Exotec discusses the state of warehouse automation

In February, Exotec SAS launched the next generation of its Skypod automated storge and retrieval system, or ASRS. Since then, the company has exhibited at annual trade shows, opened demonstration centers in Atlanta and South Korea, and won an IFOY award.

Exotec said its robots have helped leading brands such as Gap Inc., Carrefour, Decathlon, and UNIQLO improve warehouse efficiency, supply chain resilience, and working conditions. The Lille, France-based company, whose U.S. headquarters are in Atlanta, has deployed its systems at more than 150 sites worldwide and presents over 1 million containers daily. It was recognized with a 2024 RBR50 Robotics Innovation Award for Skypod.

Automated Warehouse recently spoke with Arthur Bellamy, chief revenue officer at Exotec, about Skypod and market challenges and opportunities.

Next-generation Skypod combines functions

What has the reception been to the next-gen Skypod?

Bellamy: It has been very good. We’re pleased with the feedback we had from different standpoints. On the technical side, our product has features that were not available before.

Exotec’s all-in-one ASRS can natively do buffering, sequencing, pick and pack. In the past, it could be done with multiple systems and conveyors, but at an increased cost. By simplifying and densifying the design, we’ve been well-received by clients.

We also see new opportunities that we weren’t working on before, like full case handling. We’ve also received requests around store replenishment for grocery.

But updating Skypod didn’t happen overnight. How long did the path to an award-winning system take?

Bellamy: From a commercial standpoint, I’m proud of the job that our team did on the launch. We’ve come a long way from four years ago in terms of branding and awareness. I’m pleased to show the maturity of Exotec to the outside world.

You mentioned groceries — is your ASRS moving into cold chain?

Bellamy: We can do some fresh and ambient temperatures, but not frozen at this stage. However, we’ve found a solution to handle it by integrating a third-party product for delivering a food solution.

Exotec acknowledges market challenges

Speaking of challenges, were you surprised at the bankruptcy of competitor Attabotics?

Bellamy: It wasn’t a big surprise. We had heard that it had been recapitalized with a lot of public funding, which is not a good sign for investors.

We knew that it was developing a new generation of software but didn’t see a lot of commercial traction at a time when the market has been tougher since COVID-19. Unfortunately, a few startups that are not commercially viable have failed.

It’s difficult to make such complex robots work, and products can have design flaws.

Did Exotec acquire any talent from Attabotics?

Bellamy: We have a few former Attabotics employees, such as Andy Williams, Attabotics’ former chief revenue officer and Exotec’s executive vice president of sales for North America.

We’re always on the lookout for good hires, but we have some limitations with our research and development team in France. We’re trying to keep everyone in a single location to share information more easily.

Another shifting market challenge has been U.S. tariffs. How are they affecting you?

Bellamy: They’re affecting our customer base more than us directly. I see a lot of hesitation from our customers at the moment. They don’t know how to forecast and are questioning or holding off on their investments.

Last year, the U.S. warehousing market was on fire, doubling. Now, the traction is not the same, but there is still a lot of interest in our products. It doesn’t change how competitive we are at this stage, and the impact of tariffs won’t be different than on other leaders in this industry.

Exotec has facilities in both the U.S. and Europe, but do tariffs affect your own manufacturing?

Bellamy: If we reconsider how to source parts for our products, we’re doing strategic moves that will last.

We have U.S. sourcing for racking, bindings, and fences. Robots are the exception for now. To build a Skypod system, it takes 1,000 pieces, which you don’t redesign in a week. We need suppliers at the right quality, volume, and price.

Each element of our robots can’t change because of market volatility, and we can’t have robots failing. We need stability for our clients and ourselves.

Demand for warehouse automation still increasing

How are orders for Exotec’s systems?

Bellamy: We’ve seen a lot of demand, if not a lot of new projects closing. We’ve had a lot of early-stage discussions for potential projects. A bunch of clients are doing more scrutiny as they reconsider ROI [returns on investment].

The demand is not going away — whatever’s happening now in terms of labor shortages or competitive pressures will happen later.

Companies that are continuing to invest a lot are Amazon and Walmart, which are in a league of their own.

While you just opened demo centers in Atlanta and South Korea, what are some of the differences between the current North American and European markets?

Bellamy: The European market has been a bit soft for the past couple of years. The U.S. was the growth engine in that context and was doing well, but it’s now slowing down.

As a company, we’re in a good position because of our next-gen Skypod, and we’re still at the beginning of our story in the European market. For instance, in the U.K., have have a few systems but still a long way to go to be a well-known player. Southern and Central Europe are the same, which presents an opportunity for Exotec.

We’re gaining market share, which compensates for the macroeconomic environment.