Downsized Delights: How Shrinkflation Can Chip Away at Brand Equity

Shrinkflation. Most of us—perhaps unknowingly—feel its impact every day at the grocery store.

The practice of corporations downsizing their products to maintain price levels is dominating consumer conversations. Almost every major media publication has covered the topic or a variation of it in the last month. For instance, mentions of the term ‘shrinkflation’ in articles spiked to well over 3,000 on Thursday, March 7, according to Muck Rack—the same day President Biden scolded corporations for raising prices to "pad the profits, charging more and more for less and less” during the State of the Union address.

While shrinkflation isn’t new, companies ought to tread carefully as consumers continue to feel the pinch from inflation and are hyper-sensitive to corporate actions that ding their wallet. Corporate communicators need to preempt and get out in front of any adverse public response taken against their brand following plans to reduce product size.

It's The Lesser of Two Evils

Despite idealistic views, companies cannot always absorb the costs associated with inflation, and some have no choice but to pass the cost on to consumers either through raising prices or reducing product sizes. Shrinkflation can be less of a risk—albeit still a risk—to damaging brand equity when weighed against price hikes for price-sensitive consumers.

Deception Degrades Trust

There is no more important driver of brand equity and purchase consideration than trust. Quietly reducing product sizes could be perceived as more insidious than inflation because it makes consumers feel they’ve been deceived. Some companies aren’t communicating ahead of time the change in product size or volume, so when consumers uncover the change unexpectedly, it leaves them feeling taken advantage of.

To add insult to injury, shrinkflation is also within a corporation’s control to a certain extent—this is true at least in the eyes of the consumer. Inflation is viewed purely as a market force, while consumers view shrinkflation as a corporate choice.

How to Rebuild Brand Trust with Consumers

The days of segmenting communications as “corporate” or “consumer” are over. PR advisors have evolved to become business problem solvers who no longer can limit themselves to challenges that only come in black or white. Communicators need to solve problems that come in all shades of gray. And doing so requires PR advisors to have business acumen as well as an understanding of what moves and inspires their consumer.

Think through the impact of corporate messaging. Consumers award trust to brands who earn it and transparency is key. Brands need to take what was previously considered a corporate message intended for the market and think through how that same corporate messaging impacts their consumer and then tell them.

Be transparent and address changes openly. Brands should address any plans to alter product size directly in their corporate communications to stakeholders and the marketplace.

Strike the right tone—and choose the right platform. Conversations on “new” media platforms like TikTok and legacy ones like Instagram or X—largely driven by Gen Z, who has been described as the most “anti-capitalist” generation—can be effective channels to engage consumers with expected product changes. Just make sure you strike the right tone and craft the message in a way that is authentic to the brand’s voice on the channel.

If brands aren’t transparent about their plans and their consumers catch wind, the hill to rebuilding trust is a steep one.

Layton Lassiter is co-founder of communications agency Gray Wolf.