000, is testing a system called Alphabot that uses autonomous mobile carts to gather nonperishable items for customers who have placed online grocery orders for pickup. Alphabot, developed with robotics startup Alert Innovation, then delivers those items to Walmart workers who pick, assemble and deliver the orders to customers.

Other examples include worldwide delivery service DHL, which uses product-picking robots at its warehouses in North America to help handle ecommerce demand and Gap Inc. (No. 20), which in October 2017 began adding human-assisted robotic arms from robotics and artificial intelligence startup Kindred to its warehouses. Amazon.com Inc. (No. 1) now uses more than 100,000 robots inside its warehouses. In 2012, Amazon acquired Kiva Systems and its fulfillment robotics for $775 million then renamed it Amazon Robotics.