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Three business trends every funeral director should watch

Every funeral director wears many hats. The one often overlooked is that of a business leader. Running a funeral business is a unique and quite special calling, but that does not mean those who do so are not also studying wider business trends.

Of the many changes taking place in society and our economy now, there are three that will resonate more than most in our sector. 

Trend #1: digital consumerism

Consumer behaviour is always changing and part of the challenge for any business that serves consumers is to keep abreast of how those changes are taking place. The role of digital channels has been closely watched by all of us. 

For example, over half of retail sales either take place or are influenced by digital channels; many retailers now see over half their website traffic coming from mobile devices; and as people become used to using multiple screens simultaneously, how you interact on one channel (for example, Facebook) could influence behaviour on another (your website).

None of these phenomena are new to the world we now inhabit with coronavirus. But digital consumerism has accelerated dramatically this year, with older audiences catching up on some behaviours typically associated with younger demographics.

For example, according to the Capgemini Research Institute, one in three over 60s will increase their use of digital payment channels in the next six months.  Indeed, our own research demonstrates how digital purchases are now more the ‘norm’ than telephone purchases for over 70s. In statistical terms, over 70s are three times more likely to buy something online than on the phone. 

To put that into a funeral planning context, we know that four out of ten people considering a plan purchase would happily do so using video conferencing technology now – something I don’t think anyone would have predicted at the turn of the year.

Digital channels will never replace the immediate benefits of meeting a funeral director and getting the support you need. But the increasing tendency of consumers to shop – and compare – remotely does emphasise how important it is for funeral directors both to have an online presence and the facility to use video such as Facetime, Microsoft Teams, Skype or Zoom with consumers.

Trend #2: commoditisation

The growing average cost of organising a funeral or crematorium service, and ongoing affordability issues for lower-income groups, have been the central pillars of the competition regulator when investigating the sector. 

Transparency on price is viewed by many as the key that unlocks competition and delivers more fairness for consumers. Providing the right level of easily accessible information on products and services is the key to helping consumers make informed decisions. But there is a balance which needs to be struck. Taken to its natural conclusion, a fully commoditised funerals market would likely lead to price pressures on certain offerings which may ultimately restrict choice for consumers. 

Avoiding full commoditisation is an increasingly important trend across the world. Margins are being squeezed in many sectors, particularly given how price sensitive many consumers have become in the broader context of online shopping, and how open they are to researching and comparing products and services. 

Similar behaviours in the funeral space will make it more important than ever for funeral directors to stand out in other ways. What do clients really value? Could that differ from one to the next? 

Innovating is also important. Will some respond to the new trends developing in eco-funerals, or in live streaming? Or, conversely, might others bundle their offerings to appeal to ‘premium’ clients looking for a more substantial service? 

John Quelch, a Professor of Business Administration at Harvard Business School, claims that the most overlooked investment a business can make in the face of commoditisation is in customer relationship management. Understanding the price different types of customer paid, and the costs of serving those needs, he claims, could be critical to identifying how and when to preserve margins. 

Whatever path a funeral director might choose, as commoditisation takes hold it will become essential to understand how to compete and differentiate in an increasingly fluid sector.

Trend #3: shop local

The shop local trend is accelerating globally, with many consumers expressing a desire to protect their communities and, particularly, their independent traders. 

From buying local groceries to supporting independent retailers proactively, anecdotally we know that people are currently enjoying a renewed commitment to their local community. 

But will it last? As the effects of the coronavirus pandemic are here to stay for some time, it is a safe bet to assume elements of it certainly will. Lockdown seems to have turbo-charged our local mindset, which prioritises the needs of small, independently run businesses over larger, more homogenous alternatives.

But as lockdown restrictions ease and the attractions of the larger conglomerates return, it will be the task of local traders to reinforce their credentials and continually remind people of supporting their local professionals.

This is a really important trend for funeral directors, particularly those that are independently run. Most funeral directors feel keenly their responsibility to their communities. They are integrated into the local fabric of society in a way few other businesses would dare claim to be. There are subtle ways to re-emphasise the importance of supporting your local community – and funeral directors who do so could well benefit.

In reflecting on each of these trends, the common thread is change, and pace. The funeral sector has had to respond to many changes but these are without doubt fresh challenges to the status quo. I have every confidence the sector will flourish, and adapt, as it has done for centuries.

 

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