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12Jul, 2017

E-commerce in Funeral Industry – Driving Customer Experience at least expected Places

Author Chris Wilson Category

Did you ever imagine that one day you would be shopping for funeral services online? Probably not. But, we now live the world where e-commerce has left its mark on every possible industry, including funeral industry.

A niche, funeral industry rakes in more than $20 billion each year while serving an average of 2.4 million funerals in U.S. alone. A typical funeral in the U.S. costs anywhere from $8,000 to $10,000. A very high cost, considered unfortunate but unavoidable.

But e-commerce is here to change that. In this blog, we will have a look at the factors driving e-commerce growth in the funeral industry.

Industry Overview

Before we get to how e-commerce is revolutionizing the funeral industry, let us have a quick look at the industry by numbers (in the U.S.).
Funeral Industry Statistics
Source: PBS and NFDA

Factors Driving E-commerce Adoption

There are multiple factors driving the e-commerce adoption in the funeral industry like

1) Rising Costs and Lack of Transparency

Consider this,

  • The average cost of a funeral in U.S. is between $8,000 – $10,000
  • Cremation rates are rising fast and nearly 50% of Americans choose cremation. In 2010, one-third of those who chose cremation said cost was a primary factor (up from 19% in 1990).
  • A casket that sells for $1300 and above at a funeral home will typically wholesale for about $325.

Thanks to this, and lack of transparency in the industry, people had started to see undertakers as a salesman. Because of this, people now prefer planning funerals in front of the computer. This is exactly where an e-commerce store can help.

An e-commerce store will not only bring transparency to the entire process but will also enable the businesses to offer the services at a much lower cost.

The pioneer setting a trend as far as costs and pricing are considered is the funeral services company ‘Willow and Werth’. The pricing variants they offer, for the quality caskets and coffins they provide, is much lesser compared to what funeral homes offer – and they attribute this largely to the e-commerce adoption.

2) Increasing Popularity of E-commerce and Consumer Preference

Consider this,

  • According to eMarketer, the global retail e-commerce sales in 2016 was around $1.915 trillion and is expected to reach $4 trillion by 2020 (eMarketer)
  • 224 million shoppers in U.S. alone spend nearly $385 billion online in 2016 (Business Insider).

This clearly points towards the growing popularity of e-commerce as a channel of sale. This e-commerce growth, however, is not limited only to certain industries. A similar trend can be spotted even in the funeral industry. According to funeralone, in 2012

  • $240 million was spent online on sympathy gifts and flowers.
  • 93% of people purchase gifts or flowers to express their support to grieving families.
  • There are more than 200,000 searches on Google for sympathy gifts and flowers each month.

This clearly indicates that e-commerce in funeral industry is here to stay. In addition to this, the target segment for the industry is also changing. By 2020, Generation Z (born 1995 – 2010), that lives and breathes e-commerce, will represent 40% of all consumers (NFDA). So funeral businesses must seriously consider leveraging e-commerce to their advantage or risk becoming irrelevant.

An e-commerce store will not only help you increase visibility but also display the exquisite workmanship and quality of the products in great detail.

3) Globalization

We are probably using the term loosely here but hear us out. We live in a time when a large number of individuals stay away from their families, for work and other reasons. Their commitments and schedule prevent them from being present in person at the grieving time.

  • 87% of consumers associate giving sympathy gifts & flowers as an expression of love, care, and concern
  • 80% of e-commerce sympathy gift orders are from out-of-town families

(source – funeralone)

For consumers, with such predicament, an e-commerce store gives them an opportunity to send their condolences to their loved ones.

4) Difficulty in Finding and Comparing Services

A Swedish venture capitalist in an interview had said,

Our idea is that there are many people who have the feeling that the undertaker is, in fact, a salesman. And they prefer to deal with the planning themselves, in front of the computer rather than sitting in a lot of meetings

This echoes the feeling that most consumers today have. While they value and look for expert opinion, they still want to do their own research before arriving at a decision. Why? Because they can do this at their own convenience and no one can rush them to arrive at a decision. And businesses understood this long time back.

”When you visit casket dealers online, you can look at something over and over again. You’re not pressured — you have time to look with relatives and friends. It’s really easier online.” – Jay Kravetz, editor of Death Care Business (The New York Times, 2003).

The e-commerce store thus makes it easy for your customer to find and compare products/ services. Doing this otherwise is a huge challenge. The offline funeral industry is highly fragmented making finding and pricing funeral services a real pain; you might have to make a number of calls to ask for availability and pricing.

5) The Need for Personalized Services

During the phase of bereaving the death of a loved one, there is the need to identify many items and services, source it individually, and then put all of that together – it’s more effort than some people would like to go to, especially when they’re in a state of mourning.

Customers, during this stage, do not want to have numerous meetings with the funeral homes and would rather work with just one person to make all the necessary arrangements. An e-commerce store can enable businesses to offer just that.

Funera, a Swedish e-commerce company, entered the funeral market in 2004. Funera specializes in offering complete after death services. It even offers a consolidated package that includes everything from selecting caskets, choosing of a slot on the cemetery, to the flowers and other decorations. They even offer a service to arrange an online funeral for the loved ones of the departed in faraway shores.

Yiko from China is another player offering similar services. On Yiko, you can both pick and choose what you need and go with a more all-inclusive one-stop service package. You can search for available grave plots in major cities like Beijing, with prices, ratings, photos, and map integration all there to make it easy to compare options. Yiko also allows you to buy 3D printed models of the deceased, right on their site.

In summary, rising costs, lack of transparency, rising popularity of e-commerce, changing demographics, the need for personalization, difficulty in finding and comparing products/services, etc. make a very strong case for businesses in the funeral industry to drive customer experience using an e-commerce store.

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E-commerce in Funeral Industry – Driving Customer Experience at least expected Places