A strategic perspective on automated warehouse systems in retail: insights from a multiple case study

Purpose As the warehouse is increasingly viewed as a strategic component, retailers’ willingness to invest in automated warehouse systems (AWS) has increased. These investment decisions are influenced by well-known operational factors, but strategic factors, which have received limited attention in warehousing literature, also play a pivotal role. Addressing this gap, this study investigates how strategic factors influence AWS investment decisions in retail. Design/methodology/approach Based on a theoretical foundation of technology adoption, strategic intent, and automation strategy, an abductive multiple case study is conducted with eight purposefully selected retailers that had implemented or were in the process of implementing a large AWS. Findings The study ranks 10 competitive priorities and 21 AWS evaluation aspects and shows how the firm’s strategic intent and the AWS investment decisions can be connected via the formulation of a warehouse automation strategy. The findings reveal the content for such a strategy – including 7 categories and 17 considerations – related to, for example, technology innovativeness, efficiency versus adaptiveness, technology-supplier relationships, control and ownership, and risk exposure. The study empirically shows how manager characteristics and owner strategies influence retailers’ AWS investment decisions. Four strategic intent profiles are abductively developed: reliability and delivery service; profitable deliveries; scalable logistics for volume growth; and platform building for logistics services. The study also provides evidence of a reciprocal relationship between strategic intent and AWS investment decisions. Research limitations/implications The study is conducted with a limited number of Swedish retailers, indicating a need for additional studies to test the findings across different contexts. Practical implications The study offers a framework for formulating a warehouse automation strategy. As a foundation for developing the framework, the study shares empirical insights from retailers in the forefront of AWS implementation. Originality/value The study contributes as a conversation changer by showing the importance of shifting from a tactical-operational focus to a strategic perspective on warehouse configuration in general and on AWS investment decisions in retail in particular.