Commentary: Shoppers don’t mind shrinkflation if they think there’s a discount

SYDNEY: Have you seen that your favorite chocolate is a little smaller, there are fewer biscuits within the same-sized bundle or that your luggage of chips include extra air? If you haven’t, you’re not alone.

What entrepreneurs name a “contents reduction strategy” is extra popularly referred to as “shrinkflation” decreasing the scale of a product whereas the value stays the identical.

It’s a comparatively latest phenomenon within the grocery store enterprise, reflecting the strain on producers to maintain costs down. In reality, the phrase “shrinkflation” entered the lexicon solely in 2009.

Since then, producers have “shrunk” every little thing from jars of Vegemite, Maltesers, Tim Tams, Freddo Frogs and Corn Flakes. In the United Kingdom, the Office for National Statistics counted 2,529 examples between 2012 and 2017.

So why does shrinkflation appear preferable when it’s successfully the identical as placing up the value?

To examine this, we performed experiments enjoying with client perceptions of modifications in costs and quantity sizes. Our outcomes present the innate cognitive bias that buyers have in direction of specializing in worth, it doesn’t matter what.


In our experiments, we wished to measure the relative effectiveness of various methods to extend a product’s per-unit worth.

We simulated this in real-world situations by manipulating buyers’ perceptions of merchandise on the market in a grocery store in Brisbane after which measured the variations in gross sales. The experiment took six weeks and concerned 5 merchandise coconut rolls, confectionery, biscuits, soy milk and coconut water.

We modified neither the value nor the scale of those merchandise. But we did change the shelf tickets, to govern buyers into believing the value or measurement had beforehand been totally different.

Each week over 4 weeks, we modified the shelf tickets to check the next 4 eventualities, all implying an an identical enhance within the per-unit worth. 

Tactic 1 created the impression that solely the value had elevated. Tactic 2 created the impression that the value was the identical however the measurement had been lowered (commonplace shrinkflation).

Tactic 3 created the impression that the scale has elevated, but additionally the value had elevated much more. Tactic 4 created the impression that the product’s worth had been lowered, but additionally the scale had been lowered much more (shrinkflation variant).

The product and worth by no means modified however the indicators indicating the earlier worth and measurement did. In every case, the “before” per-unit worth was additionally proven an an identical 38 cents per 10 grams.

The different two weeks have been used as management weeks. In one week, we displayed a “New Package” shelf ticket. In the opposite management week, we displayed a common shelf ticket with out the phrases “New Package”.

Even although the modifications signalled by the shelf tickets represented an an identical enhance in per unit worth, the sale outcomes counsel that buyers discovered our shrinkflation variant probably the most engaging.

With tactic 4 (our shrinkflation variant) 530 items have been offered. This compares with 448 gross sales with tactic 3, 435 gross sales for tactic 2 (commonplace shrinkflation) and 391 gross sales for tactic 1.


These outcomes exhibit the industrial energy of psychological framing.

First, there’s the “silver lining effect” a combined consequence consisting of a small achieve (a lower cost) and a bigger loss (a good smaller measurement) is extra beneficial than a web consequence consisting of simply a smaller loss (worth rising or bundle downsizing) alone.

This impact is tied to the loss aversion principle developed by psychologists Daniel Kahneman and Amos Tversky, which says folks worth losses and features in a different way.

Second, worth is extra noticeable and is given extra weight than measurement. Thus buyers have been influenced extra by the value drop than by the discount in bundle measurement. We attribute this to an computerized cognitive response folks have an inherent desire for decrease costs.

In most developed nations, client safety legal guidelines require retailers to show unit costs to allow buyers to chop via the proliferation of selling alerts designed to draw consideration. However, there’s no obligation to point out the “before” unit worth, so it’s tough to gauge unit worth modifications.

It appears to be equally essential for retailers to promote unit worth modifications to assist shoppers make extra knowledgeable purchases.

But our outcomes affirm what entrepreneurs have clearly gleaned over the previous decade. Consumers’ cognitive biases are robust. So you possibly can anticipate ever extra shrinkflation and ever extra “price drop”, “discount”, “new price” and “price match” tickets to adorn grocery store cabinets.

Jun Yao and Di Wang are Senior Lecturers in Marketing at Macquarie University and the Queensland University of Technology respectively. Gary Mortimer is a Professor of Marketing and Consumer Behaviour on the Queensland University of Technology. This commentary first appeared in The Conversation.

Commentary: Shoppers don't mind shrinkflation if they think there's a discount

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