Cannibalization

Cannibalization occurs when an offering or intervention displaces demand from another offering of the same organization. A new product’s sales can therefore exceed the organization’s additional sales. Displacement can involve products, channels, or purchase timing.

In a hypothetical comparison, a new product gains 100 units of sales, while an existing product sells 40 fewer units than it otherwise would have sold. If those 40 are displaced sales and nothing else changes, net additional units across the pair are 60. Different prices and margins mean the same calculation cannot be used directly for revenue or profit.

The “otherwise” comparison needs evidence; a decline might instead reflect seasonality or a competitor. Define the portfolio and time horizon. If an experiment already measures net revenue across both products, do not subtract the displaced revenue again: that would count the same loss twice.

Related reference: GOV.UK service measurement guidance. Examples and calculations here are illustrative.