Cross Category Trends
Poly want a culture
One of the least understood aspects of Canadian life outside the country is its multiculturalism. Multiculturalism is enshrined in Canadian law, celebrated across all walks of life, and a vital factor in population growth and sustaining social services for an aging workforce. Immigrants in Canada come from more than 100 countries, making it host to one of the most unique populations on earth.
Ask Canadians to describe this situation, and you’ll often heard them talk of a mosaic, or a set of distinct cultural points making up a whole. As a result, to reach consumers in the country, brands have traditionally used so-called “total market” strategies, seeking out commonalities between all Canadians and speaking to them. But Kantar’s Canada Monitor has found that this somewhat lazy strategy may be becoming less effective.
That’s because Canada is seeing an ongoing shift from a multicultural society to a polycultural one. The difference may seem one of semantics, but it does matter. Unlike a mosaic, a polycultural society is much more like the US, where different cultural groups have enough critical mass to assert influence on one another.
In other words, the country is starting to see groups with distinct identities emerge that are now affecting one another in uniquely Canadian ways. This is an important consideration for brand marketers, who now have to considering marketing to people of different cultural origins—rather than assuming a common understanding on all things. With increasingly precise data targeting, as well as the ability to create and speak to a wider range of segments, brand looking to increase Salience and Meaning may want to start thinking about the unique and unequally shared interests of their audiences, rather than what they all have in common.
Not at your service
Canada’s Top 40 brands are just as interesting for what they’re not than what they are. They do not include, for example, a single technology company or manufacturer. Except for two beers and a whiskey, there are no FMCG brands. It’s not that Canada doesn’t build anything or produce consumer goods—in fact it has significant automotive and aircraft manufacturing—but it tends to do the bulk of it in the B2B sector or in the service of companies from the US and elsewhere.
That said, nearly all of the top brands have one thing in common: they provide customer service. Services, in fact, account for more than 70 percent of the nation’s economy (estimates vary), much more than its lumber, mining, energy, and agricultural sectors combined.
So, how do most top Canadian brands do with customer service? By one BrandZ™ metric, most could do better. Only six of the top 40 Canadian brands score highly for Experience: Cineplex, Canadian Tire, Air Canada, Canada Goose, Shoppers Drug Mart, and Petro Canada. These brands should also be no surprise to residents of the county. Canadian consumers can hardly spend any time in a Shoppers Drug Mart without experiencing great service. And Cineplex certainly keeps its customers entertained.
The rest of Canada’s top brands have a clear opportunity to build value by improving the service and experience they provide. This should not be hard. Canadians are renowned for their friendliness, which is inexpensive to provide and can go a long way to making happier customers. Innovation is also a proven way globally to improve customer experience, not least when it serves to make better products or remove pain points in the purchasing process. As Canada’s brands become increasingly digital and e-commerce more common, this metric will be an interesting one to watch.
North American does not mean American
Driving from the US to Canada can be an exercise in déjà vu. While there are differences—Canada is safer, emptier, and more urbanized overall—the same kinds of neighborhoods, strip malls, road markings, chain restaurants, and gas station convenience stores are found on both sides of the border. And, in a nod to Canadian law, many products sold in both countries come with French language instructions.
However, the same cannot be said of attitudes, and especially attitudes towards advertising. There has long been a tradition of advertisers in English Canada to simply import big budget American ads, add a “u” to the relevant words, and declare victory. However, a recent study by Kantar found that there is little correlation between success in one market and another. When moving from one country to the next, a third of TV ads do not fall into the same tertile for effectiveness and only half fall into the same tertile for enjoyment (a key driver of effectiveness).
What’s driving the difference? A range of factors, including clutter, the types of ads, how consumers view different categories, and the different statuses of brands in the two countries. People in the US are also much more likely to judge themselves successful by the amount of money they make or buy a product to reflect their status. But the biggest differences may be cultural. Canadians, for example, are far more egalitarian when it comes to gender roles in household decision making, a key factor for advertisers. Ninety percent of both males and females say they take part in household purchasing decisions. As a result, the typical US ad which shows Mom discussing paper towels while Dad is out golfing tends to fall flat.
It’s not that you can’t create an ad that serves both markets equally well, but a more nuanced approach is probably a better bet for most brands.
A risk-adverse land
Canadians enjoy a reputation as one of the safer countries in the world, but they are also among the most risk adverse of people. On a variety of metrics, Canadians over index on stay-at-home activities like cooking and under index of everything from going to the movies to going out to play sports. Sixty-eight percent of Canadians say they would rather play it safe than take a risk—a 14 point jump over global averages.
What are they concerned about? The environment is a big one, with 69 percent concerned about pollution. Partly this reflects the effects of global warming, which has increased forest fires in the western provinces, bringing smoke into cities at an alarming pace. Sixty-seven percent are also worried about the economy, no surprise there, and 66 percent are increasingly concerned about the use of their personal data.
As we’ve seen elsewhere in this report, this tendency has a dampening effect on brands, as Canadians tend to shop more for discounts and are less interested in labels than values. Still, brands that focus on helping these risk adverse consumers feel comfortable in their homes may have the best chance at success.
Disconnecting from digital
As Hal Varian of Google has noted, innovation often sees rapid adoption followed by a period of retrenchment and disillusionment. To illustrate, he uses the example of the automobile. Early on, cars were simply the new wonder, but over time people realized that they came with significant downsides as well, like pollution, accidents, and so on.
Like many global consumers, Canadians leapt online with gusto, but they are now increasingly concerned about the time they are spending on devices, annoyed at the intrusive ads that seem to follow them around, and worried that so much of their data is out there for thieves to pounce on. For example, in 2012 only 42 percent of Canadians were concerned about protecting their privacy. In 2018, that number rose to 57 percent. Sixty-nine percent say that being able to unplug from technology is a sign of success and accomplishment. And in an interesting development, the government of Ontario has moved to ban cell phones in classrooms next year.
In Canada as elsewhere, it’s become increasingly clear that the future is not purely digital. As a result, branch today need to consider not just their digital presence, but how they can stay relevant in consumers’ analog lives. Canada Monitor data shows that consumers are still looking for authentic experiences. They want to be able to see, hear, feel, and taste your brand in a way that connects to your unique value proposition. BrandZ™ data shows that those brands that rank highly for Experience, like West Jet, Cineplex, and Canadian Tire, are enabling their customers to explore the world in new ways.
So, while Canadians are becoming more connected every day, it’s worth thinking about the ways you can pull them away from the screen and back into the real world they crave.
The millennial left behind
Over the past few years, Canada has experienced a boom in costs in two major areas: real estate and education. As in any society, this has created winners and losers—and the largest group of losers in the country has certainly been millennials. While Gen Xers and centennials have largely ridden the housing boom to be wealthy on paper, younger people have found themselves behind the eight ball as they try to start families and build a comfortable life.
While popular opinion has them spending too much money on hot yoga and kale-infused smoothies, their challenges are real. By the numbers, millennials are starting at starting at lower wages than previous generations, and those aren’t going up very quickly. Thanks to the cost of education, they have 300 percent more debt than their parents and are only half as likely to own a home as people their age in 1975. This has put a strain on their wallets that is causing them to be highly selective as consumers.
Above all, Millennials are seeking control over their finances. For them, not spending money and controlling expenses is important. So, if your brand is seeking to market to them, you need to realize they have a save-first mentality—and they’re open to approaches that put them at their ease. Humour is a broadly effective strategy in Canada—as is a good balance of value and pricing.