eLogistics Outsourcing Will Become the Engine Fueling eCommerce Growth, IDC Says

FRAMINGHAM, MA — DECEMBER 4, 2000 — The explosion in B2B and B2C ecommerce is fueling the need for an IT-enhanced and integrated function that stretches from the front-end online store all the way to the end customer, according to IDC. This function is called elogistics.

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"Today's etailers face new complexities and challenges in establishing their online retail channel," said Romala Ravi, senior analyst for IDC's Business Services: eLogistics program. "Companies that have spent time and resources building sophisticated front-end activities have been confronted with the harsh reality that the real complexity lies in the implementation of an effective and integrated back-end elogistics process through which goods ordered online can be delivered to the consumer in a timely and efficient manner."

To consolidate an effective back-end elogistics process, etailers are increasingly looking to elogistics outsourcing service providers to handle these activities. "Managing the back-end process internally is a mammoth task for etailers," Ravi said. "The twin challenges of cost minimization and speed to market will open up huge opportunities for elogistics service providers to manage the ordering, customer service, fulfillment, delivery, and return processes."

According to IDC, the challenges facing ecommerce companies in quickly consolidating elogistics capabilities are opening up tremendous opportunities for providers of third-party elogistics services. "By integrating the front-end customer interactions and business functions with the back-end elogistics operations, a new breed of third-party elogistics provider is already demonstrating how its solutions can win the confidence of companies," Ravi said.

IDC expects the U.S. market for elogistics outsourcing services (B2B and B2C) to increase at a compound annual growth rate of 57% from nearly $12 billion in 2000 to $72 billion in 2004.

IDC's recent report, eLogistics: The Bedrock of Successful eCommerce Market Overview, Forecast, and Analysis, 2000-2004 (IDC #B23289), looks at recent developments in the elogistics outsourcing space. Specifically, it discusses the competitive landscape, market segmentation, and trends; sizes the market for B2B and B2C elogistics outsourcing; and profiles 13 of the service providers in the space. The report also presents findings from an IDC survey on the challenges etailers are facing in terms of elogistics.

To purchase this report, contact Jim Nagle at 1-800-343-4952, extension 4549, or at jnagle@idc.com.

About IDC

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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