A product is said to cannibalize the sales of another product when it reduces the latter's market share. In other words, customers who would have purchased the old product choose the new product instead. Product cannibalization is often seen when the company introduces a new product that is very similar to an existing product, but offers additional benefits or improved functionality. Although the new product may attract new customers, it may also cannibalize the sales of the old product, which reduces sales and thus turnover. Product cannibalization can be avoided by carefully developing the new product launch strategy and performing in-depth market analysis to understand the potential impact on sales of existing products. We often notice this when our product assortment is not optimal, during a product launch or when setting up a commercial offer. What is annoying is that this leads to a drop in sales of the products concerned and therefore a loss of turnover. This is when you have to question the relevance and usefulness of each of the products in your catalog. This is a very good indicator of the effectiveness of its assortment.
Here is a more detailed article on the subject (in french) :
Les 3 astuces pour limiter l’effet de cannibalisation