Progressive Grocer Mentions First Insight | Gen Z Still Chooses National Brands, But Pays Less Attention to Them: Report
National brands haven’t lost Gen Z yet, but the writing may be on the wall. New research from First Insight, which surveyed 2,151 consumers across all age groups, finds that Gen Z still ranks national brands first in purchase preference across every product category tested, but they don’t appear to be paying much attention to them in the first place.
When shown side-by-side photos of multi-purpose cleaners, 68% of Boomers said the national brand caught their eye first. Among Gen Z, that number was 44%. The gulf was nearly as wide in skincare: 79% of Boomers gravitated toward the leading national facial cleanser, compared to 52% of Gen Z. According to First Insight, that pattern holds across a number of other categories, including dog food and vitamins.
“Gen Z still picks national brands when you put four options in front of them,” said Chief Strategy and Growth Officer Viki Zabala. “What this data shows is that they’re noticing them less, exploring them less and in categories like vitamins, they’re a coin flip away from choosing a challenger instead.”
CeraVe, a well-known national skincare brand, catches the eye of 52% of Gen Z shoppers, but only 33% want to learn more, a 19-point falloff. Blueland, a direct-to-consumer cleaning brand with far less name recognition, stands out to just 18% of Gen Z, but 30% actually want to dig deeper, a 12-point gain.
“The brands that will win the next decade are the ones that understand exactly where they stand in the Gen Z value hierarchy — by category, by channel— and take action before that gap becomes permanent,” Zabala added.
While the data may make Gen Z’s purchasing habits seem flighty, their investments are usually deliberate. Around 59% of Gen Z consumers trade down in at least one category to fund a premium purchase somewhere else. Food, beverages and household staples are the usual sacrifices: 31% say they’re more likely to buy private label food and beverages to save money, and 24% say the same for household products. That freed-up cash tends to flow toward health and wellness, with 25% willing to pay a premium for high-quality items, and skincare and beauty products (22%).
First Insight’s report describes three distinct shopping modes operating within today’s Gen Z consumer: Value Seekers, Identity Shoppers and Creatures of Habit. Value Seekers dominate food and household aisles, while Identity Shoppers, who are often drawn to natural, premium or eco-friendly products, show up most often in the health, skincare and pet categories. The Creature of Habit, who buys on brand recognition alone, is most concentrated in pet food, the one category the report identified where legacy brand loyalty holds fast.
Millennials trade down to store brands at a much higher rate than their Gen Z fellows at 62% and have higher rates of intended food and beverage subscriptions than any other generation at 43%. Additionally, 18% of Millennials already shop specialty and DTC channels for food. First Insight’s own earlier research found that 45% of consumers who switched to a store brand when quality met expectations made the switch permanently.
“As Boomers age out of peak purchasing, this isn’t a cycle,” Zabala said. “It’s a handoff. And right now, challengers are on the receiving end.”
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