With the holiday season upon us, factories and warehouses are starting to feel the full effects of the increase in gift purchases and the decrease in available labor. From clothing to electronics to automobiles, all industries have a high demand for their products, but are unsure of how to most efficiently meet these needs. 

Holiday Sales Are Expected to be Even Higher Than Last Year

Holiday shopping generally begins to escalate in October, but the full effects are felt by manufacturers and stores in November and December. Sales are increasing every holiday season, shoppers are expected to spend 5% more this holiday season than they did in 2018—a total of $1.1 trillion.

Source: PWC 2019 Canadian Holiday Outlook

Sales during the holiday season can comprise 30% of a retailer’s annual revenue. Due to the increase in purchases, and the resulting increase in revenue that is expected, factories and warehouses often turn to hiring more temporary workers to keep up with demand.

Seasonal Workers Are in High Demand and Low Supply

Due to the greater demand for products around the holiday season, companies often find themselves with additional positions available, but no one to fill them. In 2018, more than 700,000 seasonal workers were expected to be hired for the holidays in the U.S alone. In warehouses and distribution centers, an additional 452,000 workers were needed. Specifically, UPS expects to hire 100,000 additional seasonal employees for the holiday season this year.  

However, finding these workers is becoming more and more of a challenge. With unemployment at an 18-year low, there aren’t enough workers to fill these jobs during the holidays. The workers that are available for temporary work prefer customer-facing retail jobs over manufacturing and warehouse jobs, resulting in a predicted shortage of more than 90,000 warehouse workers by 2020.  

With the increasing need for additional workers, and the decreasing amount of available workers, companies must look to other solutions to fill the high demand of the holiday season.

The Solution: Automation in Factories and Warehouses

Many companies invest in robotics and automation in order to manage the increasing demand around the holiday season. For example, Gap Inc. is using automated arms and AI in warehouses to sort retailer’s clothing orders, while Walmat is testing robots that roam store aisles checking inventory.  

Due to this labor shortage, you're going to see an acceleration of the automation trend, which is already growing rapidly.

— Spencer Levy, Head of Research in the Americas, CBRE

Due to the 14-18% increase in online purchases this holiday season, faster delivery will be more important than ever. Automating material transport will allow current workers to focus on value-added tasks, improving flexibility and efficiency, and completing products faster. Additionally, automation can work for longer hours, increasing efficiency even more, due to advanced technology that allows Autonomous Mobile Robots (AMRs) to optimize on charging opportunities.  

Source: PWC 2019 Canadian Holiday Outlook 

Specifically, UPS and FedEx relied on Industry 4.0 technology, such as automation, to increase processing speed and ship packages faster. The efficiency of automation allowed UPS to deliver 99.1%, and FedEx to deliver 98.7%, of packages during 2017's holiday season. 

Factories and warehouses also need to be prepared for a global increase in year-long shopping by implementing robotics and automation into their operations.

Implementing automation during the holiday season will certainly be temporarily beneficial, but automation can also help companies long-term. With the emergence of "Amazon Prime Days" and "Black Friday in July" sales, global shopping trends have shifted. 18% of consumers begin their holiday shopping in July, and 12% say they would complete the bulk of their holiday shopping during July. Therefore, implementing automation in warehouses and factories is beneficial year-long.