Apple’s products are often criticized as being overpriced — which is certainly true in some cases (I’m looking at you, US$999 Pro Stand for the Pro Display XDR.) However, the tech giant does make quality products, and this will benefit the company in the long run.
A new study says that 62% of consumers say they’ll stop buying from brands who change product size (“shrinkflation”) or quality (“skimpflation”) to cut costs, according to Gartner, Inc. Only 7% said they would continue purchasing from a brand that cut costs in this way.
A Gartner survey of 252 consumers in June found that shrinkflation— when the size or quantity of packaged goods is reduced without a commensurate price cut — is viewed as more prevalent than skimpflation — an erosion in the quality of a product by using cheaper ingredients or components, or a reduction in a service, such as longer delivery times.
“Brands make strategic decisions to optimize costs by changing packaging, ingredients, suppliers and service offerings all the time,” says Kate Muhl, vice president analyst in the Gartner Marketing practice. “Not all of these actions are perceived by consumers to be deceptive business practices, or perceived to be happening at all. However, in a period of unprecedented inflation, consumers are on high alert and noticeable changes that impact the value proposition of a brand’s product or service are more likely to result in harm to that brand.”
The research group’s study shows that at the majority of consumers (75%) expect prices to continue to increase in the second half of 2022, and 65% of consumers expect to cut back on purchases or stop buying altogether in at least one product category. Consumers noticed the most significant price changes in the “food and groceries” category (62%). Forty-one percent of consumers noted “household products” suffered from shrinkflation, while 32% of consumers noted that “personal care” products suffered from it.
Consumers differ on what businesses should do to limit price increases, but one suggestion stands out from other ideas: 45% said that companies should stop increasing the pay of high-ranking executives.
“Executive compensation decisions can harm brands, especially in inflationary periods,” noted Muhl.
