Parents and twin daughters on sofa using portable devices
Parents and twin daughters on sofa using portable devices

Shifting consumer priorities hold opportunities for Canadian telcos

Photographic portrait of Rohit Puri
Rohit Puri

EY National TMT Industry Sector Leader

6 minute read 12 Nov. 2023
Related topics
TMT
Telecommunications
Technology

Despite financial pressures, few households are economizing on digital home services.

In brief

  • New EY teams research shows market forces are reshaping Canadian consumer realities and the way they buy tech, media and telco products and services.
  • Canadian service providers that get closer to customers and hone a better understanding of their priorities can adapt customer journeys to solidify market share and gain a competitive edge.

With so many social and economic factors in flux, Canadian consumers are evolving their attitudes towards connectivity products and the services they enable. Service providers that drill down to understand this period of changing Canadian priorities — and refresh customer journeys accordingly — will be better positioned to create pathways to profitable growth in 2024 and beyond.

From coast to coast, Canadian consumers are focused on a common set of transformational forces: cost-of-living increases driven largely by factors outside the control of telco operators and other industry participants; inflationary pressures; growing interest in what it means to operate sustainably; greater concerns around data privacy and cybersecurity. Taken together, these issues are influencing purchasing behaviours across sectors, including the way Canadians buy tech, media and telco products and services.

These mixed findings signal unique challenges, as well as opportunities, for service providers. On the one hand, the marketplace is more competitive than ever, with consumers experiencing decision fatigue. On the other, we’re seeing new routes to cross-selling.

Delivering a simpler, more frictionless experience is essential in this environment and can even help carve out a competitive advantage. To do that, service providers must laser focus on understanding the ways customer preferences and realities are evolving.

Discover more about consumers and the digital home

Access the 2023 decoding the digital home report now for further insights to help shape your business strategy.

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How EY can help

This year’s EY Decoding Digital Home Study surveyed 2,500 households in Canada and seven other major markets around the world. What does the 2023 report reveal? 

1.     The cost-of-living crisis has changed Canadian consumer behaviours towards product preferences and service providers.

The path to purchase looks different in Canada compared to pandemic times and the years before COVID-19 pandemic took hold. Household budgets are strained, and value for money is more and more important to families as they make decisions about what products and services they need — and don’t need.

By the numbers, Canadian consumers:                                   

  • Continue to see value for money from their connectivity providers, even though interest in new products and services has dipped since 2022. Broadband content value for money increased by almost 15% year over year.
  • Avoid belt-tightening where connectivity is concerned. Only one in five consumers is taking specific actions to reduce this spend. By contrast, more than 40% aren’t taking any steps to cut connectivity costs.
  • Remain concerned by the costs of multiple streaming platforms. Almost 40% of Canadian households have cancelled, or plan to cancel, a streaming service.
  • Increasingly see bundling — especially related to the smart home, including connected devices like appliances, lighting, locks, doorbells, speakers, vacuums and voice-controlled digital assistants — and price comparison sites as good ways to hunt for the best deals.
  • Believe it would be better to get all their connectivity and content services from a single supplier. In fact, we saw a 12% year-over-year jump in Canadian households embracing this mindset.

2.     Digital investments appear to be paying off, as more Canadians shift towards digital channels for customer support.

Overall, Canadians are more satisfied with customer support this year compared to last. Driven primarily by younger age groups, self-service and online support are all growing as important channels for consumers here. Still, challenges persist at the earliest stages of the customer journey. Customers feel installation, configuration and broadband pricing continue to be confusing.

By the numbers, Canadian consumers:

  • Cite a 6% increase in overall support satisfaction compared to 2022.
  • Feel that existing pain points for installing internet-connected devices and broadband technology are getting worse — up 5% and 6% year over year, respectively.
  • Say broadband provider explanations of price changes are difficult to understand — nearly half of Canadian respondents.

3.     While Canadian consumers feel smart home pricing is “reasonable,” the smart home is struggling to penetrate the local market.

Pricing doesn’t appear to be a major barrier for Canadian consumers looking to adopt digital home products and services. Still, uptake remains constrained. That’s due largely to decision fatigue, a lack of trust and concerns over convenience.

By the numbers, Canadian consumers:

  • Increasingly agree that the price of smart home products is reasonable, up 9% over 2022.
  • Think there is too much choice in the market, with 48% agreeing they are swamped with smart home product and service choices. This creates an opportunity around bundling and the removal of decision fatigue for customers.
  • Are concerned about data privacy and cybersecurity. Some 65% are worried hackers may access internet-connected appliances, and 62% are concerned about the security of the personal information and data smart home devices collect.

4.     Canadian consumers remain increasingly focused on sustainability, digital wellbeing and privacy issues.

Consumers are ever-more focused on big-picture sustainability issues tied to the buying decisions they make. Tech, media and telecommunications products and services are no exception.

By the numbers, Canadian consumers:

  • Say more should be done to prevent fake news — 60% of Canadians surveyed.
  • Express concerns about device fatigue. In fact, 40% cited this as a sustainability issue.
  • Remain willing to pay a premium for more environmentally sustainable devices, more than one-third of Canadians surveyed. Meanwhile, some 44% believe tech, media and telecommunications service providers aren’t doing enough to support climate initiatives.

How can Canadian service providers act on this insight?

Any tech, media or telecommunications product and service provider looking to better connect with consumers in 2024 needs to put customer concerns at the heart of business strategy. Selling, installing, supporting and expanding services in this still-tumultuous environment requires providers to laser-focus on what customers are saying, and adjust offerings accordingly.

Prioritizing these four strategic priorities can help service providers move in a positive direction now:

1.       Simplify packages to capitalize on bundling appetite. Address ambivalence driven by economic uncertainty by taking a holistic approach to creating new types of bundled packages where Canadians are showing heightened interest — think bundling with smart home products and services. Keep it simple and modular by design. Ensure pricing doesn’t become more complex in a bundled service environment. Simplification can lead to greater trust and less reliance on social media and third-party sites.

2.       Make pricing more predictable and easier to understand. Many Canadians find pricing changes difficult to understand. You can build more confidence in the pricing message for the lifetime of the contract, ensuring that the pricing of packages with multiple components is clearly communicated, simple and easy to unpick for more proactive customers.

3.       Take the pain out of the path to purchase and installation. While the data shows customer support satisfaction is increasing, Canadians continue to cite challenges with earlier stages of the customer journey — including pricing interpretation and service installation. Simplify pricing packages and content, and smooth out the installation process. In a full-circle return on investment, this also helps reduce the burden on your customer support functions.

4.       Establish a sustainable brand. With nearly half of Canadians agreeing that connectivity and content providers aren’t doing enough to address climate change, and more than one-third willing to pay more for environmentally sustainable devices, service providers have a unique opportunity to engender loyalty by prioritizing environmental, social and governance (ESG) issues. Establish a brand that focuses on sustainability to differentiate yourself among Canadian operators. Be authentic, purposeful and pragmatic to resonate with consumers.

Summary

Like the market itself, customers are never static. Their behaviours evolve right along with disruptive forces, and purchasing behaviours change accordingly. Get closer to customers to understand what they’re prioritizing in telco products and services. Then adapt experiences, offerings and strategies to solidify — or grow — your competitive edge.

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    About this article

    Photographic portrait of Rohit Puri
    Rohit Puri
    EY National TMT Industry Sector Leader
    Not your average telecom strategist. British-born global citizen, focused on the development of the telecoms industry. Fluent in all things Bollywood.
    Related topics
    TMT
    Telecommunications
    Technology

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