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Online shopping shakes up the funeral industry

By Armina Ligaya

When Kim Darby’s mother passed away in July, she wanted to honour her mother’s memory but didn’t have a lot money for an expensive funeral.

A friend recommended she take a non-traditional route by shopping for services online.

“Immediately there is a relief,” said the 47-year-old from Ottawa. “Because there is nobody in your face. Nobody making you feel guilty that you’re putting a price on your loved one’s head.”

Through basicfunerals.ca, she arranged for cremation, purchased a rosewood urn, and planned a service at her mother’s home for about $3,000, less than half what other family funerals have cost.

A decade ago, it would have been unthinkable to price shop for caskets after the death of a loved one, let alone arrange and purchase the funeral services via the Internet.

Online services like basicfunerals.ca and CasketOutlet.ca, or retail giants such as Walmart and Costco selling caskets via their websites in the United States are shaking up the normally staid, slow-moving funeral home industry.

Jeff Caldwell, professor of funeral services at Humber College in Toronto, says more funeral homes are having an online presence, even posting their price lists on their websites.

“For a long time funeral services was very stagnant, very comfortable in what was happening, because it was the tradition,” he said. “Some of these changes have been forced on funeral directors. It shakes things down, makes the traditional operator pay more attention to how he or she is running a business.”

Basicfunerals.ca did 200 funerals, mainly in Ontario, during the first year it launched online in 2009. This year, they expect to do in excess of 1,200 — six times more than the average physical funeral home, said Eric Vandermeersch, chief executive of the website.

“I think that is well overdue,” he said. “Funeral homes, for years, have been marking up their products way too high because of a lack of competition. Us being one of the competitors, in which we actually offer services, is key to making this industry better for the consumer.”

On average, the cost of a funeral in Canada is between $8,000 and $10,000 said the Funeral Service Association of Canada (FSAC). The cost of a casket can vary widely, depending on size, type and finish, but would cost roughly $3,000 on average. Cremations, which represent more than 60%, are expected to rise to 64% by 2016 as the cost of a grave rises. There are more than 1,500 funeral homes across Canada, the association added.

Meanwhile, deaths are on the rise. There were 253,241 estimated deaths in 2012-2013 across Canada, according to Statistics Canada. That’s up from 244,643 the year prior, and is poised to rise as the Baby Boomer demographic moves into their elder years.

Gary Carmichael, vice-president of Arbor Memorials, one of the largest funeral services providers in Canada, says the effect of online shopping on the industry is still a question mark.

“With respect to funerals or cemeteries, online shopping or comparison would be, I would suggest, in its infancy, and it remains to be seen whether the public will embrace that, or whether they still prefer the comfort of dealing with somebody directly.”

But for some grieving individuals, arranging a funeral from the comfort of a computer screen is a welcome alternative, says Mr. Caldwell.

“There is a growing segment of our population who do all their shopping online, they do everything online, and they just don’t want to interact,” he said. “They don’t want people to see their emotions either.”

Still, experts say this doesn’t spell the end of the traditional funeral home. Business is steady, and the industry is consolidating — with corporate funeral homes snapping up the local, family-owned funeral establishments and holding multiple locations, according to the FSAC.

The giant in the field is Houston-based Service Corporation International, a publicly listed company with more than 1,400 funeral homes and 380 cemeteries in North America, mainly in the U.S. and including 10 funeral homes in Canada. Last year, it saw gross cemetery profits rise to $176.1-million, and gross funeral profits rise to $349.2-million.

In Canada, one of the largest companies is Arbor Memorial, which owns 41 cemeteries, 27 crematoriums and 92 funeral homes. Over the years, it has acquired Desjardins Funeral Home in Winnipeg and Kelly Funeral Homes in Ottawa.

“We are seeing some trends towards online and consolidation, it is not as quick as it is in other industries, and not as rapid as it is in the U.S.” said Eileen Barak, the executive director of the Ottawa-based Funeral Service Association of Canada.

She doesn’t foresee any major impact from online upstarts on the industry in the short to medium term.

“There is still that need for the personal touch. It’s not just about once the tragedy has happened to an individual family, it’s pre-planning and estate planning, navigating social services,” she said.

“When this type of event hits an individual or a family, I think there is a need for personal contact that the funeral director or funeral home can provide.”





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