Channel Fragmentation
The process by which a once-unified sales channel breaks into smaller, more specialized segments, often due to shifts in consumer behavior or technology.
Implications
The division of a market into multiple smaller segments, each served by different sales or distribution channels, often leading to increased complexity in managing and coordinating efforts across these diverse channels.
Example
Example: A consumer electronics brand faces channel fragmentation as it sells its products through a growing number of specialized online retailers, each targeting different customer niches.
Related Terms
Different from market fragmentation, which involves the division of consumers into distinct groups, channel fragmentation refers to the proliferation and complexity of sales and distribution pathways.
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