MIXX 2013: Environics "A Changing Consumer Base"

• 1. The use of PRIZM to better target an increasingly diverse consumer base Doug Norris Senior Vice President and Chief DemographerPresented at IAB Canada MIXX Conference Toronto March 21, 2013

2. The use of PRIZM to better target an increasingly diverse consumer base Doug Norris Senior Vice President and Chief DemographerPresented at IAB Canada MIXX Conference Toronto March 21, 2013 3. Overview of Presentation Key demographic Trends Overview of PRIZM Segmentation System Some applications for digital media3 4. Key Demographic Trends4 5. A growing consumer base More concentrated in large urban areas5 6. Population will continue to grow due to immigration Observed and Projected Population Growth, Canada ActualProjected2.0% 1.5%Immigration 7.5 per 1000 population Medium Projection1.0% 0.5% 0.0% -0.5% -1.0%1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 2036 2041 2046 2051 Total Population 2051 49 Million Source: Statistics Canada, Population Estimates and Projections6 7. Population has gradually shifted west for 50 years Share of Total Population, (%) 1961197134 29 282625198136 3519912001201138 37 3824 24 20 21 1610 10 9910 8Atlantic ProvincesSource: 1961-2011 Censuses7QuebecOntario9887Manitoba and Saskatchewan2324187Alberta and British Columbia7 8. Growth concentrated in large urban areasCanada 2011 Population Estimate 34,528,000% Growth 2006-2011 10%Rural Small Town 18%6% 6 Largest CMAs 46%Smaller Urban 13%9.08%6.0 4.74%3.42%2.3% Other CMAs 23%Source: Statistics Canada, Population Estimates Adjusted for UndercountCanada6 Largest Other CMAs CMAsSmaller UrbanRural Small Town8 9. Many more older consumers9 10. In a few years, more seniors than children; in 20 years, seniors make up nearly a quarter of Canadas population Percentage of Population, Canada 0-1465 and over40 35 3025 20 15 105 0 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 2016 2021 2026 2031 2036 2041 2046 2051Source: Statistics Canada, Census 2021-2006, Population Projections 2011-204110 11. Ready or not here come the Boomers Boomers Born 1946-1965 Today 9.5 Million aged 47-664.0 Million aged 67-86 By 2032 7.9 Million aged 67-8611 12. Aging will shift more expenditures to older ages and slow growth in total spendingPercent of Households aged 55 and overPercentage of Expenditures Age 55 and OverPercent Change in Total Expenditures46 4139 34 295 20122022Source: Calculations by Environics Analytics20122022HouseholdsHouseholds12 13. More diversity in families and households13 14. Only one in four households is a couple with children under age 25 Households in Canada, 2011Multiple family 2%One person 28%Lone parent 10%Source: Statistics Canada, 2011 CensusOther 4%Couples with children 26%Couples without children 30%14 15. Percentage of young adults living with parents has leveled off Young Adults Living with Parents, Canada, 201120 to 24 years old25 to 29 years old60%60% 5650% 49 40%576059 50%5140%4230%30%20%20%10%10%0%0%198119861991199620012006Source: Statistics Canada, censuses of population, 1981 to 2011.201121 152319962001252520062011171119811986199115 16. The mosaic is the new mainstream16 17. Source countries for immigration have changed dramaticallyPercent of Landed Immigrants by Region of Birth, Canada, 200625 3619 316 4 114 69 890 17111771191063Before 196150 4049 Middle East and West Central Asia*3111 1961-19701971-1980Caribbean, South and Central AmericaAfrica74United States and Oceania76 3 8 3Europe1981-19901991-20002001-2006Asia (except West Central Asia)Period of Immigration* Includes Afghanistan, Turkey, and Central Asian Republics of former USSR Source: Statistics Canada, 2006 Census17 18. Cultural diversity will continue to increase Projected Concentration of Visible Minority Population48Toronto63 46Vancouver 26MontralEdmontonKitchener39 26Calgary38 20 33Ottawa-GatineauWinnipeg59AbbotsfordWindsor% 2011 % 2031Canada 2011 19% 2031 31%2031GuelphHamiltonLondon19 32 18 27 17 28 16 25 15 25 14 2220 29Source: Statistics Canada, Projections of the Diversity of Canada's Population, 2006-203118 19. Education And Income19 20. Women are more highly educated and gap is widening Percentage of Population with University Degree, Canada, 2012Males36Females36 3026252424 21201125-3435-4445-5455-6465 and overAge GroupsSource: Statistics Canada Labour Force Survey, May 201220 21. Males have higher incomes but gap is smaller Median Individual Total Income, Canada $45,000 $40,000 $35,000Male$30,000 Both $25,000 Female$20,000 $15,000$10,000 $5,000 $0 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008Source: Statistics Canada Income Statistics21 22. In terms of income increases Seniors have fared the best; young households the worst Index of Median Income (2010$), All Family Units, Canada17025-3435-4445-5455-6465 and over160 150140Index 100 = average130 120 110 100 90 80 70 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Source: Statistics Canada, Income Statistics22 23. How PRIZM can help digital media planning? 24. PRIZMC2 Segmentation System 66 segments or clusters that capture: Socio-economic statusUrbanity (Urban, Suburban, Exurban, Town, Rural)Ethnic diversity (13 clusters)Francophones (15 clusters)Lifestage (Young, Family, Mature)24 25. Sample Customer Profile Using PRIZMC2 Based on profile, target groups are identified Typically 3 to 5 Example of a target group Affluent FamiliesAffluent FamiliesYoung and mature couples living in the centre of large Canadian cities as well as young families with new kids living in the suburban and exurban areas of those same cities 26. Coding surveys to PRIZMC2 provides a wealth of information on population segments Examples of Surveys that are coded to PRIZM Private Sector Environics Research Social Values Surveys of Consumer Behaviour/Media Use Print Measurement Bureau (PMB) Bureau of Broadcast Measurement (BBM) Newspaper Audience Databank (NADBank) Canadian Financial Monitor (CFM)Social Media Use Delivinias AskingCanadiansGovernment Surveys Survey of Household Spending Canadian Community Health Survey (CCHS) Travel Attitudes & Motivations Survey (TAMS)Environics Analytics 201226 27. Uses of PRIZMIdentify target groups based on PRIZM profile of some characteristic of interestOnce a target group has been defined, make use of survey or other data linked to PRIZM to get deeper understanding of consumer characteristics (demographics, social values, shopping behaviour, expenditure patterns, etc.)Environics Analytics 201227 28. Retail preferences for four sample segments Social ValueseShopper BehavioureShopper BehaviourSocial ValuesNeed For EscapeOnline Purchase Preference: Financial Products & Services Media (books, music, videos) Arts & EntertainmentConsumption EvangelismTime StressConsumption Evangelism Open to receiving marketing messages via mobileOnline Purchase Preference: Financial Products & Services Home Electronics/Computers Household Appliances/Furniture Media (books, music, videos) Beauty & Cosmetics Clothing Arts & EntertainmentTime Stress Likely to shop on mobile device Research online frequently Rate/Review products daily Share deals through Social MediaSaving on Principle Discriminating ConsumerismConsumptivity Importance of BrandPursuit of Originality Research online frequently Search online classifieds (i.e. kijiji) dailyEducation Ethnic PresencePursuit of Originality Need For EscapeImportance of Price Saving on Principle Confidence in Advertising Open to receiving marketing messages via mobileJob Type Ethnic Presence Likely to shop on mobile deviceSocial ValueseShopper BehavioureShopper BehaviourSocial ValuesTime StressOnline Purchase Preference: Household Appliances/Furniture Beauty & Cosmetics ClothingOnline Purchase Preference: Low across all categoriesFinancial Concern Regarding May consult 1 or 2 sources online but tend to gather information via phone more frequently than any online sourcesControl of Privacy Want the help of a customer service associate when shoppingBrand GenuinenessSaving on Principle Importance of Price Consumption Evangelism Need for Status Recognition Confidence in Advertising Consumptivity Consult from 2 to 5+ sources online when shopping Share deals through Social MediaEnthusiasm for Technology Education Ethnic Presence Open to receiving marketing messages via mobileJoy of Consumption Likely to shop on mobile deviceConcern for Appearance Above average indicated that they do not own a mobile devicethe Future Canadian Identity Ethical Consumerism Joy of ConsumptionEducation Ethnic Presence 29. How are Canadians shopping online? 30. Canadian online purchase preferences Percent of Canadians stating purchase preference as online via computer by product categoryYoung, educated, urban 31. Who are big online spenders? 44% of Canadians spend $100+ on a monthly basisSpent $100+ once or twice in the past month High Segments with an index above 120 tend to be urban and educated Index: 120Above AverageA mix of urban, suburban, exurb an and town clusters are above 100 but below the 120 indexNote: Results are based on usage in the past 2 months 32. In which categories do Canadians spend the most? Percent of Canadians who spent $100 or more by product categoryVacation (31%)Event Tickets (20%)Gift Card (9%)Beauty and Cosmetics (4%)Home & Garden (3%)Note: Results are based on usage in the past 12 Months 33. How has online shopping influenced the way Canadians gather and share product information? 34. Where do Canadians gather information before shopping? 87% of respondents consult at least one source online before making a purchase; 44% consult two or more sources While most Canadians consult retailer and manufacturer websites for information when shopping, a wide range of consumers also consult other sources. Urban, ethnic, young segments High proportion of francophone segments Urban, young segments Ethnic segments 35. What information are Canadians looking for? Information sought:Mix of urban, exurban, town, rural 36. Which consumers are making their voices heard online?Areas of Toronto CMA with segments that rate and review products on a daily basis tend to include predominant ethnic presence. 56% of Canadians rate or review products monthly 12% do so weekly 2% do so daily (3% of Torontonians) Top Toronto CMA clusters that rate/review products daily (3%)Note: Results are based on usage in the past 2 months 37. Emerging trends: Which segments are receptive to a mobile marketing message? How do consumers combine channels? 38. Which segments are receptive to mobile and social marketing campaigns? Both Profiles Likely to share shopping deals/product information through social media channels (18%)Open to receiving relevant marketing messages on mobile device from trusted retailers (11%) Urban and suburban ethnic segments Cuts across all income levels 39. Segments responsive to a call to action About once or twice a month: Visited website after seeing an address on TV (53%) Likely to be rural and olderNote: Results are based on usage in the past 2 months 40. Not all Canadians are eager to adopt online shopping trends 41. Why do some consumers resist online shopping? The eShopper PRIZMC2Link allows marketers to understand who prefers bricks-and-mortar retail shopping over e-commerce and whyUrban young, upscale and eliteHigh proportion of francophone segments 42. Understanding experiential shoppers Top 10 clusters (by index) that enjoy the experience of shopping in a store vs. onlineSocial ValuesSpend Categories for Prefer In-StoreNeed For Status RecognitionClothingIt is important that people admire the things that I ownJoy of ConsumptionMens Clothing Womens ClothingTo buy myself something new is always very gratifying for meFootwearConcern for AppearancePersonal CarePursuit of NoveltyRecreationI always choose my clothes with great care I am willing to try new products, places for vacations, or restaurants just for the pleasure of noveltyNon-Athletic Footwear Electric Hairstyling/Personal Care Appliances Childrens Toys/Games Artists' materials/handicraft/hobbycraft kits 43. Summary Key demographic trends mean an increasingly diverse consumer base Segmentation can help in identifying and better understanding the diversity among consumers and Vancouver43 44. The use of PRIZM to better target an increasingly diverse consumer baseDr. Doug Norris Senior Vice President and Chief Demographer [email protected] 613-592-340244