Warehouse Automation Services Projected to Grow $8.7B by 2025

Research shows that the potential revenue generated from offering a lifetime service contract to an automation project is roughly equivalent to the original cost of the project.

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The warehouse automation equipment market is projected to reach $8.7 billion by 2025, according to research released by Interact Analysis.

“In 2020, 80% of the revenues from automation machinery service contracts were generated in the Americas and in the EMEA (Europe, the Middle East and Africa) region. Historically, there has always been a much higher adoption rate of service arrangements in those two regions than there has been in the Asia Pacific (APAC) region due to lower labor costs in Asia, expectations for maintenance to be included in the project sale and robust in-house service capabilities by large e-commerce companies,” says Jason dePreaux, principal analyst at Interact Analysis. “But, this situation is set to change. As worker expectations rise and wages level up in APAC and other factors come into play, such as recent experiences with social distancing and the pandemic, we expect the region to be setting the pace where warehouse automation installations are concerned. Indeed, we forecast that, by 2024, the rate of growth in the APAC service market will be faster than in the Americas or EMEA.”

From Interact Analysis:

 

  • Research shows that the potential revenue generated from offering a lifetime service contract to an automation project is roughly equivalent to the original cost of the project.
  • In 2020, on-site service in various incarnations - site visits to identify and repair problems, preventive maintenance visits and the deployment by OEMs of technicians to sites on a full- or part-time basis – accounted for 40% of service revenues. Upgrade services (modernization or alteration of existing systems, not replacement) accounted for 22%, and remote services, where customers have telephone hotline access to support, 19%. 
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