Canadian online sales down as shoppers seek value & discounts

Canadian online retail sales declined by 3% year-on-year in the first quarter of 2025, reversing the 3% growth seen during the same period in 2024, according to new data from Salesforce's 2025 Shopping Index.

The decline in performance was accompanied by a reduction in average order value: the average online transaction stood at $99.25 in Q1 2025, a 4% decrease from $103.82 in the previous year's first quarter.

Caila Schwartz, Director of Consumer Insights and Strategy for Retail and Consumer Goods at Salesforce, said, "The Q1 2025 retail results paint a picture of a cautious Canadian consumer. High prices, economic uncertainty, and shifting priorities are all contributing to a more deliberate approach to online shopping. Canadian consumers are increasingly seeking out discounts and prioritising value, while retailers are responding with targeted promotions and an emphasis on mobile-friendly experiences."

The Shopping Index, which analyses the behaviour of more than 1.5 billion global shoppers across over 67 countries, found that Canadian digital commerce is being shaped by shifting economic conditions, including inflation, higher interest rates, and ongoing geopolitical uncertainties.

Spend per visit fell to $2.57 during Q1 2025, down 3% from $2.64 in Q1 2024, suggesting a continued trend towards more conservative spending by Canadian shoppers. The conversion rate for online orders in the country also softened, falling to 1.9% from 2.3% in the previous quarter and slightly below the 2% rate of Q1 2024. This indicates that while Canadians are still active on retail sites, fewer are following through with purchases.

Device usage trends showed that total digital traffic in Canada remained flat over the quarter, but the channel mix is evolving. Desktop traffic increased by 15% year-on-year, possibly reflecting a preference for larger screens during more considered shopping. Conversely, mobile traffic declined by 4%, but mobile remains the country's most significant channel for digital shopping, accounting for 70% of total traffic and 66% of all online orders during the quarter.

Mobile order volumes rose by 6% in Q1 2025 compared to the previous year, while desktop orders declined by 5%. Despite the drop in traffic, the proportion of orders completed on mobile devices continues to grow, suggesting a more transaction-oriented mobile shopper base. However, the overall number of online orders in Canada fell by 5% during the quarter.

The proportion of site visits using on-site search features was 7% in Q1 2025, but these accounted for 17% of all Canadian online orders, highlighting the conversion potential of search-driven sessions.

Retailers in Canada have responded to cautious consumer behaviour with increased promotional activity. The average discount rate grew to 16% in the first quarter, up from 15% in Q1 2024. Despite these efforts, consumers are continuing to limit their spending, with average order values declining year-on-year.

Cart abandonment remains a challenge in the Canadian market, particularly on mobile devices. The cart abandonment rate was 88% on mobile, compared to 80% on desktop – a trend that signals ongoing friction in the mobile checkout process, from slower load times to less streamlined payment experiences. Retailers continue to face challenges in narrowing the gap between browsing intent and completed sales, especially on mobile platforms.

Social media maintained its role in driving retail traffic, accounting for 10% of overall traffic and 12% of mobile traffic to Canadian online stores. These figures underscore the increasing importance of social channels, particularly for younger and more mobile-first shoppers.

Data from Salesforce's Q1 2025 Shopping Index suggest that Canadian consumers are increasingly prioritising value and turning to discounts in the face of economic headwinds. As a result, retailers are seeking ways to appeal to cautious consumers through promotions, enhanced mobile experience, and by capitalising on high-intent search and social-driven traffic.