The winds of change are blowing through the funeral industry, and Glendale-based Forest Lawn Memorial Parks & Mortuaries is among those in the industry adopting new strategies to avoid getting buried by competition.
One problem is that today's customers, especially Baby Boomers, are bypassing many of the high-dollar funeral expenses caskets, cemetery plots, elaborate ceremonies and opting for cheaper cremations, urns and private ceremonies.
"Not much has changed with regards to funerals in the last 100 years," said John Warren, a spokesman for Forest Lawn. "But when change comes, as it is now, we have to react quickly to the patterns that are emerging."
Funeral homes across the country are revamping the very image of a funeral to attract business.
"Personalization is huge. We've had everything from monster trucks to motorcycle clubs involved in funerals," Warren said. "It's still sad when a loved one passes, but we're trying to approach it more from an event-planning mindset than a funeral-planning mindset. Trying to make it more like a celebration of the person's life and less of a sad, somber event."
The most prominent sign of change at Forest Lawn is the "experiential" funeral-planning center in its Cathedral City facility, which opened in August. The traditional casket showroom and many other aspects of the "old" industry have been replaced by 43-inch plasma monitors used to view wedding-style videos and viewing rooms that more closely resemble banquet halls than churches. The planning of a funeral, and the funeral itself, Warren said, is a more interactive and customized event.
Though traditional funerals are still the most popular nationwide, thinking outside the casket has become more in vogue, especially in California.
According to a study released by the Cremation Association of America, almost 30 percent of American funerals in 2004 involved a cremation. In California, that number was 52 percent.
Ralph Torres, the general manager at Angeleno Mortuary in Van Nuys, has also seen an up-tick in cremations, especially in the Latino community.
"Before, the Catholic Church wouldn't allow cremations, but they changed their stance on that and now a lot of people choose them because they're cheaper," Torres said. "But, in addition to the cremation, most families still get a burial and additional services with the cremation so we're able to still make a little on them."
According to Jennifer Childe, an analyst with New York investment firm Bear Stearns, a traditional funeral runs between $5,000 to $5,500, plus an additional $1,500 to $2,000 for the cemetery plot. Cremations, on the other hand, start around $300, and with a ceremony or funeral run about $3,000.
"The trend is being driven by Baby Boomers who are transforming the funeral experience just as they've transformed everything from breakfast cereal to rock n' roll to 401(k)s," said Joe Weigel of Indiana-based Batesville Casket Co., the largest casket manufacturer in the U.S.
Childe agrees and says as they plan for the funerals of their parents, they're taking a typical Baby-Boomer attitude and bucking tradition, which is having an adverse effect on the bottom line.
"There's no doubt that from a revenue standpoint, funeral homes prefer a traditional burial funeral to a cremation. But the market seems to be going away from the burial-type funeral and some companies are becoming alarmed," she added.
During the early '90s, the publicly owned sector of the industry went on a buying spree and snatched up several smaller, independent funeral homes in preparation for the inevitable influx of Baby Boomers approaching their 60s. But that hasn't materialized, forcing some of the larger corporations to sell their smaller acquisitions. Now, independent companies own more than 80 percent of the market share, according to Childe.
The larger funeral corporations have taken a bigger hit as more customers opt for cremations.
"If you own the cemetery and the whole deal, that's where a cremation hurts because you lose the two biggest items the casket and the burial," Torres said.
This is where the "experiential" funeral planning center at Forest Lawn comes in.
It is designed to let clients customize funerals. For example, the family of a deceased person who liked baseball or the desert could arrange a funeral in a Hollywood-like setting that depicted a baseball stadium or a desert scene. In another case, the deceased loved monster trucks, so Forest Lawn helped arrange a monster truck funeral procession.
The company has added services like a cremation "garden" equipped with urn niches and memorials for family and friends of the deceased to visit. It's also added such services as catering and horse-drawn carriages for caskets in an effort to eke out as much money as possible.
"We've marked down our products, like caskets and floral arrangements, and have begun pushing our services more," Warren added. "The entire industry has changed from a 'here's what we have' mentality to a 'what would you like?' mentality."
But where the Boomer trend toward cremations has hurt business, another trend may improve sales. According to Weigel and Warren, prepaid funerals and funeral insurance have helped make up some of the lost revenue.
"A lot of Baby Boomers are realizing that on top of losing a loved one, planning a funeral adds substantially to the burden," Warren said. "So they like the fact that when it's their time to go, the planning of their own funeral won't add to the burden of loss on the ones they left behind."
Although planning one's own funeral can be off-putting, Boomers seem to have embraced the practice and the industry is happy to see an influx of solid, guaranteed revenue.
"The funeral business has always been a good business; everyone in the U.S. will eventually have one," Warren said. "There aren't many industries with that kind of demand, but we have to focus on giving our customers what they want."
Looking forward, Warren sees the Internet playing a larger role in allowing those who wish to plan their own funerals to see every aspect available for a funeral. Childe however, warns that this may increase competition and lower prices.
"Either way, we have to adjust and do the best we can to serve our customers," Warren said. "Just like any business, that's the bottom line."
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