Compression tools reduce file sizes for storage and transfer. Popular options include WinRAR, 7-Zip, and WinZip, offering various formats and encryption. Command-line tools like gzip and bzip2 are common in Unix systems, while XZ Utils excels in Linux. PeaZip and Keka provide user-friendly interfaces across platforms. These tools employ algorithms like LZMA and offer features such as splitting archives and cloud integration. Users select based on compression ratio, speed, and supported formats, enhancing efficiency in managing files and folders.