Greetings from Ecom Storm again! 

Today, we will explore an approach that may seem illogical, but it is actually quite effective: product cannibalisation. 

What is it? When a new product "steals" sales from an existing product in your lineup, this is known as product cannibalisation. The new product only changes demand from the previous one, not raising total revenue. That seems nasty, does it? 

Not always. In actuality, your rivals will strategically disrupt your product lineup if you don't. Here's how the most astute brands exploit cannibalisation to maintain their competitive edge.

Two Cannibalisation Aspects

Healthy Constructive Cannibalisation is not always a terrible thing. To stay ahead, some of the most well-known brands in the world depend on it.

Every year, Apple releases a new iPhone model, well aware that it will destroy sales of earlier iterations. However, doing so keeps consumers interested, boosts sales, and stops Samsung from luring Apple users away.

Cannibalisation is working to your benefit if sales of the new product exceed the losses from the old one and overall income rises.

Destructive Cannibalisation

On the flip side, cannibalisation can erode your bottom line if the old product collapses before the new one can scale.

This usually happens because of

• Poor product differentiation—customers don’t see why they should buy the new one

• Confusing pricing—the old product looks like a bad deal in comparison

• Bad timing—the new product launches before the market is ready for it

If total revenue stays flat or declines, you’re shifting demand instead of growing.

How to Make Cannibalization Work for You

Measure Market Demand and Differentiate

Make sure your new product fills a distinct need instead of just replacing the old one.

Example:

• Stress Relief Tincture: Marketed for fast-acting relief in high-pressure situations.

• Relaxation Support Tincture: Designed for long-term stress management and better sleep. The overlap is intentional, but the positioning is different. Instead of making one product obsolete, you expand the customer base.

Price for Growth

You run the danger of devaluing the entire assortment if you drastically cut the price of the outdated product. Instead, keep the pricing the same while promoting the new product as a high-end or unique choice.

Example:

• In order to indicate specialisation rather than straight replacement, Stress Relief Tincture is priced marginally higher than Relaxation Support. This encourages customers to see the new product as an upgrade, not just another choice.

Cross-Promotion That Adds Value

Introduce the new product in a method that improves the experience of your existing, devoted customers rather than making them make a decision. As an illustration, provide a set of both tinctures as a comprehensive stress-reduction remedy. Emphasise how the two items work well together in customised mailings. This turns cannibalisation into an opportunity to boost total consumer expenditure.

How to Track If Cannibalization Is Helping or Hurting 

• Examine trends in sales and revenue

  Healthy cannibalisation occurs when sales of the previous product fall but overall revenue either remains the same or increases. You are merely changing demand if revenue remains unchanged.

• Compare Key SKUs

  If the revenue loss from the old product matches the revenue gain from the new one, you’re not bringing in new customers—you’re just moving them between products.

• Understand Customer Segments 

  Did the new product draw in new customers, or did it only drive away current customers from a beloved brand? If the latter, think about how that fits into your entire brand plan.

• Watch for Repeat Purchases A successful launch should bring in higher-value customers who return. If the new product doesn’t generate repeat sales, it may not be adding long-term value.

Wrapping Up

Cannibalising your own products can feel risky—no one likes to see a once successful SKU less visible. But in a fast-moving market, keeping your product lineup fresh is necessary to stay ahead.

Doing it strategically is crucial. To make sure you are increasing revenue rather than merely shifting it, differentiate your new product, price it to retain the value of your previous products, and monitor performance metrics.

If you don’t disrupt your own market, someone else will.

That’s it for this edition.

See you next week.