Introduction

If you ask someone to name a Canadian invention, it’s a near certainty they’ll say the telephone. Indeed, our own Alexander Graham Bell acquired the first such patent in 1876, though he was later challenged by others claiming the invention as their own. As decades passed, the telephone evolved considerably, becoming a staple in Canadian homes. Smartphones, in contrast, have been adopted at an astonishing rate. While the first smartphone was released in 1992 by IBM, it wasn’t until 2007 that smartphones exploded onto the technological scene, led by the iPhone’s simplistic and intuitive design.

Fast forward to 2016, the ninth anniversary of the commercial smartphone, and smartphones seem ubiquitous and seamlessly integrated into our lives. Whether you perceive them as your life companion, your third arm or a nuisance, understanding domestic smartphone habits is critical for every marketer.

This is the third national annual survey on smartphone adoption and behaviour conducted by Catalyst Canada. In 2014, our research revealed that 55% of Canadians owned a smartphone. Now, two years later, ownership is at 76%, a 38% increase. For the first time, three out of four Canadians own a smartphone.

Figure 1: Smartphone Adoption in Canada


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Mobile Banking App Usage Is Growing

Since 2014, Canadians have consistently listed paying their bills and checking their bank accounts as two of the top ten things they do on their devices, whether that be their laptops, desktops, tablets or smartphones.

This year, we saw a spike in the amount of banking activity specifically on mobile. Bill payments and bank account checking drove the increase in mobile app usage more than any other activity. The vast majority of people doing basic banking tasks are using apps as the vehicle, as opposed to their mobile browsers. This is a testament to the major banks developing client apps that are good enough to trump the browser experience. In 2014, 65% of people who used their phone to pay bills were doing so through apps. By 2016, that number jumped to 85%. We saw a similar rise in app usage for checking one’s bank account in the last two years: this year, 84% of people checked their accounts on their phones using apps versus 61% in 2014.

Figure 2: Banking App Usage


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An important mobile banking threshold was crossed this year: over half of all respondents said they used smartphones as the primary vehicle for depositing a cheque. In previous years, the availability of mobile cheque depositing was so limited that we didn’t even collect data on this behavior, indicating how quickly Canadians have taken to depositing cheques this way.

Figure 3: Tasks Done via Smartphone vs. Another Device


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A Surge in Expected Mobile Payments in 2016

While the amount of people making mobile payments stayed the same, more people expect they will in the coming year; one-third of respondents anticipate making a mobile payment this year versus about one-quarter of respondents last year. This indicates an increasing level of comfort and ample opportunity for marketers.

Figure 4: Percentage of Respondents Who Expect to Make More Mobile Payments in the Next Year


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The dominant drawback for people who’d never made a payment this way was concern about security, with people over the age of 35 being the most concerned and millennials (respondents aged 18 to 35) being the least. Security concerns rose overall from 2014 to 2016, specifically amongst people over the age of 35 and for women. Conversely, it fell for millennials and men. The second biggest drawback was not knowing how to make a mobile payment.

For those who were comfortable making mobile payments, the top five methods were, in descending order: PayPal, Starbucks, Apple Pay, Google Wallet and specific store apps. The popularity of these apps indicate users trust these companies and the corresponding transaction systems to protect their money. Starbucks, the only retail app that over 40% of those surveyed had made mobile payments with, has clearly made significant strides in the area. An assessment of the brand’s methods could prove useful for other companies looking to engender customer trust in the mobile payment process.

Figure 5: Most Common Types of Mobile Payments

*Among Respondents Who Have Made a Mobile Payment

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Wearables: A Surprising Laggard

While the advent of wearables, particularly the Apple Watch, made headlines in 2015, the overall adoption rate was less than anticipated, with 10% of respondents saying they owned one. However, ownership has doubled over the past year, indicating that, while overall adoption may be low, it is growing quickly.

App Hoarding Continues to Decline

The first year of this study unearthed that the average Canadian had just under 27 apps. This year, that number has fallen to 18. While people have fewer apps, they’re using more apps on a monthly basis this year, compared to last year. Monthly app download behavior increased year over year, but so did monthly app uninstall behavior, indicating a fickleness among the general population towards apps, especially apps that go unused. Lack of use was the top reason for uninstalling, followed by smartphone memory space limitations.

Health Apps Used by One in Three

Health app usage is on the rise. Given the overall decrease of app downloads and increase in app uninstalls, this is particularly pertinent. This year, 30% of those surveyed had one or two health apps on their smartphone, compared to 25% last year, and 7% had three or more. While women and men downloaded health apps an almost equal amount, millennials were more likely to have a health app than people over the age of 35.

Siri’s Voice Reigns Supreme Among Wireless Voice Services

The most commonly used wireless voice control service was Siri, with one-third of respondents and nearly one-half of millennials (44%) saying they used Siri rarely, weekly or daily. Canadians most commonly used their voices to search the Internet, send texts and make phone calls. Nearly half of Google Now users use it to conduct web searches. The popularity of wireless voice control reveals an emerging way to reach customers as they search.  Voice search is an opportunity to optimize pages for long-tail keywords that users tend to speak rather than type.

Search Gets More Intuitive

When people were asked how easy it was to find news, weather, knowledge, product information and local business information using a search engine, the results were clear.

In every age group and across all search query categories listed above, there was an increase in the proportion of people who felt it was simple to find what they were looking for using search. Finding news, weather and general knowledge was deemed very easy more often than finding product information and local business information. Only 68% and 65% of respondents said finding product information and local business information was simple, respectively. While this is a noticeable increase from last year, when 56% and 51% felt this way, it illustrates the case for local and commercial brands to improve their search strategies so that the product and the user meet flawlessly.

Slow Load Times Grate Users’ Nerves

The biggest frustration for people using search engines on their smartphones was slow load times, demonstrating what has become almost a digital refrain: companies need to optimize sites and content for mobile audiences.

In Closing

Smartphones are critical components of the lives of many Canadians. The spread with which smartphones have been adopted coupled with the pace of change in the digital space demands thoughtful, informed action on the part of advertisers.

For brands playing in the Canadian space, this research can be distilled into five strategic takeaways:

  • At 76% adoption, having a mobile strategy and mobile-optimized assets is necessary simply to stay afloat.
  • Patience is passé. Make sure your site loads quickly on mobile, otherwise users will leave.
  • Take steps to ensure your business is very easy to find using search.
  • Mobile banking and anticipated mobile payments are on the rise. Building reliable security infrastructure and emphasizing security features can forge trust between your online brand and Canadian customers.
  • Voice search is now a key consideration that should be considered when drafting a comprehensive digital strategy.
  • Be wary of the wearables hype. App development and optimization for this market should be carefully considered before pursuing as adoption is still relatively low.

Appendix

Methodology

The study stems from two surveys designed to reflect the makeup of the Canadian population, meaning that recruiting quotas and statistical weighting were used to try to mirror the demographic results of the Canadian census. In addition, an effort was made so that the 2016 sample looked akin to the 2015 and 2014 samples to allow for comparisons to be drawn between years (see demographic breakdown on the next page). The majority of respondents (70%) responded to the questionnaire in English and the remainder (30%) in French, reflecting the typical language breakdown in national Canadian surveys.

Two surveys were done; the first was conducted online in December 2015, and 1,000 Canadian adults over the age of 18 were surveyed. Owning a smartphone was a prerequisite for survey participation. The second did not require smartphone ownership because it sought to find out the proportion of Canadians who owned a smartphone. The second survey, conducted in April 2016, was derived from the same pool that the first survey was derived from, and the demographic breakdown mirrored the breakdown of the first survey sample. Note that while the two surveyed populations were different groups, the sample provider used the same recruitment methods both times. Survey results have a projected ± 3.25% to 3.75% margin of error at 95% confidence for “All Respondents,” and a ± 4.00% to 4.50% margin of error at 95% confidence for demographic, behavioral and attitudinal subgroups.

Study Demographics


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