The Rise of Shelflation & Shrinkflation

Listening to the news lately feels like a crash course in economics.  Stagflation (check out our blog from a few weeks ago) has led to shelflation and shrinkflation, which consumers are noticing and speaking up about on social.

As inflation continues to rise and usually means higher prices for consumers, many companies are beginning to implement new packaging strategies to decrease costs while keeping the price the same for the consumer – known as shrinkflation

According to NPR, shrinkflation isn’t new, but it proliferates in times of high inflation as companies grapple with rising costs for ingredients, packaging, labor and transportation.  Manufacturers know customers will notice increasing prices, but are hopeful that they will not keep track of net weights or the fewer sheets of tissue.

It’s somewhat sneaky, as manufactures rely on the change in packaging creative or new branding to help deter the eye from noticing the difference of 20-30 grams removed from a package.  But in a bag of five bagels, it is pretty visible a bagel is now gone. 

Savvy consumers have noticed and #shrinkflation is now trending across social media platforms as consumers call out missing bagels, fewer detergent pods, and smaller chip bags—a challenge prior generations or businesses did not have to deal with as the only way to share this information quickly was through news stories and newspapers.  Social and real time information has given consumers an advantage to research and know which products are still a good deal for the price.

On the other hand, supply chain issues continue to rise globally and as products take longer to reach shelves for consumers, they have a shorter shelf life and lower quality once reaching home, which is known as shelflation.  

This leads to consumers shifting their approach to buying consumables – where their frequency in shopping trips will have to increase and the number of goods purchased will decrease so that products stay fresh.  However, with the continued rise in prices and tighter cashflows, consumers may have to reduce purchases all together to be able to buy gas and other necessities.

Other Packaging Strategies

Pricing is another option, providing a tiered approach through smaller product offerings that pricewise may appeal to a larger audience. This is much easier with consumables and may transfer through to a smaller shipping price to absorb as the weight and box size may decrease.

Bundling provides an opportunity to push slower moving inventory by coupling it with your higher priced and faster moving inventory.  This helps with perceived value and may help consumers feel like they’re receiving a better deal for the current price, while reducing sunk costs and moving the slower moving inventory.

Shipping efficiencies help maintain a strong customer experience and loyalty is strengthened when consumers receive a quality product on or ahead of expected time. Automation helps drastically to reduce errors and decrease costs by utilizing the current team in place to be able to ship additional orders.

 

Simplify with OPAL’s 4-in-1 Software Solution
EDI | Order Management | Warehouse Management | Shipping

OPAL is the innovative solution to simplify your small to mid-sized to enterprise business fulfillment needs in today’s rapidly transforming retail world.  

As the eCommerce industry navigates high inflation and savvy consumers, learn more about how OPAL can reduce costs through automation so that your business can reduce its shrinkflation of products.  

To learn more about how OPAL has partnered with many to scale their business to new levels of success, click here.

Click here to book your customized demo today.  We are here to support you through this time of change and are here to help you innovate and thrive!

Time to Strengthen your Channel Strategy

Time to Strengthen your Channel Strategy

eCommerce businesses and brands have bobbed and weaved through the last two years of challenges, which has led to consumers now expecting brands to connect across multiple channels and provide an omnichannel approach. Connecting across multiple channels not only increases engagement, but has been shown to drastically increase retention rates.

The two primary goals of developing a channel strategy are to have a plan to sell your product to the customer and to deliver a positive customer experience. Understanding the omnichannel approach, while streamlining the backend to keep up with increased sales may prove to be quite challenging in this era of supply chain issues and labor shortages.

Why It’s Necessary?

Diversifying your eCommerce channel strategy is critical with a few big players calling all of the shots. It’s dangerous to put all of your eggs (products) in one basket (marketplace) because if it goes down, it halts sales while your team scrambles to quickly find other channels.

Last year Apple made changes to its privacy policies for data collecting across apps. At that time, Facebook advertising and eCommerce stores were highly dependent on the data available through app collections to target and retarget ads to potential buyers. This change halted business as usual and left many scrambling to find work arounds to keep products moving for business.

Executing a strategy across multiple channels helps reduce the panic and allow for a more resilient business model in chaotic times of change.

What Are the Best-Performing Marketing Channels?

According to Statista, in 2020 there were 256 million digital buyers in the US alone, and as purchasing products online has become a common practice among consumers, it is expected to grow to more than 291 million by 2025. Even amidst the caution and global economic uncertainty, estimates show a steady increase in eCommerce.

Email Marketing

Founder and CEO of eCommerce today encourages businesses to leverage personalized emails to increase conversions and believes it is one of the best-performing channels that can help engage and convert potential clients through personalized emails, particularly if you rely on automation. Though it may be tedious to build and curate a CRM and lead generation, it is quite effective in dripping constant messaging to your leads to sell products when the time is right.

SEO- Driven Content Marketing

As people search for content online, having high quality marketing content with exact keywords will help consumers to organically find your product.

Paid and Organic Search

Finding the right mix between the two is an artform and one that requires constant monitoring. But when done well, this has a significant impact on revenue and products sold. Understanding google analytics is key to understanding what is underperforming and then use the data to strengthen online content. There are numerous online courses (some are even free) to help educate you on how to better market your business and if you’ve grown to the size of needing help, numerous agencies have full teams specializing in this.

Is the Positive Customer Experience Everything?

Even in spite of the supply chain chaos and global shipping delays, providing a positive customer experience never seems to fade in importance.

In fact, 84% of individuals state that the experience provided by a company is just as critical to them as the product they’ve purchased from that company.Even more alarmingly, one in three consumers will walk away from a brand they love after just ONE bad experience. Patience does not seem to be a virtue that many seem to have lately.

Understanding how to best diversity your channel strategies market to,acquire, and retain likeminded customers will become critical as the market continues to grow and become oversaturated.

Simplify with OPAL’s 4-in-1 Software Solution
EDI | Order Management | Warehouse Management | Shipping

OPAL is the innovative solution to simplify your small to mid-sized to enterprise business fulfillment needs in today’s rapidly transforming retail world.

As your eCommerce business defines its channel strategy to better serve your customers, automation and streamlining of processes is absolutely critical to providing top notch service to your retailers and to customers.

To learn more about how OPAL has partnered with many to scale their business to new levels of success, click here.

Click here to book your customized demo today.  We are here to support you through this time of change and are here to help you innovate and thrive!