Outlook 2024: Canadian POV

How the four “downstream effects” trends from our Outlook report is playing out in Canada

With contributions from:

• Initiative: Kyla Ames (Director, Digital), Christian Kern (Group Director, Strategy)
• UM: Katey Gault (VP, Strategy), Jeenal Patel (Senior Director, Strategy)
• Media Experts: Taylor Guthrie (Group Director, Strategy)

Welcome to Outlook 2024, where we at Mediabrands take a glimpse into the future to consider how culture, technology, and society come together and affect Canada’s marketing landscape in the years to come. A heartfelt and special thanks to the teams across the network at UM, Initiative, and Media Experts for their collaboration, and the insights that you’ll read.

As we transitioned from 2023 — an interregnum year that saw us straddle the known past and an evolving future — we now embrace, to borrow pandemic parlance, the “new normal”. As a result, it’s perhaps time to better understand not only how the two differ but also how the old has propelled the push for the new — its Downstream Effects.

At large, society has gotten more chaotic. Canada, as you can imagine, is not isolated from any of the goings-on from the rest of the world. Issues like inflationary pressure, global conflicts, and the general direction of where society is headed — topics you’d want to avoid in polite company — currently dominate headlines and discourse. And as if these themes aren’t urgent enough already, next year is also an election year, if the current government coalition remains intact until then.

At the same time, there’s never been more choices available in an individual’s life. From how we live, work, or consume — be it content, products — there are more ways than ever to do the same thing.

Consumers, armed with greater access to technologies and the freedom to choose how they use them, while balancing the mounting challenges of living well, are no longer willing to make compromises. As a result, they are increasingly embracing the flexible, based less on what everyone else is doing, but more on what they want and yearn for as individuals. Increasingly out of date are the zero-sum, binary choice between A vs. B; instead, consumers are looking for value-adding benefits that cumulate like “1 + 1 = 3.”.

For brands and marketers, the consequences of these downstream effects implore us to tangibly prove our value more effectively, whether in functional terms, or the emotional connections that we build or help enable. Ultimately, this starts with understanding our consumer’s needs and motivations, whether as individuals or as a collective, more so than ever.

Life’s New Beat

Coming out of the pandemic, we are seeing shifts to some of the most foundational cornerstones of our lives, disrupting both micro and macro patterns. While this trend is taking place across the globe, it is unfolding in Canada in a rather distinct fashion from our southerly neighbour.

Let’s start with work: there has not been as drastic of a tilt towards working from home — likely due to the US’ more sporadic geographic distribution of population, and remote/hybrid work becoming more of a necessity to bridge employers with incredibly spread-out work forces. What we are seeing, instead, is a more gradual pivot towards flexibility: almost 30% of Canadians are either working entirely from home, or are in a hybrid telecommute arrangement, while the desire for greater WFH hours persists. This reflects a similar demand, albeit a slower adoption rate, of more flexible models.

The Canadian reality is that, with nearly 50% of our population living in the 10 largest communities (and this share unlikely to shift drastically), when we think about the new beats and rhythms of life, it’s less of a story about the where, and more about the how: namely, how to navigate a life that is increasingly costly and chaotic.

Take the economy as an example. In contrast to the US, where there is a notable “say-do” gap among millennials regarding economic realities, as defeatist online economic discourse is proving incongruent with the reality that they are largely on track with previous generations in terms of homeownership, this is less true in Canada. While the idea of the vibe-cession, catchy and topical for sure, is an apt encapsulation for the US, the question of affordability is very much a real issue for millennials and Gen Z.

A study found the rate of homeownership has had the largest dip with millennials, and in particular, Canadians aged 30–34 saw their homeownership rate drop 11.7% in just ten years. This highlights a shift in what was traditionally a rather habitual life milestone. Canadians aren’t facing the same vibe-cession as the US; rather, it’s a stark reality that is impacting decisions across one’s life. In turn, this is also raising questions on the necessity of traditional rituals like marriage and child-rearing. Gone are the days of following the crowd just because it’s “what we do.” Instead, we are seeing more scrutiny around the cost-benefit of each decision.

As we move further out from the pandemic, it’s notable that Canadians are still keeping up with the routines they picked up during the pandemic. Many Canadians are still cooking more than they were pre-pandemic and for some, baking fresh sourdough is more than just a phase. This shift also triggered a long overdue conversation around mental health leading to a greater focus on individual needs.

And ultimately, this is why the flipside of increasingly unaffordable milestones is not an immediate about-face towards frugality. It is, rather, an embracing of the notion that each of our best lives may look entirely different from that of our cohorts, and we’re giving ourselves greater permission to explore what that looks like. If that means ditching some of the trusty (and costly) milestones to focus on shorter-term needs of self-maintenance, and other dopamine-drive forms of gratification, so be it.

The past few years have affected individuals and society in other significant ways, and this fragmenting of cohorts is also illustrated in their passions and content consumption. For example, IPG’s proprietary Recode study shows younger generations have the lowest ties to any semblance of history or belonging. Couple this with Canada’s higher amount of school closures (and for longer) during the pandemic compared to the US, it has necessitated a shift towards digital channels and increasing the amount of hyper-niche content being consumed, like gaming, Anime, Korean dramas. While the desire for connection remains, the pandemic era has ushered in a shift towards not only how we, especially the younger generations, seek out connections, but also the agility in which our identities evolve — freer to embrace our curiosity, jumping in and out of passions as quickly as our algorithms allow.

While much of the effects of these new rhythms are still to be played out, and who knows if we’ll ever fully remold the boxes we fit into (or if there will be any boxes at all, even) it’s clear that there is already much greater freedom to go about our days and lives. For brands, this is a call to be nimbler and more nuanced in finding their consumers. Cohorts that previously seemed rather homogenous may no longer be the case, and it’s even more important to evolve from generalized assumptions about its consumers to understand what the moments and need states are that require brand presence. Technologies, such as AI, are not far away in their development to enable more robust tracking and analysis, to allow brands to be more anticipatory in consumers’ times of need. In this world of new rhythms, consumers will embrace brands that show up at the right time with the right solution. — Kyla Ames, Christian Kern (Initiative)

The Remixed City

It’s nearly impossible to discuss any urban planning topics from a Canadian angle without first acknowledging that the country is undergoing its most rapid population surge in 66 years — with our total exceeding 41 million residents, and with 98% of the growth being attributed to immigration. So as cities and spaces evolve globally, it’s important to take a slight detour — no pun intended — to understand the effects of immigration in Canada, and how that is affecting our own communities, especially within major urban areas as they try to morph into more active, self-sustaining neighbourhoods.

This population surge has also put immense pressure on infrastructure, as affordable housing supply is struggling to keep pace with the burgeoning populace. Immigrants are predominantly gravitating towards urban hubs in pursuit of employment, and as a result, we are witnessing these effects play out in a more pronounced manner within major cities and their surrounding communities.

It is within this context that we see governments and businesses evolving to provide more useful spaces for residents. Calgary, for example, has launched a Downtown Development Incentive Program (DDIP) aimed at converting 6 million square feet of vacant office space into residential by 2031. As a domino effect, the city’s downtown core will be reinvigorated, fostering a vibrant milieu of retail, entertainment, and community life. Concurrently, retailers are extending operating hours in response to increasing consumer demand. Edmonton, similarly, has embraced fully the 15-minute city concept and has pledged to increase the diversity of building types and accessibility of neighbourhoods through zoning bylaw changes. Or take Toronto’s The Well, for example, nestled at a core downtown intersection that mixes retail, dining, outdoor space, and over a million square feet of residential and office spaces all in the same complex.

While these may not be new concepts for those who live in denser cities like in Asian countries, it ultimately is for Canada. The primary reason is that we are a nation that is still very much dependent on cars, with decades of urban planning policies prioritizing private vehicular transportation, and we are only in the beginning stages of turning communities, whether cities or suburbs, with more active and agile transportation options.

As part of those urban advancements, there is also a focus on revamping public transit systems to decongest traffic. Globally, India is launching driverless pod taxis, and the UK has launched its first autonomous bus service. Canada, meanwhile, is perhaps further behind, as autonomous driving technology is not in the cards yet for the near future. In the meantime, cities are investing more in public transit, for a greater network of travel between multiple municipalities, long a sore point for commuters, especially those who must switch between different region transit systems that have traditionally been inefficient and lacked coordination.

So what are brands and marketers to make of this?

First, as communities are increasingly turning away from car-centric planning philosophies, we will likely see growth in transit-based, out-of-home touchpoints in mid-sized communities, ones that previously perhaps made less sense to invest in due to the lack of scale. In the near future, activations in communities outside of the major cities — Toronto, Vancouver, Montreal, Calgary, Edmonton — will become more feasible in costs as dwell time within those neighbourhoods increases.

Secondly, and perhaps more importantly, whereas it was long touted that North American malls would soon become extinct as e-retail grows, with the pandemic being the final nail in the coffin, it’s the opposite. In fact, Canada is witnessing a brick-and-mortar renaissance, with retail and amenity spaces evolving from being transactional to providing more satisfying branded experiences, matching consumer demand.

For example, Canadian cities have seen an influx of gyms that, instead of focusing purely on fitness, broadened their offering to enable balancing work and wellness. Sweat and Tonic and Altea Active have both built spaces in Canada that include spas, bars, cafes, as well as high-speed internet and call rooms, allowing a user to seamlessly switch between working and working out, spending their day under one roof.

Consumers’ choices of how to shop have never been more flexible, and they are increasingly demanding the best of online and offline experiences. Retailers are responding accordingly — Canadian Tire is investing more than $1 billion to elevate the connection between the two realms: pickup counters that have products ready in “less than a minute” after a consumer orders online, digital appointment scheduling and wayfinding (as every Canadian Tire shopper breathes a sigh of relief), all the way to larger concept stores as big as 100,000 square feet to showcase the breadth of available products.

Lastly, it will also be fascinating to consider how Canada’s cultural mosaic affects the evolution of these spaces. Canada’s cities are generally amalgamations of smaller, neighbouring, ethnic enclaves — think Chinatowns, Little Italy’s, etc. As communities transform into more modern, vibrant spaces that promise to bring everyone under one roof, these enclaves will likely become more integrated, and therefore turn into fewer but bigger multi-ethnic cultural spaces that not only stay authentic to the respective cultures, but also offer broader audiences more accessible opportunities to engage and interact. — Katey Gault, Jeenal Patel (UM)

Revenge of the Monoculture

What is already a fragmented Canadian media landscape has become even more so, characterized by the increasingly diverse array of platforms and varied content. This, in tandem with the isolation Canadians felt over the pandemic, has created a longing for shared cultural experiences — monoculture moments that resonate across diverse audiences despite the ongoing fragmentation. 2023 epitomized this resurgence, with the likes of Barbenheimer and Taylor Swift’s Eras Tour causing global pandemonium, and homegrown moments like the launch of the PWHL and the Women’s World Cup, highlighting how certain events captivate not just specific segments, but rather a wide swath of Canadians.

The idea of cultural moments is especially interesting for a country like Canada. Fundamentally, we are a diverse country, consisting of many distinct backgrounds and values, with a national culture that is similar but distinct from the U.S. However, in terms of pop culture, Canada has always been linked to our neighbour, largely because of the behemothic entertainment machine south of the border, leaving us to differentiate ourselves through the geopolitical political angle — more serious, and less likely an entry point for most brands and businesses. For example, if you Google “Top cultural moments in 2023” and then add “Canadian” to the mix to see the nuances between the US and Canada, you might see something like the below:

CNN
· ‘Barbenheimer’ rules the box office
· Celebrity memoirs reign
· “Scandoval” shocks the Bravo universe
· Pedro Pascal fever hits new heights
· Eras and Renaissance tours make summer sing

CBC
· Unprecedented wildfires
· Unrest on the labour front
· The refugee crisis
· Years in the making (Arctic Winter Games)

As we continue to involve ourselves in these cultural conversations coming out of the US, the recently enacted The Online News Act has added yet another wrinkle. The Act requires platforms like Meta and Google to compensate local news publishers for any content that is being displayed, which has then subsequently led to Meta removing Canadian news content from users’ feeds. There’s much to be debated about the entire chain of events, from what is arguably an imperfect legislation to solve a very real problem, to the heavy-handed way in which Meta has threatened to call the government’s bluff, ultimately leaving publishers in no better shape than they were before. Amidst all that, it’s becoming clear that it’s arguably harder for users to easily access Canadian news.

Subsequent research from Vividata, a syndicated database, shows that 53% of Canadians were reliant on Meta platforms for news updates and 23% of Canadians feel that they are less informed about local events and news since the ban. While those who want insightful Canadian news will still be able to get it, the reality is that many users logging on to Meta’s platforms will be mostly exposed to US-centric pop culture.

So how can Canadian marketers lean into a monoculture that’s heavily led by the US? There is a clear opportunity to localize these trends using partnerships. By partnering with Canadian creators and businesses, brands can add local credibility to macro-cultural trends to drive increased relevancy in Canada. With the Barbie phenomenon, we saw a number of Canadian partnerships materialize, including well-known brands such as Roots, and upstarts like the PWHL, both adding iconic Canadiana as they rode the cultural train. Beyond business collaborations, influencer partnerships are another way to add some Canadian flair to US-led monocultural moments. Canadian actor Simu Liu, who gained further popularity from his role in the movie, partnered with the likes of Google, Cheetos, Cadillac, and Nobis, lending his endorsement to connect more closely with Canadians.

Canada’s diversity is perhaps the biggest reason why brands need to localize while joining in on monoculture conversations. While it is about bringing everyone together, it is just as important to acknowledge that different strands within monoculture naturally emerge as they mean different things to different communities. As mentioned, immigration currently drives 98% of Canada’s population growth, while the Quebec population also continues to grow; surpassing 9MM people, of which 85% speak French. What a cultural symbol evokes in a recently immigrated South Asian teenager can be entirely different from the connotation it brings to someone ingrained in North American culture their entire life.

Nuances exist across these audiences in terms of media consumption, behaviours, and values, meaning that in order to build a sense of FOMO through cultural events and conversations, we first need to understand how our consumers connect with that particular strand of culture. Ultimately, when we talk about monoculture, it may be tempting to think of it as a one-size-fits-all vehicle for communication. The reality, and a somewhat paradoxical-sounding one at that, is that there is room to personalize it for a brand’s consumers within bigger shared moments and conversations. For brands in Canada, crafting culturally coherent yet distinctively localized marketing campaigns, by considering our diversity and representing us in an authentic way, is key to meaningfully harnessing monoculture and, ultimately, forging deeper connections. — Taylor Guthrie (Media Experts)

The Experience Economy

The popularity of live events grabbed headlines across the globe in 2023, and Canada is no exception. Case in point, Beyonce’s Renaissance tour not only sold out its Toronto dates, but also effectively brought the city’s downtown to a halt during her weekend in town. This buzz around the tour prompted many retailers to create themed pop-ups catering to visiting fans, creating a frenzy that went beyond the concert itself.

The concert fever is part of the bigger global trend of the growing experience economy that is estimated to exceed USD $110 billion in consumer spending. We could chalk this up as part of the revenge spending as pandemic-era lockdowns fade further into the rearview mirror, but within it lies a greater theme, namely our desire for in-person experiences and a hunger for community and connection. As 2024 unfolds in Canada, economic clouds are gathering. Our interest rates remain high — or relatively high to the 16 or so years of near-zero interest rates we’ve been experiencing — while fears of a recession loom large, in stark contrast to the US economy that is seemingly merrily humming along. So it is telling that, besides a temporary holiday spike for goods, the demand for discretionary services has proven more resilient.

Caught between the conflicting forces of belt-tightening and the hunger for experiences is the idea of value. Gone are the days of spending on autopilot, when consumers go out on a Saturday night “just because.” Instead, businesses and organizations are being challenged to articulate and prove their value. A study done by Stone-Olafson in Edmonton and Calgary showed that the greatest reason for hesitating to partake in activities came down to — you guessed it — money.

So, if the top concern for consumers is “why should I spend my money and time doing the same old things”, we can perhaps find the answer in the rapidly expanding ways brands and businesses are reinventing the “same-old,” namely by turning them into unmissable events. Through this, brands can ultimately elevate experiences and messaging to break through the clutter and capture a larger portion of consumer spending. While exclusive events like Taylor Swift’s and Beyonce’s concerts will remain the greatest headline-makers, what is actually more interesting, and rapidly gaining traction, is the expanding out-of-home entertainment experiences beyond this tier.

Whether through emerging technology like immersive augmented reality, or melding elements of multiple different experiences into one, this proliferation of events is transforming consumer expectations of common activities. In Canada, there have been a slew of “immersive exhibitions” in recent years that aim to elevate the arts of van Gogh and Walt Disney beyond the conventional museum-like passive viewing experience. Even dining can take on an immersive spin that blends the digital and physical. Le Petit Chef, a global restaurant chain, recently made its entry into Canada, opening three restaurants within Ontario. Originating in France in 2015 and successively enlarging its footprint into multiple countries and cruise lines, the chain’s main selling point is a holographic chef that projects onto an empty plate as diners watch him prepare his dishes, and once done, the servers place the real finished meal onto the table.

For brands, aspirations of creating something that is immersive in every sense of the word like The Sphere — Vegas’ newest showpiece blending live events with larger-than-life digital backdrops — may seem daunting, so it’s more practical to start small and aim for augmenting physical experiences. Whether it is increasing connectivity between users and communities, uniting diverse audiences in real time, or bringing the brand promise to life by incorporating tangible elements to transform it into an experience, it’s feasible to begin immediately and make incremental progress.

The use of augmented technology, especially, can help address the desire for connection that we crave as a society while solving Canadian-specific challenges that brands and marketers traditionally encounter. For instance, imagine the kind of immersive experiential activations that are able to connect communities from coast to coast without the costs that have normally inhibited these activations in smaller neighbourhoods, or uniting consumers of different cultures with an event where language can be simultaneously translated.

The home is another place that’s ripe for an experiential revolution. The scale and adoption of technologies like the Apple Vision Pro, while admittedly low today, is expected to grow. In the meantime, brands should start identifying moments where it can meaningfully provide consumer value. Whether it is to remove friction in the user experience or adoption barriers, brands can elevate everyday moments and routines and transform them into new touchpoints to foster a deeper emotional connection with consumers. — Kelvin Mak (UM)

The philosopher Ken Wilber, in reference to humanity’s evolution, put to words the idea of “transcend and include” in his book A Theory of Everything. It’s easy — and tempting — to think of the future in a zero-sum fashion, juxtaposing the new versus the old, a rejection of what has come before for the sake of embracing the next big thing. The more nuanced reality is that we take pieces of what we like with us, and blend them into the new ideas and habits that arrive. Ultimately, this is how the downstream effects are playing out: they manifest in new business models, new ways of life, and emerging touchpoints that incorporate timeless human desires for community and connection with fresh elements, creating distinctly new experiences that stand on their own.