Final answer:
The 'Last mile problem' in ecommerce refers to the delivery challenges faced by organizations as they strive to efficiently distribute goods to customers. This issue is influenced by various factors including supply chain inefficiency, digital divides, and increased global competition. Solutions involve improving transportation, labor policies, and technological infrastructure.
Step-by-step explanation:
The 'Last mile problem' refers to the challenges that organizations face when delivering goods to the end-user in an ecommerce context. At its core, this issue often arises due to inefficient supply chain practices that can increase costs, reduce profits, and negatively impact customer satisfaction. Moreover, the rapid advancement in technology and global trade has reshaped markets, increasing competition and consumer expectations for fast and efficient delivery services.
Consequently, businesses must address poor design decisions made early in the supply chain to ensure customer needs are met. This can involve leveraging new transportation and communication technologies, revising labor policies, and accounting for geographic limitations such as digital deserts or congested transportation networks. In addition, businesses need to consider strategic location planning for distribution centers to avoid congested street networks and take advantage of transport options like rail or water, which can be more cost-effective.
Furthermore, small retailers may struggle to compete with larger superstores due to economies of scale, which can exacerbate the 'Last mile problem.' To compete in an ever-globalizing marketplace, organizations may need to embrace digital platforms that facilitate international trade and allow firms to benefit from the comparative advantage and value chain slicing. However, this necessitates that companies also invest in technology infrastructure and market competition in regions affected by the digital divide.