Digital Retail in Canada Trends and Forecast
The future of the digital retail market in Canada looks promising with opportunities in the food & beverage, clothing, and digital product markets. The global digital retail market is expected to grow with a CAGR of 15.7% from 2025 to 2031. The digital retail market in Canada is also forecasted to witness strong growth over the forecast period. The major drivers for this market are a rise in online shopping platforms, growing demand for tailored shopping, and increasing use of smartphones for retailing.
• Lucintel forecasts that, within the type category, Wi-Fi is expected to witness the highest growth over the forecast period.
• Within the application category, digital product is expected to witness the highest growth over the forecast period.
Emerging Trends in the Digital Retail Market in Canada
The digital retail market in Canada is experiencing rapid transformation driven by technological advancements, evolving consumer preferences, and changing retail dynamics. As more consumers embrace online shopping, Canadian retailers are adopting new strategies to stay competitive and meet the growing demand for convenience and personalization. Below are key emerging trends shaping Canada digital retail landscape.
• Rise of Voice Commerce and Virtual Assistants: Voice commerce, powered by virtual assistants like Amazon Alexa and Google Assistant, is gaining momentum in Canada. Consumers are increasingly using voice commands to search for products, place orders, and make purchases, offering a new, hands-free shopping experience. This trend is reshaping the way Canadians shop, with retailers optimizing their digital platforms for voice recognition and integration. Voice commerce enhances convenience and accessibility, providing Canadian shoppers with more efficient ways to shop while driving growth in the digital retail sector.
• Augmented Reality (AR) in Product Visualization: Augmented Reality (AR) is revolutionizing the online shopping experience in Canada by allowing consumers to visualize products in their real-world environment before making a purchase. Canadian retailers are adopting AR to enhance customer engagement, enabling shoppers to virtually try on clothes, see how furniture fits in their living rooms, or test makeup products. This technology improves decision-making, reduces return rates, and boosts customer satisfaction. As AR adoption grows, Canadian retailers are differentiating themselves by offering immersive and interactive shopping experiences, elevating their competitive edge.
• Subscription-Based Models for Convenience: Subscription-based models are gaining traction in the Canadian digital retail market, offering consumers convenience, personalization, and cost savings. From meal kits to beauty products, consumers are opting for recurring deliveries of curated items tailored to their preferences. This trend is driving brand loyalty, as subscription models encourage repeat purchases and provide businesses with predictable revenue streams. As more Canadian retailers implement subscription services, consumers are benefiting from customized experiences while retailers build lasting relationships with their customer base.
• Focus on Eco-Friendly and Sustainable Retailing: Sustainability is a growing priority for Canadian consumers, and retailers are responding by integrating eco-friendly practices into their operations. From offering sustainable product lines to reducing packaging waste, the demand for environmentally conscious products is driving innovation in digital retail. Retailers that prioritize sustainability are building brand loyalty among eco-conscious consumers, while also appealing to the growing trend of social responsibility. In Canada, where environmental concerns are prominent, adopting sustainable retail practices is becoming a key differentiator for businesses in the digital marketplace.
• Expansion of Same-Day Delivery Services: Same-day delivery is rapidly becoming a critical service for Canadian digital retailers. With increasing consumer expectations for faster, more convenient shipping, retailers are investing in logistics and technology to offer expedited delivery options. Same-day delivery appeals to time-sensitive shoppers and enhances the overall customer experience, making online shopping more competitive with brick-and-mortar stores. As the demand for faster shipping grows in Canada, retailers offering same-day delivery are gaining a competitive edge and improving customer satisfaction.
These emerging trends in Canada are reshaping the digital retail market, focusing on improving convenience, customer satisfaction, and sustainability. As technologies like voice commerce and AR transform the shopping experience, Canadian retailers are adapting to meet the evolving demands of consumers, driving growth in the sector.
Recent Developments in the Digital Retail Market in Canada
The digital retail market in Canada is undergoing significant changes as retailers and consumers embrace new technologies and evolving shopping habits. Recent developments have focused on enhancing customer experience, expanding service offerings, and responding to changing market demands. Below are key developments that are reshaping Canada’s digital retail landscape.
• Growth in E-Commerce Marketplaces: E-commerce marketplaces in Canada have been growing at a rapid pace, with both local and international players expanding their presence. Retailers are increasingly utilizing platforms like Amazon, eBay, and Walmart.ca to reach a broader audience. These marketplaces provide Canadian retailers with access to millions of customers, simplifying the online shopping experience and broadening product offerings. As more consumers turn to these platforms, retailers are increasingly investing in digital marketplaces to increase visibility and sales.
• Increased Investment in AI and Machine Learning: Canadian retailers are leveraging Artificial Intelligence (AI) and Machine Learning (ML) to improve personalization, inventory management, and customer service. AI-driven recommendation engines are enhancing the shopping experience by suggesting personalized products, while ML algorithms optimize supply chains and pricing strategies. These technologies enable retailers to offer more tailored experiences and streamline their operations, driving efficiency and profitability. As AI and ML adoption continues to grow, Canadian digital retailers are using them to stay competitive in an increasingly data-driven market.
• Omnichannel Retail Expansion: Omnichannel retail strategies have been gaining momentum in Canada, with retailers integrating online and offline channels to provide a seamless shopping experience. Consumers can now purchase products online and pick them up in-store, return items easily, or browse in physical stores and complete the purchase online. This integration creates a more flexible and convenient shopping experience for customers. As more Canadian retailers expand their omnichannel capabilities, this trend is reshaping how consumers interact with brands and how businesses approach retail strategies.
• Rise of Buy Now, Pay Later (BNPL) Services: The Buy Now, Pay Later (BNPL) payment option is becoming increasingly popular in Canada. Retailers are integrating BNPL services into their online stores to offer consumers flexible payment solutions. This development allows shoppers to make purchases and spread payments over time, making high-ticket items more accessible. BNPL services are driving conversion rates by lowering barriers to purchase, and as demand for this payment option grows, Canadian digital retailers are adopting it to enhance customer experience and increase sales.
• Expansion of Cross-Border E-Commerce: Cross-border e-commerce is becoming more prevalent in Canada as consumers seek products not readily available in domestic markets. Retailers are tapping into international markets by offering localized services and navigating global shipping challenges. This development allows Canadian consumers to access a wider variety of products and enables Canadian retailers to expand their reach globally. Cross-border e-commerce is also fostering global competition, compelling businesses to innovate and enhance their offerings to attract international customers.
In conclusion, the emerging trends and recent developments in Canada’s digital retail market highlight the growing importance of technological innovation, customer experience, and sustainable practices. From voice commerce and AI to omnichannel strategies and BNPL services, retailers are adapting to changing consumer expectations. These trends are reshaping how Canadian businesses approach digital retail, offering consumers more personalized, convenient, and flexible shopping experiences while driving growth in the market.
Strategic Growth Opportunities for Digital Retail Market in Canada
The digital retail market in Canada is transforming rapidly due to increasing consumer demand for convenience, personalization, and a seamless experience while shopping. Changes in technologies and shifting consumer expectations have triggered the emergence of new growth opportunities that businesses can exploit across various applications. Below are key growth opportunities Canadian retailers are exploring to achieve a competitive advantage and scale.
• Expansion of Omnichannel Retail Strategies: Blending brick-and-mortar experiences with digital, multichannel retailing has become a huge growth opportunity for businesses in Canada. Therefore, the integration of e-commerce platforms with stores for buy online, pick up in store (BOPIS), and return through online and offline channels would enhance convenience and strengthen customer loyalty. Omnichannel retailers are improving the customer journey, enhancing sales, and creating long-term relationships with customers, thereby increasing their market presence and growth in Canada.
• AI-enabled Personalized Customer Experience: Artificial intelligence (AI) is helping Canadian digital retailers personalize the shopping experience on an unprecedented scale. AI-driven tools allow businesses to offer customized product recommendations, dynamic pricing, and personalized promotions based on customer behavior and preferences. This improves customer satisfaction and increases conversion rates. As AI continues to evolve, retailers can further refine their marketing strategies, boosting customer engagement and driving sales. By leveraging AI, Canadian businesses are fostering stronger customer connections, leading to sustained growth in the competitive digital retail space.
• Growth of Mobile Commerce: Mobile commerce (m-commerce) is a growing opportunity for Canadian retailers as consumers increasingly shop via smartphones and tablets. Better mobile payment systems, responsive websites, and mobile applications will make the shopping experience easier for consumers. The increase in m-commerce is an opportunity to reach a larger audience for retailers and facilitate the lives of tech-savvy shoppers by making it easy to shop. Mobile commerce is expected to increase as Canadian consumers embrace shopping on the go. This provides an important growth opportunity for digital retailers to capture market share.
• Subscription-Based Services and Loyalty Programs: An increasingly important growth channel for Canadian digital retailers is subscription-based models. From food and beverage subscriptions to beauty and wellness products, recurring deliveries curate stable revenue streams and customer retention. Another form of loyalty, based on customer purchase activity and engagement with a brand, is also on the rise. Retailers can leverage these programs to strengthen relationships, increase lifetime value, and drive repeat business, thereby ensuring steady growth in the digital retail space.
• Focus on Sustainability and Ethical Practices: Sustainability is becoming increasingly important for Canadian consumers, with many preferring brands that are responsible toward the environment and society. Retailers embracing sustainable practices, such as eco-friendly packaging, ethical sourcing, and carbon-neutral operations, are gaining consumer trust and loyalty. Businesses that include sustainability in their digital retail strategies can attract environmentally conscious consumers and differentiate themselves in a competitive market. This focus on ethical practices is fueling growth in the digital retail sector by attracting a socially responsible customer base.
These growth opportunities are the future of the digital retail market in Canada. Through omnichannel strategies, AI personalization, mobile commerce, subscription services, and a focus on sustainability, Canadian retailers are setting themselves up to not only meet evolving consumer expectations but also achieve sustainable growth in the long term.
Digital Retail Market in Canada Driver and Challenges
The Canadian digital retail market is impacted by several technological, economic, and regulatory factors. Some of the major drivers are advancements in e-commerce technology, changes in consumer behavior, and a rise in demand for personalized experiences. Challenges like data privacy issues, the requirement for digital transformation, and global players competing at a very intense level are also affecting Canadian businesses. Here are the major drivers and challenges shaping the market landscape:
The factors responsible for driving the digital retail market in Canada include:
• Technological Advancements in E-commerce: Technological innovation remains a prime growth driver in the country digital retail market. Advances in AI, machine learning, and big data analytics ensure better management of inventory, a more personalized shopping experience for customers, and complete automation of customer support services. These improve operational efficiency, enhance customer engagement, and give a competitive edge to the businesses involved. Canadian retailers that utilize emerging technologies are likely to better cope with changing consumer needs and perform well in such a highly competitive scenario.
• Changing Consumer Behavior: Consumer behavior is rapidly shifting toward online shopping, with Canadian consumers increasingly prioritizing convenience, speed, and personalization. The growing preference for mobile shopping and on-demand delivery services is driving digital retail growth. Retailers who can adapt to these changing behaviors by offering seamless, personalized, and fast shopping experiences are more likely to succeed. As consumers continue to demand more convenience, Canadian businesses must be ahead of these trends to maintain customer loyalty and capture market share.
• Growth of E-Payments and Fintech: One more major driver of the Canadian digital retail market is the growth of e-payments and innovations within the fintech sector. Digital wallets, BNPL services, and cryptocurrencies are just a few of the secure, convenient, and flexible payment options. Such payment methods facilitate easy and smooth transactions, which in turn significantly increase conversion chances and customer satisfaction. As these digital payment systems continue to develop in the country, many Canadian retailers embrace new technologies to match consumer desires and sell more.
• Online Market Expansion: Amazon, Walmart, and other regional online marketplaces have been contributing to the increase in the size of the Canadian digital retail market. The main reasons are: they offer wide exposure to consumers and allow smooth shopping experiences. Expanding these markets enables Canadian companies to expand into foreign markets and add more customers. As more retailers use these sites to sell products, the Canadian e-commerce market continues to grow larger, providing businesses with new opportunities to grow and prosper.
• Regulation Support for E-Commerce Growth: Regulatory changes and government support have positively impacted Canada digital retail market. Policies introduced by the Canadian government have supported the growth of e-commerce, such as improving digital infrastructure, enhancing cybersecurity, and encouraging innovation in the retail sector. These regulations have helped Canadian retailers operate more efficiently, reducing entry barriers and stimulating growth. Further regulatory support would help Canadian businesses navigate the challenges of digital transformation and continue expanding their digital retail operations.
Challenges in the digital retail market in Canada are:
• Data Privacy and Cybersecurity Concerns: As digital retail grows, so does the risk of data breaches and cybersecurity threats. Data privacy concerns are a significant challenge for Canadian retailers, as customers are increasingly wary of how their personal information is being used. Retailers must invest in secure payment systems, comply with data protection regulations, and implement robust cybersecurity measures to protect customer data. Failure to address the concerns will result in a loss of consumer confidence and reputational damage, therefore impeding growth in the market.
• Severe Competition from International Retailers: The Canadian digital retail industry is very competitive. The Canadian digital retailing space has significant participation from domestic as well as international players, such as Amazon, Alibaba, and Walmart. These global giants are gradually dominating the Canadian markets. Canadian retailers have to find a way to stand out by offering something unique, such as better customer service and new shopping experiences. To be able to compete, Canadian businesses must invest in technology, marketing, and logistics to maintain their competitive advantage.
• Digital Transformation Challenges for Traditional Retailers: Many traditional retailers in Canada cannot make this transition easily. E-commerce needs heavy investment in technology, supply chain management, and digital marketing. The challenges and associated costs are quite hard to encounter for small retailers. To be competitive, retail businesses need to be a major force on online platforms by enhancing their digital capacity and making their processes more streamlined. Without successful digital transformation, traditional retailers lose relevance in a market that is increasingly becoming a digital realm.
In conclusion, the digital retail market in Canada is driven by a variety of drivers and challenges. Technological advancements, shifting consumer behavior, and e-payment growth are fueling market expansion, while data privacy concerns, intense competition, and the need for digital transformation remain significant hurdles. Canadian retailers must navigate these factors to remain competitive, innovate, and meet the evolving demands of their customers, ensuring sustained growth and success in the digital retail space.
List of Digital Retail Market in Canada Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, digital retail companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the digital retail companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
Digital Retail Market in Canada by Segment
The study includes a forecast for the digital retail market in Canada by type and application.
Digital Retail Market in Canada by Type [Analysis by Value from 2019 to 2031]:
• Near Field Communication
• Wi-Fi
• GPS
Digital Retail Market in Canada by Application [Analysis by Value from 2019 to 2031]:
• Foods & Beverages
• Clothing
• Digital Product
• Others
Features of the Digital Retail Market in Canada
Market Size Estimates: Digital retail in Canada market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Digital retail in Canada market size by type and application in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different type and application for the digital retail in Canada.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the digital retail in Canada.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the digital retail market in Canada?
Answer: The major drivers for this market are rise in online shopping platforms, growing demand for tailored shopping, and increasing use of smartphones for retailing.
Q2. What are the major segments for digital retail market in Canada?
Answer: The future of the digital retail market in Canada looks promising with opportunities in the food & beverage, clothing, and digital product markets.
Q3. Which digital retail market segment in Canada will be the largest in future?
Answer: Lucintel forecasts that near field communication is expected to witness the highest growth over the forecast period.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the digital retail market in Canada by type (near field communication, Wi-Fi, and GPS), and application (foods & beverages, clothing, digital product, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
For any questions related to Digital Retail Market in Canada, Digital Retail Market in Canada Size, Digital Retail Market in Canada Growth, Digital Retail Market in Canada Analysis, Digital Retail Market in Canada Report, Digital Retail Market in Canada Share, Digital Retail Market in Canada Trends, Digital Retail Market in Canada Forecast, Digital Retail Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.