David vs . Goliath : Uncovering The Future of Traditional Markets in Indonesia

The main purpose of this study is to address the attributes that explain younger generations’ (Generation Y) store loyalty to a shop in the traditional marketplace in Indonesia. This paper acts as the preliminary study with the primary goal in producing hypotheses on Generation Y store loyalty for traditional marketplace shopping in Indonesia. The result of the study will be useful for further research with statistical support, with the final goal to help local merchants in shaping their upcoming fate. The findings of this study suggest that from the analysis and synthesis of the research, there are several hypotheses that can be drawn and will be useful for future research. The attributes of accessibility, merchandise, reputation, in-store service, store atmosphere, public facilities, price, and security are all responsible to support younger generations’ (Generation Y) store loyalty to shop in traditional marketplace in Indonesia. This study has successfully generated the relevant categories in influencing the store loyalty attributes for Generation Y when they are shopping in the traditional marketplace in Indonesia. The results of this study will be useful as a benchmark for future research concerning Indonesian traditional marketplace consumers in general, and younger generations’ (Generation Y) consumer behaviour when they are shopping in traditional marketplace in Indonesia.


Introduction 1.
The continuation of competition between traditional markets, also called as pasar tradisional, and modern markets (like mini markets and supermarkets) to win the heart and, in its turn, the wallet of groceries consumers in Indonesia appear to be one-sided.In spite of best efforts conducted by the traditional merchants, including marketing methods such as price discount, they are slowly cornered to the brink of collapse.The struggle of traditional merchants might seem to have little meaning against the marketing muscles of modern market giants.
This situation reminds us to the epic tale of David versus Goliath.Up to this writing, the traditional marketplace merchants in Indonesia mostly still rely on the loyalty of their older generation clients (e.g.Baby Boomers).Meanwhile, the very survival of traditional market, in the long run, depends on how skilful local merchants are to attract younger generations (i.e.Generation Y) as their future consumers.The traditional marketplace merchants cannot give hope only to the loyalty of older generations to be passed on their youngsters.
This paper was brought forward to uncover the factors that might explain younger generations' (Generation Y) store loyalty toward traditional markets to help local merchants in shaping their upcoming fate.The phenomenon was approached by integrating the theory of generational cohorts into retail consumer behaviour model proposed by Thang and Tan (2003) to produce a modified version of the retail consumer behaviour model.Then, several hypotheses about the reasons for the reluctance of young people visiting the traditional markets will be built.However, prior to entering the discussion, the development of traditional markets in Indonesia will be discussed first to provide clearer pictures about challenges faced by the traditional markets.

The Development of Traditional Markets in Indonesia 2.
Traditional markets or pasar tradisional are places where consumers can buy daily necessities ranging from foodstuff, fabrics and garments to small household items generally through bargaining process with cash as a common payment method.The history of traditional markets in Indonesia started since the 5 th century under the era of Kutai Kertanegara.At that time, traditional markets were set up near the harbour or river banks to facilitate the unloading activities.In the ISSN 2039-9340 (print) Mediterranean Journal of Social Sciences MCSER Publishing, No 5 September 2015 29 Dutch colonial period, traditional markets grew and moved to urban centres.The type of goods sold in the traditional markets is also regulated within specific time or date period.These regulations promote the current naming system of traditional marketplace in Indonesia such as Pasar Senen (Monday Market) in Jakarta and Pasar Legi in Yogyakarta which is based on the Javanese calendar system (Malano, 2011).
Traditional markets in Indonesia are considered to reach its golden age in the 1960s to 1970s (Malano, 2011).However, according to 2008 data, the number of traditional markets in Indonesia continually declined by 8,1 percent yearly (Malano, 2011).In Jakarta itself, it was estimated there were 450 kiosks closed each year (Malano, 2011).At the same time, the number of modern markets in Indonesia increased by 31,4 percent (Malano, 2011).Moreover, according to AC Nielsen, the consumers appear to be increasingly favouring the modern markets (Zulaikha, 2009).It was not surprising that the market share of traditional markets eroded bit by bit (see Figure 1).Some studies also suspect the rise of modern markets as the primary cause of the fall of the traditional markets (Sadino and Syahbana, 2014;Malano, 2011;Suryadarma et al., 2010).
According to Sadino and Syahbana (2014), based on the store image attributes, the modern markets surpassed traditional markets regarding the merchandise variety, merchandise quality, convenience, promotion, and location.Traditional markets in Indonesia are being perceived by the consumers as dirty, over-crowded, and tarnish (Malano, 2011).However, modern markets are not the only problem of traditional markets (Suryadarma et al., 2010).The lack of infrastructure, intense competition with the street vendor, lack of fund for business expansion, and declining purchasing power of consumers cited as the cause of traditional merchants' business downturn (Suryadarma, 2010).Several strategies pursued by traditional markets as a means to deal with competition.The most popular approach is politeness, merchandise quality, and price discount (Suryadarma, 2010).Regarding to street vendors, traditional merchants perceive them as the one who steal away most of their business since they are located around the traditional market and blocked the consumers from entering (Malano, 2011;Suryadarma, 2010).To deal with the street vendor, the majority of traditional merchants display their wares in front of the markets and even on the sidewalks Malano (2011).This condition is often led to a traffic jam Malano (2011).Hence, it is not uncommon that the inner part -including the upper floors -of traditional markets is seen inhabitable Malano (2011).Young shoppers, along with the majority of other consumers (see Figure 2), appear to prefer modern store compared to the traditional marketplace (Kato et al., 2009;Malano, 2011).It seems to exacerbate the plight of traditional markets unless something is done to change it.This paper is following the argument that the store loyalty can be explained by consumer perception toward store image (Thang and Tan, 2003).In the context of store loyalty, shopping motives also seem to play a role since it influences the consumers' perception toward store image attributes (Noble et al., 2006;Morschett et al., 2005).It is also argued that the cohort group retained some influences toward shopping motives (Parment, 2013) and consumers' perception (Nicholas, 2009).The conceptualization and the interrelationship between those variables will be explained on the following sections.

Store Loyalty
For any business entities, including retailers or merchants, the store loyalty seems to be one of the paramount importance.However, numerous studies have shown that loyalty is a multi-facet concept.Oliver (1999) developed phases of commitment that flow from cognitive loyalty toward action loyalty.An action loyalty is characterized by consumer's readiness to re-buy (or re-patronage) and their intention to overcome various situational factors that might hinder the act of repurchase (Oliver, 1999).Bloemer and de Ruyter (1997) also argued that there are several levels of store loyalty with each being defined by the level of buyers' pledging their commitment toward his or her store choice.Consistent with Oliver (1999), it is argued that higher level of commitment leads to -and hence can be measured byhigher level of word of mouth, price insensitivity, and purchase intention (Bloemer and Oderkerken-Schroeder, 2002;Rahadi, 2011).

Store Image
Several studies that discuss the shoppers' loyalty toward particular store format in Indonesia reveal interesting results.Rahadi & Widyarini (2008) and Zulaikha (2009) found that loyalty toward traditional markets is influenced by location (accessibility), product freshness (quality), the existence of public facilities (such as rest rooms and praying area), buyerseller relationships, transaction simplicity, value (comparison between perceived cost and benefit), knowledgeable merchants or personnel, and cultural preservation.However, it is proved that in Zulaikha (2009) model and in the study by Rahadi (2011), the store image (e.g.location and product freshness) and shopping motives (e.g.relationship-seeking and culture preservation) are pretty much muddled.
In the context of shoppers' loyalty toward the modern market, Salim (2009) discovered that the store image retains a positive influence while store personnel are found to have no significant impact.Further elaboration on the store image, Thang and Tan (2003) proposed merchandising, accessibility, reputation, in-store service, store atmosphere, and promotions as store image attributes.Thang and Tan (2003) study seems to be consistent with the store image attributes employed in previous studies (i.e.Carpenter and Moore, 2006;Sinha and Banerjee, 2004;Bloemer and de Ruyter, 1997).Aribestari and Setyono (2013) found that there are different factors influencing different store attribute attractiveness.For traditional markets, the sources of store attribute attractiveness rest on product variety, price, and public facilities.Meanwhile, for modern markets, the attractiveness rest on convenience, product variety, price, physical conditions, and physical facilities (Aribestari and Setyono, 2013).It clearly shows that the different store formats posses a distinct store image (Aribestari and Setyono, 2013;Bloemer and de Ruyter, 1997).Hence, in this research, accessibility, merchandising, reputation, store atmosphere, in-store service, public facilities, price, and security will be employed as the key attributes of store image.

Consumer Perception
Perception is a process that starts with consumer exposure and attention toward marketing stimuli and it ends with consumers' interpretation (Hawkins and Mothersbaugh, 2010).As what have been acknowledged, the reality of external world (objective reality) can be differed from consumer perception about that reality (subjective reality) (Hawkins and Mothersbaugh, 2010;Morchett, 2005;Mazursky and Jacoby, 1986).Hence, Thang and Tan (2003) argued that the effect of store image toward store preference is mediated by consumers' perception as a result of consumers' emotional and cognitive response.Despite using different terminology, the definition offered on store preference by Thang and Tan (2003), consumers' prioritization of store measured by patronage frequency, was very similar with the conceptualization of store loyalty previously explained.

Shopping motives
Taking a different angle, Noble et al. (2006) argued that the loyalty toward local merchants is also influenced by consumers' internal factors i.e. shopping motives.Even though some studies differentiate the shopping motivations into hedonic and utilitarian motivations (Jackson et al., 2011;Kim and Kim, 2005;Martin and Turley, 2004), Noble et al (2006) introduced six distinct shopping motives, consisting of information attainment, price comparison, uniqueness seeking, assortment seeking, convenience seeking, social interaction, and browsing.However, only some of these shopping motives can be better accommodated by the local merchants compared to modern store formats (Noble et al., 2006).These findings support the notion that different consumers groups place different emphasis on different store image attributes (e.g.Morchett et al., 2005).

Cohorts
Cohorts refers to the groups of people who experience similar external events (economics, political, social, cultural, and technological events) during their 'coming of age' years (Noble and Schewe, 2000).Different cohort groups expose to different massive societal events that sometime are referred as defining moments and hence, instilled different values, attitudes, preference, and buying behaviour that will last throughout one's lifetime (Schewe et al., 2000).These findings explain why some researchers argue that employing cohorts as segmentation variable are more useful rather than the age group (Parment, 2013).This paper argues that the cohorts influence how consumers place different importance on different store image attributes based on their shopping motives.Since different store formats perceived by consumers to present distinct store image (Aribestari and Setyono, 2013;Bloemer and de Ruyter, 1997), it is expected that the rationale behind Generation Y reluctance to visit traditional markets can be uncovered.
Although not every country will have the same cohorts as found in America (Schewe and Meredith, 2004), the cohorts were previously popularized in America and hence, the understanding of each American cohort groups, as presented in Table 1, is important (Codrington, 2011).Also, it is worthy to be noted, among past studies, there were some variations about labels and also 'coming of age' years of each cohort groups.In the Indonesian context, it was argued that Indonesian had all of the cohorts delayed.The rapid economic development came late in 1960 to 1970 under Soeharto's New Order Era.The major change in political landscape, which marked the beginning of Reformation Era, came in 1998 when many countries around the world had it during 1980s.Thus, it would be reasonable to argue that today adolescents in Indonesia are growing up in Generation Y period (Codrington, 2011).Generation Y lives in the era where electronic media, especially television and the internet, had flooded them with information in respect to materialism.In contrast to its predecessors (e.g.Traditionalist), Generation Y is more likely to perceive an opulence as an appropriate even a desired lifestyle (Bakewell and Mitchell, 2003).They are not easily fazed with the controversial information (Urwin and Venter, 2014).They are more open to the conspicuous consumption as a means of self-expression or symbol of opulence lifestyle (Kim and Jang, 2013).Furthermore, they are more likely to trade up compared to other cohort groups and seeing shopping as a leisure activity (Bakewell and Mitchell, 2003).Even in the labour market, Generation Y is also being regarded as ambitious and expected to be less loyal to their employers compared to older cohorts groups (Hewlett et al., 2009).Parment (2013) revealed several significant differences between Generation Y and Baby Boomers as comparison group regarding their shopping motives and behaviour.First, Generation Y emphasizes the emotional aspect in their purchase criteria while Baby Boomers emphasize on the rational purchase criteria.For Generation Y, product choice is an emotional decision while channel choice is a rational one.The opposite is true for Boomers (Parment, 2013).Furthermore, as to grocery products, Baby Boomers show a higher degree of buyer involvement compared to Generation Y (Parment, 2013).
Secondly, Generation Y is also found to have a lower loyalty toward particular retailers compare to Boomers.They also do not recognize the need for building a relationship with their respective grocery retailer.On the contrary, Boomers trust local dealers and tend to be loyal to one grocery retailer.It is concluded that Boomers are more likely to build relationship with stores, to be more loyal to stores, and to shop in fewer stores.Meanwhile, Generation Y bases their choice of retailers either on the lowest price or convenience attributes.Generation Y also tends to shop around without any intention to buy especially in variety-seeking purchase behaviour (Parment, 2013).
Third, for Generation Y, the brand serves as a sign of image, social profiling, and quality while Boomers regards brand only as a sign of quality.This difference can be attributed to the fact that Generation Y purchase behaviour is profoundly influenced by their social environment.The study revealed that Generation Y worries more than Boomers about how they are being perceived as a consumer, including their product choice, by their social environment.It is indicated that Generation Y is exposed to a higher social risk (Parment, 2013).
Fourth, Generation Y also possesses the ability to deal with the large supply of information that is perceived by Baby Boomers as confusing one.Boomers rely more on their retailer advices in purchase consideration compared to Generation Y, it is more likely due to the difficulty in information processing.Hence, Boomers show a higher tendency to ask for assistance from groceries store personnel compared to Generation Y (Parment, 2013).

The Relationships of Store Loyalty Antecedents
Most consumer behaviour studies in modern days employ the SOR (stimulus, organism, and response) framework to depict the role played better by consumers' psychology in explaining consumers' response to numerous marketing stimuli (Jacoby, 2002).Some studies in the context of store loyalty also adopt SOR framework to explain how consumers might respond, whether by approaching or avoiding, different stimulus within store environment (Salim, 2009;Thang and Tan, 2003).The SOR model built even called as "The Model of Retail Consumer Behaviour" (Thang and Tan, 2003).Hence, SOR framework is also adopted in this research to establish the relationships between store image, shopping motives, cohort group, consumer perception, and store loyalty.
In the context of the relationship between the antecedents of store loyalty, it is proved that the store image impact on store loyalty is mediated by consumer perceptions (Salim, 2009;Thang and Tan, 2003).While the effect of shopping motives on store loyalty are also suspected to be mediated by consumer perceptions as well (Noble et al., 2006;Kim and Kim, 2005).Morchet et al ( 2005) also support the argument stating that shopping motives influence the degree of involvement or selectivity during the perceptual process.Meanwhile, the influence of cohort group is rather complicated since Jackson et al (2011) found no difference in shopping motives between different age groups.However, Parment (2013) insisted on the idea that cohort can explain consumers' behavioural motivation and serves as a sound basis for segmentation.Cohort groups are also argued to have a strong influence on consumer perception (Nicholas, 2009).It is consistent with Hawkins and Mothersbaugh (2010) argument that the meaning attached on marketing stimuli partly depends on individual traits, experiences, and expectations.
In respect to the SOR classification, consumer perceptions are considered as embedded, or factors that internalized, in shoppers as an individual and hence regarded as a part of an organism.Meanwhile, store image, shopping motives, and cohort group are regarded as stimulus since these are the external factors to the shoppers.However, one might argue that shopping motives and cohort group are part of consumer's internal factors (organism).Such duality is difficult to be accommodated by conventional SOR model (Jacoby, 2002).To address the duality in the nature of the stimulus, the stimuli were divided into external stimulus and internal stimulus.Hence, store images belong to external stimulus while cohort group and shopping motives were part of the internal stimulus as reflected on the modified SOR model shown in Figure 3.Some explanations might emerge as to the decreasing number of Generation Y visits to traditional markets in Indonesia.In this study, we argue that the phenomenon is the result of Generation Y poor perception toward the attributes of traditional markets' store image.Additionally, by utilizing various empirical findings from past studies regarding the influence of cohorts on shopping behaviour, several hypothesis can be forged as the attempt to explain the relationship between cohort and store loyalty.
First of all, Salim (2009) argued that modern markets provide a better choice for busy people for daily necessities ISSN 2039-9340 (print) Mediterranean Journal of Social Sciences MCSER Publishing, Rome-Italy Vol 6 No 5 September 2015 34 shopping due to the longer operation time compared to the traditional market.Since Generation Y is more likely to belong to an active workforce, they might be more loyal to a store that provides shorter travelling time and longer operation time.Hence, it can be hypothesized that:

H1.a: Generation Y is more loyal to a store format that provide excellent accessibility. H1.b: In generation Y perception, traditional markets always provide inadequate accessibility.
Generation Y is also less likely to ask for assistance during shopping and shows higher tendency to be involved in variety-seeking behaviour or shopping around (Parment, 2013).This behavioural shopping indicates that Generation Y is more likely to browse as their shopping motives.This type of shopping motives was better accommodated by modern markets that provide wider assortments and self-service concept (Noble, 2006).In the modern market, grocery products (e.g.fruits and vegetables) are also displayed in a neat colour-coded manner that will increase the visual appeal of grocery products as browsing objects.Hence, it might be hypothesized that:

H2.a: Generation Y is more loyal to a store format that provide wide variety of quality merchandise. H2.b: In generation Y perception, traditional markets always provide poor variety of quality merchandises.
Generation Y is also exposed to higher social risk (Parment, 2013).Hence, reputation might be valued by Generation Y as an important attribute to be considered in their channel selection because reputable stores stimulate higher affiliation that might extend toward pride of ownerships and a sense of premium (Thang and Tan, 2003).Malano (2011) also stated that, for the young generation, shopping in modern markets can lift their sense of pride and prestige.It appears that Generation Y perceives modern stores as more reputable compared to traditional markets and hence, it can minimize their social risk.Hence, it might be hypothesized that: H3.a: Generation Y is more loyal to a store format that convey good reputation.Noble et al (2006) found that those who seek for information attainment, merchandise uniqueness and social interaction are more likely to develop loyalty toward local merchant.This finding is consistent with the findings by Zulaikha (2009) suggesting that within Indonesian context, buyer-seller relationship and information from merchants were still regarded as important attributes that were being sought by traditional market customers.At one side of the fence, Baby Boomers rely more heavily on the assistance of store personnel in their purchase behaviour due to informationprocessing difficulties and are more likely to build relationship with sellers (Parment, 2013).These findings might help to explain why older generations in Indonesia are more liable to shop in the traditional market (Sadino and Syahbana, 2014;Kato et al., 2009).At the other side of the fence, Generation Y is regarded as techno savvy (Codrington, 2011) and hence they do not rely much on the store personnel assistance to obtain more information since most of information currently available on the internet.It can be concluded that in-store service does not perceived as an important attribute by Generation Y.Moreover, the aggressive behaviour of traditional markets in offering their goods, as observed by Malano (2011), might deter browsing behaviour (Noble et al., 2006).Hence, it can be hypothesized that: The above hypothesis is consistent with the findings that browsing appears to be a motive that could not be accommodated effectively by the local merchants since they exercise higher degree of shoppers' surveillance (Noble et al., 2006).

H3.b: In generation Y perception, traditional markets always convey poor reputation
In the context of store atmosphere, since Generation Y prefer to engage in market browsing activities (Parment, 2013), environments within the store might be considered as important factors that influence their loyalty.Moreover, Generation Y is more likely to perceive shopping as a leisure activity (Bakewell and Mitchell, 2003) or possessing convenience seeking motive.Martin and Turley (2004) also offered an insight that those who possess hedonic shopping values, who perceive shopping as a leisure activity, are more likely to pay attention to store environmental variables and exhibit greater desire to stay within store environments and stronger re-patronage intention.Hence, it can be hypothesized that: The rational nature of Generation Y channel selection criteria (Parment, 2013) might lead them to maximize every possible benefit that being offered by a store.Those benefits can take various forms such as the availability of restroom, praying area, and parking lot.Since Generation Y is also known as having the attitude of "...feel entitled to life rewards without paying their dues" (Nicholas, 2009), it can be hypothesized that: In respect to price of the products being offered in the store, modern markets are perceived as the store format that offered higher price compare to traditional market (Malano, 2011;Suryadarma et al., 2009).However, based on Parment (2013), product choice is an emotional decision for Generation Y hence making the price attribute as a less influential factor.Moreover, younger generations perceive the act of bargaining, that commonly found in traditional markets and might lead to a lower price, as inconvenient and hence they prefer a fixed price (Malano, 2011).These findings lead to hypothesis that:

H7.a: Generation Y neglect price as a factor that must be considered during their shop visits. H7.b: in generation Y perception, traditional markets always offer competitive price.
According to Maslow, safety needs are considered as the needs that precede other requirements (e.g.esteem needs) (Hawkins and Mothersbaugh, 2010) and hence it is very essential to human functioning especially as a consumer.Unfortunately, traditional markets are perceived as being susceptible to criminal acts such as pick-pocketing (Malano, 2011).Considering Generation Y convenience seeking motive in shopping activities (Bakewell and Mitchell, 2003), it can be hypothesized that:

5.
Several pieces of evidence from the past studies are constructed in this paper to explain the reluctance of young generation (i.e.Generation Y) to shop at traditional markets.The concept of cohort was integrated into retail consumer behaviour model due to its ability to reveal the consumption motivation (Parment, 2013).It turns out that Generation Y possess unique motives that might affect their perception toward traditional markets' store image attributes.In turn, their perception will influence the decision whether traditional markets are worth to receive their commitment and resources.
This paper also forge several hypotheses to reflect the influence of Generation Y values toward the perception of store image attributes.It was argued that Generation Y is more likely to have poor perception toward the attributes of traditional markets' store image regarding accessibility, merchandise, reputation, in-store service, store atmosphere, public facilities, and security.The only advantages that traditional markets had over modern store formats seem to rest in price competitiveness.Unfortunately, there was a presumption that price is a less influential factor in Generation Y shopping decisions.However, every argument built in this study, including the relationships between the determinants of store loyalty previously depicted, must be further examined and served as the objects of empirical testing.

Future Research 6.
This study acted as the base for collective studies performed by the authors to uncover the attributes influencing the future of traditional marketplace, particularly in the context of the Indonesian market.The findings in this study will be useful as the benchmark to create further research papers with statistical analysis, with qualitative and quantitative research approaches.The final goal of the study is to create a conceptual model explaining the attributes for traditional marketplace in Indonesia.

Figure 3 .
Figure 3. Modified SOR Model of Retail Consumer Behavior Discussion 4.
H4.a: Generation Y is more loyal to a store format that provide looser in-store service.H4.b:In generation Y perception, traditional markets always provide more stringent in-store service.
H5.a: Generation Y is more loyal to a store format that provide good store atmosphere.H5.b: in generation Y perception, modern markets always provide poor store atmosphere.
H6.a: Generation Y is more loyal to a store format that provide good public facilities.H6.b:In generation Y perception, traditional markets always provide poor public facilities.
H8.a: Generation Y is more loyal to a store format that provide good security.H8.b:In generation Y perception, traditional markets always provide poor security.

Table 1 .
Codrington (2011)roups, Adapted fromCodrington (2011)They are the optimist.Value idealism, personal growth, and personal gratification.Putting a greater emphasis on image and self-expression.They loved conspicuous consumption and accumulated more debts.
Traditionalist(born 1920s -1945)Great Depression and World War II Hard working attitude, very dedicated people, and preferred rules, order, and hierarchies.They were also self-sufficient, save more money, and very cautious concerning making a loan.They were also known as distrustful of any change ISSN2039-9340 (print)