Preface

This fourth edition of Catalyst Canada’s annual national survey measuring smartphone adoption and behaviour highlights four important areas of Canadian smartphone usage. First, the study observes how users interact with the basic functions of a smartphone, such as messaging. Second, the study explores to what degree smartphone AI is being adopted in the Canadian market. As a third point of interest, the study addresses ongoing issues with security in making mobile payments. And, as a last point of interest, the study offers insights into mobile ads and who is seeing them.

Young users prioritize instant interaction with basic functions

Our study finds that, while older audiences tend to use smartphones as a convenient compliment to everyday tasks, such as reading emails or checking the weather, younger audiences are using their smartphones as an alternative to face-to-face conversation. And the key lies in offering the most streamlined, mobile-friendly experience possible.

When asked what their biggest frustration when browsing on a smartphone, for example, screen-size is an overarching irritation across all age groups. But once the data is sliced according to age demographic, the resulting picture is somewhat different, with 49 per cent of respondents between the ages of 18 and 24 and 39 per cent of respondents between the ages of 25 to 34 listing slow load times as a primary annoyance. Screen and button size only begin to take a sharp lead with older respondent groups.

In tandem with faster load times, younger respondents are more likely to use Snapchat, with 63 per cent of respondents between the ages of 18 and 24 answering they use the app. This app, which offers instantaneous and short-lived messages, is also favoured by women in this demographic over men, with 66 per cent of women between the ages of 18 and 24 answering they use the app in contrast to just 43 per cent of men for the same figure.

In addition to Snapchat, younger smartphone users are more likely to be using other messaging services as well. For example, respondents between the ages of 18 and 24 use a combination of text messaging, Facebook messenger, Snapchat and WhatsApp. These same figures experience an exponential drop-off with older respondents, with only text messaging and Facebook Messenger showing significant use for those between the ages of 50 and 64. This implies younger audiences are more message-agnostic, using a variety of ways to communicate via their mobile devices.

Figure 1: Messaging Service Preferences


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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.

So what is the takeaway?
Observing the messaging behaviour of different respondent age groups shows a clear correlation towards a preference for an instantaneous messaging system for emerging generations of smartphone users. Combined with the idea of message-agnostic users, this suggests younger demographic groups are looking for a platform offering a real-time and intimate alternative to face-to-face conversation, with less regard for security or privacy than older groups.

Adoption of smartphone AI is on the rise

As observed in last year’s edition of this mobile study, older respondents are likely to list security concerns as a primary reason for shying away from performing monetary tasks or sharing information on their phones. The same rings true for this year’s report as well, with 50 per cent of overall respondents voicing security issues as a primary concern of completing purchases online.

But when it comes to AI apps on their smartphones, usage numbers suggest a more complicated conclusion. For example, while younger generations are more open to relying on smartphone AI with high-trust maneuvers, like driving a car, older generations were more likely to have smart features installed in their homes. While a first-glance conclusion might imply older generations are simply attempting to make domestic tasks easier, which they very well might be, a deeper dive yields a less-obvious takeaway.

Figure 2: Smart-Home Tasks


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Data from Statistics Canada shows that less than half of Canadians between the ages of 25 and 29 own a home. This same figure plummets to less than a quarter of Canadians below the age of 25. Meanwhile home ownership numbers for Canadians between the ages of 30 and 34 balloons to nearly 60 per cent, and continues to grow for older age groups.

So what if the reason why younger Canadians are less reluctant to adopt smart home tech is because they do not own homes? When renting an apartment, a person might have less space and might be less inclined to invest too much in a unit they do not own. And yet young Canadians are comfortable enough with mobile AI technology to trust their phones to drive their car. With the latest 2016 Canadian census showing 54 per cent of dwellings as single-detached houses, combined with an emerging generation of technology-trusting homeowners, the use of smartphones and AI technology for domestic tasks is projected to grow.

And smartphone AI does not stop at the front door of the home.  

From automatic replies to texts, of which 35 per cent of all respondents are open to, to creating automatic reminders, of which 32 per cent of respondents are open to, a variety of personal tasks are expected to be left to smartphone AI in the near future. And there appears to be an opportunity in health or emergency services.

Figure 3: Automatic Smartphone Tasks


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While openness to smartphone AI adoption is strong across all categories for younger respondents, automatic transmission of emergency medical information is an AI feature popular with all age groups. Although the willingness to adopt this feature is consistent for all respondents, this figure becomes more pronounced in older groups, with about a quarter of respondents older than 50 being in favour. In contrast, demand for this feature competes in younger generations with AI apps designed to identify songs or pick music to play, for examples.

Security remains a primary disincentive for making mobile payments

In line with last year’s mobile study, this year’s respondents again listed security concerns as a primary deterrent to making payments online. And yet, as predicted by our team last year, this trend is less pronounced in younger users, with just 19 per cent of respondents between the ages of 18 and 24 listing security as a concern, in contrast to 52 per cent of respondents over the age of 65. This same pattern, although less pronounced, can be correlated to percentages of respondents who listed not understanding how mobile payments work as a deterrent.

One conclusion might be that a lack of understanding of how mobile payments work is a contributing factor to having less faith in the security of mobile payment systems In other words, companies might consider launching more robust user education programs to help grow Canadian confidence in mobile payment systems.

Figure 4: Hindrances to Making Mobile Payments


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For the 60 per cent of respondents who use their smartphones to make payments, PayPal is the mobile wallet of choice, garnering 30 per cent of the market. Apple Pay is a distant second, with Google Wallet an even more distant third. This trend is consistent with last year’s study.

But who is making payments?

Frequency for mobile payments varies from person to person, with only 18 per cent of respondents admitting to doing so weekly. The majority of respondents making mobile payments do so occasionally, and these users are nearly two times as likely to be women, with 27 per cent of the 42 per cent of occasional users being female. This figure is further emphasized with those who make payments weekly, with only 4 per cent of respondents being male for this particular demographic.

In terms of branded apps, travel apps are popular throughout all age and gender groups observed in this study. But specific gender-centric apps can show opposite correlations for respondents who respond as users. For example, while only 15 per cent of male respondents answer they used their phones to collect Shoppers Optimum points, 24 per cent of female respondents claim to be users. Contrast this with the My Canadian Tire ‘Money’ app, where 22 per cent of males are users, with 15 per cent of females for the same figure.

Younger users getting more mobile ads

Mobile ads for all categories, whether via app, browser or social media, are more prominent for younger groups of respondents. The reasoning behind this trend most likely stems from lower levels of usage across older age groups, with 28 per cent of respondents older than age 50 not using apps, an additional 26 per cent not using browsers and a whopping 46 per cent of the same age group not using social media apps. Since only 5 per cent of all users knowingly have an ad blocker program installed on their phone, mobile advertisement penetration is only expected to increase.

When looked at in terms of gender, men receive less mobile ads then women. This trend is most prominent with respondents between the ages of 18 and 24, the age group which is also most likely to receive ads overall. With 55 per cent of women not planning on installing an ad blocker program in the near future, this trend is expected to stay true.

Figure 5: No Ad-Blocker on Smartphone


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Concluding remarks

As a new generation of smartphone users begins to emerge, marketers should pay particular attention to the changing ways young people are using their phones. While a trend may stand true for a study as a whole, different conclusions emerge when data is sliced.

Here are some key distilled points from the 2017 Catalyst Canada Mobile Study:

  • Although audiences as a whole stress larger screen and button size to help them with their day-to-day tasks, younger audiences are seeking a complete virtual social environment on their phones. To help digitize face-to-face interaction, the preferred mobile messaging system of the future needs to be a seamless and instantaneous user experience.
  • As more young people move into home-buying positions, adoption of domestic smartphone AI is expected to increase, as is trust in this technology.
  • While security concerns are a primary disincentive for making mobile payments, these concerns may stem from a lack of understand on the user’s end of how exactly these payments work.
  • Younger demographics, women in particular, seem less concerned about receiving mobile ads on their smartphones.

Appendix

Methodology

The data for this study was collected through a survey conducted from May 4 to May 8, 2017. The survey was offered in both English and French, with English users making up 73 per cent of the 1100 respondents across Canada. Samples were sent based on generation population percentages, with all respondents between the ages of 18 and 99. No age or gender split was used for this survey.