Campaign cannibalization is a discount pulling sales that would have happened anyway down to a lower price instead of creating new ones. It is why a campaign report can show a revenue increase while total profit falls. Unmeasured, the campaign looks successful, gets repeated, and margin erodes permanently. The effect shows up both across products and across channels.
The way to separate it out is to assess the campaign period together with the weeks before and after; a sales trough in the weeks afterwards shows demand was pulled forward. The second type of cannibalization is between products: the discounted item eats the sales of its full-price equivalent. The third is between channels; a marketplace campaign lowers full-price sales on your own site. For a sound measurement, comparable products left out of the campaign are used as the baseline.
The way to separate it out is to assess the campaign period together with the weeks before and after; a sales trough in the weeks afterwards shows demand was pulled forward. The second type of cannibalization is between products: the discounted item eats the sales of its full-price equivalent. The third is between channels; a marketplace campaign lowers full-price sales on your own site. For a sound measurement, comparable products left out of the campaign are used as the baseline.
The way to separate it out is to assess the campaign period together with the weeks before and after; a sales trough in the weeks afterwards shows demand was pulled forward. The second type of cannibalization is between products: the discounted item eats the sales of its full-price equivalent. The third is between chan…
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