me, my canadian life, my wallet - kpmg international€¦ · report, released in 2017, revealed...

Me, my Canadian life, my wallet

kpmg.ca/customer-insights

An in-depth look at the Canadian customer

http://www.kpmg.ca/customer-insights

02 The customer insights imperative

03 Highlights

06 Understanding the Five Mys

14 The customer wallet

15 Canada: Emerging themes

17 Paying attention to the right signals

19 Canada: STEP events

21 Generational surfing

25 Gen X and Gen Z: The alternative echo effect

27 Wealth and retirement: Delay and pray, or avoid?

29 Customer wallet: Life event trajectory

31 The illusion of control

Table of contents33 Trust: The true imperative

34 One degree of trust with my data

37 A day in data

39 Can your customer trust you?

42 Institutions we trust

44 It’s the future. Do you know where your customer is?

49 The future of interactions

52 B2B: The human factor

55 The global viewpoint

59 Methodology

62 The wake-up call

© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The customer insights imperativeFew executives debate the importance of deep customer insight and empathy, and the need to get closer to the customer. But how many can truly claim to have done so in the face of constant, seismic change?

I n today’s connected society, it is becoming increasingly difficult for companies to segment, reach, convert, and retain customers. Technology is changing the way customers interact with companies and with one another, and disruptive innovations are turning industries upside

down and creating new customer expectations across the board. What’s more, instant access to information via mobile apps and online channels is making customers more informed than ever, while shifting life stages mean that traditional demographic segmentations are no longer adequate for predicting customer behaviours. And with the global economy creating a much broader definition for competition, the race is on to both understand and adjust to these disruptions.

KPMG International’s inaugural Me, My Life, My Wallet report, released in 2017, revealed rapid and profound changes in customer motivations, attitudes, and expectations. The publication introduced the Five Mys, a distinctive new framework to help organizations understand

the complex, underlying drivers of human decision-making. In the year since its introduction, we’ve seen clients around the world and across industries using this powerful new lens to form richly-layered stories of customer behaviour and provide a fresh perspective on their dynamic, disruptive and changing markets.

This year’s global report built upon the unique and multi-layered research methodology, drawing in new insight from across the KPMG network and extending our primary research to four new markets. It represents nearly 25,000 customers across Canada, US, UK, China, Brazil, France, India, and the UAE, as well as interviews from frontline players in each market.

In the pages ahead, we delve deeper into the Canadian findings, profile the Canadian customer, and analyze the intricacies of their buying behaviours. We also explore some of the key differences between Canadian customers and their global counterparts and what this means for companies looking to do business in the Canadian market.

“ While Canadian customers share some commonalities with the US and global markets, we also have a unique social fabric that must be understood in order to earn our loyalty.”

PETER HUGHES Customer and Digital Services Leader KPMG in Canada


2Me, my Canadian life, my wallet

HighlightsA glimpse into the technologically powered world of today through customers’ own words, sentiment and actions — and a preview of the research themes and insights explored throughout this report.

Attachment to technology

Split between those that would prefer to lose their wallet versus their phone

China AverageIndiaBrazilFrance UAEUS UKCanada

59%

41%

25%

50%

75%

50%

25%

75%

Would rather lose phone

Would rather lose wallet

Those very interested in new technology — the first ones to buy a new device when it comes out

China

53%

India

47%

Brazil

31%

France

27%

UAE

22%

US

19%

UK

18%

Canada

13%

Average

29%



News sources

Data

Internet/online(e.g. news site)

84%

93%

Television

80%

90%

Podcast

14%

33%

Newspaper

56%

68%

Radio

70%

72%

Social media

60%

78%

36%have updated their social media privacy settings to protect their data

42%

65% expect a company to protect their data

58%

24%expect a company to make things as easy as possible for them

29% 9%expect a company to value their time

9%

2%expect a company to know everything about them

2%

GlobalCanada



“ We’re witnessing the collision of technological, demographic, and geographic revolutions, the results of which are having a profound impact on how customers communicate, manage their time, and choose their products and services. The Five Mys is designed to help businesses and retailers make sense of these changes and get a better sense of who their customers are at this exact point in time.”

WILLY KRUH Global Chair, Consumer and Retail KPMG International

Customers’ choices have always been influenced and governed by multiple factors, but never has this been as complex and subject to disruption as it is today.

This was our impetus to develop the Five Mys framework, a tool designed to help identify what customers value in an experience, understand the

moments that matter to them, become smarter about the connections that contextualize their lives, and learn about the trade-offs they make around time and money.

Faced with an ever-changing customer, organizations need a fresh approach to help understand the complex, underlying, and interconnected drivers of human decision-making

Understanding the Five Mys



Customers’ best experiences have become their expectations

Individuals are making fundamental shifts in how they process and filter information

Business impactKnowing what customers truly value in an experience, and what’s setting the benchmark for their expectations, can help companies eliminate wasted efforts and focus on the onesthat truly make a difference in customer behaviour.

Characteristics that drive behaviour and expectations

Knowing how to win the battle for customers’ attention can help companies target investments to the moments, interactions and media, or channels that matter, to maximize return on investment.

My motivation

My attentionWays people direct their attention and focus

Many organizations will already explore elements of the Five Mys in isolation, or solely in the context of their category or a specific life stage of their customers. We believe it is the combination of the Five Mys that generate richer stories, analysis, and insight into customers’ unmet needs, the trade-offs they are making, and the totality of factors influencing their decisions across all aspects of their lives that is simply not possible within a single ‘my’.

How these factors work in concert across the customer’s life stages and life events is the key to unlocking real insights, and understanding not just the customer of today, but predicting what will drive the customer of tomorrow.

Business impact



People are increasingly using technology to automate or accelerate tasks throughout their lives

Customers are getting smarter about the world, and the world is getting smarter about them

The shape of a customer’s wallet changes across life events

Business impactBy understanding the impact of life events on the trade-offs between time and money, as well as when and where they occur, and how they are changing based on new life events, companies can engage with customers in the right way, at the right moment.

Understanding what the wallet represents and has inside it enables companies to target those able to buy.

Getting smarter about how customers connect, and with whom they connect, can fuel better insights and stronger connections.

My watchHow individuals balance the constraints of time and how that changes across life events

My walletHow people adjust their share of wallet across life events

My connectionHow individuals connect to devices, information and each other

Business impact Business impact



Acustomer’s best experiences have become their basic expectations. They no longer limit their comparison of a company to its closest competitors, but rather to whoever sets the highest standard for their

best customer experience. They pursue quality, convenience, and more intuitive, personalized experiences. Value is placed on peer reviews and social reference, and many people place

more confidence in individual influencers than in companies and institutions. Overall, customers are becoming savvier and are expecting more from organizations they do business with. They are saying, “know me”, “value me” and “make it easy for me” — and, in times of heightened fake news, trust issues, and anxiety — “protect me”.

Questions to ask

– Which customers do you want to win with?

– How do you obtain insights to better understand the key drivers of behaviour for your most profitable customers?

– How can you develop behavioural insights to understand your customers’ whys, and do so in a way that respects and protects their preferences and data?

– What are the key customer journeys that drive value?

– How do you prioritize these key journeys against the investment dollars available?

– Who is setting the experience benchmark in your customers’ lives, and how is this shaping their expectations?

– Where are the key expectations and friction points on the customer journey?

My motivation

of Canadians feel high levels of anxiety about the hacking

of financial, medical, or other personal information

online

48%

37 %



My attention

Individuals are subject to unprecedented volumes of information, increasingly available whenever and wherever they want it. Moreover, customers are increasingly becoming a product of the technologies that ease,

define or govern their lives; whether mobile devices, smart technologies or artificial intelligence and voice-powered connectivity, all of which, have changed attention spans relative to more analogue experiences

54%

of Canadians proactively filter information

62%

of yesteryear. This abundance of information and hyperconnectivity is colliding to create constant pressures on customer attention. And as time becomes more precious, individuals are making fundamental shifts in how they process and filter information and divide their days.

Yet, while patience and attention thresholds are falling, individuals continue to make time for the things that matter. Understanding how customers prioritize and marshal their time and attention is essential to breaking through the noise, and to building deeper, more meaningful relationships with your customers.

Questions to ask

– What is competing for your customers’ attention?

– How are customers filtering and processing information and communication, and how can you help them manage information overload?

– What are the moments that matter most to the customer, and how do you target these moments?

– How and where do you capture your customers’ attention in a way that is relevant?

– How do you maintain a valued dialogue once you have captured the customer’s attention?



As a result of increased connectivity, individuals are having more digitally “connected” interactions. Consequently, they’re getting smarter about the world, and the world is

getting smarter about them – about who they are as individuals, about other “people like them,” and about communities, cultures, macro and micro trends, and groups that share commonalities.

Understanding the shape and patterns of these wide-ranging interactions and networks is central to understanding how decisions are influenced, when and by whom. The companies that cultivate such an understanding and how it could evolve as technology further permeates our lives will be those best equipped to engage with customers on their terms.

Questions to ask

– How do your customers use technology to connect with the world around them?

– Who are your customers connecting with?

– How do you help customers get smarter about the ways they can engage with your brand?

– How can you develop better connections?

– What are the privacy and trust implications of building such intricate pictures of your customers’ lives?

My connection

of Canadian Millennials have disconnected from

devices, social media, news, information and/or

their online life 32%

39%



How much time individuals have (or think they have) influences how they interact with other people, services, and companies. And they’re increasingly using technology to

automate or accelerate tasks throughout their lives, whether with recurring grocery and household orders or embracing algorithms that curate and help guide what they purchase, watch, or listen to next.

Questions to ask

– What are the pivotal life events impacting your customers, and how will this impact the ways in which you position your offerings?

– How can you evolve your offering and positioning across the life-event continuum?

– Can you save your customers time by providing new offerings or reducing friction?

– For those in life stages moving from time scarcity to time abundance, what new opportunities for products and services are being created?

– How can you help prepare your customers for upcoming life events?

My watch

of Canadians feel they work too much

38%

32%



Often in a symbiotic relationship with time, the shape of an individual’s wallet changes across life events. How much money they have, how they choose to allocate it and their

attitude towards money shifts based on numerous factors, not just salary or age. And the timing of these life events has been, and continues to shift; when individuals buy their first house, get married, choose to have a first child, etc.

Understanding the relationship between income, consumption spending mix and resulting wealth (net savings) or deficits, and how this relationship changes for different generations across various life events, provides a level of insight beyond that offered by traditional demographic models.

Questions to ask

– How can you ascertain the way in which your customers are spending or sharing their wallet?

– How can you identify the people who will earn more or less in the future?

– How do you prepare for potential shifts in the customer wallet in the event of economic changes?

– How can you help your customers manage their wallets and budgets, both for their current circumstances and for their futures?

My wallet

of Canadians are worried about running out of money

in retirement

45%

32%



The customer walletMany organizations still believe that their primary competition is a rival company in their industry — but our research and experience continue to show that our only true competitor is the customer wallet.

Across the globe, factors including income, taxes, education, retirement, debt and interest rates all converge to influence the shape of individual customer wallets. As individuals move through various life stages, their priorities shift, thereby impacting spending (and saving) habits. Understanding the constraints and

demands on your customers’ wallets at varying life stages can provide invaluable insights into when, why and how they buy.

When faced with the possibility of a 10% decrease in income, we found that Canadian respondents, more so than any of their global counterparts said that they would cut spending on leisure activities.

Loans ordebt repayment

Household goods(includes health and beauty)

Media (Games)

Savings or investments

Personalhealth

Clothing

Food

Media(Movies, TV)

Transportation

Electronics

Budgeting

We asked respondents where they would cut spending if their income decreased by 10%.

Leisureactivities 53%

36%

32%

26%

29%

14%

15%

15%

7%

8%

3%

“ Typically, I always leave entertainment and going out with friends as a secondary thing, that once I’ve gotten all the important things out of the way, whatever free money I have, I’ll either put into savings, or I’ll use it to go out with my friends.”

AUDREY, 26, Vancouver



Canada:Emerging themesCanadians are looking to strike the right balance between staying up to date with advances in technology and the modern connected world while still maintaining their privacy, autonomy and sense of self.

Those that would trade their data, would trade it for:

can’t determine what information is trustworthy

My motivation My attention – Value autonomy, independence

and privacy

– Experiences prioritized over physical goods

– Personal networks and word of mouth have significant influence on buying decisions

– Many proactively filter information to avoid overload

– A cynicism pervades, with many questioning brands’ authenticity and motives

– Some fear information spiraling out of control; a “fake news” epidemic

feel they have caught up with all they need to know each day

don’t care if brands engage with them on social media

Security

Better value/price

Money21%

17%

1 1%

52% 42%

“ There’s always an update on Instagram, on Facebook, on Snapchat [...] People are constantly posting things, and trying to manage that with your regular life and getting everything done…”

would not trade their personal data

1 in 331%

FRANCES, 32, Rivers

*All statistics quoted are based on 2018 Me, my life, my wallet survey results.



shop for electronics annually

76%

My connection My watch – Multiscreening is a very common

behaviour; many need their phones during other activities

– Some express a disdain for voice assistants as they have the potential to remove free will

– Wealth seen as the facilitator of free time and a more balanced life

– Concerns around privacy/autonomy outweighing convenience of time-saving innovations such as auto-replenish services

– The gig economy is in full force, with many holding several side-jobs

– Many saving on daily luxuries to splurge on vacations

– Automation is a concern, but few see it as a direct threat to their income

My wallet

would rather lose their wallet than their phone

are highly anxious about retirement

28%50%

have disconnected30%

needed a break

31%felt they were missing out on life

feel their work schedule doesn’t leave enough time for personal life

expect companies to value their time

43%

a day7h

“ I mean I’d love to retire as soon as possible. I would love to just make jewelry and not have to worry about working but I think that the reality of retiring early is quite slim. If I’ll ever be able to retire, I don’t know”AUDREY, 26, Vancouver

1 in 4

“ … you can’t watch TV without having at least your phone in your hand. I’m on the iPad, too, now, I have my phone beside me, and there was a time when [...] the TV would be on in the background…”BRENDAN, 31, Toronto

a day worked on average7.8 h

vs. prefer

46%

*All statistics quoted are based on 2018 Me, my life, my wallet survey results.



Paying attentionto the right signalsMaking sense of signals of change is critical to keeping up with changing customers

Around the world, from sector to sector, companies are locked in a battle for growth. Faced with mounting competition, many are

struggling to understand the wide variety of trade-offs customers are willing to make and the forces impacting their decisions. And for many, the past is no longer a reliable indicator of future behaviour.

A variety of macro- and micro-demographic and economic shifts, along with accelerated mass adoption of new technologies, are having multifaceted impacts on customer behaviour.

These shifts are signals of change, and they can be detected in short-wave and long-wave forms.

Short-wave signalsShort-wave signals emanate from micro events and extracts of information that tell the complex stories of customers’ lives. They

include with whom they connect, share content and interact with via social media; the information and media they consume; where they go, when and how they get there; when, where and what they buy, whether online or offline; and where they have it shipped, how often they reorder it and how they pay. The vast data trails emerging from an individual’s deepening relationships with technology and the pervasiveness of their devices provide contextual data or clues on almost all facets of their lives. This short-wave data reveals what an individual did, but it doesn’t explain the underlying motivations or divulge the “why” behind the decisions. Making decisions based on this data likely assumes the future looks like the past.

The graphic on pages 37–38, A day in the life of data, provides a visual representation of the amount of data that individuals produce each day.



Long-wave signals Long-wave signals are external, macro events that impact an individual’s experiences, values, and behaviours, and provide context for what motivates and drives them. They influence how individuals connect to each other and the world around them, as well as where they focus their time and attention. Long-wave signals emerge over time in the form of demographic shifts and STEP (social, technological, economic and market, political and regulatory) events experienced by each generation. In isolation, long-wave signals can appear too removed to detect a direct impact on a customer purchase or behaviour. However, for companies paying attention to them, these signals help get to the “why” behind human decision making and, importantly, how it’s changing.

Pages 19–20 provide a closer look at some of the STEP events that have influenced generations of Canadians.

Short- and long-wave signals combinedShort- and long-wave signals are each important, but the real power lies in putting them together to understand the macro and the micro in context.

Finding the right ways to mine and analyze these signals will help companies better predict their customers’ changing needs and expectations and the forces that influence when, where, how, and why they open their wallets.



Canada: STEP events

S O C I A L

E C O N O M I C

P O L I T I C A L

T E C H N O L O G I C A L

19751945 196519551940 1950 19701960

INF

LU

EN

CE

Social, technological, economic and political factors combine to define our cultures and often serve to shape the motivation, attention, connection, watch

and wallet of entire generations. This visualization reflects some of the key STEP events that have shaped the lives of Canadians.

In the following section we will discuss how these STEP events, the Five Mys as well as the interactions between generations have shaped Canadian customers’ behaviours.

• Prime Minister Pierre Trudeau introduces the Official Languages Act

• A new national flag of Canada is adopted

Montreal becomes the first Canadian

city to host the Olympic games

•

• Newfoundland joins Canada as the 10th province

• Canada joins NATO

• First subcutaneous pacemaker is built by Canadian engineer John Hopps

• Toronto-born Alfred J. Gross invents the telephone pager

• First offshore discovery of oil in Prince Edward Island

• Canada joins the United Nations

• Canada’s first television station, CBFT Montreal, begins broadcasting

• Alkaline battery is invented by Lewis Urry

• The first Canadian subway opens in Toronto

• The Canadian Labour Congress is formed

• Instant Replay is invented for CBC’s Hockey Night in Canada

• The Trans-Canada Highway opens

• Native people win the right to vote in federal elections

• Canadians get social insurance cards

• Colour TV introduced

• A new national flag of Canada is adopted

• The Canada Pension Plan is established

• The air force, army, and navy are unified as the Canadian Armed Forces

• IMAX is invented

• Prime Minister Pierre Trudeau introduces the Official Languages Act

• Voting age lowered from 21 to 18

• Montreal becomes the first Canadian city to host the Olympic games

• Toronto’s CN Tower becomes the world’s tallest free-standing structure

• Canada launches the world’s first geostationary domestic satellite, Anik A-1

• Korean War



1985 20051995 201519901980 2000 2010 2020

• Marc Garneau becomes the first Canadian in outer space

• Same-sex marriage becomes legal in Canada

• Canada celebrates its 150th birthday

• Kim Campbell becomes the first female prime minister of Canada

• Pay TV begins operation

• The Free Trade Agreement between Canada and the US went into effect

• Marc Garneau becomes the first Canadian in outer space

• A recession is officially announced

• Nunavut is separated from the Northwest Territories to become Canada’s third territory

• Formal end to Canada’s operations in Afghanistan

• Self-driving vehicles start in Ontario as pilot project

• Federal Liberal government proposes Act to legalize cannabis

• Canada celebrates its 150th birthday

• GST (Good and Services Tax) is introduced

• Roberta Bondar is Canada’s first female astronaut in orbit

• Kim Campbell becomes the first female prime minister of Canada

• The Canadarm is developed by staff of SPAR Aerospace

• The $1 coin, which quickly earns the nickname “loonie,” is introduced

• Québec bans public signs in English

• The first internet search engine, Archie, is created by Alan Emtage at McGill University

• The 56k modem is invented by Dr. Brent Townshend

• Same-sex marriage becomes legal in Canada

• Canada gets a new Constitution Act, including a Charter of Rights and Freedoms



Generational surfingWith all the hype and attention building around baby boomers and Millennials, is your organization overlooking Generation X?

Riding the waves between generations isn’t as predictable as it once was. Companies have traditionally relied on assumptions about life stages, using age as a proxy to identify when and how people will

purchase certain products or services. Now, however, life stages are extending, life events are drifting, and new life milestones are emerging.

In our inaugural edition of Me, my life, my wallet, we explored generational surfing with a focus on baby boomers, born between the mid-1940s and the mid-1960s, and Millennials, born between 1980 and the turn of the millennium. In this edition, we turn the spotlight on Generation X, the demographic grouping born between the mid-1960s and 1980.

The allure of Baby Boomers and Millennials is easy to understand. The former, born between 1946 and the early 1960s in North America, grew up in a post-war era of increasing affluence, consumerization, and optimism — accumulating housing and assets at a pace far outstripping the preceding ‘Silent Generation’. Today, as this generational cohort progresses through the retirement and deaccumulation chapter of their lives, they’re largely considered to both have money and the time to spend it, attracting the attention of a wealth of industries scrambling to tailor propositions and experiences to the watch and wallet dynamic of this audience.



Millennials, meanwhile, represent a different but very real appeal. Largely considered the first truly digital generation, they grew up in an era of widely available and rapidly advancing computing, technology, and mobile communication. Therefore, while the size of their wallets may not match those of Baby Boomers, their sheer size as a demographic grouping, and their comfort with digitally-powered experiences makes them a prospect that’s hard to ignore.

No doubt, the drastic (and often conflicting) differences in values and characteristics between these two generations makes them a boon for data-savvy, personalization-focused marketers. Yet, sandwiched between these two cohorts is a group that is often overlooked (or even ignored): Generation X, aka ‘the forgotten generation’.

Are Gen Xers less valuable than the Baby Boomers preceding them and the Millennials who follow? Or could their Five Mys represent a new opportunity for organizations to target a distinct watch and wallet dynamic?

Who is Generation X?Generation X (Gen X) comprises people born between 1960 and 1980, prior to Baby Boomers and before the rise of Millennials. They account for nearly two billion people globally and over one-quarter of Canada’s population. They are characterized by their entrepreneurial approach to work, independent thinking, and desire for work-life balance.

Gen X: Looking beyond generalizationsTo understand the forces impacting Gen X’s wallet today, it’s first important to understand the life events that have influenced them up until this point.

Consider Karen, a typical Gen Xer born in the late 1960s. After finishing education and moving into the workforce, the 1987 Black Monday crash sent shockwaves through financial markets creating severe consequences for business confidence amid already softening

economies and deflationary pressures. Over a decade later, as Karen entered her peak earning years and began investing, the 2000 Dot-Com crash brought further economic pressure. Then, having bought a home at the height of the housing market and being in the early years of starting a family, the 2008 financial crisis hit, affecting employment, investments, and home ownership.

In the US, between 2007 and 2010, Generation X collectively lost approximately 45 percent of their wealth, an average of $33,000 US Dollars per person, and in the region of a 27 percent fall in home equity. Widespread layoffs and poor job prospects (in part due to the rise of outsourcing and offshoring) saw 15 percent of Gen Xers dip into savings to cover everyday living, while almost a quarter stopped contributing to retirement accounts, with many never starting back up due to the protracted nature of the recovery since the financial and housing crisis.

“ Too many companies are still operating with a ‘Boomer’ strategy, and yet it’s the Millennials and Gen Xers who represent the largest demographic. They’re the ones that are transforming everything.”

WILLY KRUH Global Chair, Consumer and Retail KPMG International

Who is Generation X?This generation has given rise to several technological trailblazers; Google, WhatsApp, and Amazon, which were all developed by Gen Xers. And although Millennials are recognized as tech-savvy, Gen Xers were early technology adopters who use social media

more habitually than any other generation – 40 minutes more each week than Millennials, according to Nielsen’s Social Media Report 2016. However, this generation could be considered the most neglected and overlooked by marketers.

of Gen Xers say they don’t feel

financially secure

40%



While the impact of some of these economic events may have been more acute (especially in relation to the housing market) and less severe on Canadians than they were on their neighbours in the US, they have still left their mark on this generation. Perhaps, as a result, this year’s survey reveals 50 percent of Canadian Gen Xers are worried about retirement (45 percent globally), with only five percent claiming they have adequate savings to do so (nine percent globally).

Double-DaycareMore and more Gen Xers are experiencing a new life-stage we refer to as “double-daycare”, a period in which their time and energy are being split between caring for both younger children and aging parents. This makes them unique among today’s generations.

This life-stage can present pressures on Gen Xers’ watches and wallets; and is influential in how they are choosing to allocate their time and financial resources; be it to support their Boomer parents or accommodate their Gen Z children, who are typically spending more time with their parents than previous generations.

“ I don’t have a pension plan, and I don’t believe the Canada pension plan will still be in place when I retire. Or at the age - the magic number of retirement. It was set up by a different generation … but knowing that it’s depleted, and the generation that’s accessing it is larger than my generation, and there are not as many people putting into it, when I retire it won’t be in existence, so I’ll have to work.”

JOANNA, 44, Douglas

of Generation X lost wealth between

2007 and 2010Pew Charitable Trusts, 2013

45%



Basis for new opportunityAlthough the past and present have been full of challenges for Generation X, the future outlook is positive. While many Gen Xers are not as wealthy as their parents were at the same age, they are currently at the peak of their earning years and have a strong work ethic. As our survey shows, this often overlooked generation is earning more and spending more than at any other time in their lives.

Despite not being digitally native like Millennials, Gen Xers are technologically savvy. What’s more, in part due to a looming wealth transfer from their parents, globally they are expected to become significantly wealthier over the next two decades.

So how can organizations respond to the watch-wallet dynamic of Generation X, and tap into their increasing wealth and affluence?

“Gen Xers face stressors and responsibilities from all sides, and they’re increasingly willing to pay for services and products that can help them cope,” says Peter Hughes, Customer and Digital Services Leader, KPMG in Canada; “As demands on their time and wallets continue to grow, they may be more likely to invest in ways to relieve that pressure – especially as they begin to inherit money from their parents and increase their earnings on the job.”

Companies are already building products and experiences tailored to the watch and wallet of this time-starved generation. The accelerating adoption of subscription services, automated reminders, digital personal assistants, and time-management tools powered by artificial intelligence (AI) has begun to address this time crunch. The battle to engage Gen Xers will play out in smart homes connected to the

internet of things, voice platforms that emerge as a cutting-edge alternative to handheld devices, and AI-powered virtual assistants that help manage all aspects of our lives, not just our diaries. Gen Xers will invest in technologies to make their lives smarter, while baby boomers primarily spend to make their lives easier.

Organizations that can harness data, analytics, and technology to become, in part, a program manager for customers’ lives can bring balance to the watch-wallet dynamic of Gen Xers and create tangible value. By aggregating and simplifying the complexities of Gen Xers’ lives, those organizations will be well placed to tap into the growing wealth of this at times overlooked, yet important, group of customers over the next few decades.

of Canadian Gen Xers feel their work/life is out of balance

44%

51%



Gen X and Gen Z:

The alternative echo effect

Behaviour transfers between parents and their children are happening more rapidly than in the past. Technological improvements and economic

realities are becoming increasingly intertwined within the generations and, as a result, accelerating the rate of technology adoption. While this same phenomenon is occurring between Baby Boomers and their Millennial children (profiled in our inaugural edition), the echo effect between Gen X (ranging from their 40s to mid-50s) and Gen Z (in their teens) has unique nuances that are playing out in unexpected ways.

According to a 2017 study conducted by the University of New South Wales Business School that examined responses from five countries, Generation X was the first cohort to grow up with both parents working. Thus, they became known as the first latchkey generation, in part due to their mothers entering

the workforce in increasing numbers. Many felt like they were on their own, seeking parental attention. As parents themselves now, are they overcompensating for having been on the receiving end of parents who were not around? Or do they just perceive the world to be less safe?

Their Gen Z children are spending less time away from home and more time online — according to a Nature Valley survey conducted with MARU/Vision Critical, today’s kids are spending three times more time indoors on digital devices than they do outside in nature.

Screen-time generationGen Xers were heavily influenced by peers, movies, and television, and were one of the first generations to grow up on video games and affordable home computing consoles. Because they are generally comfortable with gaming, they let their children play games. As a result,

As Gen Zers influence their Gen X parents, and Gen Xers influence their Gen Z children, an alternative reality is emerging

of Canadian parents in our survey said their children influence their

media purchases

30%

51%



we are seeing games and gaming, albeit in a different and increasingly, alternative reality, playing such a prominent part in their children’s social lives.

With today’s social media-fueled pressure to be somebody, new-age gaming is enabling our newest generation to form and live part of their lives through self-curated online identities. Take the latest gaming blockbuster Fortnite, that while being a free-to-play game, makes more money than any other games, including $300 million in ‘in-game’ sales in a recent month. Fortnite is a virtual place where Gen Zers, many of whom have not yet come of smartphone or driving age, can socialize. It’s become the place to hang out, the new playdate.

And why is this important? It’s their identity and it’s shifted the focus of

multiple shows simultaneously, toggling back and forth between both devices and content.

As a result, the media landscape is getting far more complex, mixing realities across games and movies. There is a whole new generation of celebrities from Instagram and YouTube to Fortnite stars that are influencing this generation.

Mixed realityWe’re witnessing a combinatorial explosion of stories, worlds, and devices, and social lives are getting merged and remixed. The world of movie tie-ins, such as Star Wars toys, is being completely upturned. Games become movies, movies have games inside them, YouTube remixes games and movies using Minecraft, LEGO makes Minecraft sets, toys become games and then become movies, back to games. If the medium is the message, the medium is getting remixed and altered in real time.

Is this generation fundamentally changing the face of media, entertainment, and fashion? And what are the potential implications for media and entertainment companies? If Millennials were digital natives and wanting everything as an experience, Gen Z, supported and financed by Gen X, want the ability to curate, craft, design, and remix all media and experiences. Media needs to be cross-device, cross-story and cross-experience.

“ I watch media on my phone, laptop and desktop. My favorite type of media is social media because I can talk to my friends on it. The media I watch most is probably YouTube because I can just watch it, or video games on my PC because I can play with my friends.”

OLIVER, 13, Ottawa

many teens’ wallets from physical things to virtual; driving them to spend real money in a virtual setting, on add-ons that have nothing to do with gameplay, to improve their alternative selves, who they are and how they look, and at the same time fostering their interest in similar styles and fashions in the real world.

Just digitalGen Zers are not just digital natives; they’re digital in utter ubiquity. They have multiple devices and have to adapt rapidly as new technology breaks through. They don’t watch traditional television in nearly the same way as their predecessors. They’re savvy about media, where to get it and how to consume it on their terms. They also use multiple devices at the same time, gaming and watching

the mean age that Canadian parents in our survey gave their first child access to social media

10.5 10.1



A2017 World Economic Forum study reported that the world’s six largest pension saving systems — the US, the UK, Japan, the Netherlands,

Canada and Australia — and the two countries holding the world’s largest populations — China and India — are together forecasting a savings gap of US$400 trillion by 2050, a sum five times the size of the current global economy.

Wealth and retirement:

Delay and pray, or avoid?With an increasing portion of the world’s population ill-prepared, will unretirement become the new retirement?

Add to this our aging population, lengthening life spans, rising healthcare costs (with fewer defined benefits), employment disruption through technological advances, increasing inflation, and rising interest rates, and the pressure on the customer’s wallet is rising. With retirement increasingly at risk of becoming a 20th-century phenomenon, is it time to ask if the math still works?

Anxious yet ambivalentIn this year’s survey, we explored attitudes towards wealth and retirement to reveal a somewhat anxious, yet complacent and ill-prepared customer. On average, 28 percent of Canadians (27 percent globally) expressed high levels of anxiety towards their retirement while a third of Gen Xers reported high levels of anxiety even though retirement is the next significant life stage they’ll encounter.

This ambivalent attitude showed little variation by income level. Only 12 percent of Canadian baby boomers and 5 percent of Canadian Gen X respondents (i.e., those with the closest proximity to the de-accumulation phase of their lives) claimed to have adequate savings to retire. More concerning still, is that only a little over a third of these two generational cohorts reported to be actively saving. With only a decade or two before retirement, an astonishing 42 percent of Gen Xers say they’ve not yet started saving for their post-employment years and, among those already in retirement, 45 percent told us they had what we call FROOM (fear of running out of money). As for future retirees, roughly two-thirds of Canadian Millennials have either failed to start saving for their futures or have put such efforts on hold.

What accounts for the delays in future planning? The struggle to pay off debt? The need to earn more in a post-employment life stage? Is this ignorance, ambivalence, assumptive about the role government will play, or living for today and putting off thinking about tomorrow — or is there something else going on?

UnretirementThese issues are contributing to the emergence of a new life stage called “unretirement”. Around the world, members of older generations are facing one or both of two new realities: the prospect of living longer and the need or desire to work longer. Today, many who once assumed they’d retire and enter a de-accumulation phase of their lives are prolonging (or attempting to) their working lives.



Moreover, some are having to compete with more contemporary skills, reinvent themselves with second careers, or take part-time jobs to make ends meet.

Working longer is not necessarily perceived to be a bad thing; some people are staying in the workforce longer simply because they want to. In our global survey, a number of respondents said they didn’t want to retire because they worry that retirement connotes boredom and they prefer to be active and working as long as they possibly can (that is, working on something enjoyable rather than out of necessity). As a result, many aren’t necessarily looking to retire in the same way as in the past, and unretirement could play out in unexpected ways.

For those with assets beyond the financial (e.g., health, time, or physical assets), the gig economy opens up new ways to make money while providing flexibility and control over both time and assets. Need cash? Become a rideshare driver or rent out your house on Airbnb while you stay with your kids. In good health and good with people? Take care of other seniors. For some, these options are part of a “top-up” phenomenon – a way to supplement either the watch (providing them with something to fill their time) and/or the wallet (giving them a little additional income to help them live the life they want to). For others, however, it’s about sheer survival in terms of affording rent, paying the mortgage or simply stocking the fridge in the face of a wallet under profound pressure.

As Boomers have gone through life events, they have changed the face of businesses serving them along the way. As such, it is now likely that they will expand the definition of retirement to include when, where and

how they retire. Based on their past, many Boomers have the potential to reject the retirement paradigms of the Silent Generation, such as the idea of retiring in social communities in sunny places. Instead, they are more mobile, versatile, active; and they shun expectations about what seniors should be or do. Their plans fragment even further depending upon whether they have health, wealth, or neither.

What’s more, when it comes to how Boomers support their children, we may need to challenge assumptions about today’s projections of intergenerational wealth transfers. Given extended life spans, reduced pensions, FROOM, and rising healthcare costs, will Gen Xers and Millennials actually receive their expected inheritances?

Business implicationsWhat could extended employment, second careers, or semi-retirement mean for customers’ needs? Where could it create new opportunities? If growing concern about retirement leads to an increased allocation of today’s income towards savings or debt repayment, which categories will suffer and which will stand to gain? How might customers adapt their allocation of spend, and where will they make sacrifices? Moreover, if today’s customer isn’t investing in their future life stages, who will be our ‘senior’ customer of the future?

While it may appear to be the remit primarily of the financial services industry, customer attitudes and

behaviours about planning for the future have potential implications for all industries. The result is a need to deepen and broaden our understanding of:

– The totality of our customers’ wallets, not just income and spending patterns, but also wealth accumulation (or net deficits)

– The interrelationship between consumption today and planning for tomorrow, and how this changes the shape and size of the customer wallet — including what’s left in the wallet

– How consumption patterns change across these life stages, and what are the new unmet needs

– The interdependence between generations, and how the financial position of one cohort impacts another, from extending financial support across generations to diminishing wealth transfer as lifespans extend and rising healthcare costs erode assets

– The opportunity to play an active part in helping customers to better plan and prepare for their futures through goal-based planning and the choices they make today.

Even if large portions of society are adopting a ‘delay and pray’ or ‘avoid’ attitude to their retirement, the businesses serving them need to be prepared for the uncertain future ahead.

“ It would be nice to know at some point during the course of my life … that I didn’t have to think about money, for the future. [...]”

TIM, 39, Montreal



0

You

Partner

Kids

Parents

College First job Second job Marriage Kids

Pre-accumulation Accumulation

Now Future

Customer wallet: Life event trajectoryIt’s the nature and timing of customers’ life events that determine the shape and journey of their wallets – not their demographics

During the course of customers’ lives, their wallets travel through four distinct phases: pre-accumulation,

accumulation, preservation and de-accumulation. Yet, while these phases are common across generations and countries, the way in which individual customers move through them is not.

First home

In understanding the shape and size of customers’ wallets, and the trajectory that they will take, it is important to look beyond basic demographics or socioeconomic groups. Consideration should be given to the life events that punctuate each phase, where in their lives these are timed, and the potential pressures these create or alleviate on the wallet.



Major promotion Empty nest Final job Retirement End of life costs

Future

Care for spouse

Care for children

Care for aging parents

Now

Preservation De-accumulationAccumulation

For instance, two customers with the same demographic profiles will follow two very different trajectories if one begins their financial life with a large student loan to pay down, where the second didn’t pursue higher education. If one shuns home ownership in favour of living with parents for longer and then renting, whereas the second reaches for the property ladder as

soon as they enter employment. If one pursues marriage and children in their mid-20s, whereas another puts the decision off until their late 30s in favour of travelling and building life experiences.

These factors don’t just affect the size of the wallet, viz. income less consumption and spending, but also when it is likely to be

under more or less strain, and therefore what needs might be most prioritized by customers at a given time. In concert with the Five Mys framework, charting the path of customers’ wallets and taking into account the timing and nature of their key life events can help us to plan and predict at an individual level, rather than an imprecise homogeneous group.

Kids go to college

Care for agingparents

Passing of spouse



The illusion of controlTechnology is protecting customers against information overload, but not without a price

We live in an era of abundant information where more data and content is produced in 60 seconds than an individual can consume

in a lifetime. Individuals are in a near-constant state of connectivity with devices playing a central role in their daily routines, and a growing prevalence of voice- and AI-powered assistants in their homes.

Even still, individuals are becoming smarter about the world around them and how they use technology to help manage the dizzying array of companies, marketers, and content creators competing for their time and attention. But what of the consequences?

According to this year’s global survey, there is a generally high level of comfort with this new status quo. Some 76 percent of customers told us they like having access to lots of information. In Canada, 54 percent of customers told us they proactively filter information, while 31 percent rely on those they follow to do so, and 33 percent prefer apps and technology to filter information for them. Interestingly, 64 percent believe they can determine if the information they’re seeing is trustworthy, but what about the remaining 36 percent?

This is a largely positive response at first glance. It suggests customers love information, can recognize its currency and integrity, and rely on their networks, technology, and personal efforts to filter out what’s most important or relevant to them.

But is this sense of enthusiasm and comfort with technology and information filtering a boon for organizations seeking to deepen customer relationships and engagement or is it masking a more complex, nuanced scenario? What are the implications of us each curating, filtering and leveraging technology to keep on top of the information overload?

The digital filterFor organizations, it’s no longer sufficient to understand what customers value and how they access information; they have to start considering what customers have edited out of their lives, who they’re really relying on to filter and channel information and messages, and the political, social and demographic biases being formed around their target audiences.

Targeting and personalization have been growing in importance and potential since the advent of

the modern digital era. Even still, customers’ abilities to harness technology to manage information access and avoid information overload isn’t just an opportunity for organizations, it introduces a layer of complexity as to how those organizations reach, capture, and sustain the attention of customers who are increasingly living in an edited version of reality.

“Technology doesn’t just make customers’ lives easier, it enables companies to help them to make their lives easier, and in so doing can help build stronger, connected and longer-lasting relationships,” said Willy Kruh, Global Chair, Consumer & Retail, KPMG International. “But with this opportunity comes the need for companies to develop data and analytics capabilities that will aid them in better understanding and addressing customers’ emerging realities. The opportunity is indeed present and compelling, but it brings with it new levels of complexity and nuance that must be understood before brands can benefit.”

Curating and arbitraging information and content for customers offers powerful potential. Understanding our customers’ Five Mys can help anticipate what they truly want.

ignore and close their device when they feel information overload

1 in 4



Needed a break

54%

Believed it was healthier

17%

Felt anxiety and/or overwhelmed

12%

Wanted to protect their privacy

Were being bullied Other

50% 14% 15%

13% 2 % 6 %

12% 2% 3%

Of the people that have disconnected from devices, what was the primary reason chosen to disconnect?



Trust: The true imperative

In today’s era of heightened transparency and informed, empowered, and connected customers, the concept of trust has risen to a new level of prominence. No longer to be taken for granted, trust is fast emerging as a prerequisite to accessing a myriad of valuable data and insight from customers that are increasingly wary of sharing their data. Customers and regulators alike

are dedicating increasing attention to these issues. Organizations, institutions, and governments can’t afford not to. In this chapter, we delve into this complex issue and explore the implications for businesses.

An explosion of data. Uneven confidence in institutions. The need to act.

© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.


One degree of trust with my dataCustomers may be willing to part with their data and personal information today, but they are far more sensitive to how it is being used and by whom – as are an increasing array of regulators. As a result, companies need to get ahead of the curve.

Trust takes a lifetime to build and a moment to breach. Often with long-term or irreparable damage.

In years gone by, corporate scandals would emerge once or twice in a lifetime. Yet, today, they are occurring with ever greater force

and pervasiveness. Fake news, hacking, corruption, misdemeanour and malfeasance have become a part of everyday life. And increasingly, those scandals involve personal data and a breach of trust.

While data is being touted as an asset, data also has the potential to become a significant liability, if misused, mishandled or left unprotected.

As technology has permeated seemingly all aspects of customers’ lives, so too have the data trails that accompany it. That data offers value to the organizations that can harness, control or capitalize upon them. Yet, whereas customers were once arguably blissfully unaware of the breadth and depth of data available to, or held by, organizations, recent events have given the subject much greater prominence.



The data tug-of-warIt is interesting to note that as companies continue to further hone their ability to customize their service offering to the needs and desires of their individual customers through the use of data and analytics, Canadian customers are becoming increasingly distrustful and weary of sharing their information.

What companies must remember is that the data tug-of-war is not one that can be won or lost. It is critical that both sides come out on top and that companies are able to gain and maintain the trust of their customers.

“In the battle for growth, knowing your customer – intimately, personally and holistically – is what will separate the winners from the rest of the pack. And the critical prerequisite to this knowledge is data,” commented Julio Hernandez, Global Head, Customer Center of Excellence, KPMG International. “It has currency, it has value. With it, organizations can craft deeply personalized experiences, can stop living in today and start predicting the customer of tomorrow. But without it, organizations are left in the dark, relying on outdated assumptions and imprecise generalizations. Trust, therefore, is of such paramount importance it simply cannot be left to chance.”

The contract: Implicit or explicitCompanies and executives need to be mindful of both the implicit and explicit expectations of customers when it comes to their data. And complacency is simply too big a risk to take when every organization is

The transparency gap is changing. Up until now, customers might have been primarily concerned with increases in the volume or extent of their data – whereas now the public focus is shifting to how much of their data has been digitized, aggregated, tracked and monetized by organizations and governments without their full knowledge or permission.

“Canadians have always held the privacy of their data in high regard, and that’s partly because Canada has active privacy watchdogs and sound privacy legislation that has been deemed adequate to the higher standards set in European laws, albeit it’s time for a refresh in light of the GDPR. Privacy is less of a consumer protection issue in Canada, it’s viewed as a fundamental right and freedom and an important fabric in our democratic society,” says Sylvia Kingsmill, National Leader, Digital Privacy and Compliance for KPMG in Canada. “Now, public expectations are even greater in light of highly publicized cyber breaches and privacy scandals involving sensitive data that can cause harm to Canadians if privacy protections are left unchecked. They’re more cautious about who they’re giving their data to, they want to know exactly what it’s being used for, and they want some kind of value in exchange for giving it. That’s where the need for greater transparency and, in turn, trust comes into play.”

As this transparency gap closes, and more information enters the public domain, companies are at risk of increased exposure and vulnerability.

just one tweet or news cycle away from being the next hacking victim or having manipulative or opaque data practices exposed.

As our research shows, customers are generally comfortable when it comes to trusting their information to an organization or institution with whom they have a relationship, especially when they feel that the organization has a legitimate reason to collect that form of data (e.g., retailers are most trusted with transactional data, healthcare companies are most trusted with medical information, etc.). But the implicit contract is that this data goes no further. It’s fine for the company to whom the data is knowingly provided to use it in ways that are expected or consented to, but it’s simply not acceptable for it to be misused, manipulated, sold or exposed.

The problem with an implicit contract, however, is that it can be something of a grey area. Do customers truly understand the totality of personal, financial, transactional and behavioural data an organization holds on them? Do they truly understand where and how companies can collect third party data, and how their digital footprint

of Canadians trust banks with their payment data

Only 9% trust retailers with it

57%



can follow them around online? Do they understand and accept how different aspects of data and personal information can be compiled to build a picture of their life and predict or influence their future behaviour and choices?

The solutionAt the end of the day, customers increasingly value their data and want it to be valued by the organizations and institutions they choose to share it with – but they are also calling for more transparency and control over its use.

As we introduced in our inaugural Me, My Life, My Wallet report, customers want organizations to ‘make it easy for me, know me, value me’. Now, they’re also saying ‘protect me’. And herein lies the opportunity for companies to get ahead of the curve.

“Customers are beginning to understand the value of their data, and are much less inclined to give it out than they have been in the past,” says Sylvia Kingsmill. “Businesses need to be open and clear about why they’re asking for certain types of data, how they’re going to protect it, and with whom they’re planning to share it.”

The GDPR Standard The EU’s data protection regime under the General Data Protection Regulation (GDPR) has raised the bar for better privacy protection around the world. “It doesn’t matter where you’re headquartered, GDPR is a global piece of legislation that applies to foreign entities processing EU data,” says Kingsmill. “The Canadian government is in the process of modernizing its own federal privacy rules that apply to Canadian businesses in order to continue enabling the free flow of EU data across borders for commercial purposes. We can anticipate stronger protections around algorithmic transparency, consent and adoption of privacy by design principles to give the customer greater control of their personal information, and in effect, promote a better customer experience based on trust.”

are highly concerned about unauthorized tracking of their online habits

are highly concerned about theft of credit cards when online shopping

are highly concerned about hacking of financial, medical or other personal information online

are highly concerned about identity theft

30% 33%

37% 39%

Canadians are concerned about the way in which data is collected and whether it is secure.

51%



A day in dataDo customers appreciate their daily digital interactions and the depth of data they generate?

Customers’ increasing reliance or even fondness for technology has created a complex web of devices, apps, tools and destinations, all adding to the vast treasure trove of data that paints a picture of their lives.

My devices

My accounts, passwords, apps and permissions

Electronic cards

Laptop

Smart TVs

Automobiles

Smart home

Smart meters

Connected wearables

Surveillance

Smart watch

Email

Electronic files

Texts

Video

Online shopping

E-books

Health data

Music

Photos

Online banking

Where is my money?FINANCIAL− Income− Credit score− Credit history− Financial apps− Credit cards− Debit cards− Financial transactions

How am I working?WORK− Files created− Time logged− Productivity− Emails− IP address− Professional connections

Am I healthy?HEALTH− Daily habits− Food / nutrition− Exercise log− Biometrics− Steps− Sleep habits− Apple health data− Fit bit data

How am I paying?PAYMENTS− Purchases− Payments− Income− Credit score− Account types

What am I buying?SHOPPING− Date of purchase− Purchasing habits− In store receipts− Online shopping− Ads clicked− Recent searches− Deliveries

Where am I?LOCATION− Location history− Frequent trips/

destinations− Commute− Vacation/ travel history− Ticket purchases

What am I searching?SEARCH− Search history− Website views− Ad clicks− Time spent in search− Content viewed− In app tracking

What am I doing?CALENDAR / EVENTS− Calendar− Contacts− Events / locations− Ticket purchases

Who do I follow?SOCIAL CONNECTIONS− Contacts− Calls− Texts− Social media connections− Likes− Follows− Comments− Groups− Organizations

What am I doing at home?SMART HOME− Energy use− Temperature− Lights− Utilities− Cleaning− Smart sensors− Security− Remote monitoring

What am I listening to?CONSUMING MEDIA− Streaming accounts− Viewing history− Video views− Music streaming− Genre preferences− Time viewed

Twitter

YouTube

Instagram

LinkedIn

Apple watch

Whatsapp

Spotify

Gmail

Google maps

Netflix

Nest

Uber

Phones & tablets



My digital footprint

My data exhaust

Electronic cards

Laptop

Smart TVs

Automobiles

Smart home

Smart meters

Connected wearables

Surveillance

Smart watch

Email

Electronic files

Texts

Video

Online shopping

E-books

Health data

Music

Photos

Online banking

Where is my money?FINANCIAL− Income− Credit score− Credit history− Financial apps− Credit cards− Debit cards− Financial transactions

How am I working?WORK− Files created− Time logged− Productivity− Emails− IP address− Professional connections

Am I healthy?HEALTH− Daily habits− Food / nutrition− Exercise log− Biometrics− Steps− Sleep habits− Apple health data− Fit bit data

How am I paying?PAYMENTS− Purchases− Payments− Income− Credit score− Account types

What am I buying?SHOPPING− Date of purchase− Purchasing habits− In store receipts− Online shopping− Ads clicked− Recent searches− Deliveries

Where am I?LOCATION− Location history− Frequent trips/

destinations− Commute− Vacation/ travel history− Ticket purchases

What am I searching?SEARCH− Search history− Website views− Ad clicks− Time spent in search− Content viewed− In app tracking

What am I doing?CALENDAR / EVENTS− Calendar− Contacts− Events / locations− Ticket purchases

Who do I follow?SOCIAL CONNECTIONS− Contacts− Calls− Texts− Social media connections− Likes− Follows− Comments− Groups− Organizations

What am I doing at home?SMART HOME− Energy use− Temperature− Lights− Utilities− Cleaning− Smart sensors− Security− Remote monitoring

What am I listening to?CONSUMING MEDIA− Streaming accounts− Viewing history− Video views− Music streaming− Genre preferences− Time viewed

Twitter

YouTube

Instagram

LinkedIn

Apple watch

Whatsapp

Spotify

Gmail

Google maps

Netflix

Nest

Uber

Phones & tablets



Can your customer trust you?Do they? Will they, once they understand what you are doing with their data? It’s time to rebalance permission and presumption.

Given its potential value, it may be appealing to sweep up the vast troves of data now available about customers, but it’s no longer sufficient – it’s time to start understanding what customers think about their data, and how they decide whom to trust to protect it and use it responsibly.

It’s time to start a new conversation with customers that focuses on both permission and presumption. Firstly, this means obtaining explicit permission from customers to capture, store and use their data. Secondly, this involves moving beyond consent to both understand and meet their presumptions about what their data reveals about them and how they are willing for it to be used.

In moving beyond rudimentary opt-in and opt-out choices to a more intimate understanding of what a customer is willing to share in exchange for greater value (and what that value constitutes – be it personalization, special offers, faster service, etc.), and hearing how they want to interact and be contacted, organizations stand both to develop insights to help shape and personalize the customer experience, whilst simultaneously winning customer loyalty and maintaining their trust. Moreover, organizations engaging in these sorts of conversations with customers can mitigate the risk of misguided internal presumptions – after all, just because a customer gives away personal information, we shouldn’t presume this gives us the right to use or sell it indiscriminately.



Can your customer trust you?

Growing regulatory attentionBeyond an overall erosion of trust, new regulations will continue to make customer engagement more challenging. Regulatory scrutiny of data privacy, security, and customer transparency is expanding in the U.S. and Europe and is likely to gain traction worldwide.

Recent KPMG International research indicates that trust is becoming a defining factor of an

organization’s success or failure, and as the cornerstone of an organization’s license to operate, trust reduces uncertainty and builds resilience. It influences reputation. It drives customer satisfaction and loyalty. It enables global markets to function. And it inspires employees, who can only deliver a great customer experience if they have one with their employer.

Obtaining permission, understanding presumptionWinning with customers increasingly depends on the quality and personalization of the relationships we are able to build with them, and success is ultimately built on the trust that is developed day-in and day-out, through the realities of personal experience.

Personalization involves more than addressing a customer by name; it’s about demonstrating that you understand a customer’s specific circumstances and will design or adapt the total customer experience accordingly. Acting on what you know about your customers, providing individualized attention, demonstrating knowledge of their preferences and past interactions can together help create an experience that feels truly personal – and that shows you respect the value inherent in the data your customers share with you.

Obtaining a customer’s permission and, in turn, understanding their presumptions is the key to creating the personal experiences that allow both parties to benefit. Several steps are critical:

– Make permission clear and understood. Embrace transparency. Be explicit, straightforward, and upfront about the data you collect so customers can provide their permission in the full understanding of what they’re permitting. Limit the ‘legalese’, and eliminate the lengthy, illegible boilerplate text.

– Provide specifics about how you protect customers’ data. Not just once – regularly updating and communicating data security practices is vital. A robust cyber security program is critical not only to protecting customer data, but to safeguard the brand and reputation. Customers need to know how you assess data security and privacy risks, the controls you have in place to ensure compliance with relevant laws and regulations, and how you would cope with data breaches.

of Canadians are very anxious about

identity theft 51%

39 %

© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.


– Be clear and consistent with third parties. If your organization collects or acquires data through third-party sources, or shares any data with partners or third parties, apply the same levels of transparency and remain privacy conscious. Be up front with customers about where and how you acquire or share data and personal information, and demand any partner, supplier or third party to at least meet your minimum standards and transparency levels. Be clear on where your responsibilities lie for data acquired from, or shared with, third parties, and communicate what you will and won’t do with it. Most importantly, respect the customer and commit to unsubscribing them easily and quickly at a single request.

– Be open when things go wrong. In the event of a breach of data or falling short of publicized policies, be up front about it immediately, explain how you’re working to fix it and ensure it doesn’t happen again.

A win-win approachRecent KPMG research reaffirms that the high-performing brands for customer experience excellence are beginning to think of their customers as assets that should be protected, nurtured, and invested in. And this is more than a lofty ideal – these efforts pay off on both sides of the relationship. As customers become more empowered and informed, the organizations that have invested time and money in making customer-centricity a reality are driving growth in both profits and revenue.

Customer-centricity is only truly possible when you understand the customer holistically – the full set of forces which drive their behaviour and choices. Exploring each of the Five Mys – motivation, attention, connection, watch and wallet – as well as the shifting sands of life stages and pivotal life events, is the starting point in developing, personalizing, and maintaining the critical customer relationships of both today and tomorrow.

of Canadian customers are anxious about

unauthorized tracking of their online habits

46%

53%



We asked customers about their overall level of trust across 12 industries, specifically whether they trusted employees, felt companies cared about them and trusted them with their data

Institutions we trust

Wealth management

Banking

Automotive

Healthcare

Government

Retail

Media

Power and utilities

Technology

Insurance

Telecom

Advertising

Average

100%

0%Level of trust in industries (% that trust)

Canada AverageUS Brazil UAE IndiaChinaUK France

59%

54%

54%

49%

46%

45%

60%

51%

43%

37%

26%

47%66%62%50%45%40%40% 37% 37%

62%

44%

33%

27%

15%

33% 39%

38%

31%

36%

60%

39%

46%



It’s the future. Do you know where your customer is?

The pursuit of customer insights, personalization, greater empathy, ‘winning service’, and distinct experiences are far from lofty ideas. They are, however,

grounded in the cold, hard, and increasingly competitive reality of a meaningful commercial prize at stake.

The challenge facing organizations is twofold. Firstly, to recognize that the way in which a customer reaches a decision today has changed from yesterday and will most likely change tomorrow based on different circumstances, life events, and engagement models.

Secondly, in our hyperconnected, transparent, and democratized world, where both information and power literally lie in the hands of the customer, the ability to deliver a distinctive, personalized, and intentional experience becomes even more paramount. Moreover, the expectations from those experiences are rising faster than many organizations can keep pace with, as a customer’s best experiences anywhere – in any category or sector – becomes the expectation for all others.

Winning the battle for ever-evolving customers requires a combination of holistic insights, the willingness to design intentional experiences, and the ability to deliver them accordingly

“ These aren’t the customers that organizations have dealt with in the past. Their lives are changing constantly as a result of new or altered life events, new technologies, and ever-changing motivations. They no longer fit neatly into traditional boxes, meaning organizations must make the effort to understand them at a deeper level, track their evolving needs, and constantly re-aligning their products and services to deliver what they really want.”

PETER HUGHES, Customer and Digital Services Leader, KPMG in Canada



More than a management idealBuilding customer closeness. Designing intentional experiences. This isn’t empty management rhetoric; it’s a commercially grounded imperative.

Analysis from KPMG International’s multiyear, global study into customer experience excellence demonstrates the scale of the gap between high-performing organizations and their lower-performing counterparts. From a global perspective, the top performers deliver, on average, twice the shareholder value than their underperforming peer group. They benefit from twice the revenue growth and they build greater customer equity — the propensity of a customer to stay loyal — giving them the potential of an economic premium to price inelastic customers that are less likely to migrate to competitors.

excellence, which help answer ‘how’ to respond with the best experience for that customer — becomes a powerful tool in aiding companies to define and refine their customer strategies.

Understanding the customer of tomorrowUnderstanding a customer’s motivations and expectations, the competition for their attention, how they’re connected to technology and each other, how they balance the constraints of time and money, and how all of these change with different life events and life stages is at the heart of KPMG’s Five Mys framework. Using this framework is the starting point in identifying why customer behaviour is changing today. It helps predict how that behaviour may change tomorrow. It provides a granular and very individual perspective, even down to the level of the individual customer, that traditional demographic segmentation and market research efforts struggle to deliver.

For some organizations, this deep and intimate understanding of customers can also be used to overcome internal structural impediments to change. USAA, an American company specializing in providing financial services for members of the armed forces and their families, for example, used life events as a basis to structure teams and resources. The firm ensured their staff became intimately familiar with their customers’ lives, even going as far as recruiting customers as employees and encouraging their people to undergo military training to develop a level of empathy and insight that few organizations could match.

These same companies are also able to invest in those attributes that customers value and rationalize those that they do not, often resulting in better customer economics. In difficult times, organizations falling short of delivering winning and personalized experiences typically see margin erosion five times greater than that of their top-performing peers.

Developing an intimate understanding of both the customer of today and tomorrow, and designing intentional experiences, isn’t just associated with the upsides of growth, loyalty, and stronger margins. Failure to do so can have existential consequences.

In this section, we explore how the juxtaposition of the Five Mys, which help answer the ‘why’ behind customer behaviour; and the six pillars of customer experience



underpinning insight into customers of today, or tomorrow. Hence the potency in juxtaposing the Five Mys and the six pillars, which can lead to a heat map or road map of priorities for internal change, resource allocation and focus.

An added complexity of intentional experience design lies in hierarchy. Companies need to meet their customers’ minimal expectations at each individual pillar before they earn the permission to step up to the next one. Integrity, for instance, is the foundation of the six pillars. If an organization fails to meet its customers’ expectations for integrity, no amount of effort to differentiate or win in personalization or empathy will pay off.

For others, it helps drive core service design. A Chinese payments provider, for instance, has used its understanding of the online customer to develop a specialized interface. Aimed at Millennial smartphone users, the interface enables them to buy through their portal, where they can make payments, buy theater tickets or check their investments. And much of its design has been based on behavioural observation.

At its heart, the Five Mys enables organizations to prioritize resources and efforts towards the most attractive potential markets and customers. Even more crucially, it arms executives with a depth of insight — the ‘why’ behind customer behaviour — that offers profound potential, if acted upon. It’s this need to act, respond, adapt offerings, or to design new intentional experiences that the six pillars is powerfully placed to answer, “So how do you do that?” and to help align the whole organization to deliver.

Designing tomorrow’s intentional experienceKPMG International’s research, across dozens of industries and millions of customers for almost a decade, helped to identify the key traits of top-performing organizations in intentional experience design through personalization, integrity, expectations, resolution, time and effort, and empathy. These form our six pillars of customer experience excellence and address the ‘how’ that follows understanding the ‘why’.

Few executives would dispute the importance in excelling in these areas and many would point to genuine internal aspirations to do so. But too often such efforts can stumble as they lack the depth or breadth of

“Everyone has a negative customer service story where a company has failed to deliver on a promise or come off as incompetent or disingenuous. Customers tend to hold on to those experiences and it takes a lot of effort to win them back,” says Katie Bolla, Associate Principal, Customer and Digital, KPMG in Canada. Therefore, she adds, organizations hoping to win with today’s slightly cynical customer would do well to understand their expectations and reservations: “When you get to the root of customer behaviour – the ‘why’ – that’s when you can begin designing better and more intentional experiences for current and future customers using the six pillars as a foundation.”



My watch

My attention

My motivation

My connection

My wallet

Understanding the customerActivating the

customer experience

The sum, greater than its parts“When we understand what’s really important to a customer around a given life event — not just stated or presumed importance, but what really leads to the opening and closing of the customer wallet — we can design experiences accordingly,” said Julio Hernandez, Global Head, KPMG International Customer Center of Excellence. “Understanding the relative importance of time pressures versus budgetary pressures versus expectations of personalization or a premium service allows us to tailor our propositions, our messages and our experiences to match.”

In isolation, KPMG’s Five Mys offer a route to deep customer insight and the ability, using data and analytics, to predict where our customers will be, and their unmet needs and desires, tomorrow. Equally, KPMG’s six pillars framework provides leaders with an evidence based roadmap to delivering winning customer experiences.

Looking at customers through these two lenses in concert, therefore, offers a compound opportunity to understand, align and predict — and, ultimately, dramatically increase the relevance of an organization to its changing customer.



Excellence

– Commit to excellence – Organized around

the customer

Engagement

– Alignment of employee experience (EX) and customer experience (CX)

– Motivation and passion

Excecution

– Attention to detail – Constant monitoring

Economics

– CX link to value – Experience

optimization

Engaging the customer

Internal capabilities

Integrity

Time and effort

Expectations

Resolution

Empathy

Personalisation



Many organizations may claim to know a lot about their customers, but do they really know enough? Transaction history and demographics aside, too few companies can realistically claim

that they have a firm grasp of their customer’s Five Mys: My Motivation, My Attention, My Connection, My Watch and My Wallet.

In KPMG International’s inaugural Me, My Life, My Wallet report, we explored the concept of generational surfing — the idea that by understanding a customer’s particular life stage — young adulthood, parenthood, empty nesting or retirement — and the shifting of pivotal life events, organizations can identify patterns of change and anticipate emerging needs.

Understanding a customer’s propensity to adopt new technologies (which is often a factor of the generation to which they belong) as well as the ways in which they utilize those technologies, can provide further context for an organization when it comes to reaching their customers.

Three lensesIn response to media fragmentation and an explosion of new technologies, many organizations have opened all kinds of channels, touchpoints, or pathways to engage with their customers. Unfortunately, not all of these channels are connected and some have been more popular than

others, often creating more confusion than clarity for both customers and the brands with which they engage. Instead of trying to offer everything out of FOMO (fear of missing out), companies should consider their touchpoints and how customers use them through three different lenses:

Voice — Speaking and listening

Text — Writing and reading

Images — Viewing and sharing

“If I have a quick query, I might find it more efficient to send a text and read the answer. If I’m filing an accident claim, I might want to upload an image of my damaged car. If it’s a more complex issue, where I need some consultative expertise, I’ll be more inclined to use a voice touchpoint,” said Julio Hernandez, Global Head, KPMG International Customer Center of Excellence. These touchpoints are not mutually exclusive; they can be used individually or collectively to address a customer in a way that’s most convenient for them. The key is to understand how a customer can use them to answer a question, fulfill a need or solve a problem.

Context is also critical when it comes to defining what customers deem appropriate or intrusive. Customers expect organizations to know who they are, the value they represent, and what they’re trying to do. Beyond that, expectations vary wildly.

The future of interactionsTo thrive in an increasingly fast-paced world, organizations need to be both technologically savvy and proactive to ensure they are reaching the customer at their point of need, and in a way that is both relevant and transparent



In what Forrester dubbed as an era of accelerating sophistication and hyper-adoption, tracking how Millennials and Generation Zers are approaching technology can help organizations understand the kind of experiences customers will demand tomorrow, which they need to start thinking about today.

“ … There was a particular company that I had some interest in one of their products. And then, when I left their page, I was basically inundated every single day constantly every time I went on to social media [...] “oh we see that you’ve left and why don’t you try this kind of thing.” It was almost too much [...] I don’t mind the occasional one, especially if they group that with like a promotion [...]”

FRANCES, 32, Rivers

“ Exponential developments in AI, edge computing and connectivity like 5G are resulting in powerful experiences where people will be more seamlessly connected with machines. Unobtrusive, smart sensing and always connected machines interact more naturally with humans, further driving human adoption of machine generated experiences. We, as humans, are already talking to devices, always sharing sensed data via wearables and automatically recognized by cameras. As we get comfortable with this new normal, our expectations from the firms we buy from or engage with, are going to be centered around the principle of Understand Me. Organizations have to re-tool themselves to be a part of this connected data eco-system to provide individuals with relevant and timely experiences. The Five Mys framework allows organizations to synthesize all this data in the context of human behaviour, and allows organizations to create rich, custom and differentiated experiences through deep understanding of each person and group.”

SHREESHANT DABIR National Leader, Data and Analytics and AI KPMG in Canada



B2B: The human factor

Gone are the days when quality, cost and delivery were the cornerstones of business-to-business (B2B) relationships and decision-making. While

undoubtedly still important, they have become commoditized and a hygiene factor in any commercial transaction.

What’s at play today is a more complex, multifaceted and, ultimately, human suite of factors that influence how different members of a company’s decision-making process make choices, make trade-offs and select partners, with more parallels to customer relationships than in years gone by. And although the consumerization of B2B markets has long been discussed, the depth of insight available hasn’t kept pace. While this report focuses on a changing customer, many of the themes uncovered in our research are both pertinent and evident in a B2B context. And the lenses we apply to understand what’s really driving customer choices, both today and tomorrow, can be applied with equal potency in a client context.

Applying the Five Mys in B2BUsing the Five Mys in a B2B context can help to provide the same holistic understanding of how clients make choices that we’ve explored in a customer context earlier in this report. Not only are the same factors at play in a business context, but the people making commercial decisions and managing relationships up and down the value chain are all, ultimately, customers – and their behaviour and experiences at home undoubtedly influences their professional lives.

My motivationAlthough typically tied to financial drivers, B2B decision making has become characterized by wider aspects of a trusted and sustainable relationship. Cost is rarely a sole or primary driver of choice, with changing expectations around service and transparency having a significant influence on commercial motivations. We must also consider that, in the same way as our best experiences as customers set the benchmark across

Business customers are also customers in their personal lives and they are bringing their rapidly changing expectations to the worplace – applying customer behaviour lenses in a B2B context can pay dividends



categories, so to do these customer expectations permeate commercial expectations (‘if my retailer can do this, why can’t these suppliers?’). Equally, this transfer can occur on a supplier-to-supplier basis, as a client experience in one aspect of their role can quickly become the new expectation.

My attentionThe pressures on the attention of different members of a decision-making unit are under just as much of an assault as in our lives as customers. Work attention has become fragmented as technology has changed our relationship with information and communication. Understanding how this changes for different roles within a client organization, and at different phases of a client’s business calendar, can help to identify who and what else is really competing for the time and attention of your target audience.

My connectionUnderstanding how different members of a decision-making unit are connected, how they interact and how they influence one another’s choices is key to understanding how to tailor messages, proposals and experiences for a client organization. Moreover, recognizing the impact of social media in a business context is key, as different members of a value chain have become more connected in the form of an influencer ecosystem, lending itself to collaboration, co-creation and real-time feedback and insight.

My watchTime is just as precious a commodity in a business context, and can span both an individual and an organizational level. For the individual, this ranges from the time and effort spent negotiating and executing the transactions, to implementation, servicing and being serviced. Whereas for the organization,

time can take the form of payment terms, delivery terms, implementation timetables and guarantees.

My walletBudgets are inevitably a critical influencer on any commercial decision, but understanding more broadly a company’s balance sheet, income statement, working capital and other financial dynamics can help to yield insight into the pressures on the company wallet – and identify potential opportunities to add value through the structuring of the financial aspect of commercial relationships.

Just as for customers, the Five Mys are both interconnected and constantly changing. To look at any one of these underlying drivers of decision making

in isolation risks failing to understand the nuances that can make or break a commercial transaction, or a client’s unmet needs and the tradeoffs that can help shape experience and relationship design.

Life stages and life eventsFor customers, the Five Mys change to reflect what’s important to an individual as they progress through different life stages and encounter life events. Similarly, business professionals have key career events, such as a first job, key promotions, new jobs with new companies, as well as key career life stages, notably early career, peak-earning years and retirement.

of Canadian CEOs are confident their company will experience growth over the

next three years

96%

90%

of Canadian CEOs see technological disruption as an opportunity rather

than a threat 96%

96%



In much the same way, the concepts of life stages and life events can be applied in a B2B context to predict when and how a client’s priorities might shift, to identify how this could be reflected in ongoing service delivery or experience and, ultimately, to build loyalty and foster a sustainable relationship.

In particular, it’s important to recognize the very different contexts that come before and after a transaction has been negotiated and executed. For instance, consider an executive team renting their first office as a cash-strapped start-up, compared with expanding their footprint as a profitable and scaled venture. The context shapes the decision.

Separating customer acquisition, pre and up to purchase, from customer service, post-purchase use, and service, is meaningful as very different dynamics are at play during each stage. Companies that do not interact with the customer during the acquisition phase may well interact during the use and service phase, or different individuals in a client organization may step in to play a role in the relationship. Understanding the Five Mys in these two different contexts – securing the relationship versus delivering the experience – will enable organizations to tailor their offer and messaging with far greater precision.

What’s more, the generational cohorts of our business customers will influence their expectations from technology. Inevitably, as people reach senior leadership roles, still dominated by boomers for many industries, their interactions with enterprise technology is often limited as such responsibilities are delegated to others. Consequently, they are often divorced from the realities of day-to-day experiences with enterprise technologies for both employees and customers. Add to this

the Gen Xers’ diminishing tolerance for legacy technology, Millennials’ high expectations, and a generation of Gen Zers preparing to enter the workforce, and the generational lens for technology expectations becomes increasingly important.

End of benign enterpriseBeyond the need to understand the individual constituents that make up decision-making groups and influence business purchasing and relationships, it’s also time to recognize that organizations — like brands — are developing their own Five Mys.

Around the world, in unprecedented ways, businesses are increasingly choosing, or facing pressure, to take a stance, aligning themselves with broader issues in the public agenda and showing their hand: “This is what we believe in.”

These could be political or economic issues, societal issues including equality and human rights, or more niche or nuanced issues pertinent to the local workforce or stakeholders.

Whatever the issue may be, the brand of the organization is developing and revealing more of a soul, becoming more of a living organism. With this, it reveals a distinctive pattern of ‘mys’ to its employees, partners, clients, investors and other stakeholders.

Growing expectationsAs in the individual lives of customers, expectations in a B2B context are rising faster than many can keep pace with. Features and price alone cannot be relied upon to secure or maintain sustainable commercial relationships, and the benchmark for ongoing client experience is continually being reset.

“Customers in the boardroom aren’t very different than those in the living room,” says Katie Bolla, Associate Principal, Customer and Digital, KPMG in Canada. “At the end of the day, they want their commercial and business partners to know the organization, value its partnership, make it easy to transact, and protect both their data and public reputation.”

“ Some companies are saying ‘We’ve done this for 40 years, why change now?’. They’re moving into a new age with an old mentality; they’re not curious, they’re not reinventing themselves. When I speak with clients, I challenge them to take a different view. I ask them: What if you started today? Who would you be? How would you stand apart? How would you use technology to shape your business and reach your customer? How would you look at what’s in front of you and adapt?”

WILLY KRUH, Global Chair, Consumer and Retail, KPMG International

of Canadian CEOs list appointing leaders that

can better relate as a top challenge in meeting the

needs of Millennials

45%

44 %



In the inaugural Me, my life, my wallet report, KPMG International explored how changing customer attitudes, expectations and behaviours were playing out across four major global markets; China, India, the UK and the US. This year, we

have extended our survey and ethnographic research to include four additional countries, namely Canada, Brazil, France and the UAE.

In the preceding pages, we explored the nuances of the Canadian customer, what differentiates them from their global counterparts, and what this means for organizations that are looking to do business in Canada.

The following provides an overview of our global findings as well as links to more detailed summaries for each country that participated in this year’s survey.

Customers are changing all around the world, subject to common forces and factors, but often with an uncommon response. Change, it would appear, is indeed in the eye of the beholder.

In Brazil, once a leading light among emerging market economies, customers have weathered political upheaval and the worst economic contraction of modern times. Their introduction to the modern digital world and all the benefits it has to offer has

been offset by heightened pressures on the customer wallet in the face of a weak recovery, and low levels of trust in both public and private sector institutions. And while this increasingly digitized nation of more than 200 million customers may be entering an upswing in prosperity and confidence, its online culture of bargain-hunting and recent memory of corruption, scandal and the risks inherent in data may not dissipate overnight.

In France, we see a nation of digital enthusiasts, one of the world’s top five nations for e-commerce and the first with a national online commerce network dating as far back as 1981. With three decades of e-commerce history, it should be no surprise that online purchasing is not limited to Millennials. Yet, while keenly embracing technology, French customers are doing it on their terms, expressing distaste with being treated as a data point, and demanding human, personalized interactions and experiences with brands. They know the value inherent in their data to brands and other institutions, and are willing to share it for the benefit of personalization. But trust is found lagging, particularly in banks, technology and telecom companies.

The global viewpointCitizens of global change and forces, but with a distinctly local response

Executive summary:



Turn to the vast and rapidly changing country populated by 1.3 billion Indian customers, and diversity becomes strikingly apparent. More akin to a continent than a country, India is home to a collection of languages, religions, demographics and more, as well as vastly different urban

compared with rural connectivity and behaviours. While smartphones have become part of everyday life for the 10 percent of India’s citizens who reside in its 10 largest urban centers, the digital revolution, and with it, new access to information and choice, is revolutionizing commerce and

customer engagement across the vast expanse of the mainland. Caution is noted, however, that adapting to the Indian market is essential, especially given the time-poor nature of customers, with differing motivations and life goals than in the West.

Meanwhile, the UAE’s modest, yet affluent, population of around 9.5 million citizens is witnessing a comparable but equally different digital revolution. This highly connected nation places great value on social and immersive entertainment and experiences that accompany the Gulf states’ expansive malls. But citizens are being encouraged to embrace the value of technology through the digitization of public services and investment in smart cities. This will only serve to raise the bar for those keen to engage a population unlikely to turn their back on the offline customer experiences that typify their day-to-day lives.

Further east, in China, the dramatic growth of a handful of dominant platform businesses such as Alibaba and Tencent continues on its pervasive path, accelerated by a growing middle class and trend towards urbanization comparable only to its equally populous neighbour India. Due to dramatic differences in customer motivations and attitudes between top-tier cities and more urban areas, technology looks set to continue its profound impact for the majority of citizens, only set to play out in very different ways across

“ Customers are changing all around the world, subject to common forces and factors, but often with an uncommon response.”

of global CEOs say that, rather than waiting to be disrupted by competitors, their organization

is actively disrupting their sector

54%



the country, raising the localization and personalization imperatives for organizations seeking to capture increasingly connected customers.

Returning to the West, the UK’s rapid digitization of its recent past and status as the ‘Connected Kingdom’ is no longer necessarily a guide to its future. Uncertainty grows stronger as the implications of leaving the European Union remain opaque, both politically, economically and societally. The impact on UK customers’ choices, should their wallets face new pressures in 2019, remains unclear.

Meanwhile, the evolution of attitudes towards trust and data privacy continue to compound organizations’ efforts to engage customers, subject to an advancing regulatory environment. It remains to be seen whether new regulation will enhance customers’ feelings of protection or lead to a further retrenchment in sharing data.

Finally, the U.S., seems to be our neighbor only in proximity. We see customers increasingly carrying their opinions with them when they spend, further complicating a market as diverse as its Eastern counterparts, if unmatched in scale. Trust is uncertain and customers continue to value and reward those organizations

that deliver meaningful customer experiences. Technology and its adoption in customer engagement continues to flourish as Silicon Valley and others look for smarter ways to get things done, and create evolving or innovative business models.

While customers in each of these markets are subject to many of the same forces of change, and often talk of many common themes affecting their Five Mys, the nuances are vastly more significant than some may at first assume.

The search for deep customer understanding is not a new idea, but it has grown in importance. Customers are responding differently to this changing environment, not just by generation or income level, but influenced as well by national culture and context.

Those organizations that reflect this in how they design and deliver products, services, propositions and experiences, and organize and structure their businesses to do so, stand only to increase their relevance to an evermore complex customer.

“ The search for deep customer understanding is not a new idea for 2018, but it has grown in importance.”

Brazil China France India

UAE US UK

The global customerLearn more about the unique trends shaping the customers in each of these markets.

Visit kpmg.com/knowyourcustomer



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http://www.kpmg.com/knowyourcustomer

http://www.kpmg.com/knowyourcustomer

Traditional research methods work best when the future looks like the past, but in a time defined by seismic change and greater volatility, new

ways of thinking are needed to reach new insights.

Building on our multilayer research framework, as well as design-thinking practices developed by KPMG Innovation Labs for our inaugural Me, my life, my wallet report, we’ve gone further this year by talking to, surveying and conducting ethnographic research with more customers in more markets around the world. Critically, we don’t rely on any one of these activities alone to paint a picture of the future; it’s

in their combination that the sum becomes greater than its parts.

We begin by understanding macro trends, identifying social, technological, economic and political signals of change. We then layer on a combination of scientific data and fact-based historical and economic data, before adding original ethnographic research to understand the ‘why’ behind behaviour.

We combine this developing picture and the ethnographic findings to inform questions for our primary survey, to test the prevalence of behaviours. Our approach starts with deep qualitative research to uncover insights that don’t come out through

MethodologyThe context behind our unique, multilayered approach to generating fresh insights

Scientific

Quantified and historical

“ We start with trends research because that is where the early signals appear. The fringes of behaviour and the outlier activities of today can be the major trend waves of tomorrow. In addition, we layer in neuroscience, ethnography and historical research, which are critical components to enhance the quality of our insights …”

COLLEEN DRUMMOND Head of Innovation Labs, KPMG in the US



traditional market research, moving from signals, to hunches, to hypotheses that are tested, validated and quantified.

Why does this approach get better answers? Baked into each layer of data is an opportunity to check our cognitive biases, and keep exploring the unknown–known and unknown–unknown territories. Put simply? It helps us go hunting for insights in the right areas, asking the right questions.

Our methodology is a unique and multi-layered approach that includes:

– Inputs from a survey of 18,000 online customers in 51 countries by geography, generation and product category

– Inputs from our Global CEO Survey of 1,300 business leaders from around the world

– Inputs from our Global Consumer Executive Top of Mind Survey of 526 senior executives from 31 countries where 60 percent expect the market to become more volatile

– Two new surveys of approximately 25,000 customers from Brazil, Canada, China, France, India, the UAE, the UK and the US across demographics and life stages

– In-depth ethnographic interviews with 196 customers in Brazil, Canada, China, France, India, the UK and the US

– Quantified evidence of trends over time

– Neuroscience theory and frameworks behind decision-making and behaviour

– Extensive industry sector disruption research

Quantified and historical

Ethnography

Survey

Trends analysis



You may not know it, but you have already been disrupted

The wake-up call

state, both opportunities and threats, as well as the continuing transformational disruptions to come. Are you prepared? It’s insufficient to just talk about ‘innovation’ or ‘digital’; we also have to be able to execute.

When we talk to business leaders around the globe, we find consistent agreement that we’re in a transformational time — with most believing we will see more change in the next two to three years than in

the last 50. But too many executives also say that their companies haven’t been, or somehow won’t be, affected. Not only do we strongly disagree — we think this is evidence of a significant and dangerous disconnect. Our world has been turned upside down. Companies and industries are not just ‘in disruption’, a verb, they are disrupted — a noun! And this upheaval and transformation will continue.

The pace of change has never been this fast, yet it will never be this slow again.” So remarked Justin Trudeau, prime minister of Canada, at

the 2018 World Economic Forum summit in Davos.

It’s one thing to recognize that disruption is happening, across organizations, sectors and geographies. But it’s quite another to acknowledge we ourselves have been disrupted, and therefore our business strategies and related tactics have to meet our current

“

“ Are you willing to stake your future customer loyalty on your current customer strategy? Start building your customer-centric organization of the future, today.”

LET’S DO THIS.



CitationsArticle Page Reference Source

Generational surfing 21-24 Canadian Gen X population size Source: 2016 Canada Census

21-24 Gen X wealth decline, 2007–2010 Gen X rebounds as the only generation to recover the wealth lost after the housing crash, Pew Research, 2018

21-24 15% of Gen Xers dip into savings to cover everyday spending

Generation X (Gen X), Investopedia, 2018

21-24 Gen X social media usage 2016 Social Media Report, Nielsen, 2016

21-24 Notable Gen Xers Source: Generation X goes global

21-24 Gen X time spent browsing online for shopping From Browse to Buy: The Conversion Challenge, Barclays Bank, 2017

Gen X and Gen Z: The alternative echo effect

25-26 Gen X experiencing both parents working How do you get the best from Generation X?, University of New South Wales Business School/South China Morning Post, 2017

25-26 Children’s time spent playing outside in the UK Kids spend half as long playing outside as their parents did, National Trust/Daily Mail, 2016

25-26 Fortnite in-games sales revenues Report: ‘Fortnite: Battle Royale’ Made Nearly $300 Million Last Month, Forbes, 2018

Wealth and retirement: Delay and pray, or avoid?

27-28 Global savings gap Global Pension Timebomb: Funding Gap Set to Dwarf World GDP, World Economic Forum, 2017

Can your customer trust you?

39-41 Consumers’ attitudes towards data Crossing the Line, KPMG International, 2016

39-41 Consumer expectations of personalization KPMG 2018 CEO Outlook, KPMG International, 2018

39-41 Customer Experience Excellence 2018 Global Customer Experience Excellence Analysis, KPMG International, 2018

It’s the future. Do you know where your customer is?

43-48 Customer Experience Excellence 2018 Global Customer Experience Excellence Analysis, KPMG International, 2018

The future of interactions 49-50 Social media usage by generation Pew Research Center, 2018

49-50 Millennial internet access by smartphone Pew Research Center, 2018

49-50 Consumers’ attitudes towards data 71% of consumers worry about brands’ handling of personal data, study finds, ExpressVPN/Marketing Dive, 2018

B2B: The human factor 51-54 96% of Canadian CEOs are confident their company will experience growth over the next three years

Going pains: 2018 Canadian CEO Outlook

51-54 96% of Canadian CEOs see technological disruption as an opportunity rather than a threat


51-54 44% of Canadian CEOs list appointing leaders that can better relate as a top challenge in meeting the needs of Gen Y


Executive summary: The global viewpoint

55-58 54% of global CEOs say that, rather than waiting to be disrupted by competitors, their organization is actively disrupting their sector

KPMG 2018 CEO Outlook, KPMG International, 2018

The wake-up call 61 Justin Trudeau WEF speech Justin Trudeau’s Davos address in full, World Economic Forum, 2018



The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

© 2018 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 20317

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Let’s do this.Do you know who your customer is? Will they still be there tomorrow? And are you willing to stake your future customer loyalty on your current customer strategy?

KPMG’s professionals can help you better understand the changing customer landscape and support you in building a customer-centric strategy for the future. Let’s do this.

kpmg.ca/customer-insights

KATIE BOLLAAssociate Principal, Customer and DigitalKPMG in [email protected] | 416-777-8720

SYLVIA KINGSMILLNational Leader, Digital Privacy and ComplianceKPMG in [email protected] | 416-777-8190

SHREESHANT DABIRNational Leader, Data and AnalyticsKPMG in [email protected] | 416-777-3626

WILLY KRUHGlobal Chair, Consumer & Retail KPMG [email protected] | 416-777-8710

COLLEEN DRUMMONDPartner in ChargeInnovation Labs at KPMG IgnitionInnovation & Enterprise Solutions KPMG in the [email protected] | 804-399-3858

JULIO HERNANDEZCustomer Advisory Lead KPMG in the USGlobal Head, Customer Center of Excellence KPMG [email protected] | 404-222-3360

PETER HUGHESCustomer and Digital Services LeaderKPMG in [email protected] | 416-777-8594

KPMG in Canada KPMG International

Contacts

https://home.kpmg.com/ca/en/home/campaigns/2018/09/lets-do-this.html?cid=int-refn_hpb_ca_2018_lets-do-this&utm_medium=refn&utm_source=int-hpb&utm_campaign=2018-lets-do-this

http://www.kpmg.ca/customer-insights

https://linkedin.com/company/kpmg-canada

https://twitter.com/kpmg_canada

http://www.youtube.com/kpmgcanada

https://instagram.com/kpmgcampuscdn/

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