Environics Analytics’ PRIZM5 Segmentation System Captures Changing Consumer Landscape

Women aged 18 to 34.
Households with incomes under $100,000.
Men aged 35 to 50 who earn over $200,000.

When it comes to marketing, most campaign managers still view consumers through the lens of age, sex and income.

But the consumer landscape has undergone massive upheaval of late, with online and mobile shopping and social media sites competing with traditional outlets to capture the attention of today’s consumers. As a result, marketers are under increasing pressure to better target customers and prospects, and many are turning to geodemographic segmentation to make sense of what consumers are thinking, buying and doing.

Based on the demographics and lifestyles of small neighbourhoods, geodemographic segmentation helps marketers develop informed strategies for prospecting new customers, re-aligning sales territories, cross-selling existing customers and predicting future opportunities. And in today’s fragmented marketplace, segmentation is especially valuable in identifying increasingly narrow target audiences and speaking to their interests—be it sustainably sourced products, civic duty or international travel.

This spring, the Canada population came into sharper focus when Environics Analytics (EA) released its latest edition of PRIZM5, the nation’s most widely used geodemographic segmentation system. For 2016, PRIZM5 has identified 68 distinct lifestyle types with names like Urbane Villagers (wealthy middle-aged urban sophisticates), Pets & PCs (younger, upscale suburban families) and Jeunes d’Esprit, or “Young at Heart” (older, lower-middle-income rural couples in Quebec). By integrating data from nearly a dozen demographic, social values, marketing and media sources, PRIZM5 offers up-​to-date insights so marketers can position their brands to match changing consumer tastes. And taken together, the 68 lifestyles highlight the dynamic trends that are reshaping Canada’s landscape.

PRIZM5 includes 68 lifestyles spanning 19 Social Groups and 14 Lifestage Groups in settings that range from urban, suburban and exurban to town and rural.

A Diverse Consumer Landscape

Across many dimensions, Canada’s profile is remarkably diverse. With a population of 35 million, Canada is growing at a rate of more than 1 percent a year—the fastest among G-8 countries—but the growth is far from uniform across the country. While birth rates have been declining as young people delay marriage, immigration accounts for nearly two-thirds of population growth, with much of it occurring in cities. Today, 22 percent of Canadians are immigrants, 11 percent speak a non-official language at home, and 21 percent self-identify as members of a visible minority. Many of the major cultural communities in Canada’s big cities have experienced strong growth, particularly the Chinese, South Asian, Filipino, Latin American and Arab populations.

PRIZM5 reflects this increasing diversity with the emergence of segments like Asian New Wave (younger, well-educated Asian singles and families), South Asian Achievers (suburban upper-middle-income South Asian families) and Enclaves Multiethniques, which grew more than 10 percent in the last year. Concentrated in Montreal neighbourhoods, the segment consists of younger city dwellers and is unusual for its significant presence of francophones and immigrants from such French-speaking countries as Algeria, Morocco, Haiti and Vietnam. Despite their lower-middle incomes, these young consumers make a strong market for nightclubs, dating services, pop music concerts and team sports like soccer and football. Marketers should note that many Enclaves Multiethniques members also like to travel, and not just to visit their home countries but also to explore closer-to-adopted-home cities in Quebec, Ontario and the Northeastern U.S.

But cultural diversity is no longer simply a big-city phenomenon. Although nearly half of the populations of Toronto and Vancouver consist of visible minorities, second-tier cities like Saskatoon, Regina, Oshawa and Brandon, Man., have also seen their diverse populations grow rapidly. Part of this trend reflects internal migration of second- and third-generation Chinese and South Asian immigrants.

The fastest-growing immigrant group consists of Filipinos, many of whom are settling in communities like Brandon due to government programs specifically designed to attract immigrant groups. In Newcomers Rising, a segment of younger, downscale city immigrants, 7.3 percent of members are Filipino—the highest concentration in the nation. Although their entry-level jobs typically result in low household incomes, they have above-average rates for university educations and high rates for going to classical music concerts, film festivals and health and living exhibitions. The takeaway for those involved with diversity marketing is that their focus should extend beyond big cities and look to fast-growing medium-sized urban areas. 

Another dimension, the nation’s aging population, is also revealed in the 2016 PRIZM5 system. Fifty years ago, Canada was home to four and a half times the number of children under the age of 15 as seniors over the age of 65. But those kids have grown up, and today seniors outnumber children. Many Baby Boomers are choosing to age in place, creating segments like Aging in Suburbia (older, upper-middle-income suburban couples and families). Indeed, PRIZM5 identifies 18 segments with high proportions of Boomers, including many exurban and rural segments.

As they have through most of their lives, Baby Boomers profoundly affect the marketplace. Because they’re living longer with a better quality of life than any previous generation, they’re staying in the workforce longer. In Country Acres, a segment of older rural couples and families, nearly a third of the residents are Boomers—and 63 percent are still in the labour force, mostly in service sector and blue-collar jobs. Staying on the job longer translates to more disposable income for buying boats and ATVs, outfitting trucks with satellite radio and homes with hot tubs, and spending weekends going to pro sporting events. Marketers need to take note that these Boomers, with their deeper pockets and fewer child-related obligations, will represent a much larger market for premium products and services in the coming decade. 

Boomers are also making different housing choices than previous generations. They live independently later in life, staying in their homes longer and refusing to move to senior care facilities or their children’s residences. If they do choose to downsize from their suburban homes, they’re increasingly moving to condos in downtown neighbourhoods. Single City Jazz, a segment of younger, diverse singles in city apartments, saw a 6.4 percent increase in Baby Boomers—to 65,310—the largest percentage increase in Boomers of any segment. The segment also saw a comparable 6.0 percent increase in the number of apartments—189,000 units—to help accommodate the new residents in its city neighbourhoods.

At the same time, Millennials, those 15 to 34 years old, are rapidly taking centre stage as the nation’s largest demographic group. Today, they number 9.3 million people—27 percent of the Canadian population—but they’re hardly a monolithic group. PRIZM5 identified six segments where Millennials have left home and are in various phases of finishing school, starting jobs, and beginning families. In segments like Urban Digerati and Street Scenes, both filled with young, independent city dwellers, the number of Millennials rose by more than 5 percent in the last year.
But as household formation rates have declined over the past ten years, other groups of Millennials have delayed leaving the nest. In affluent, urban segments like Cosmopolitan Elite and Urbane Villagers, these Millennials are still living with their parents in relative comfort. And in Boomerang City (upscale, multi-generational urban households), older children either have returned home after post-secondary education or never left their family home. Of course, multi-generational households are not unusual, especially among segments with a high population of culturally diverse members. But these segments offer companies a unique opportunity to reach both young adults and their older parents with products, services and perhaps even jobs intended to encourage the emptying of the nest.

The Gravitational Pull of Urban Centres

Another trend captured by PRIZM5 is the migration to urban centres. Between 2010 and 2015, the six largest CMAs (census metropolitan areas) grew 8.7 percent compared to 3.4 percent for small towns and rural areas...

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