The most recent issue of The Economist has articles on a shake up in the “death care” industry, a $16 billion per year industry that it describes as “stodgy and exploitive.”
Undertakers have long been able to get away with poor service. Their customers are typically distressed, under time-pressure and completely inexperienced (people in rich countries buy more cars than they do funerals). As a result, few shop around, let alone haggle. With consumers docile, providers can keep quality low and prices high—much like tourist-trap restaurants, another one-off purchase made in haste with little information. Some sellers have made matters worse with techniques ranging from opaque pricing to emotional blackmail. The asymmetry in knowledge between undertaker and grief-stricken client allows ludicrous markups on things like coffins. It also makes it easier to sell services that people do not realize are mostly unnecessary.
Funny, but all the factors that The Economist believe are characteristic of the death care industry are also characteristic of another industry. One with annual U.S. revenues not of $16 billion, but rather $3.5 trillion, or more than 2,000 times as much. Want to guess which one?