Two of the biggest challenges in today's multi-billion dollar e-commerce industry are profitability and differentiation. Even with exponential growth in online sales, e-retailers are struggling to earn customer loyalty and report profits. This can largely be attributed to their inability to control costs while sustaining revenue growth, and manage increasing consumer expectations in the face of fierce competition and fast moving technology.

Profitability remains elusive to even the most successful e-commerce vendors despite significant investment in state-of-the-art front-end order management, back-end supply chain management, and real-time integration technologies. This is reflected in high fulfillment costs (approximately 25% of revenue for pure-plays compared to 15% for catalogers)¹ and low browser-to-buyer conversion rates (approximately 3.2%)² during 1999. In addition to continued revenue growth, the innovative market leaders are targeting significant reduction in their fulfillment costs; for example, Amazon.com plans to reduce their fulfillment costs from 17% of revenue in 1999 to 14% in 2000.³

Over the course of the last few years, it has become clear that the key success factor in meeting those challenges is no longer the look-and-feel or the personalization of a web-store buts its intelligent real time decision support. Whether you've created an engaging e-Business presence or have fully tweaked customer-business interaction features, what ultimately determines customer satisfaction and return business is how well you fulfill each order. Accurate fulfillment planning requires more than just logistics and visibility across the supply chain - it requires superior real time decision support. Fulfillment planning takes into account constraints across the entire value chain - customers, merchants and suppliers. No matter the flavor - B2B or B2C - if you don't plan well you may not be able to deliver the goods to the satisfaction of your customer.

Real demand never exactly matches forecasted demand, and front-end processes work in real time while back-ends operate in batch mode. Fulfillment planning looks at inventory plans created by the back-end on one hand, and determines in real time the cost effective way of fulfilling real orders received by the front-end on the other hand - how, where and when, given consumer and vendor preferences and constraints.

ICONOCI's target market is real-time fulfillment planning in logistically complex, high-volume commerce environments, particularly e-commerce - business-to-business (B2B), business-to-consumer (B2C), application service providers (ASP) and trade exchanges. The market currently lacks a fulfillment planning solution that optimizes real demand against forecasted demand in real time while comprehensively accounting for all aspects of the supply chain.⁴

According to AMR Research and ICONOCI, the potential overall market size for real-time fulfillment planning today is estimated to be $3.9 billion growing up to $14.3 billion over the next five years.

ICONOCI will show you how to reach your performance and savings goals by implementing the next generation of real time fulfillment planning.

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1. Source: AMR Research Report on Supply Chain Management for May 2000. The AMR Research Holiday Survey: Internet Retailers Are Still E-Fulfillment Amateurs.

2. Source: The State of Online Retailing 3.0, April 2000. A Shop.org study by The Boston Consulting Group.

3. Source: Forbes News, April 27, 2000: Amazon Reins in Spending.

4. "63% [of the respondents] reported less than 90% forecast accuracy.' Source: CPFR Survey Findings & Analysis, April 2000. The Next Wave of Supply Chain Advantage: Collaborative planning, Forecasting and Replenishment.