Shrinkflation, Skimpflation...

In late 2021 NPR’s Planet Money coined a catchy new economic term. Skimpflation. 

The definition: When, instead of simply raising prices, companies skimp on the goods, quality, and services they provide.

Alan Cole, “Unlike typical inflation, where they’re paying more for the same goods, Skimpflation is when you’re paying the same or more for something that worsened in quality.”

Shrinkflation on the other hand is when the price of our “stuff” goes up or stays the same, but the amount you get goes down.

Shrinkflation adversely affects consumers’ ability to make informed buying choices.  Consumers have been found to be deterred more by a rise in price than by reductions in pack sizes.  Corporations deflect attention from product shrinkage with “less is more” messaging, for example by claiming health benefits of smaller portions or environmental benefits of less packaging.

What does this have to do with Inflation?

The economywide decline in service quality that we now are seeing is somewhat different. It is a situation where we are paying the same or more for services, but they fall short compared with what they used to be.

Shrinkflation is just one of the ways companies cope with higher costs fueled by inflation, shortages, and supply chain snarls.  Marketing and supply chain teams are struggling to figure out how to respond to rising costs and still maintain profit margins.  You may have a long list of ideas as to how to boost margins, ranked by profit impact and how noticeable these changes may be to your customers.

Shrinkflationa and Skimpflation are suddenly very noticeable because these changes are happening all at once in a short period of time.

A DIFFICULT TIME FOR BUSINESS

The economy is teetering on the edge of recession, and it is a difficult time for you, whether a big corporation or a small business.   You made it through COVID-19 only to be hit by soaring energy and material price increases, plus staff shortages. 

Some businesses must decide to pass on their increased expenses or replace parts and services with something cheaper.  Do you take a hit to profits or do you choose Skimpflation or Shrinkflation?

TIME FOR STRATEGIC PLANNING

Strategic planning is often neither “strategic” nor much of a “plan.”  This year has revealed the limitations of a rigid annual planning process even more starkly, as the best-laid plans of 2022 were quickly thrown out the window.  Trying to read tea leaves through these uncertain times will be even trickier.

Strategic planning also tends to be outdated the moment it’s written.  As you plan for 2023 think about putting planning on one side, agility on the other, and a practical and workable sweet spot in the middle.

In the print world of words, Skimpflation and Shrinkflation are not invited guests, EVER.  You still get the amount you order and the quality expected.

What experience have you had with Shrinkflation and Skimpflation?

Alexander Clark Printing is helping change business printing one ink spot at a time. 

Printed documents run business.  Words on a page communicate with your staff and customers. 

Alexander Clark can supply you with your promotional products, from pens to stress balls, from mugs to wrist bands.

When done right, direct mail marketing can work with your other channels, like digital marketing, to make your business stand out. 

 Printing on the envelope is your opportunity to add color, personality, and in some cases, life to your envelope. Which one you choose can depend on the kind of mailing you are doing, the size of your mailing and your budget.

 Alexander Clark Printing can manage your documents. Our technologies empower our clients, streamline processes, lower costs, improve service levels.