Is “Service” more important than “Convenience and Price”?

May 22, 2024/Business, Cremation/

Is “Service” more important than “Convenience and Price”? That’s an interesting question that some businesses are asking themselves today. . . . .and the answer is “It Depends”.

Just over the last weekend I came upon two articles — one pertaining to Walmart and the other to their rival Target. In the article on Walmart that you can read here, Walmart CEO Bill Simon says his company at this point is in a “Bubble”. That “Bubble” being that he believes in this inflationary economy that his company is attracting customers who value “Premium and Service” but at this time are not willing to pay for that.

Simon states, “The Walmart experience is better than it used to be, but it’s still not a premium experience. Walmart is built on convenience, cost and assortment. Not on service. As the economic challenges abate … service will become more important than convenience and price. And, we’ll see a shift back of some of the consumers. That’s the bubble.”

And, this article on Target, who generally are known for better service than Walmart, points out that they are lowering prices one might believe to keep these more discriminating shoppers from moving to Walmart. Here’s what Target announced on Monday, “Target Corporation announced on Monday that it will lower everyday regular prices on approximately 5,000 frequently shopped items across its large assortment.”

So, it appears to me that these companies, with their seasoned experience and reams of data, know that at some financial point, even those most discriminating and premium shoppers will turn to “price” over “Service” and “Experience”. . . at least for the everyday items that can be purchased at Walmart or Target.

What about Funeral Services? — My question then is, “Is there a point where that type of choice happens with Death Care choices”? Or, “Are Death Care choices simply too personal and important to make “price” the issue?”

While I think that there are consumers who make their Death Care choice based somewhat on cost. . . . I also think an economic downturn does not affect this one-time choice as much as it would for say products at Target or a hotel selection on a vacation, or the idea of purchasing less expensive concert tickets.

Tom Anderson
Funeral Director Daily

I think Death Care choices are simply too important and too personal to many consumers to deviate from their “desired wishes” to save a few bucks. I think we have been in a point where high inflation has altered to the upside many prices lately. . . .and consumers, including funeral consumers, have had the opportunity to alter their choices on those matters during this recent time.

However, where we have some evidence of possible consumer adjustments over the past three months, I do not find any evidence of “price” becoming more important than “choice” with funeral services. I offer the fact that in Carriage Services’ 1Q 2024 financial report that they state that their average revenue per funeral contract increased 4.1% versus the same period of a year ago. And, Service Corporation International relates the same indication with a 4.3% increase in their “At Need” comparisons of a year ago.

It would be my opinion, that it is not temporary financial situations of consumers that might cause the amount paid for Death Care choices to trend lower over time in the future. I would suggest that it is the continual “sea change” of Death Care wishes by the consumer that makes them more comfortable with services such as Cremation, Direct Cremation, and the like over the at one time overwhelming choice of casketed earth burial. . . . . .and part of the comfortability will come from a reduced cost actuality of the choice and not from any temporary financial squeeze on the part of the consumer.

So, that is probably Good News and Bad News for Death Care businesses. . . . . The good news is that I don’t expect much in fluctuation of sales in the immediate future because of personal financial issues. The bad news is that I expect more and more consumers to be comfortable in choosing lesser services over time which will make the ability to continue to move those revenue per service numbers higher a continuing challenge.

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