At Global Bronze, we are witnessing a transformation of our customer’s markets and their modus operandi. The traditional business models used in the funeral industry no longer align with consumer demand, and operators are scrambling to compete in the modern environment. Our mission is to assist operators in their journey of navigating industry shifts and provide insightful solutions to capitalize on emerging trends.
Our current customers are more diverse than past generations, and new customers are entering the field that are first generation operators. One factor that led to this shift is the reduced barriers of entry in the funeral market. These businesses once required a large up-front investment, including expensive real estate in desirable locations. As the demand for cremations rose, the physical location of funeral parlors became less of a competitive advantage. In addition, smaller teams can replace the roles of Funeral Directors, Advisers, embalmers, etc.
Cemeteries face a similar crisis affecting their long-term financial sustainability. Based on projections, the U.S. cremation rates will exceed 50% by 2018, and will continue to rise. Another factor affecting profits are default accounts or “no shows” for cremated remains. The ashes are traditionally prepared for inurnment or scattering at a meaningful location. Unfortunately, up to 80% of cremains do not find their way to cemeteries, meaning some garages and attics are full of “forgotten” urns. The rising costs of burial expenses force customers to look for new methods of memorialization.
Stonemasons that produced headstones and memorials faced increased competition and low price margins, and many shifted their focus to being a dealer instead of a manufacturer. This shift provided the opportunity for both small-batch manufacturers and overseas production facilities to compete in global markets. Monument dealers also feel the pressure from cemeteries and funeral homes that became dealers and cut into their market share. However, large-scale dealers enjoy higher purchasing power that allows them to control their costs.
Funeral homes are losing their traditional casket revenues due to competition from specialty casket shops or big box retailers like WalMart and Costco. Funeral homes attempt to recoup some of those profits by offering cremation services, banquet hall rentals and similar amenities. Even larger hotel chains are getting into the business of offering the same reception services after funerals. As an alternate strategy, many funeral homes are choosing to add glass or granite niches for cremated remains located on their current property (subject to law restrictions) or on separately purchased plots of land. Funeral homes benefit by having early access to the family members making arrangements, and they can package the memorial & inurnment services together thus replacing the lost casket revenue.
In contrast to the historical separation of roles, operators are getting into adjacent lines of business hoping to gain market share and sales volume. Businesses without sustained sales volume will fail, therefore the focus needs to be on expanding opportunities. Consolidators are still very active in acquiring smaller operators, particularly those without family members who plan to continue the business. While there’s no doubt that consolidation will play a role, the mergers will not be at the prices we saw in 1980’s and 1990’s.
Outside of proper inventory considerations, businesses also need to dedicate appropriate time to marketing their products and services, even on a limited budget. Using social media is a highly effective way to stay competitive in global markets at a relatively low cost. It’s vital to design and implement online selling systems to effectively market your business to new generations.
At Global Bronze, our goal is to forge a strong partnership with our customers to help them sell more, at higher profit levels. In our re-branding efforts, we launched a new media division to sync with our customer’s needs and assist them with growing their businesses and offering additional products. We’ll also focus on areas of new product development, new patents (like the previous E-Z Plaques), contemporary product designs, seamless ordering and economical shipping for their customers. Our relentless focus on professionalism, quality and timeless designs keeps raising the bar to serve you better.
This still begs the question: How will traditional companies win in the modern funeral industry?
The profitability of the funeral market is still secure, but it’s relevance in the long run depends on the education of the public via marketing channels such as social media. The biggest industry competitor is not any individual company, rather a general lack of demand for the industry, particularly displayed by the younger generations. The sentiment that they’d “rather spend the insurance money on vacation than on burying our relatives” is becoming more and more frequent. As an industry, we must work together to combat the possibility of becoming irrelevant to the consumer markets.