Chain Store Age Mentions First Insight | Survey: Gen Z Shoppers Pay Premiums For Health & Wellness, Beauty Products
Gen Z consumers are trading down on household essentials – but splurging elsewhere.
Nearly six-in-10 (59%) Gen Z consumers actively trade down in one category to fund a premium purchase in another, according to a new survey AI-powered consumer feedback firm First Insight. While cutting staples like food and beverages and household goods, Gen Z consumers are splurging in health and wellness (25% willing to pay a premium) and skincare and beauty (22%). Nearly one-third (31%) say they are most likely to purchase private label food and beverages to save money, and 24% say the same for household goods.
Gen Z consumers are more willing to trade down than other generations. When asked by First Insight which brand “stands out first,” Gen Z respondents consistently trailed baby boomers in naming established national brands compared to private label, direct-to-consumer and premium alternatives. For example, when shown photos of multi-purpose cleaners across these brand types, 68% of baby boomers said the national brand stood out first, compared to 44% of Gen Z.
Similarly, 79% of baby boomers selected the leading national brand of facial cleanser compared to just over half (52%) of Gen Z, with similar gaps appearing with dog food and vitamins. However, when asked to rank brands by purchase preference, Gen Z still chose national brands #1 in every category — ahead of private label, premium and direct-to-consumer challengers alike.
“Gen Z still picks national brands when you put four options in front of them. 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,” said Viki Zabala, chief strategy and growth officer at First Insight. “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. As boomers age out of peak purchasing, this isn’t a cycle. It’s a handoff. And right now, challengers are on the receiving end.”
Additional insights from the survey include the following:
- Forty-two percent (42%) of Gen Z and Gen X, and 40% of millennials, say they have purchased food/beverages from chains like Dollar General and Dollar Tree in the past month. This is significantly more than baby boomers, with only a quarter (25%) saying the same.
- Only 25% of Gen Z and 28% of millennials say they are not subscribed to any product-based subscription services, compared to 55% of Gen X (ages 45-60) and 69% of baby boomers who say the same. Food and beverage subscriptions are the most popular for Gen Z (34%) and millennials (31%).
- Forty-four percent of those surveyed say a product is worth subscribing to instead of buying in-store if there are discounts or cost savings. Thirty-four percent cite exclusive product offerings not available in-store, and 33% cite convenience.
First Insight’s report is based on responses from 2,151 respondents ranging from 18 to 80 years old.
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