Highways and highstreets are fueling growth in tier 3-5 towns, outpacing metros, driven by the 3Fs: fuel, food, and fashion, as per a report. These smaller cities are growing nearly twice as fast as metros due to increased disposable incomes and evolving consumer preferences. The report highlights a shift towards premium products, with local product assortments gaining importance.
Tier 1-2 markets nearing saturation are seeing highway and high-street retail areas becoming new demand centers. The report emphasizes the importance of understanding consumer behavior at a detailed level for future growth. Retail demand spreading to lower demographics signifies a democratization of purchasing power and inclusive economic growth.
The report notes a 20% growth in offline consumer spending and a 25% increase in retail outlets between 2023-2025. While categories like electronics and jewelry are in early growth stages, footwear has matured across different city tiers. Grocery spending saw a 74% national rise, with tier 3-5 cities leading at 104% growth compared to 32% in tier 1-2 cities.
AI-enabled retail intelligence is playing a crucial role in identifying high-potential areas and shifting consumer demands. The report underlines the significance of aggregated payments data in understanding evolving consumer behavior and preferences for retailers to succeed in the evolving market landscape.
