Deep Dive: Urban Lifestyles Driving Shifts in Spending
Across the globe, more and more people are turning to city-center living. This trend spans developing economies and Western markets. In this report, we explore the trend’s impact on retail product categories and retail formats.
- Perhaps urban living’s greatest effect on consumer goods industries will be that it drives an incremental shift from spending on retail to spending on services.
- Greater urbanization should boost the markets for product rental, subscription services and on-demand fulfillment. We also expect it to support spending on leisure services and a shift in home-maintenance spending from do-it-yourself (DIY) options in favor of professional service providers.
- City-center living is boosting demand for antipollution products such as air purifiers, face masks and skincare. It is also helping drive growth in the “sleep economy,” which consists of products and services that promote better sleep.
- Within retail, we think greater urbanization will sustain a move from a model that requires consumers to put in much of the effort—including driving to a store, browsing the aisles in a large-format shop, and picking and packing their own products—to one where consumers expect retailers to take a greater share of the burden and offer greater convenience.