Why shrinkflation and smarter packing design are good for the environment – and even the consumer
‘Skinny design’ has a bad name. But could it actually be widely beneficial?
Shrinkflation, whereby a product is offered in smaller size and usually at the same price, is generally frowned upon by consumers. However, according to strategy consultants McKinsey, there may be times when such smaller packaging can have benefits for business, consumers and environment.
“It means less material cost, it means less shipping cost, it means more product on the shelf, so fewer stockouts,” says London-based McKinsey partner Benedict Sheppard. “Fourth, and perhaps most importantly, it means less environmental impact as well.”
For businesses the advantages are most obvious, offering the potential to reduce costs and grow revenue. Using less packaging saves money on material costs and also means that more of the product will fit into a truck or freight container, thereby increasing savings. Then, ‘skinny design’, as McKinsey dubs smaller packaging, pays off further at the retail end with more of the product fitting onto a shelf or display. “Even an increase of 5 or 10% of products on the shelf can have a meaningful impact on sales,” says Atlanta-based partner Dave Fedewa.
The environmental benefits also begin with the reduced packaging, which uses less material and leaves the design smaller and lighter. That translates into more units per truck or shipping container, potentially reducing fuel consumption and carbon emissions in transport.
The role of good design
Smart skinny design means designers looking not just at the overall packaging, but also thinking about how the product itself can best be arranged to fit the packaging. “There are ways to nest products, ways to disassemble products and ship them stacked into each other,” says McKinsey’s Lea Kobeli. She points out that the way in which a product is designed for shipment can impact CO2 emissions as a result of how it is utilised for container optimisation.
For consumers, the rewards may not be so readily apparent. However, where brands pass on their bottom-line savings that can lead to lower-priced goods (or reduced price increases at a time of inflation). There’s also a growing consumer demand for greener goods – a 2022 study found that 58% of European consumers consider the climate impact when buying goods, with 90% of Gen-Z respondents willing to pay more for sustainable packaging.
A different way of thinking
One challenge for companies wishing to explore the skinny design trend – and a reason that many have yet to try it out – is that it impacts a number of different areas: design, procurement, supply chain, logistics, sales. All have their own different pressures and points of view within an organisation. Marketers, for example, may complain that a smaller package means less room for branding or product information.
“All those people have pretty different incentives,” says Sheppard. “Therefore, one of the challenges is how do you get cross-functional incentives so that everyone feels a sense of responsibility to deliver great material cost, great customer quality and also consider logistics. Easy to say, hard to do.”
Though skinny design is still far from widespread, there are already sectors where it has worked – LED bulbs, food and industrial goods for example – and it’s an approach that chimes with the growth of e-commerce, where shipping costs are always a key concern.
Meanwhile, as artificial intelligence and generative design – digital simulations that can explore thousands of iterations – become more prevalent, it will become faster and cheaper to develop packaging configurations and test materials, potentially making skinny design the default practice. As McKinsey sees it, that’s a “win-win-win practice” for business, the consumer and the environment.
