Funeral homes of tomorrow are on the Web

From...

by Ronna Abramson

(IDG) -- His father's ashes stowed in a cardboard box in his carry-on bag, Chicago lawyer Kent Maynard Jr. knew as he flew home earlier this year that he had to plan a military funeral for the retired Air Force colonel whose name he shared. His father had asked to be cremated, and Maynard wanted to minimize his dealings with funeral directors. So he turned to the Net, going online to buy a wooden urn with an Air Force insignia along with a case for a flag folded by an Air Force platoon. He also posted a free obituary at a virtual cemetery.

"I really didn't want to discuss [it] and have someone asking me questions," says Maynard. "The last thing you need is someone trying to guilt you into something you don't want."

The online funeral industry began emerging a few years ago, but in the last few months it has become much more crowded. A year ago there were two major companies, Los Angeles-based Plan4ever and New York-based HeavenlyDoor.com (the only publicly traded funeral site), competing to be the definitive funeral portal. But earlier this month Arrangeonline.com launched, boasting the coveted endorsement of the National Funeral Directors Association. Another company, Funeral.com, is scheduled to unveil its site Nov. 30, banking on its moniker to drive traffic.

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While these sites seek to offer a full range of services and products, there's also a bevy of new companies offering everything, including grave sites, caskets and Webcastings of funerals.

The companies are fighting over a growing business. The number of U.S. deaths is expected to grow from 2.3 million in 1998 to 2.6 million in 2010 and reach 3 million by 2020 as baby boomers age. Still, it remains to be seen how the Internet can fit into a business in which undertakers clearly control the market.

What appears to be emerging in the funeral industry is a hybrid model: Net companies need to be allied with funeral homes, particularly given their large share of the death business. The situation is similar to the auto industry and its relationship with dealers. The Web can be used to reduce the amount of time that a customer spends at a brick-and-mortar store, but ultimately the deal needs to be closed in person.

Arrangeonline.com is the first to take this step, asking customers to check off a list of the services they want, complete with low- and high-price estimates. It then forwards the information to local funeral homes, which then call the customer to iron out details. (Arrangeonline is a subsidiary of Continental Computer, which has sold software to nearly one-quarter of the nation's 22,000 funeral homes.) Officials with Plan4ever, HeavenlyDoor and Funeral.com say they will unveil similar services in the coming weeks.

Arrangeonline.com is starting from a different place than industry pioneer HeavenlyDoor, which began by selling online obituaries. While it has since expanded its offerings, it remains unprofitable, losing $2.6 million in the quarter ending June 30. The company just tested a system that lets consumers buy prearranged funerals online through a funeral home, and executives expect to release it to the public by the end of the year.

Meanwhile, Plan4ever also appears to be pursuing a brick-and-click strategy, opting to work with the large chains that own one-fifth of the nation's funeral homes, while continuing to offer free online obituaries.

Maynard took advantage of the free obituary at Plan4ever, but his decision to buy his father's urn from another site underscores the challenge funeral portals face. While they seek to empower customers, they may have trouble keeping them on their portals. "Every step of the way, we controlled the process," says Maynard.

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