Traditional Market Attractiveness and Customer Loyalty: The Moderating Role of Digital Literacy
DOI:
https://doi.org/10.35870/ijmsit.v6i2.7979Keywords:
Traditional Market Attractiveness, Local Product Uniqueness, Digital Payment, Customer Loyalty, Digital Literacy, PLS-SEMAbstract
This study develops and empirically tests the Cultural–Digital Traditional Market Attractiveness Model, an integrated framework explaining how cultural and functional market attributes generate customer loyalty toward traditional markets. Grounded in the stimulus–organism–response paradigm and customer perceived value theory, the model positions market attractiveness as the evaluative mechanism that converts local product uniqueness, cultural atmosphere, digital payment availability, market accessibility, and price competitiveness into customer loyalty, and specifies buyers' digital literacy as a boundary condition of that conversion. A quantitative explanatory design was applied to 300 traditional-market consumers in Surabaya, Indonesia, selected through purposive sampling, and the data were analyzed using Partial Least Squares Structural Equation Modeling with SmartPLS 4. Local product uniqueness (β = 0.355), cultural atmosphere (β = 0.303), price competitiveness (β = 0.268), and market accessibility (β = 0.188) significantly increase market attractiveness, whereas digital payment availability does not (β = 0.049; p = 0.237). Market attractiveness strongly increases customer loyalty (β = 0.496), and buyers' digital literacy positively moderates this relationship (β = 0.118; p = 0.010), raising the simple slope from 0.378 at one standard deviation below the mean to 0.614 at one standard deviation above it. Market attractiveness transmits the indirect effects of the four significant antecedents on loyalty but not that of digital payment availability. The model explains 70.2% of the variance in market attractiveness and 38.1% of the variance in customer loyalty. The findings indicate that digital modernization strengthens loyalty only when it complements cultural authenticity, product differentiation, accessibility, and economic value, and only when buyers possess the literacy required to use it. Traditional-market revitalization should therefore prioritize distinctive local products, authentic cultural experience, and buyer digital literacy rather than payment infrastructure alone.
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