Research CANADIAN NEWS September 12, 2025
Infographic: Looking Ahead in the Canadian Promo Industry
Top challenges this year for Canadian distributors continue to be profitability based as economic concerns and tariff woes press downward on end-buyer demand. And while AI adoption is more prevalent among large distributors than small, a clear majority of all companies are concerned about cybersecurity in 2025.
Key Takeaways
• Retaining top customers has become a more pressing issue this year, supplanting finding and retaining talent as a top business challenge.
• Strategic thinking and AI adoption are emerging as critical differentiators in a competitive market.
According to State of the Industry data from ASI Research, two of the top three challenges for Canadian distributors stayed the same in 2024 and 2025.
“Increasing the size of our customer base” and “remaining profitable under pressure to cut prices” were the first and second challenges cited in the latest survey due to ongoing economic uncertainty. In third for 2025 was “retaining our best customers,” which replaced “recruiting and retaining well-qualified employees” cited in 2024, signaling a shift in the job market.
Meanwhile, the percentage of distributors reporting plans to sell their company in the next year has ticked down, from 20% in 2024 to 18% in 2025, while a majority (86%) are concerned about cybersecurity and ransomware attacks.
Jill Pascuzzi, vice president of sales and marketing at Brand Blvd (asi/145124) in St. Catharines, ON, says the ball is in distributors’ court to find opportunity in a changing business environment. “Those that don’t pivot from pushing product to thinking more strategically and consultatively alongside their clients are going to fall behind,” she says. “Canadian end-buyers are still spending; it’s just a matter of them spending with one company or choosing another that provides more value.”
A growing area of competitive advantage: artificial intelligence. Less than a quarter (22%) of Canadian distributors say they’re currently using it in some capacity (31% of large firms and 15% of small), while 41% say they have “no plans” to use AI at their companies. Pascuzzi says that’s a mistake.
“If you’re not currently working on incorporating AI into your everyday workflows to create efficiencies and provide a better experience for clients,” she says, “you’re already behind.”
Looking ahead to 2026, Pascuzzi says distributors will be challenged to break through the noise to compete in a crowded marketplace. “Be more curious, more strategic, more creative and make sure you have a seat at the client’s table when they’re discussing their overall marketing or recruiting strategy,” she says. “If you’re not in that room, you’re losing to the person who is.”
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