Shrinkflation

Do you know that ‘downsizing’ is not only an HR term but also used by marketers?

Recently I watched a 2007 Youtube video where B. J. Novak (remember the handsome and cunning Ryan Howard from popular show The Office?) where the actor showed how the size of Cadbury’s Easter egg reduced over the years. But, the company claimed, “Our eggs aren’t smaller, you are bigger”!

This marketing tactic is known as shrinkflation (shrink+inflation) or ‘package downsizing’ where brands reduce the quantity of product in the package but charge you the earlier price. The term was coined by US entrepreneur and economist Pippa Malmgren and you will see a multitude of brands taking this route frequently. A few years back, social media trolled Toblerone as the Swiss chocolate brand surreptitiously increased the gap between the triangular shapes of chocolate slabs by reducing thickness.

Brands claim it is absolutely necessary to beat inflation and make the product ‘affordable’. It means with the increasing price of input costs (e.g. Agri commodities, electricity, labor, etc.) they have two options.

First, they can increase the product cost. But that is easier said than done. Because the stakeholders (customers, media and society at large) will instantly notice the change and scream “I-N-F-L-A-T-I-O-N!!! Not the smart thing to do.

Second, the more sensible thing to do is to reduce the quantity and charge the valued customer the same price and hoping the customer will not notice. Remember, research has shown you and I are less likely to notice and care about a reduction in weight compared to an increase in price.

But, many customers are not convinced. Reddit, the social news aggregator has a shrinkflation community with more than 20,000 members.

So, next time you go to buy a bag of salty, spicy, crispy potato chips that has more air than chips, hit the pause button and think… Should you switch to a competitor brand or a retailer brand?

Image courtesy: https://commons.wikimedia.org/wiki/File:Toblerone_3362.jpg (licensed under creative common attribution)