What Shrinkly changes in a file
Compression and conversion answer two different problems: a file that is heavier than it needs to be, and a file in a format the page cannot use. Both work on how the file is stored; neither moves a pixel.
Compression
A camera or a design tool saves more detail than a page can show. Compression rewrites the file so it carries only what a browser needs in order to draw the picture: repeated patterns in the pixel data are packed tighter, and the parts of the file a page never displays are dropped. The picture keeps its proportions and its place in the layout; what changes is how much data has to travel to show it.
The same picture in a file that is never larger than the one you dropped.
Format conversion
A photograph, a screenshot of sharp text and a logo on a transparent background are not best served by the same encoding. Conversion takes the image you have and writes it in another format, so the same picture arrives in a container that suits the page, the content management system or the build step that receives it.
One picture in the format your page needs, without opening an editor.
The picture’s own size and proportions
The pixel width and height, and the proportions between them, stay exactly as they arrived. Nothing is cropped, stretched or scaled: the file is rewritten around the picture rather than the picture being redrawn smaller. The layout still decides how large the image appears on screen, and it now decides that for a picture carrying fewer bytes.
The same picture in the same place, so nothing on the page shifts.