The Impact of Delivery Services in Traditional Markets on the Performance of Traditional Markets and Store Owners

Purpose: Traditional markets, historically regarded as pivotal in distribution and local economic revital ization, face a competitive chal lenge amidst the rise of IT technology and the surge in non-face-to-face transactions due to the COVID-19 pandemic. As offline-centric entities, traditional markets are experiencing a lag in competitiveness. Government initiatives prioritize digital transformation to rejuvenate these markets. This study aims to assess the tangible impact of implementing delivery services, a key component of digital transformation policies for traditional markets, and to explore potential variances based on commercial district characteristics. Research design, data, and methodology: We u til ized t he t raditional market survey c onducted b y SMEAS to c onduct t wo s tudies e mpl oying regression analysis. Firstl y, w e investigated t he c orrelation between traditional markets with a high delivery ratio and sales. Secondly, we explored whether the scale of the business district (national, regional, local, neighborhood) moderates the association between delivery services and sales. Results: In a model control ling for previous year’s sal es and r egion, traditional markets with a high proportion of delivery showed a positive effect on sales compared to markets without such a f eature. Additional ly, s tore owners who utilized delivery services demonstrated a positive relationship with sales compared to those who did not, and the size of the commercial district exhibited a moderating e ffect. Specifical ly, the effect was more pronounced in stores within the remaining three commercial districts, which are relatively smaller in size. Implications: I t is necessary to prepare pol icy measures based on the fact that delivery services i n traditional markets h ave a mul tiplier effect r ather than a substitution effect, and that the effect of del ivery services varies depending on the size of the shopping district.