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With the increasing prices for ingredients and manufacturing, grocery brands get two choices to maintain their level of profits –

• Increase the price of the product.
• Reduce the size of the product.

The latter is what shrinkflation is. It’s a widespread marketing strategy companies use to avoid raising prices that may scare off customers.

What Is Shrinkflation?

Shrinkflation, also known as package downsizing, is the practice of reducing the size or quantity of a product and even reformulating while maintaining the price or increasing it very slightly.

It’s often used as a way to avoid raising prices and losing customers, as it can be seen as less drastic than a price increase.

Coined by the British economist, Pippa Malmgren, this phenomenon has become more prevalent in recent years as the cost of ingredients and manufacturing has increased.

Take Nestle’s KitKat Chunky for example. The chocolate shrank by 16.7 per cent from 48g in 2014 to 40g in 2018, while the price increased by 25% from  £1.25 to £1.56.

How Does Shrinkflation Work?

Packages that are shrinking can be the result of companies:

• Reducing size,
• Reducing quantity,
• Reformulating their products, or
• Removing ingredients from a product while maintaining the same price.

In some cases, products may simply be reduced in size without any change to the ingredients or quality. In others, the ingredients may be reduced in quantity. For example, Shreddies shrank 20% for the same price.

Sometimes, the brand changes the entire packaging of the product, as seen with the Pantene example above.

Causes Of Shrinkflation

There are several reasons why shrinkflation happens. Some of the most common causes include:

• Increased Costs: The cost of ingredients and manufacturing makes it more expensive for brands to produce their products.
• Competition: An increased competition in the market can lead to companies needing to maintain or reduce their pricesin order to be maintain their market share.
• Changing demands: Trends and demands for products can change quickly, which may force companies to reformulate their products which, in turn, can lead to size changes.

Effects Of Shrinkflation

Shrinkflation can have a number of different effects on both consumers and companies.

For Consumers:

Shrinkflation gives rise to hidden inflation as the price of a product doesn’t change, but the quantity does. This can make it more difficult for consumers to track what they are missing and may even lead to an emotion of being cheated.

For Companies:

Companies often argue that shrinkflation is necessary to maintain their products’ quality. However, when done without proper communication and explanation to the consumers, it can lead to a loss of trust between the company and the consumer. In some cases, it can also lead customers to buy products from competitors.

Advantages Of Shrinkflation

There are a few advantages that come with shrinkflation.

• More Affordable: In some cases, like the KitKat Chunky example, products may be reduced in size but not in price. This makes them more affordable for customers.
• Maintained profits: Although the size of the product is reduced, companies can still maintain or increase their profit percentage by doing the same.

Disadvantages Of Shrinkflation

There are also a few disadvantages to shrinkflation.

• Unfair practice: When a product is reduced in size without any change to the ingredients or quality, it can be seen as an unfair practice by consumers.
• Loss of trust: When companies do not properly communicate with their consumers about why a product is shrinking, it can lead to a loss of trust between the two groups.
• Competition: In some cases, companies may shrink their products in order to undercut the prices of their competitors. This can lead to a race to the bottom that is not good for either consumers or companies.

Examples Of Shrinkflation

There are many examples of shrinkflation around the world. Here are a few:

Dove Soap

Dove soap is a good example of shrinkflation. The soap bars have decreased in size from 113 grams to 106 grams, but the price has stayed the same. This means that the price per gram has increased.

Sugar Packages

Here’s an example of a sugar package with 1g less sugar but packaging that makes it look wider.

Toblerone Chocolate

In 2014 Toblerone reduced the weight of its chocolate bars by 25% by adding more space between each piece

The company had to reverse the decision two years later after the customers complained.

Domino’s

Domino’s reduced the number of wings in its $7.99 deal from 10 to 8 to cope with the increasing ingredient and marketing costs.

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Social media marketing has changed the game when it comes to marketing products and services. It used to be that if you were a brand, you would have to pay for ads in multiple media outlets in order to get your product recognised by the general public. However, this is no longer the case!

Influencers have disrupted the social media marketing industry and have taken over where traditional advertising has failed.

But while this word “influencer” gets thrown around a lot these days on social media. Not many people really know what is an influencer or what an influencer actually does. Think of it this way, they are the new salespeople in town, but instead of hiring them for big bucks, brands give away their products and pay them with samples to get their name out there.

What Is An Influencer?

An influencer is a person or a brand with a noticeable following in a particular niche and the power to affect buying decisions of a large group of people.

In simple terms, an influencer or a social media influencer is a brand operating in the social media space that:

• Has a noticeable following in a particular niche. Not just following, but the engagement level on their posts and opinions is also huge. This means that there are many people who engage with the influencer’s content, which in turn makes it more relevant than other social media posts.
• Has the power to become an opinion leader and affect buying decisions of a large group of people. The influencer holds great sway over their followers and, in a way, has a large level of control in their decisions.

How Do Influencers Work?

Influencers are the creators forming the spine of the creator economy.

Their job includes developing content for their followers, engaging with the audience and building a reputation of being the go-to person in their niche.

They are the ones who keep the social media platforms up-to-date by creating trends almost every day. In a way, they help the social media platforms find their next generation of users and keep people coming back through fresh content.

In short, they are the faces people love to watch during breaks, before making important decisions, and even when they are looking for inspiration.

Once the influencers have considerable followership, they start monetising their efforts (posts, articles, videos, etc.) through brand partnerships, affiliate links, brand takeovers, and sponsored posts.

The Importance Of Influencers

Influencers have become the new torchbearer of word of mouth and virality, both for the consumers and the businesses.

They are the new heroes in town, promoting brands and services without putting out explicit ads. But how does this actually help the brands?

For The Consumers

The rise of influencers has changed people’s content consumption habits and buying decisions. People now look up to them to know new trends, learn the latest about a niche, and take recommendations on what they should buy next or which brand they should purchase from.

In a way, this has changed the social media marketing industry as people rely on influencers more than they do brands or companies for recommendations. In fact, over 92% of consumers trust an influencer more than a brand advertisement or celebrity endorsement. 

This means that influencers play a great part in influencing people to buy a particular brand or product.

Moreover, with the increased usage of Adblock technologies (over 47% of customers use Adblock), traditional advertisement channels are becoming less effective in educating customers about new brands or services.

For The Brands

With their target audience moving towards influencers for recommendations (49% of consumers make their decisions based on influencer recommendations), influencers as a marketing channel are becoming more relevant than ever.

The key to brand’s success is to build a relationship with their audience, which they can do by collaborating with influencers.

Today, influencers do not just stop at mere recommendations. They actually perform the role of a brand ambassador and help promote brands across their influence platforms. This trend has increased exponentially with big brands opening up to this realm of opportunities and working more closely with the creator economies to promote themselves.

In fact, brands see an average earned media value of $5.78 for every dollar spent on influencer marketing.

Types Of Influencers

When looking at influencers, one should understand that they come in all shapes and sizes.

They do not just vary based on their following base; rather, other characteristics make them different from one another. Some of the factors that separate influencers from each other include followership, the type of content shared, and the industry they operate in.

Based On Followership

The most common and traditional way of categorising influencers is on the basis of how many followers they have. This way, influencers can be divided into five types:

• Mega influencer (over 1 million followers): This is the top 1% of influencers who shape the market, create trends, build new markets, and influence consumer decisions.
• Macro Influencer (500,000 to 1 million followers): Opinion leaders, industry experts, trendsetters are all part of this category.
• Mid-tier influencer (50,000 to 500,000 followers): They have a dedicated niche audience and play an important role in spreading awareness about brands or products.
• Micro-influencers (50,000 to 10,000 followers): They may not have a large following base, but they do enjoy a certain degree of influence which is more than the average social media user.
• Nano-influencer (1,000 to 10,000 followers): Influencers with usually low number of followers but a high engagement rate.

Based On Content-Type

Influencers can be divided into four categories based on the type of content they distribute.

• Bloggers: These influencers share their personal experiences, opinions, and insights on a particular niche using their dedicated websites. They may also offer professional advice to their target audience in the form of articles, video tutorials etc.
• Vloggers: Vloggers share their thoughts and opinions in the form of videos. They take the help of platforms like YouTube, Twitch, and Instagram to reach their target audience.
• Podcasters: Podcasters are influencers who share their content through audio streaming. They are popular with people looking for expert advice on a particular subject or who want to get entertainment.
• Social media posters: Posting on social media is the most common form of content sharing for influencers. They use platforms like Facebook, Twitter, Instagram to share their thoughts, tips & tricks with others.

Based On Industry

Influencers can be divided into four categories based on their industry of expertise:

• Diversified influencers: These are generalists who possess a wide range of knowledge and expertise or are followed by a large audience in several niches. Such influencers include celebrities, politicians, and journalists.
• Industry influencers: These are experts within a particular industry and have a deep understanding of the subject. They can be considered an authority on that specific topic and are further categorised into subject matter experts like fashion influencers, travel influencers, beauty bloggers etc.

Is Influencer A Real Job?

Like any other profession, being an influencer is also a full-time job.

Even though they don’t work under anyone, these influencers are infopreneurs who have daily to-do job lists and specific goals they need to achieve to stay on top of their game.

This profession involves them bridging the gap between a business brand and its target audience using the power of influence.

Influencers usually spend endless hours engaging with their audience, researching to find new opportunities, creating content and sometimes even working on the product they’re promoting.

Some of them also attend live events and conferences or set up their own workshops and seminars to provide more value to their followers and clients.

How Do Influencers Make Money?

Influencers have developed their own creator-centric economy powered by several income streams. These revenue streams include:

• Platform revenue sharing: Influencers who rely on platforms like YouTube or Facebook often earn money by sharing advertisement revenue generated through their content.
• Affiliate marketing: Influencers use their influence to promote brands or products to their audience. In return, they get a commission from the sale of these products.
• Product placement: Influencers with high followership are often paid to promote brands on their social media platforms.
• Brand sponsorship: Brands often involve influencers in their marketing campaigns where these people either take over the brand’s social media channel or include the brand’s offerings in their own channel.
• Subscription-based: Influencers who rely on platforms like OnlyFans use their influence to generate revenue by making people pay for access to exclusive content.
• Self-brand offering: Several influencers even launch their own brand of products or services based on their expertise and knowledge. For example, a lifestyle blogger may launch his or her own line of beauty products.
• Donations: Influencers can also generate revenue from their fans by accepting donations from them.

How Much Money Do Influencers Make?

It pays to be popular. Influencers with a large social media following can make a lot of money, with over 48.49% of influencers agreeing that they make money from being an authority.

According to data by Hype Auditor, an average micro-influencer (with followers between 1K and 10K) earns $1,420 per month, and an average mega influencer (with followers over 1M) earn $15,356 per month.

These influencers spend 28.7 hours per week on average to earn this much.

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The abbreviation ‘FMCG’ is widely used in many parts of the world. It essentially stands for “Fast-moving consumer goods” and covers a wide range of products, including food, beverages, clothing, household products, personal grooming products and more.

These goods are generally sold to the retail market and are designed for mass consumption. As they are so widely available, FMCGs are usually cheaper than other types of goods.

Since these goods have specific characteristics, it is essential to understand what is FMCG and how they are different from other product types.

What Is FMCG?

Fast-moving consumer goods (FMCG) are consumer products designed for frequent use, usually consumed quickly, and have high demand and low cost.

This definition of FMCG can be broken into four key parts

• Designed for frequent use: FMCG products are typically used often, even daily. These include products like bread, soap and shampoo.
• Consumed quickly: FMCG products are consumed quite speedily. For example, a consumer might purchase bread from a local bakery or bakery chain and eat it on the same day it is purchased.
• Have high demand: The demand for FMCGs is usually very high. This can be due to their affordability or practicality, among other reasons. An example of an FMCG product with high demand would be soap – people tend to buy soap frequently due to the need for cleanliness.
• Low cost: FMCGs are usually inexpensive or at least cheaper than other types of goods on the market. An example would be bread – it is often much more affordable than a luxury handbag.

These goods are called fast-moving as they move from the sales area to the point of consumption within a short time span.

Characteristics Of FMCGs

There are some key characteristics that define FMCG products and separate them from other types of products. These are:

From The Consumer Perspective

• High availability: FMCG products are usually widely available and sold in several stores and supermarkets worldwide. This allows consumers to purchase these products easily without too much trouble.
• Purchased frequently: FMCGs include products that consumers frequently require, usually daily or near-daily. For example, breads and coffee are generally bought at least once a week.
• Low buying effort: FMCGs are usually low effort purchases for the consumer. For example, with shampoo, most people know that they prefer a particular brand or type without testing it. This means that most people enter the store knowing exactly what they want and buy it straight away.
• Low cost: FMCGs are usually inexpensive compared to other products on the market, therefore taking up a smaller proportion of consumers’ income.
• Rapid consumption: The time between buying the product and consuming it is very short, often only a number of hours. For example, a loaf of bread might be purchased in the morning and consumed at lunchtime that same day.

From The Retailer Perspective

• High turnover rate: FMCG sales are higher than other product types’ sales as they are purchased frequently by consumers. This means that retailers can keep inventory for these products for shorter periods of time, which ultimately reduces costs.
• Highly distributed: Since these goods have high demand and low cost, they usually need to be widely available and distributed across different locations and regions. For instance, there might be several different supermarkets in a town that all sell the same bread brand.
• Low unit cost: As FMCGs have a high demand and low cost, they usually have a low unit price for consumers. This means that retailers can sell these products at a low price and still retain the same profit margin. This is different from luxury items that usually have a high unit cost but lower demand, meaning that they must be sold at a higher price to maintain the retailer’s desired level of profit.
• Non-durability: FMCGs are not built to last. This is because they have a short time span from production until consumption. They are also required in large quantities so manufacturers do not need to preserve them for long periods of time, which allows them to be sold at lower prices.
• Consistency in form, size, colour and price: FMCGs are standardised, which allows them to be produced cheaply in bulk quantities. For example, if a manufacturer produces packets of shampoo, they are all the same size and contain the same amount of liquid. This means that when one purchases a packet of shampoo from their local store, they know exactly what they are getting.

Types Of FMCGs

FMCG products are usually broken up into different types depending on the industry they are sold in. These include:

• Food and Beverages
• Personal Care
• Healthcare Care
• Home Care

Food And Beverage

Food and beverage products usually fall into the FMCG category due to their short life span and high turnover rates.

Types of food and beverage products that are usually classed as FMCGs include but are not limited to:

• Processed food, such as bread, pasta and potato chips.
• Ready to eat food, such as packets of nuts or crisps.
• Beverages, such as bottled water, coffee cups and cans of soda.

Personal Care Products

Personal care products, such as shampoo and toothpaste, can also be classed as FMCGs because they are needed frequently by most consumers, usually bought at a low cost and not built to last.

These include lotions, hair dyes, lipsticks, cosmetics, deodorants, bath soap, dental care products, etc.

Healthcare Care Products

Healthcare care products are also classed as FMCGs because they are usually highly demanded, not built to last and very distributed.

These include products like plasters, bandages, syringes, condoms, etc.

Home Care Products

Products that are used for household purposes also fall into this category because they are usually standardised, low durability goods that are highly distributed and sold at a usually low unit price.

They include cleaning products, kitchen towels, toilet rolls, bleach, dusters, etc.

FMCG Companies Examples

Some of the largest FMCGs companies in the world include but are not limited to:

Coca-Cola

Coca-Cola is an American multinational corporation that is currently among the world’s largest beverage companies. The Coca-Cola Company manufactures, distributes and sells nonalcoholic beverages. The company operates in over 200 countries and focuses its product range on sparkling soft drinks such as Coca-Cola and Diet Coke, still drinks such as Minute Maid, and energy drinks such as Powerade.

Nestle S.A.

Nestlé S.A., often styled as NESTLÉ, is a Swiss transnational FMCG company headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the world measured by sales.

The company deals in baby food, medical food, bottled water, coffee and tea, confectionery, dairy products, frozen food, pet foods, ice cream, breakfast cereals, and snacks.

Unilever PLC

Unilever is a British-Dutch multinational consumer goods company co-headquartered in London, United Kingdom and Rotterdam, Netherlands. Its products include food, beverages, cleaning agents and personal care products. It is among the world’s largest consumer goods companies measured by market cap.

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Ads don’t always look like ads. They can be disguised in a way that they look like regular content. The advertiser or marketer might actually pay the publisher to publish this disguised ad in their newspaper, magazine, or digital publication.

When that happens, it is called an advertorial.

What Is Advertorial?

An advertorial is an advertisement presented in a format that looks like legitimate and original editorial content. The advertiser, or marketer, pays the publisher to publish their ad.

Unlike a traditional advertisement, advertorials look like regular editorial content and are even written in a way to give information about a product or service and not merely sell it.

The advertorial can be written as if the marketer was an industry expert, giving details about the industry trends or how their product is better than its competitors.

Usually, publications include a disclaimer somewhere in the advertorial, telling readers that it is an advertisement and not the regular content.

Characteristics Of An Advertorial

There is no standard format or template for an advertorial. One publication might be different from another, and even one advertiser can have a different advertorial from another advertiser.

But there are some general characteristics that most advertorials include:

• Sponsored content: The advertorial is a paid advertisement, not an independent editorial.
• Promotional nature: The advertorial only presents information to help sell a product or service or build brand awareness.
• Informative nature: Although an advertorial’s main purpose is to present information to build a brand, it also contains useful and interesting information relevant to the reader.
• A lack of hard-selling: Unlike traditional advertisements, advertorials don’t include a direct call to action like ‘call now’ or ‘visit our store’. It doesn’t tell the reader exactly what they should do after seeing the advertorial.
• Disguised appearance: Most advertorials resemble regular editorial content, such that often readers don’t even realise that it is an advertisement.
• A disclaimer: Most print and digital publications include a disclaimer somewhere in the advertorial to make it clear for readers that they are reading an advertisement and not regular editorial content.

Types of Advertorials

Advertorials can take many forms, based on what the marketer wants to accomplish with the ad. Different types of advertorials are usually chosen depending on what result is needed.

Comparative Review Advertorials

One of the most common types is a comparative review advertorial, where an advertiser or marketer publishes their product or service along with their competitor’s product or service.

This type of advertorial is helpful for consumers because they can compare two or more products side by side, making it easy to decide which one they prefer.

Comparative review advertorials are perfect for newcomers in the market who have little brand awareness. Marketers use this advertorial type to generate interest in their product with less spending.

Promotional Or Image Advertorials

Promotional or image advertorials are where the advertiser publishes content about their brand or offering intending to build a favourable brand image.

They might publish success stories highlighting the positive effects their product had on someone’s life or they will talk positively about their business and what makes them unique without directly comparing it to the competitor.

Promotional advertorials are more about creating an image that appeals to their target market rather than generating sales through hard-selling, which is why they don’t have a call to action.

Journalism Advertorials

Another common type of advertorial is a journalism advertorial that looks like the regular publication’s content. It’s written as a news article with a catchy headline and body that looks just like usual editorial.

Journalism advertorials are usually published in magazines and newspapers since they have more space to play with. They might not directly talk about the advertiser’s product, but it will still be mentioned in the context of an interesting story or topic relevant to their target audience.

Advocacy Advertorials

Advocacy advertorials are where the advertiser creates content about an issue they care about so that their product can be associated with it.

Although this type of advertorial goes beyond selling a product, it is still related to what they do so that readers will feel encouraged to purchase their products in order to support them.

The marketer might publish content about how their products contributed to a charity cause, or they might talk about improving the environment, without directly selling their product.

Consumer Guide Advertorials

Consumer guide advertorials are content written with the intention to direct the reader on the right path. For example, an article about how to find a reliable plumber might link to the brand website for people to contact them easily.

The main purpose of this type of advertorial is to direct the reader to take action without appearing too promotional.

Components Of An Advertorial

An advertorial is a combination of an ad and editorial content.

In print, it looks just like a usual editorial column. In digital publications, you will find them in between regular articles, where the advertiser does not want their content to look too promotional.

Advertorials use a similar style as journalist writings. They have

• Catchy headline: Headlines of advertorials are usually written with the same style as journalist headlines, catchy and drawing attention to what is compelling about the topic.
• Introduction: This section seeks to engage the reader by making them interested in the topic. It usually contains a short paragraph that outlines what to expect from the body of the article.
• Body: Advertorials have a body just like regular articles. They are usually more detailed than an ad, but they can be shorter or longer depending on the topic of the advertorial. The body is generally driven by the objective of the advertorial and doesn’t stray too far from it.
• Conclusion: Advertising often uses a call to action because it is their main objective, but other advertorials do not require any because their goal isn’t to generate sales. If there is a call to action in advertorials, it might be to subscribe to an email list or to read another article on the website.

Advertorials can be used to build sales, but they are targeted at building brand image through positive associations with their product. Although advertisers want readers to take action by buying their products, this is secondary to their main objective which is about building a favourable impression of their brand in general.

Advertorial Examples

Advertorials are usually published in print, but you can also find them online.

There are many types of advertorials and they all vary depending on what the advertiser wants to achieve with their content.

Forbes Advertorial

Economic Times Advertorial

Wired Advertorial

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