Backward compatibility refers to the ability of a system, product, or technology to work with older versions of itself or with products designed for previous generations. This means that if you upgrade to a new version, you can still use your old files, software, or hardware without any issues. For example, a new gaming console like the PlayStation 5 can play games made for the PlayStation 4. This feature is important for consumers as it protects their investments in older products and ensures a smoother transition to new technology. It also encourages developers to create new applications or games that can still function with older systems, broadening their potential user base.