The 2026 Automation Study conducted by Peerless Research Group for Modern Materials Handling provides a detailed snapshot of current warehouse and distribution center automation adoption, investment priorities, and planned upgrades based on responses from more than 120 professionals directly involved in purchasing decisions. Warehouse automation is entering a new phase as companies rethink how they move, store, and manage goods under constant pressure to do more with less. Global organizations invested about $21 billion in warehouse automation in 2023, with automated storage and retrieval systems (AS/RS), conveyors, software, and robotics ranking among the top picks for modernization.
By 2033 that figure is expected to exceed $90 billion, representing a 329 percent increase over a 10-year period and confirming that automation has become a core operational requirement. Key drivers include the ongoing e-commerce boom, persistent labor shortages, and the need to balance cost reductions with improved operational efficiency. Respondents represent a diverse set of operations spanning food, beverage and tobacco (15 percent), electrical equipment (8 percent), chemicals and pharmaceuticals (7 percent), and aerospace (7 percent), with nearly half working inside a warehouse or DC.
Facility footprints average 137,054 square feet, with more than one-third exceeding 250,000 square feet. Average employment stands at 1,095 people, and average company revenue is $675 million. Full automation levels remain limited across processes: labeling leads at 24 percent, reporting at 18 percent, and packaging at 13 percent.
Picking is fully automated in only 12 percent of operations, storage in 11 percent, conveyance in 10 percent, and replenishment in 9 percent, while retrieval stands at just 3 percent. Many core fulfillment processes are still mostly or fully manual, with 33 percent of respondents reporting no plans to automate picking and 31 percent saying the same for retrieval. Equipment adoption shows stronger momentum.
Forty-nine percent currently use conveyor and sortation systems, with 51 percent planning implementation or upgrades within two years. Goods-to-person picking solutions are used by 48 percent, also with 51 percent planning further activity. Weighing, cubing, and dimensioning equipment is in place at 43 percent of sites (57 percent planning additions), pocket sortation at 41 percent (59 percent planning expansion), automated packaging at 37 percent, automated storage systems including mini-loads and AS/RS at 36 percent, AGVs at 35 percent, and palletizing robotics at 33 percent.
When evaluating systems, durability, reliability, and uptime rank as very important for 92 percent of respondents. Fast response times for service are essential for 95 percent (up from 83 percent the prior year), purchase price for 78 percent, total cost of ownership/ROI/maintenance for 77 percent, parts availability for 74 percent, integration and compatibility for 68 percent, and scalability for 59 percent. Primary investment drivers include the need to fill orders faster to meet service-level agreements, keep pace with competitors, support new go-to-market strategies, and address difficulties finding and retaining reliable associates.
Software and data-capture tools form the connective tissue. Mobile and wireless technologies are used by 63 percent, barcode scanners by 62 percent, and RFID by 47 percent. WMS leads software usage at 57 percent, followed by parcel rating tools at 55 percent, LMS and CMMS at 50 percent each, WCS at 49 percent, TMS at 43 percent, WES at 38 percent, slotting software at 36 percent, and YMS at 30 percent.
Planned focus over the next 24 months centers on YMS, slotting, WES, and CMMS upgrades. Average planned spending on materials handling equipment and solutions for 2026 is $1.6 million (up from $1.5 million in 2025), with 31 percent expecting increases, 43 percent expecting flat spending, and 22 percent still unsure. The study underscores that while full lights-out automation remains limited, investment momentum is clear and accelerating across both hardware and the software layers required to orchestrate it.