History of e-commerce: The rise of warehouse robotics and automation

The 2010s were a remarkable decade of rapid creation and growth of warehouse automation startups like Exotec and Symbotic, and proactive implementation of automation by e-commerce giants like Amazon and Walmart.

The decade of the 2010s witnessed a transformative era in the world of e-commerce, marked by the meteoric rise of warehouse robotics and automation. This blog post explores the pivotal events and advancements during this decade that reshaped the landscape of e-commerce logistics.

2010 — Amazon’s Strategic Acquisition of Diapers.com

In 2010, Amazon made a significant move by acquiring Diapers.com, a company already utilizing Kiva Systems’ robots in its warehouse operations. This acquisition not only expanded Amazon’s e-commerce dominance but also introduced them to advanced robotics technology used in warehousing. Just two years later in 2012, Amazon made a remarkable decision that pulled them and the greater e-commerce industry towards automation.

2012 — A Revolutionary Event: Amazon Acquires Kiva Systems

The year 2012 was a game-changer for Amazon and, by extension, the entire e-commerce sector. Amazon acquired Kiva Systems for $775 million, marking the beginning of a new era in its logistics operations. By 2014, Amazon had fully integrated Kiva robots into its warehouses. This integration drastically reduced the “click to ship” cycle times from 60–75 minutes to just 15 minutes and decreased operating costs by 20%. In 2015, Amazon rebranded Kiva Systems to Amazon Robotics, signifying its commitment to robotic innovation.

Amazon’s acquisition of Kiva Systems was revolutionary, as it marked the rapidly increased adoption of robotics in warehouses around the world.

2015 — A Landmark Year for Logistics Robotics Startups

2015 was a watershed year in the logistics robotics industry. Renowned companies like Exotec, Geek Plus, Fabric, and Agility Robotics were founded. The impact of Amazon’s acquisition of Kiva Systems was profound, with venture capital investments in warehouse robotics startups soaring from less than $250 million in 2012 to over $1.6 billion in 2015, and further up to $2.7 billion in 2017.

2015 — Exotec’s founding and success in France

As mentioned in the prior section, Exotec was a revolutionary startup founded in France in 2015. Raising a $1.7 million seed round in 2015 and a $3.6 million Series A round in 2016, Exotec started off as a software company that implemented efficient fleet control algorithms for robots sourced from third party manufacturers. However in 2017, they unveiled their own automated storage and retrieval system (ASRS) called Skypod along with the announcement of a joint project with Cdiscount, France’s second largest e-commerce company. Exotec’s growth has since continued, with a $17.7 million Series B in 2018, a $90 million Series C in 2020, and a $335 million Series D in 2022. With its most recent fundraising round, Exotec became France’s first ever industrial unicorn startup at a company valuation of $2 billion.

2015–2017: Amazon’s Robotics Competitions

Between 2015 and 2017, Amazon hosted the Amazon Picking Challenge, later renamed the Amazon Robotics Challenge. These annual competitions spurred innovation in automating warehouse operations, particularly in picking and stowing tasks.

2015 — UPS Experiments with Delivery Drones

In a groundbreaking initiative, UPS partnered with startup CyPhy Works in 2015 to test drone delivery. They successfully executed a 3-mile drone delivery route, transporting asthma inhalers to a children’s camp on an island off Boston, Massachusetts. This experiment marked the beginning of a new delivery mechanism in e-commerce logistics.

2016 — DHL Joins the Robotics Movement

DHL, another logistics giant, embarked on its robotics journey in 2016. Through a pilot project with French startup Effidence, DHL implemented EffiBOT trolleys to assist workers in order picking, enhancing efficiency and productivity in their warehouses.

2017 — PUMA automates its warehouse using AutoStore

In 2017, athletic brand PUMA’s North American division stepped into the warehouse automation game by implementing an AutoStore automated storage and retrieval system (ASRS) at its third party logistics facility in California. AutoStore is a Norwegian warehouse robot technology company founded in 1996 that offers an ASRS which utilizes a cubic storage system and robots. This project with PUMA increased the capacity of their facility by 2–3 times, enabling PUMA to consolidate multiple facilities into a single one. Rapidly growing as a warehouse solution provider, AutoStore was previously acquired in 2016 by EQT in a deal estimated to be worth $436 million to $545 million today. Then in 2019, EQT sold AutoStore to private equity company Thomas H. Lee Partners for $1.9 billion while maintaining a 10% stake in the company. In 2021, SoftBank entered into an agreement to acquire 40% of AutoStore shares for a staggering $2.8 billion. Finally in 2022, AutoStore went public in an IPO that was Norway’s biggest in two decades. Today, AutoStore’s market capitalization is over $6 billion, showing continued growth.

2017 — Walmart tests warehouse automation solutions from Symbotic

In 2017, Walmart began testing warehouse automation company Symbotic’s solutions at 2 of its distribution centers. This marked the beginning of tremendous growth for Symbotic, originally known as CasePick Solutions when the company was founded in 2005. Symbotic’s system is an automation solution that can automate warehouse processes from end-to-end using a combination of robotics and AI software. For a company’s internal logistics, the Symbotic The testing at 2 Walmart facilities grew to the implementation at 25 regional distribution centers in 2021, and in 2022, expanded to all 42 of Walmart’s distribution centers. In that same year, Symbotic went public through a merger with a SoftBank SPAC. Symbotic continued to grow after its IPO and its current market cap is $22.5 billion. Symbotic’s technology and success proved that full automation of the warehouse is possible.

2018 — FedEx Steps into Warehouse Robotics

In 2018, FedEx announced a partnership with Vecna Robotics, introducing AGVs (autonomous guided vehicles) and mobile robots into their logistics operations. This move underscored the growing trend of automation in the logistics sector and its critical role in the future of e-commerce.

Conclusions for the decade — Giants in the making

The 2010s were a decade of rapid technological evolution in the field of e-commerce logistics. The adoption of robotics and automation by industry giants like Amazon, UPS, DHL, and FedEx not only revolutionized their operations but also set new standards for efficiency and speed in the global e-commerce ecosystem. Along with the established giants, we also see the rapid growth of startups providing such robotics and automation. With Symbotic for example, its current market capitalization of over $22 billion showed the world that hardware startups can meet or even exceed the valuations given to software startups.

The next post will be the final entry in the History of E-Commerce series where I cover the 2020s and what awaits beyond it. While giving the most up to date takes on current events in e-commerce, I also discuss what kind of society may be possible in the future as logistics innovations mature and become ubiquitous.