Canadian Tire Competitive Research

Part
01
of eleven
Part
01

Seasonal Tire Changes

Tires are changed for seasonality in Canada based on safety risks, provincial regulations, access to winter tire loans, financial incentives in the form of discounted car insurance, season for shopping and cost and provincial tire initiatives.

Risks

  • In Canada, switching tires to winter tires is recommended in the period of Thanksgiving to Easter, especially because the anticipated temperature is below 7°C.
  • It is ideal to have them changed prior to the start of the snow to avoid all-season tires from stiffening and reduced traction, longer braking distances and increased rolling resistance.
  • Although there are risks associated with not changing the tires for winter, there are many who believe that their all-season tires are efficient for the change in season. People living in areas such as Manitoba and Saskatchewan are among those with this belief.
  • However, winter tires are more efficient for braking and going around corners while traveling in snowy conditions. It takes all-season tires almost twice the distance (12m) it takes winter tires (6.5m) to make a complete stop from 16km/h on polished ice.
  • Winter tires are being used to lessen hazardous driving situations and according to TRAC’s 2018 Canadian Consumer Winter Tire Study, most winter tire owners (80%) have seen the benefits of having them.


Provincial regulations

  • All provinces as well as Transport Canada encourage adherence to seasonal tire changes especially between the months of October and May.
  • In 2018, the winter tire usage for British Columbia, Alberta, Saskatchewan/ Manitoba, Ontario and Maritimes was more than 50%.
  • Some provinces have a law to change all-season tires to winter tires in winter. This is for safety reasons but also has the benefit of lengthening the life for tires used for all seasons.
  • In Quebec, it is a regulation to have all-season tires changed to winter tires in the period of December 15 to March 15.
  • Studded tires are only allowed in the Northern areas of Ontario, and attract a hefty fine if used elsewhere.
  • In British Columbia winter tires are required from October 1 – April 30; highways that don’t meander through mountain passes have this requirement up to March 31.
  • Overall, the winter tire usage increased from 66% to 76% between 2017 and 2018.


Winter tire loans

  • In areas such as Manitoba, there’s the possibility of getting loans specifically for qualified winter tires.
  • Motorists can access up to $2,000 per vehicle for a maximum of 48 months at a low interest rate.
  • However, at the very least, customers have to be a Manitoba Public Insurance customer.
  • Manitoba Public Insurance winter tire loans are only available for tires purchased after March 6, 2014, and are only accessible after it is determined that the motorist qualifies. This would be confirmed by the participating retailer.
  • This helps to off-set the expensive ritual of having to switch tires according to season.
  • Other financial institutions also offer loans for winter tires as well as seasonal and summer tires.


Financial incentives for winter tires

  • Some states including Ontario, offer incentives for winter tire installation in the form of lower premiums for vehicle insurance. These began in 2016 in Ontario.
  • These financial incentives are motivational for motorists and play a significant role in getting them to use winter tires.
  • 11% of winter tire users in 2018 said it’s because of lower auto insurance premiums.
  • Due to the influence of the financial incentives in Manitoba, Ontario and the Atlantic, winter tire shipments have increased by 35%, 25% and 14%, respectively.
  • Companies may vary in requirement for one to qualify for these financial incentives (car insurance discounts). Customers are expected to have tires on their car in the period of December 1 – March 1 for TD Insurance Meloche Monnex and between November 1 and April 1 for Aviva.

Shopping early for winter tires and the cost

  • Early shopping for winter tires is recommended to avoid having a meager selection to choose from. This is especially true for persons who may want to purchase a specific brand.
  • Autumn is a good time to make purchases since most retailers tend to get their inventory around this time. However, consumers may want to start their shopping “as soon as the temperature is low enough”.
  • Winter tires that qualify for use in Canada bear the Alpine logo which is certified and “labeled with the 3-peaked mountain/snowflake”.
  • Costco, PMCtire and Kijiji are some places that offer the best deals when purchasing winter tires. However, checking the ranking for tires could also be beneficial when looking for budget tires.
  • The cost of all-season tires is cheaper than that of the winter tires and may be the reason why some motorists prefer to use them even in winter. All-season tires reduce operating cost but are not effective for most severe conditions.
  • 18% of motorists across Atlantic, Ontario, Saskatchewan/ Manitoba, Alberta and British Columbia resist winter tires because they are too expensive.


Provincial tire initiatives

  • To help motorists to adhere to rules about the use of winter tires, several provinces have launched tire initiatives. British Columbia ensured that signage on highways served as a reminder about the mandatory use of winter tires on specific routes, especially in winter.
  • On January 1, 2016, Ontario’s government stipulated that insurance premiums for drivers who use winter tires must be lower.
  • In September 2014, Manitoba Public Insurance started offering low-interest financing that are specific to accessing winter tires.
  • Quebec made it a law for all passenger vehicles to use winter tires during the season.

Research strategy

To provide insights into the seasonality of tire changes we leveraged several industry-specific and tire company-related publications including Canada Drives and TireCraft, provincial government publications, international media sources and finance news sources. Information was grouped according to common themes found, with the inclusion of a slightly older sources to gain additional understandings.

Part
02
of eleven
Part
02

Top Automotive Services Needed

There is no evidence that direct sources, which exist in the public domain, list the top 10 automotive repair and maintenance services in Canada. There is data available through global automotive market research that suggests congruency among 6 vehicle maintenance and repair services.


Top Automotive Services

  • According to IMR Automotive Research, a global automotive market researching company, the top ten automotive repair and maintenance services include oil change and oil change filter, wiper blades, air filter replacement, scheduled maintenance repairs, new tires, battery replacement, break work, antifreeze replacement, engine work, and wheel alignments.
  • Additionally, according to IBISWorld, an international provider of market intelligence and research reports, some of this information is also true when specifically looking at Canada's automotive industry
  • According to IBISWold's data, scheduled preventive maintenance, brake repairs, electrical system repairs, wheel and alignment maintenance services, and heating and air conditioning services are all the most common repair and maintenance services performed by professionals.
  • Robyn Howard, an author for On The Move, a Canadian blog focused on the Canadian automotive industry, also lists oil and oil filter changes, wheel alignments, and brake repairs as the top 3 most commonly performed automotive services in Canada
  • According to the University of British Columbia, the most commonly performed automotive products and services include engine and transmission repair, scheduled preventive maintenance, brake repairs, electrical system repairs, wheel and alignment services, and heating and air conditioning work.
  • The study at the University of British Columbia lists the most common automotive maintenance services as engine and transmission work (25.6%), followed by preventive maintenance (22.5%), other categorized services (15%), brake repairs (14.5%), electrical system repairs (9.3%), wheel alignment services (7.2%), and heating and AC services (5.9%).


Research Strategy

Direct data could not be found to identify the top 10 automotive repair and maintenance services in Canada. There was, however, enough data to determine 6 of the top vehicle and repairs services performed by a Canadian professional. There was also insufficient data to determine how many of these services are completed by consumers versus a professional. In this instance, "top" is defined as the most often performed automotive services. Research was performed by determining available data by both global and Canadian market research companies, Canadian universities, and blog posts written by automotive professionals with several years of experience.

There were three main research strategies utilized in this analysis. Direct research was conducted through automotive industry sources, such as global market research companies, Canadian market research provided by a university, and a blog post from an industry expert. Research was also conducted through sources related to and compiling mechanics's data to see what services they provide auto owners the most. Resources such as CAA and My Mechanic Auto were searched, but only limited information on frequency of services was found. No list of top 10 services amongst mechanic's data was found. Finally, research was performed through auto manufacturers' resources looking for a compilation of the 10 most recommended services. It was discovered that oil changes and air filters are the two highest recommended services. There was no evidence of a top 10 recommended compilation list from auto manufacturers. We believed this would be an effective strategy in order to conduct a comparative analysis among auto manufacturers. Unfortunately, outside of oil changes and air filters, recommendations vary according to manufacturer. A comprehensive list of top 10 repair/maintenance services among professionals in Canada was unable to be identified.


Part
03
of eleven
Part
03

Fountain Tire Competitors

OK Tire, Tirecraft, Kal Tire, Big O Tires, Canadian Tire, Integra Tire & Auto Centre, Superior Tire & Auto, Active Green + Ross Complete Tire & Auto Centre, and Frisby Tire are Fountain Tire's competitors in Canada. Detailed below are each company's website link, company description, and the reasons why they are considered competitors.

OK Tire

  • The company's website can be accessed here.
  • OK Tire products and special programs include farm, truck, specialty tire programs, and passenger and light truck.
  • They also provide services such as automotive services, maintenance, and repairs, oil/fluid changes, and exhaust systems.
  • Both companies provide services since the 1950s and offer services in Canada.
  • Both companies are selling tires for trucks and farming. They both provide automotive services including oil changes and exhaust systems.

Tirecraft

  • The company's website can be accessed here.
  • Tirecraft is a Canadian-owned company that is an expert in tires and automotive services.
  • They offer a line up of products, including winter tires, summer and performance tires, all-season tires, ultra-high-performance tires, truck tires, SUV and CUV tires.
  • They also provide mechanic and auto repair for cars, trucks, commercial fleets, tractors, and OTR vehicles.
  • Both companies are offering services in Canada including locations in British Columbia, Alberta, Manitoba, Ontario, and Saskatchewan, selling tires for winter trucks, and selling brands including Dunlop and Goodyear.
  • Both companies provide automotive services including oil changes, tires, brakes, and vehicle suspension.

Kal Tire

  • The company's website can be accessed here.
  • Kal Tire is Canada’s largest independent tire dealer for passenger car, truck, and SUV, including specialty tires and tire accessories. It also provides tire and mechanic services.
  • Both companies offer services in Canada selling tires for trucks.
  • Both companies are selling tires for passenger cars and provide automotive services including oil changes, wheel alignment, tires, brakes, and vehicle steering, and suspension.

Big O Tires

  • The company's website can be accessed here.
  • Big O Tires is a tire, wheel, and auto service company. The products and services include tires to green tires, truck and car maintenance and repairs, and custom wheels.
  • Both companies offer services in Canada including British Columbia and sell tires for trucks, including the brand Goodyear.
  • Both companies provide automotive services including oil changes, wheel alignment, tires, brakes, cooling systems, batteries, and vehicle steering and suspension.

Canadian Tire

  • The company's website can be accessed here.
  • Canadian Tire provides winter tires, all-season and all-weather tires, performance tires, and more, from top brands including BF Goodrich, Goodyear, Pirelli, and Michelin. It also provides auto service into its Canadian Tire Auto Service Centre.
  • Both companies offer services in Canada and sell tires for trucks, having a selection of brands like Goodyear, Dunlop, and Kelly tire.
  • Both companies are selling tires for winter and provide automotive services including oil changes, tires, brakes, and vehicle steering and suspension.

Integra Tire & Auto Centre

  • The company's website can be accessed here.
  • Integra Tire & Auto Centre's services include tires and automotive for passenger, commercial, or agricultural vehicles.
  • Their services are batteries, starters, alternators, engine repair and diagnostics, air conditioning, air filters, belts and hoses, cooling systems, custom accessories, wheels and rims, mufflers and exhaust, tune-ups, RV/motor home repair, agricultural tires, light-duty fleets, heavy-duty mechanical, retreading, commercial tires, and 24-hour fleet service.
  • Both companies offer services in Canada and sell tires for farms. They also provide automotive services including oil changes, tires, brakes, batteries, cooling systems, and vehicle steering and suspension.

Superior Tire & Auto

  • The company's website can be accessed here.
  • Superior Tire & Auto provides brand name and private label tires.
  • They offer services such as axle, CV joint, driveshaft repair, belts and hoses, brake repair, climate control systems, cooling system repair, differential repair, electrical and electronic systems, engine diagnostics and performance, exhaust system repair, four-wheel-drive system, glass repair and replace, lube, oil and filter change, nitrogen inflation, preventive maintenance, starting, charging and batteries, and steering and suspension system.
  • Both companies offer services in Canada, specifically in Ontario. They both sell Goodyear and Dunlop tire brands.
  • Both companies sell tires for passengers and provide automotive services including oil changes, tires, climate control systems, exhaust systems, brakes, batteries, cooling systems, and vehicle steering and suspension.

Active Green + Ross Complete Tire & Auto Centre

  • The company's website can be accessed here.
  • Active Green + Ross Complete Tire & Auto Centre offers a complete line and selection of passenger and light truck tires and automotive service and repairs to most car and light truck models with over 65 locations in Ontario.
  • Both companies are offering services in Canada, specifically in Ontario, and are selling tires for winter and passenger cars.
  • Both companies provide automotive services including alignment, oil changes, tires, exhaust systems, brakes, batteries, cooling systems, and vehicle suspension.

Frisby Tire

  • The company's website can be accessed here.
  • Frisby Tire provides retail and wholesale of tires including well-known brands such as MICHELIN®, Cooper, Goodyear, BF Goodrich, Uniroyal, Bridgestone, Firestone, Hankook, Nokian, Pirelli, and Yokohama tires. The company is considered as the "oldest auto repair shop serving customers in Ottawa, Nepean, Kanata, and surrounding areas".
  • Both companies are offering services in Canada specifically in Ontario, both selling tires for passenger cars, using brands like Goodyear.
  • Both companies provide automotive services including alignment, oil changes, tires, exhaust systems, climate control systems, brakes, batteries, cooling systems, and vehicle steering and suspension.

Research Strategy:

In order to identify nine Fountain Tire's competitors in Canada, our research strategy was to understand first the services of Fountain Tire. Then, we looked for companies that provide the same services, specifically in Canada. Therefore, we leveraged each competitor's website in providing its brief description of services, and why it is considered a competitor. Each of the companies has a resemblance in the tire category (trucks, passenger, farm, winter, etc.), tire brands, and auto service types that Fountain Tire provides.
Part
04
of eleven
Part
04

Tire Buying Consumer Demographics

Demographic details of the Canadian tire buying consumer in the public domain is limited; we have triangulated the profile of the typical tire consumer. The primary tire buying consumer is 25-54 years, Caucasian, lives with a spouse/partner, and more likely to be a resident of Quebec or Ontario.

Age

  • Most licensed drivers in Canada are aged 25+ (nearly 9 in 10).
  • On an average, younger owners drive more than older ones: millennial owners (106,602 kms.), Gen X owners (105,527 kms.), boomers (99,571 kms.), and pre-boomers (85,754 kms.). As younger generations drive longer distances, their need for tire replacement owing to wear and tear is greater.
  • Older generations are also more likely to maintain proper tire inflation to prolong the life of the tire; 83% of 65+ individuals versus 50% of 18-34-yr-olds think it is very important to maintain the right tire pressure and 81% of 65+ individuals versus 50% of 18-34-yr-olds believe it is important to maintain the right tire pressure for good tire life.
  • According to an Ipsos survey, younger drivers are more likely to install winter tires than older drivers: 18-34 (79%), 35-54 (72%), and 55+ (65%).
  • Based on the aforementioned data, the primary buyers of tires in Canada are 25-54-year-olds.

Gender

  • More women (70%) than men (62%) "support making winter tires mandatory across Canada throughout the winter months".
  • Forty-one percent of Canadian car buyers are women. However, they influence the purchase of 80-95% of all new cars.

Race

  • Nearly four in five Canadians are white--Europeans and Canadian natives--and people of color account for over one-fifth (22.3%) of the population. Even on accounting for racial differences in factors that drive the purchase of tires, the white population is likely to be the primary tire buyer.
  • Individuals of European descent account for 57% (19,683,320/34,460,065) of the Canadian population.

Location

  • Ontario (38.6%), Quebec (22.6%), British Columbia (13.5%), and Alberta (11.6%) have the largest share of the population in Canada.
  • The share of vehicle registrations in 2018: Ontario (35.7%), Quebec (24.8%), British Columbia (11%), and Alberta (14.8%).
  • According to the Tire and Rubber Association of Canada's 2019 Winter Tire Report, 100% of Quebec's population, 69% of Ontario's, 68% of British Columbia's, and 63% of Alberta's population use winter tires.

Marital Status

  • The primary target group for Canadian Tire's main stores is parents aged 30-49. Automotive services sales are one of Canadian Tire's main business segments.
  • Fifty-six percent of Canadians aged 25 to 64 are married and 15% live under common law.

Research Strategy

In order to fulfill this request, we searched the Statistics Canada database, reports by industry bodies such as the Tire and Rubber Association of Canada, statistical databases like Statista, and research reports by agencies such as Ipsos and JD Power. Additionally, we also attempted to find the target groups for tire stores such as Kal Tires and Canadian Tire. While we were unable to find a comprehensive precompiled demographic profile of the tire buyer in Canada, we triangulated the same based on winter tire consumer and vehicle ownership data.
Part
05
of eleven
Part
05

Media Psychographics of the Tire Consumer

Streaming services are remarkably popular among Canadian Millennials and Gen Xers, notably Netflix. However, TV is still relevant to Gen Xers. Facebook and YouTube are popular platforms for those in the 25-54 cohort, while podcasts appeal more to Millennials than Gen Xers.

Type of Media

  • As reported by IAB Canada, the internet reaches 98% of Canadians in the 25-34 bracket and 99% of those in the 35-54 bracket. It has the highest reach among all types of media, followed by TV (90% and 95% respectively), and Radio (84% and 92% respectively).
  • OOH is still relevant for these consumers, reaching 82% of those in the 25-34 bracket and 86% of the 35-54 cohort. Newspapers (48% and 50% respectively) and Magazines (39% and 49% respectively) landed at the bottom.
  • Ninety-six percent of Canadian internet users in the 25-44 age group use email services (versus 93% of those in the 45-64 bracket), 90% use some form of instant messaging app (vs. 73.1%), and 88% use some type of social media app (66.9%).
  • When it comes to podcasts, those in the 25-44 age group are more likely to listen to it than other age groups. For instance, 37.8% of Canadian adults aged 25 to 44 listen to podcasts, as opposed to 21.1% of those in the 45-64 age bracket.
  • Streaming platforms are popular among Canadians in the 25-44 bracket (75%), as well as video sharing websites, like YouTube (85%).
  • Seventy-one percent of Canadian Gen Xers subscribe to traditional TV, while 72% have an SVOD subscription.
  • Fifty-seven percent of Canadian Millennials have access to a cable subscription.
  • Canadians ages 18 to 64 prefer to watch comedies on TV (broadcast/cable/satellite). Other popular TV shows include drama (55%), news (50%), documentaries (48%), crime and mystery (45%), sports (42%), reality TV (33%), and science fiction and fantasy (33%).

Platforms

  • Eighty-eight percent of Canadian millennials use Facebook weekly versus 83% of Gen Xers.
  • Pinterest, on the other hand, is more widespread among Gen Xers (25%) than Millennials (18%).
  • Seventy-two percent of Millennials and 67% of Gen Xers use YouTube frequently.
  • Thirty-three percent of Gen Xers and 30% of Millennials reported using Twitter regularly.
  • Fifty-nine percent of Millennials and 36% of Gen Xers have Instagram accounts.
  • Reddit and Snapchat are mostly used by Millennials in Canada.
  • Almost half of Canadian millennials believe YouTube is the most useful source to learn about new products, services, or brands they might consider buying. Only 16% said the same about TV.
  • One in four Canadians Gen Xers said that they watch less traditional TV than they used to because of YouTube. Almost half reported watching YouTube during the primetime hours.
  • Seventy-four percent of Millennials and 58% of Gen Xers subscribe to Netflix. Forty-percent of Millennials and 31% of Gen Xers have a Prime Video subscription.

Frequency

  • Thirty-percent of Canadians in the 25-44 age group spend, on average, between five to ten hours online per week, while 26.3% spend between 10 to 20 hours per week. Nineteen percent spend less than five hours, 15.8% spend between 20 to 40 hours, and 8.6% spend more than 40 hours online per week.
  • Traditional media is a relevant hobby among Canadian Millennials, as they spend on average 3.3 hours reading books every week and 4.1 hours per week watching live television. For comparison, they reported 3.9 hours per week on Instagram, 2.4 hours on Snapchat, and 1.9 hours on Twitter.
  • However, YouTube, Netflix and Facebook are the most frequent sources of entertainment among Millennials, as they spend 8.1 hours on YouTube, 7.4 hours on Netflix, and 7.3 hours on Facebook every week.

Online Expenditures

  • Ninety-one percent of Canadian internet users in the 25-44 age bracket use the internet to purchase physical goods. Seventy-four percent use it to buy digital goods and services, such as music or video downloads and online data-storage services. Services like food and beverage delivery or buying tickets online, are also popular and used by 82.3% of the cohort.
  • For those in the 45-64 group, the percentages decrease, as 85.9% buy physical goods online, 58.3% acquire digital goods and services, and 74% use services like food delivery.
  • When it is time to pay for these online purchases, 80% of Canadians in the 25-44 group use credit cards, 44.5% use online payment services, 24.5% prefer electronic transfer, 15.5% pay with prepaid gift cards or online vouchers, 22.8% use their debit cards, 17.4% exchange reward points or redemption programs, 10.4% use virtual wallets, and 3.3% use other methods.
  • For those in the 45-64 age bracket, credit cards are also the most popular payment method (78%), followed by online payment service (39.1%), electronic transfer (21.6%), reward points or redemption program (18.7%), debit card (15.1%), prepaid gift card (9.2%), virtual wallet (5.1%), and other methods (4.1%).
  • Canadians in the 25-44 age group spent, on average, $3,214 online in 2018. Online purchases of physical goods grabbed the largest share of the expenditure, accounting for $1,583, followed by food/beverage delivery or ticket purchases ($1,371), peer-to-peer accommodation services ($1,050), peer-to-peer ride services ($348), and digital goods or services ($381).
  • Canadians in the 45-64 age group spent, on average, $2,595 online in 2018. For this cohort, food/beverage and tickets accounted for the largest share ($1,637), followed by peer-to-peer accommodation services ($1,340), physical goods ($1,049), and digital goods and services ($345).
  • Netflix reaches 6.3 million subscribers in Canada. Research suggests that Canadians are buying more digital movies, with nearly 7 million EST transactions recorded in 2018 — up 18% from 2017. Apple ITunes has the largest share of these transactions, accounting for over two-thirds of spend across movies and TV content.

Ontario & Quebec

  • People living in Ontario prefer to connect in person than digitally (73%); however, they would still prefer to email or text than talk on the phone (60%). Seventy-seven percent believe technology and digital tools made their lives easier.
  • Ontarians, in particular, tend to say that GPS and digital maps made a positive impact in their lives, more than any other province (45% vs. 42% national average).
  • People living in Quebec are more dependent on technology than other provinces (55% vs. 49% national average). Eighty-six percent say they would prefer to connect in person than digitally, but 53% would prefer to email or text than talk on the phone.
  • People in Quebec are more likely to have done an app cleanse on their phones than the rest of Canada (73% vs. 69% Canadian average).
  • French Canadian adults are heavier users of media than the overall Canadian, except for magazines.
  • As reported by Google, YouTube videos are Quebecers’ preferred format for content consumption, as 86% stated that YouTube would have whatever they want to watch at any given moment. Seventy-four percent prefer to watch YouTube tutorial videos than to read instructions.
  • Sixty percent of the Quebecers surveyed by Google prefer to watch late-night TV segments on YouTube than on TV (40%), while 79% said that watching movie/TV trailers on YouTube helps them decide what to watch.

Research Strategy

In order to create a media consumption profile of tire consumers based on the previously created demographic profile, the research team leveraged the age and location insights available, as they were the categories more likely to provide relevant details. For instance, if most Canadians are Caucasian and married, that information would not provide any insights that could differentiate tire consumers from overall Canadians. We excluded the gender, given the limited information available to determine which gender is more likely to buy tires.
Consumers in the 25-54 age bracket would fit the Millennial (24-38) and Generation X (40-54) category, using the Pew Research Center definition. Nevertheless, not all sources use the same description or age group; for that reason, whenever the age bracket was expanded or limited, we provided the exact age range for clarity.


Part
06
of eleven
Part
06

Trends - Advertising Regulations

The adoption of mandatory reporting of data breaches, the use of cookie banners to ensure meaningful consent, and new directives making automated data collection algorithms more transparent are the three current regulatory changes and directives that will impact advertisers using Third-Party Cookies. Each of these changes in regulation is triggered by increasing breaches in user data and growing worries concerning the discriminatory way big data can be used to threaten the civil rights of Canadians.

Helpful Findings

Adopting Mandatory Reporting Obligations for Data Breaches

  • Responding to many significant data breaches, such as the one orchestrated by Cambridge Analytica to Facebook, which affected 600,000 Canadians, Canada updated its Personal Information Protection and Electronic Documents Act (PIPEDA) to strengthen cybersecurity.
  • Hence, on November 1, 2018, Canada required businesses to make mandatory reports to the Office of the Privacy Commissioner of Canada (OPC) any breaches in client data (data gathered, often, from Third Party Cookies). Before this, PIPEDA made this a voluntary requirement.
  • This change covers any domestic (private-sector organizations, federally-regulated organizations) or foreign organization (businesses operating in Canada use personal data across its border) that is covered by PIPEDA.
  • Once a personal (user) data collected by a Third Party Cookie has been breached, according to the new regulations, the organization responsible must report this to the individuals affected and actions taken to reduce further and future harm.
  • Also, specified by the new regulations, the breached organization needs to notify any government agencies in Canada that may be able to reduce the harm.
  • Since the mandatory reporting obligations were added to PIPEDA, the number of data breaches has increased 6 times, clearly demonstrating cybersecurity motivating the update to Canada's PIPEDA.
  • The OPC got 680 reports of breached data affecting 28 million Canadians.

The Use of Cookie Banners for Meaningful Consent

  • In response to a 2017 breach of Canadians' personal information to Equifax, as well as the Cambridge Analytica breach discussed above, in 2019 the OPC updated and continues to modify the PIPEDA guidelines for meaningful consent.
  • The purpose of 'meaningful consent' guidelines is to strengthen the provisions organizations must follow to collect, through means such as cookies, users' private data, specifically moving toward a default opt-in notification (i.e., cookie banner).
  • "Cookie banners" ask users to explicitly give their consent to having Third Party Cookies placed on their devices.
  • The changes in regulation do not ban the use of cookies.
  • These updated guidelines recommend that organizations provide "Just In Time" notification of what data is collected by cookies and how it will be used.
  • The updates to meaningful consent also require organizations to notify what choices users have to opt-out of their personal data being used.
  • While organizations regulated under PIPEDA are adopting the "cookie banners," technically it is the user's responsibility to manage their cookie preferences on their search engines.

Measures to Improve Algorithmic Transparency

  • A growing concern for Canada in the automated collection of private data--through means such as cookies--is the potential for these big collections to be used in discriminatory ways towards individuals (e.g., policing practices).
  • To address the existence of, and growth potential of, biased/discriminator data collection, the Canadian government is recommending moving toward practices that make transparent the algorithms used in data collected from sources, such as cookies.
  • The Directive on Automated Decision Making will impact private-sector organizations who advertise using cookies by asking them to do an algorithmic impact assessment of the data they collect and release to the public; the purpose here is to determine if the data collection has the potential to perpetuate bias/discrimination against vulnerable populations.
  • Requiring algorithmic transparency will also add new requirements in the automated collection of data to organizations regulated by PIPEDA.

Research Strategy

The team first focused on governmental reports (e.g., OPC and the Standing Committee on Access to Information, Privacy and Ethics [ETHI]) to locate recent changes or proposed changes in the regulation of automated data collection (including data collected by Third Party Cookies). From these sources, we identified new changes and directives toward mandatory reporting of data breaches, changes to getting meaningful consent, and requiring algorithmic transparency. However, none of the information we came across constituted a trend.

We also searched recent business periodicals, legal websites monitoring Canadian legislation changes, and white papers from consulting agencies helping businesses understand the Canadian regulatory environment of protecting user privacy (e.g., Forbes, International Association of Privacy Professionals, and Lexology) to compare legislative changes with the reporting/analyzing on/of trends in Canada's regulatory environment of user privacy. While this strategy confirmed that the above legislative changes and directives are indeed important occurrences (being reported on and responded to) that meet intensifying or newly identified threats, we were still unable to confirm them as trends or locate any new information on the topic.

Next, we searched through reliable news reports, articles, and publications, including Forbes, Digiday, the Wall Street Journal, among many others to identify trends in regulations to protect user privacy, as well as the impact on third party cookies to advertisers. As publications typically report on new regulations being implemented, we were hoping that they would provide relevant details on recently administered standards for safeguarding user privacy. Again, we were unable to locate the requested information through this strategy. There was no information presented that revealed additional regulations being implemented or increasingly adopted, or any other data that would point to a trend in this space.

Due to the insufficient amount of information surrounding the specified topic, as there is limited data available to discern a trend, we provided the information we found earlier (i.e, new changes and directives toward mandatory reporting of data breaches, changes to getting meaningful consent, and requiring algorithmic transparency). We then read the legislation, directives, or committee notes (e.g, PIPEDA or ETHI report) on these regulations to identify the ways each of these will impact advertisers using cookies. We found that none of these changes ban the use of cookies but will add new requirements that organizations will need to follow.
Part
07
of eleven
Part
07

Trends - Renting vs Buying

Some key trends and insights into millennial attitudes about renting versus buying are renting as a chosen preference, financial pressures, higher quality items available via renting, renting is less effort and then how these trends play into car ownership. Where possible, research is focused on Canadian millennials, though insights have been used from North America as a whole to round out the research.

Statistics About Millennial Renters

  • The top consumer categories for rentals include furniture, video games, clothing, tools, jewelry, technology and home appliances.
  • Those aged 18-38 years old account for 64% of consumer goods renters.
  • The top three reasons for renting instead of buying are to test things before purchasing, as a temporary solution and only needed for a short time.
  • Millennials are renting things on an "as-needed" basis instead of making a bigger investment in purchasing.
  • 12.3% of millennials plan to "always rent", which is an increase from 10.7% in 2018.
  • Nearly half of Canadian millennial renters think they will never own a home.

Renting Because They Prefer To, Not Because They are Forced To

  • Millennials see renting as a useful solution to several issues instead of just feeling like they are being 'forced' to rent for financial reasons.
  • The renting of consumer goods, for example, is popular when something is only needed for a short time or as a way of 'testing' a product before making a purchase.
  • For property, millennials want to be able to go out and enjoy themselves without the pressures and obligations of home ownership.
  • Furthermore, renting is associated with greater flexibility and mobility.
  • Among millennials who plan to rent forever, 40% cited flexibility as their top reason.

Financial Pressures Are Still a Factor

  • While many millennials do intentionally choose to rent things, they also acknowledge there is a financial aspect at play.
  • The millennial generation has significant barriers to home ownership like student loan debt, lack of down payment savings and bad credit. In Canada, the new 'mortgage stress test' adds an additional hurdle.
  • For example, millennials are savvy that home ownership comes with many hidden costs, and they are reluctant to take these on. 37% of millennials who plan to rent forever cited maintenance and other ongoing costs as major factor in their decision.
  • This also might be because their peers who have purchased property are possibly regretting it. One survey found 60% of home-owning millennials regretted their decision to buy.
  • Canadian millennials are also more financially wise. They understand elements like negative equity and house poor. Therefore, some millennials who can technically afford to purchase a home still choose not to.
  • For consumer goods, 43% of millennials reported that they find renting less expensive than buying.

Higher Quality is Obtainable When Renting

  • Millennials value quality items, and they report that when renting, they can achieve a desired quality for a lower price point.
  • 18% of millennials who have bought a home report it is too small for their needs, and 10% regret the chosen location of their home. Renting allows greater flexibility to live in the location and size of home desired, because it comes at a lower initial price point.
  • The same concept applies to rented goods, too. Companies like Rent the Runway are popular because consumers can access designer clothing for far less money.
  • 32% of millennials renting consumer goods cited "higher quality than can afford to buy" as a reason for renting.

Renting is Less Effort

  • Similar to financial pressures, renting again is seen as less pressure, as someone else can take care of details and any maintenance or breakages. 10% of millennials stated home maintenance is the primary reason they choose to rent.
  • 41% of millennials who rent consumer goods stated they do it because there is less maintenance and responsibility involved. 42% also stated it is more convenient.

Similar Factors Affect Car Ownership

  • Similar to home ownership and consumer goods, millennials attitudes towards car ownership are also affecting purchases. Half of survey respondents aged 22-37 stated owning a car was not worth the maintenance costs.
  • Driving as a whole is affected by millennials' attitudes. 6% fewer millennial adults possess a driver's license than ten years ago. 16% say they could live without access to a car.
  • Ride-sharing services are more prominent than ever in Canada, which makes owning a car feel less necessary.
  • The gig economy is also affecting car ownership. 15% of millennials who do plan to purchase a car say they are only doing it to drive for Uber or Lyft.
  • Millennials are also flocking to urban centers, which has affected preferences to rent property and cars.
  • However, data shows that millennials are eventually purchasing cars, since Canadian car ownership rates are not actually declining. They just choose to do it later in life than previous generations.
  • When a Canadian millennial does choose to purchase a car, they might first go for a lease option, which allows them to access a higher quality model. This is similar to the same trend for renting clothes or even property, as it increase the affordability of more luxury items.
Part
08
of eleven
Part
08

Trends - InCar Audio

While in-car audio systems like Android Auto and Apple CarPlay are gaining an increasing foothold in Canada's larger in-car audio market, subscription fees and competitive pressures continue to limit the growth of this emerging industry sub-segment.

Increasing Customer Awareness

  • One of the fundamental trends underlying the growth of in-car audio systems such as Android Auto and Apple CarPlay in Canada is the increasing consumer awareness related to such options within the country.
  • This trend was substantiated by the preponderance of Canadian-based consumer media that currently discusses what these systems are (e.g., TechRadar), how to retrofit older car models (Driving.ca) and the more general growth in consumer awareness/demand for these products (e.g., TechRadar, CAA).
  • Despite the fact that these systems are in their relative infancy in the automotive world, with Apple CarPlay first announced in 2013 and Android Auto first introduced in 2014, they are now widely discussed within mainstream media and desired by Canadian consumers.
  • As a result, such in-car audio systems have shifted in consumer perceptions from "rarely-seen optional" extras to a "must-have for any new car buyer" that are increasingly influencing car purchase decisions.

Increasing Prevalence in Vehicles

  • In parallel with growing consumer awareness for in-car audio systems, Canadian auto retailers are increasingly including Android Auto and Apple CarPlay as either optional or standard features within new cars.
  • This growing prevalence of in-car audio systems within Canadian vehicles was identified as a trend based on a review of the historic vs. current presence of Android Auto and Apple CarPlay within new Canadian cars.
  • Notably, the presence of Android Auto and Apple CarPlay as options within new vehicle purchases in the country has grown dramatically since 2014 (when only the Kia Soul was sold with these options) and 2015 (when only five models were sold with these options) to 2018, when these systems were available in over 100 car models and across over 30 car brands in Canada.
  • Moreover, car retailers in the country are more frequently making in-car audio systems a standard rather than an optional feature within their vehicles.
  • As a result, systems such as Android Auto and Apple CarPlay are becoming a more accessible and ubiquitous in-car audio entertainment option for vehicle owners in the country.

Rise of Subscription Fees

  • However, as in-car audio systems become increasingly common in Canada, a growing number of manufacturers are beginning to charge subscription fees.
  • This rise in subscription fees for systems such as Android Auto and Apple CarPlay was identified as a trend based on multiple credible resources that specifically discussed this trend (e.g., TechRadar), as well as corroborating media coverage of auto manufacturers that are demonstrating this trend (e.g., Toronto City News, CNET).
  • Specifically, some manufacturers have started charging Canadians subscription fees for Android Auto and Apple CarPlay, in addition to more standard hardware installation fees.
  • For example, Toyota has begun to charge customers for the service after a four-year free period, while BMW also recently attempted to introduce a one-year $100 or 20-year $400 subscription model in Canada.
  • While these subscription fees have made Android Auto and Apple CarPlay less attractive in some cases, they have primarily resulted in backlash against the automakers who impose them.
  • As a result, some auto manufacturers are reversing these fees amid media criticism and considering customer preferences.

Growing Fight for Market Share

  • Meanwhile, the growing fight for audio market share in Canadian cars also weighs on the adoption and use of in-car audio systems.
  • This trend was identified by the numerous, credible media resources discussing how online streaming has struggled to compete in Canada's car audio market over several years (e.g., Radio Connects, CMF), as well as how in-car audio systems are currently and expected to remain at a disadvantage in this competitive marketplace (e.g., Vovia).
  • Overall, the audio market in Canadian vehicles remains dominated by AM/FM radio, with various researchers estimating that these radio stations hold between 73% and 79% of audio market share in the country's cars.
  • However, other services such as Sirius XM and podcasts are increasingly competing for market share, with each currently holding market shares of between 6%-11% and between 2%-3%, respectively.
  • As a result, streaming has had a difficult fight to gain traction with Canadians, and only has between 4% and 11% of the market.
  • Overall, industry experts suggest that digital audio options such as in-car audio systems will continue to "struggle" as long as mobile data packages are less affordable in Canada.
Part
09
of eleven
Part
09

Trends - D2C Advertising

Current trends in direct-to-consumer (D2C) advertising are shift from e-commerce to omnichannel D2C advertisement, prioritization of long-term returns over short-term results, increased focus on creating positive social impact, and an increase in subscription offerings. The requested information on the trends is presented below.

Shift from e-Commerce to Omnichannel D2C Advertisement

  • Initially, D2C advertising was widely used in e-commerce but a shift from this position is a current trend. Many D2C brands in Canada have reported a higher rate of spending on omnichannel marketing. More D2C retailers are now increasing their investment in advanced linear or over-the-top (OTT) television.
  • The brands are increasingly flocking to channels such as television, which have the scale to take a brand's message to the masses. In Canada, an average of 24.7 viewing hours are spent per week. Such statistics partly explain this growing trend.
  • The shift is considered a trend because it represents a transformation from reliance on online advertisements such as banner ads and sponsored content to using multiple advertising channels. The trend is a recent phenomenon nurturing a new model of D2C advertising that uses multiple channels. It is also improving the impact of D2C advertising in terms of reaching more consumers and creating better consumer experiences.
  • The trend impacts the marketplace by providing a wider space for retailers to implement D2C advertising. The trend is also enhancing customers’ interactions and experiences with the various brands using D2C advertising. For example, a Canadian firm, Endy, also uses its showrooms as part of the D2C advertising. Customers who visit the showrooms are able to interact with the brand directly by experiencing the products through sight, feeling, and touch.

Prioritization of Long-term Returns over Short-term Results

  • The increased emphasis on long-term customer relationships and loyalty vis-à-vis short-term sales is a noticeable trend in D2C advertising. Canadian brands such as Indochino are using the omnichannel experience to build customer loyalty. After acquiring the customers, D2C brands need to retain them in the long-term.
  • The move is considered a trend because it represents a shift in focus in D2C advertising. As a new type of advertising that is gaining more popularity recently, DTC advertising is also shifting its focus from the immediate goal of attracting sales to that of building and sustaining customer relationships that last long.
  • By focusing more on long-term customer relations, the market is becoming more customer-oriented where the advertisers see customers as more than just one-time buyers. Moreover, providing greater customer experiences is becoming the norm for most retailers using D2C advertising as opposed to attracting one-time consumers.

Increased Focus on Creating a Positive Social Impact

  • The growing consumer information and demand for corporate social responsibility is pushing many D2C retailers in Canada towards creating a positive social impact. They are using social good as part of their brand advocacy in their D2C advertisements and marketing.
  • This is considered a trend because it embeds corporate social responsibility and ethics into advertising. Consumers are also able to learn about the social impact of retailers through their D2C advertisements.
  • This trend is providing an opportunity for retailers and brands to build good brand reputations in the market. For example, the Montreal-based clothing brand, Frank and Oak, has been strengthening its positive social impact through its marketing mix including through it DTC advertisements to create a good brand impression among consumers.

Increase in Subscription Offerings

  • There has been an increase in subscription offerings in D2C advertising in the recent past. Brands such as Dollar Shave Club with offices in Canada prefer these subscriptions because they provide greater customer convenience. The company has over 3.2 million subscribers in four countries, including Canada.
  • Increased subscription offerings is considered a trend because it is creating a new way for consumers to interact with brands and shop conveniently. Rather than the traditional way of shopping by visiting shopping stores, customers can get their items delivered to them through the subscription offers.
  • The trend is impacting the marketplace by prompting more customers to subscribe to their preferred brands. Moreover, the convenience of subscription enhances customers’ experiences.
Part
10
of eleven
Part
10

Trends - EV

Advancements in battery technology, improvements in charging technology, autonomous driving, and government policies and incentives are current trends surrounding electric/autonomous vehicles. The requested information on the trends is presented below.

Advancements in Battery Technology

  • Research and development in electric vehicle technology has led to significant advancements in battery technology. The lithium-ion battery cathodes are being improved continuously, thus making them cheaper. The improved batteries are also giving electric vehicles a bigger range.
  • Alternatives to lithium-ion batteries are also emerging with solutions like graphene polymer, micro-capacitors, and miniaturized solid oxide fuel cells gaining prominence.
  • Advancements in battery technology is considered a trend because improved batteries are making electric cars cheaper compared to gas-powered vehicles. It is also a trend because improved batteries are giving drivers range confidence.
  • The trend is stimulating the impetus to buy electric vehicles in Canada. Many Canadian drivers are reluctant to buy electric vehicles because of their cost and range. Hence, this trend is giving them the confidence to purchase electric vehicles.

Improvements in Charging Technology

  • Emergence of fast-charging stations and portable charging solutions is a notable trend surrounding electric vehicles. Companies such as Tesla and Porsche are leading in this trend with other automakers following suit.
  • As the level of electric vehicles' adoption rises in Canada, improvements in charging technology to match the demand is rapidly taking shape. The country is changing its electric vehicles charging infrastructure to high power charging (HPC) charging stations. Besides charging faster, the new stations are also configured differently to accommodate more vehicles.
  • Improvements in charging technology is a trend because it has cut charging time to as little as 10 or 20 minutes. Initially, it could take as long as 14 hours to fully charge when using customary electric vehicle chargers.
  • The trend is creating an incentive for Canadians to transition to electric vehicles. Considering that time to charge has been a major worry among Canadian drivers, this trend is accelerating electric car sales in the country.

Autonomous Driving

Government Policies and Incentives

  • The Canadian government’s move to develop policies and incentives aimed at encouraging people to buy electric vehicles is a current trend. The government understands that electric vehicles are among the most promising technologies for reducing pollution emanating from the transport sector.
  • The Canadian federal government, supported by a few key provinces, has developed several policies and incentives to kick-start electric vehicles' uptake. For instance, Quebec has a plan that offers a discount for each individual electric vehicle sold while Ontario offers rebates. Other incentives include privileged parking lots in strategic locations and reserved lanes.
  • The move is considered a trend because it has encouraged many people to buy electric vehicles as shown by the accelerating sales. It is projected that the electric vehicle market share in Canada will reach 29% by 2030, partly because of the strong policy and incentives.
  • The policies and incentives trend is having a profound impact on the marketplace. It is wooing more people to shift to electric vehicles because of the incentives accrued such as the low purchase cost. Thus, electric vehicle manufacturers are experiencing improved business.


Part
11
of eleven
Part
11

Trends - OTT

Canada's OTT market is currently experiencing a number of trends related to growth and expansion, however this surge in OTT adoption is also driving new levels of government scrutiny and regulation.

Increasing Market Penetration

  • Perhaps the most significant, overarching trend within Canada's OTT market is the industry's steady and rapid growth in the country.
  • This trend was identified based on the findings of multiple credible researchers (e.g., CMF, PWC Canada, eMarketer MediaInCanada), who highlight OTT's recent momentum in acquiring customers and strong forecasted growth.
  • According to CMF, OTT penetration rates in Canada more than quadrupled between 2011 and 2017, with OTT penetration rates growing from 12% to 58% among anglophones and from 3% to 41% among francophones in the country over that period.
  • Notably, OTT usage is particularly high among those between the ages of 16 and 34 in the country, with more than half of this group engaging with OTT services at least 4-5 times per week and consuming between 1.64 and 1.86 hours of OTT content daily.
  • Moreover, a recent analysis by PWC Canada suggests that Canada's OTT industry will grow at a 10.7% CAGR between 2018 and 2023 to reach a total value of $2.7 billion.
  • Meanwhile, despite the fact that the growth in OTT consumption has created competition for other entertainment mediums, it appears that OTT is not significantly eroding alternatives such as traditional TV, given that subscribers remain interested in both mediums.

Expansion in Number & Types of Providers

  • In parallel with this market growth, the OTT market in Canada is also experiencing a surge in the number and types of providers.
  • This trend was similarly identified based on the commentary of industry experts (e.g., PWC Canada, CMF, Kearney), who discuss the diversity of OTT providers in the Canadian marketplace, as well as the continued entry of new startups.
  • According to PWC Canada, the country's OTT market is currently divided between 25 services, with Netflix operating as an industry leader based on the company's 70% market share.
  • A separate CMF report adds that there is significant diversity among these providers, with 75% being of foreign origin and the large majority catering to niche audiences.
  • Moreover, Kearney notes that many of the OTT services in Canada are experimenting with different monetization models, including SVOD, AVOD, "fremium" models and standalone subscription plans.
  • Meanwhile, the entry of new and more diverse OTT providers is expected to continue in the country, with CMF forecasting that the number of OTT services in Canada will double to 50 by mid-2020.

Increasingly Fueled by Mobile

  • Meanwhile, mobile devices are increasingly fueling the OTT market, as Canadian shift towards less traditional means of viewing content.
  • This trend was identified based on robust discussion by industry experts (e.g., Kearney), as well as corroborating statistics from CMF and Parrot Analytics.
  • According to Kearney, "mobile is surpassing TV" as the primary growth channel for OTT content delivery.
  • In particular, the increase in mobile network operator (MNO) partnerships and bundling deals is encouraging customers to consume more OTT content via their mobile devices.
  • Notably, a 2018 analysis by Parrot Analytics found that a surprisingly large 15% of Canadians already used their mobile phones to access TV content.
  • Just one year later, however, analysis by CMF found that approximately 20% of anglophones and 14% of francophones watched OTT content via their smartphone.
  • Meanwhile, Kearney asserts that MNOs are aware of their "growing importance" in the sale and marketing for OTT services, and are therefore encouraging further use of mobile data plans as well as offering "higher-margin visual entertainment options" as a result of this trend.

Increasing Government Scrutiny

  • Finally, the overall expansion of OTT in Canada, particularly among foreign-owned services, is creating a trend towards increased regulatory scrutiny for the industry.
  • This trend was selected based on the preponderance of credible media resources (e.g., eMarketer, CBC, Financial Post) that are currently reporting on how local funding concerns are drawing increased government review and legislation to the OTT industry.
  • Currently in Canada, digital media providers are exempted from the content quotas and funding requirements that are placed on all local traditional broadcasters.
  • Due to the large and rapidly growing financial opportunity that OTT represents for Canada, however, the country directed its Canadian Radio-television and Telecommunications Commission to deliver a report regarding how to more equitably govern the "creation, production and distribution" of content in Canada.
  • One key outcome of this report was the new Broadcasting and Telecommunications Acts, which is currently under review as part of the legislative process.
  • In parallel, Canada reached a deal with Netflix to invest CA$500 million in Canadian productions over five years.
  • However, these actions have not quenched support by members of the public or industry organization such as CBC and CRTC for a broader "Netflix tax" as well as increased oversight of all digital streaming services.
  • Given these factors, industry experts anticipate expanded regulation of the OTT industry in Canada's near future, which may potentially have a negative impact on subscription levels in the country.
Sources
Sources

From Part 02
From Part 04
Quotes
  • "Younger owners drive more kilometers: On average, average miles driven by Gen Y owners is 106,602 Km and Gen X owners drive an average of 105,527 Km. By comparison, Boomers drive an average of 99,571 Km and Pre-Boomers an average of 85,754 Km"
Quotes
  • "Winter tire habits vary significantly by age and by region. Younger drivers aged 18-34 (79%) are the most likely to install winter tires, compared to 72% of those aged 35-54 and 65% of those 55+. Viewed differently, older Canadians are most likely not to install winter tires (35%), compared to just 21% of those aged 18-34 who don't use winter tires."
  • " British Columbia, well known for its milder winter temperatures, registers the highest proportion of automobile owners or leasers who do not install winter tires (52%), followed by Saskatchewan and Manitoba (42%), Alberta (39%), Ontario (32%) and the Atlantic provinces (22%). In Quebec, where installing winter tires is mandated by law, just 3% of owners/leasers admit to not using them during the winter months."
  • "Women (70%) are more likely than men (62%) to support making winter tires mandatory across Canada throughout the winter months, while men (31%) are likelier than women (21%) to say winter tires aren't that much better than all-season tires."
Quotes
  • "Younger drivers aged 18 to 34 are most likely to put their tires on just before the first snow arrives (63%), more so than those aged 35 to 54 (57%) or 55+ (51%)."
From Part 06
From Part 08