In 2004, Blockbuster Video was at its apex. With a three-plus billion dollar market cap, 9,000 stores worldwide and clear market-leader momentum, they were seemingly positioned for continued dominance. When America wanted to watch a movie at home, they went to Blockbuster. Now, eleven years later, they don’t exist. They announced the close of their remaining stores back in 2013. So, what happened? How does a company like Blockbuster lose its market leadership position in less than a decade?
In short: they didn’t evolve. As high-speed internet usage surged, and more and more media was available through the web, Blockbuster’s core service became obsolete. Netflix launched their streaming service in 2007, websites like Hulu became popular, YouTube exploded and before long, Blockbuster was a giant dinosaur, looking wide-eyed at a meteor whose impact it couldn’t avoid.
Sound familiar, funeral home operators? The market landscape is changing. And just like there is no chance that movie-watchers will wake up tomorrow and decide that DVD rental was the way to go, families in need of funeral services or pre-need customers are not migrating back to expensive burials. Right or wrong, they’re just not. We are past the days of trying to analyze the reasons behind the shift. Your choice is to strategically adapt to a new way of operating or to disappear.
Netflix took a gamble in 2007. Though the infrastructure was not fully developed, they bet the future was in streaming content and a virtual (instead of brick and mortar) operation. Certainly the brass at Blockbuster saw the change too but their belief was they were big enough to drive market demand instead of adapt to it. Although the going was rough for Netflix, and they made critical mistakes along the way, their ability to read and react to how today’s customer wants to consume movies and television allowed them to not only survive but thrive.
So what’s the lesson for today’s Funeral Home owner or operator? If your answer to any business strategy question is; “because we’ve always done it that way”, it’s time for a change. Cremation customers are here to stay and many (most) of them are not choosing cremation because it’s cheaper. They’re choosing cremation because its what they believe in. They’re choosing cremation because it’s practical. Cremation customers are just as interested in personalized legacy as burial customers. The lesson here is that its better to be Netflix than Blockbuster. Avoid the meteor.