By Mark Seavy

Following several years of significant supply chain disruptions, consumers’ once iron-clad bonds with brands have weakened. This has given rise to less loyalty across all ages, according to McKinsey & Co.’s recent ConsumerWise report.

The findings—stemming from a survey of 15,000 consumers across 18 global markets—show that consumers aged 45 years and older, traditionally among the most loyal to brands, have become more likely to opt for new labels.

“Weakened brand loyalty, affordability over sustainability, and heightened interest in wellness products and services reflect the preferences and priorities of consumers across all ages and geographies,” McKinsey stated. “When they couldn’t find exactly what they needed because of pandemic-era supply chain disruptions, roughly half of consumers switched products or brands. That behavioral change has proved quite sticky with consumers continuing to be open to exploring alternatives, and brand loyalty fading across demographic groups.”

In advanced markets, more than a third of those surveyed tried assorted brands. And 40% switched retailers in search of better prices and discounts in response to widespread price inflation and economic uncertainty.

In the U.S. and Canada, 38% of consumers had tried new brands within the past three months of being surveyed, followed by Sweden (37%), the European Union (34%), and South Korea (33%). In terms of switching retailers, South Koreans were the most likely to make a change in search of better prices at 63%, followed by the Netherlands (52%), Sweden (42%), Canada (40%), and the U.S. (36%).

Along those lines, Gen Z and Millennials became “slightly more likely” to join older consumers in being willing to trade down to lower priced brands and retailers, McKinsey reported. That has led to the growing popularity of private label brands.

Thirty-six percent of those surveyed planned to buy private label items more frequently given the emphasis they are being given by Target, Walmart, and other retailers. More than half of (60%) consumers believe that private label products offer equal or better quality than national brands, according to McKinsey.

Yet in emerging markets, younger consumers (18- to 24-year-olds) split from those in more advanced regions. Young consumers in Asian and Middle Eastern countries like India and Saudi Arabia have a “strong desire” to spend on premium products and are twice more likely to trade up to more expensive items than those in advanced economies, according to the report.

“They are also up to three times more optimistic about their respective economies,” the report said. “This optimism could translate into higher levels of future consumption.”

Another break from the trends of the past was that while younger consumers continue to factor sustainability into their buying decisions, they are making trade-offs in the “face of economic uncertainty and inflation,” the report said. In the U.S. and Europe, there was a decline at the start of 2024 from a year earlier in the number of Gen Z and Millennial consumers that said sustainability was a key factor in buying decisions.

In the U.S, for example, the importance of sustainability declined 6% with Gen Z and 7% with Millennials. In the EU, meanwhile, sustainability fell 4% with both demographics, while in Sweden it was down 8% with Gen Z and 12% with Millennials.

“Younger consumers aren’t just deprioritizing sustainability in their purchase decisions, but they are less willing to pay a premium for sustainable products,” the report said. “Among these consumers, only a very small percentage were willing to pay a premium for personal care and apparel products with sustainability claims.”