The global economic crunch is forcing both brands as well as individual consumers to rejigger their monetary strategies in the coming year. Many brands are trying to use various tactics to bolster their profit margins, and the three most common tactics are inflation, shrinkflation and skimpflation. Inflation is when the price of a good increases, whereas in shrinkflation you pay the same price but get less of a product for it such as in the case of chips packets containing fewer chips by weight. Skimpflation is when brands reduce the quality of the product to avoid having to increase the price.
With all of that having been said and now out of the way, it is important to note that consumers have a clear preference for one out of these three strategies, namely inflation. Brands sometimes assume that increasing prices would alienate consumers, but in spite of the fact that this is the case 62% of consumers said that they might stop buying from a brand that uses either shrinkflation or skimpflation.
Just 7% of consumers seem unbothered by these two tactics, which suggests that increasing prices is the way to go for brands with all things having been considered and taken into account. 75% of consumers feel like prices will continue to increase, and 45% suggested C-suite executives taking a pay cut because of the fact that this is the sort of thing that could potentially end up keeping prices stable without requiring shrinkflation or skimpflation.
This will have a noticeable impact on marketing strategies, with marketers looking to expand their reach whilst keeping the current inflationary climate in mind. 65% of consumer said that they plan to decrease their spending this year to ride out inflation, so marketers will have to work overtime to continue inducing consumption among their target markets. It will be interesting to see how the marketing industry adjusts to the new normal, and chances are that it will require them to delve deeper into the world of analytics and opt for more automation by using AI and machine learning.
Sources: Gartner / Martech
Read next: Humanity Has Already Used Up Earth’s Annual Resources for 2022
With all of that having been said and now out of the way, it is important to note that consumers have a clear preference for one out of these three strategies, namely inflation. Brands sometimes assume that increasing prices would alienate consumers, but in spite of the fact that this is the case 62% of consumers said that they might stop buying from a brand that uses either shrinkflation or skimpflation.
Just 7% of consumers seem unbothered by these two tactics, which suggests that increasing prices is the way to go for brands with all things having been considered and taken into account. 75% of consumers feel like prices will continue to increase, and 45% suggested C-suite executives taking a pay cut because of the fact that this is the sort of thing that could potentially end up keeping prices stable without requiring shrinkflation or skimpflation.
This will have a noticeable impact on marketing strategies, with marketers looking to expand their reach whilst keeping the current inflationary climate in mind. 65% of consumer said that they plan to decrease their spending this year to ride out inflation, so marketers will have to work overtime to continue inducing consumption among their target markets. It will be interesting to see how the marketing industry adjusts to the new normal, and chances are that it will require them to delve deeper into the world of analytics and opt for more automation by using AI and machine learning.
Sources: Gartner / Martech
Read next: Humanity Has Already Used Up Earth’s Annual Resources for 2022
