Demographics on the move

Taking a cab ride in Saskatoon can be very instructive. The driver is clearly well-educated and curious about what you are doing in town.

Turns out he’s from Bangladesh, has an MBA, and is moonlighting to help fund his grocery store start up that caters to the tastes of a South Asian neighbourhood. There’s an opportunity, he feels, to take on an established business across the street.

Immigration waves are felt all over Canada in every province, affecting the way many enterprises — including flooring businesses — cater to their “neighbourhood” demographics. According to Statistics Canada, between 2000 and 2010, annual immigration to Canada rose from 227,500 to 280,700.

Where are they going and where did they come from? The answers lie in Changes in the Regional Distribution of New Immigrants to Canada, a report by Aneta Bonikowska, Feng Hou, and Garnett Picot of Statistics Canada released earlier this year.

So where have they gone? The study specifically examined changes in both intended and actual settlement destinations of new immigrants. Between 2000 and 2010, the authors say, the share of new immigrants intending to settle in Toronto declined from 48 percent to 33 percent, while the share intending to settle in Montreal increased from 12.5 percent to 16.6 percent.

In the west, the share intending to settle in Alberta increased from 6.3 percent to 11.6 percent, the share intending to settle in Manitoba increased from 2.0 percent to 5.6 percent and the share intending to settle in Saskatchewan increased from 0.8 percent to 2.7 percent. The share intending to settle in Vancouver declined from 14.6 percent to 13.3 percent.

“We try to purchase products that will work with all the various different demographics,” says Connie Barillari, product manager with Ceramic Shnier.

“In some parts of the east coast they buy more vinyl,compared to Ontario and Quebec, which purchases more
porcelain or wood.”

Ahead of the Americans

Terrazzo Tile & Marble Association of Canada (TTMAC) member Shnier is conscious of trends and Canada’s ethnic diversity, Barillari notes. “Canada is also a very fashion-forward country compared to the United States, and we do follow the ethnic requests that we get. Consumers here are quite up to date.”

Canada’s more rural areas have a bit more traditional tastes, she says. “But nowadays with globalization and all of the television programs about design trends and renovations, you have more and more people that are very knowledgeable about products — not like they used to be.”

And where did recent immigrants, with their diverse design tastes, come from? The source region of China in 1999/2000 accounted for 21.3 percent, according to Statistics Canada, dropping to 12.8 percent in 2009/2010. From India and South Asia, the percentage was 21.7 and 18.1, respectively.

The next largest source regions were Africa (9.1 up to 14.5 percent), the Philippines (5.1 up to 14.0 percent) and West Central Asian and the Middle East (8.4 up to 8.9 percent).

The climate factor

Canadian Flooring Cleaning and Restoration Association (CFCRA) president Jason Walker is not precisely sure how much changing ethnic demographics is changing the flooring industry.

“There is the big stereotype that Italians prefer tile floors, but is that demographics or just what you grew up with?” asks Walker. However, he has noticed an ethnic Chinese consumer preference in hardwood floor trends towards clear maple rather that with characteristics such as darker tones, knots or stressing.

Bigger than ethnic demographics, Walker adds, is that purchasers are more likely to buy the flooring that best suits their local climate, such as tile in hot-weather areas. “Go anywhere it is hot and humid and you’ll find more tile and stone floors,” Walker says.

“Certainly in areas where it is colder, people install more carpet than ceramic tile,” said Barillari. “And because Canada has more recent immigrants, there is purchasing in that direction — but I think it also depends on where they come from.

“Per capita what we purchase in ceramic tile compared to the U.S. is a lot more because of the ethnic groups that we have in Canada.”

Walker agrees with Barillari that TV shows are driving trends in the flooring market. “Home renovation shows on television are definitely affecting tastes,” he says.

“For example, LV products shown on TV have people asking us what LV is. This is a product that we hadn’t heavily inventoried in the past.”

When it comes to the age demographic — younger versus older buyers — Walker and Barillari both agree and disagree.

According to Barillari, “there is really not a big difference in younger and older in tastes because they both go into a show room or a design centre and they will say ‘I want that’. I don’t think there is a big difference any more because everyone is following the trends.”

Walker believes there is a buying age difference, but that it is purchasing power that is dictating decisions over taste trends. “First time buyers tend to go for inexpensive carpet or vinyl floors. As the consumer gets older they are willing to spend because they have more money and want to live in the house longer.

“Older customers are also looking for more traditional flooring such as wood or stone patterns. Renovations of small or tiny houses may go for fad floors such as rubber or cork while larger homes go for a more timeless look.”

Barillari agrees that purchasing power does play into consumer decisions. “If they go into a design centre or chose a builder’s program they won’t buy the upgrade package. The older, mature buyer will get the higher level product such as more natural stone.”

Decisions for suppliers based on demographics in the flooring industry, whether by age, ethnicity or geography, are often driven just by plain common sense.

For example, flooring sales will see increases in areas of the country where building permits are on the rise. These kinds of statistics help to inform the supply chain of what’s coming down the pike. Most recently, Statistics Canada reports that the total value of building permits decreased 3.7 percent to $7.5 billion in August this year, with Ontario registering the largest increase in the value of residential building permits.

The New Housing Price Index (NHPI) from Statistics Canada provides a window into geographical demographics, too. The NHPI in August rose 0.3 percent, largely the result of higher new home prices in Ontario. New home prices declined 0.1 percent in both Charlottetown and Victoria. Builders in Charlottetown lowered prices to encourage sales, Statistic Canada has reported.

So whether or not recent immigrants will occupy these new homes, the market is still a huge one in Canada for flooring opportunities.

But the last —  and the best bit of demographic common sense comes from Jason Walker: “99 percent of buyers are not going to put laminate in a million-dollar home.”

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