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Channel Compression
The shortening of the distribution chain by eliminating layers of intermediaries, aimed at reducing costs and improving speed to market.
Implications
The shortening or simplification of a distribution channel, often by eliminating intermediaries or streamlining processes, leading to faster, more cost-effective delivery of products to the market.
Example
Example: A software company adopts a channel compression strategy by selling directly to consumers through its website, bypassing traditional retailers and distributors.
Related Terms
Different from channel expansion, which adds new intermediaries or partners, channel compression reduces the number of steps or players involved in getting a product to market.
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