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Channel Cannibalization
The phenomenon where the introduction of a new sales channel or product eats into the sales of existing channels or products, potentially reducing overall profitability.
Implications
The reduction in sales of one channel due to the introduction or growth of another channel, often a concern when launching new sales or distribution channels that compete with existing ones within the same company.
Example
Example: A clothing brand sees channel cannibalization when launching an online store, which leads to reduced foot traffic and sales in its physical stores.
Related Terms
Different from market cannibalization, which refers to competition between products, channel cannibalization focuses on the impact of one sales channel on another within the same company.
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