Cycles and trends. . . how will they affect Death Care

August 15, 2023/Business/

For my entire life I’ve enjoyed watching what is happening around me and then trying to figure out why it is happening. It’s kind of an odd hobby but it has proven to be a really good hobby to help one keep ahead of his competitors in business.

What I’ve deduced is that the things happening around me fall into one of two categories. . . . .either the things happening are cyclical meaning that this process will come and go or the happening is a “trend” which eventually changes human behavior over time.

Today, I’m going to put out some recent articles that I’ve read on changes in society — and try to decipher if the subject they cover is in a cycle or it is the emergence of a trend. Either way, I’m going to give my take on how the potential change in human behavior will affect Death Care. I don’t have a crystal ball, but here goes.

First, some things that I think will prove to be cyclical:

Credit Card Debt –– Credit Card debt hits a record high at $1 trillion, NY Fed says. Yahoo Finance. I think that this is a function of a 40-year high of inflation and wages that, while trending higher, have not yet caught up with that “real cost” of inflation. In other words, I think that many consumer families are “upside/down” on the “income/expense” ratio. Meaning that they are using credit to pay for some every day living expenses. It’s difficult for consumers to pay this debt back until either inflation (and the interest rate) comes down or wages go higher. How does this affect Death Care? If you receive payments via credit card, you can expect your clients to possibly spend less because of less available credit on credit cards. Funeral homes should be aware of other ways to advance credit to these clients if you cannot carry the debt yourself.

Tom Anderson
Funeral Director Daily

Americans reducing savings accounts –– Americans are pulling money out of their 401(k) plans at an alarming rate. CNN Business. According to this article, Americans pulled money out of their retirement savings accounts at a 36% higher rate in the 2nd Quarter of 2023 than they did in the 2nd Quarter of 2022. I think that is a result similar to increasing credit card debt. . . basic expenses are outpacing many working American’s discretionary income at this time. Again, the answer is getting inflation under control. How does this affect Death Care? The long-term implications of taking money out of a retirement fund prematurely can be devastating. The compounded growth over time creates wealth and taking out prematurely may cause the opposite — underfunding retirement. Over time this phenomena of premature withdrawals will have an affect on preneed and the ability to spend on end-of-life decisions. It makes the idea of advocating for preneed even more important for a funeral home’s survival.

Related article — with inflation eating away at American’s paychecks and savings accounts, where will Preneed funeral plans come on the consumer’s spending priority list? “U.S. inflation means that families are spending $709 per month more than 2 years ago” CNN Business

And, here’s a couple of items I think become long-term trends:

Raising fuel economy standards — U.S. proposes raising vehicle fuel economy standards to 58 mpg by 2032. Reuters. Most of us average Americans have had our fill of the necessary “Green Economy”. However, I believe I am like most of the rest of the global population — in that I’m all for using less energy and saving the planet. I just don’t believe we can do it in a day. . . and trying to raise fuel economy to 58 mpg by 2032 would spell the end of the fossil fuel market and create havoc with job creation. How does this affect Death Care? I believe, like cremation was a trend in the 1960’s, that greater awareness of ecology is a trend and a growing movement with almost all people. While we have differences in “how fast the needle should move”, there is general agreement that being more concerned about the environment is a good thing. I think that bodes well for some of the non-traditional, more perceptually environmentally friendly, disposition methods such as Green Burials, Natural Organic Reduction and Alkaline Hydrolysis moving forward.

Demographic shifts in America — Long distance movers — Why did they move and how? National Association of Realtors For 32 years, from 1989 to 2021, the median miles moved when a person or family moved hovered between 10 and 15 miles. In 2022, that number jumped to 50 miles with a full one-quarter of moves being almost 470 miles in distance. There is no doubt that the “work from home” phenomena and the “retire where I want to” phenomena were a big part of that statistic. I think that this is a trend that is also here to stay. How does this affect Death Care? It’s interesting to note that the National Association of Realtors found out that it was not first-time homebuyers making these long moves. . . . . they found that it was “repeat buyers” and “younger Baby Boomers” making these long moves. I think that funeral homes need to understand that those in your neighborhood today may not be there when their death occurs. Funeral home owners need to know about their shifting neighborhoods and never lose sight of their “customer acquisition” techniques moving forward. Being complacent about “telling your story”, advertising, and reaching out continuously might be a recipe for disaster.

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