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NewsTalk

Welcome to the archives for NewsTalk, an IBJ blog published from November 2007 through December 2010.

Retail / Real Estate & Retail

Wal-Mart gets into the casket business

November 6, 2009

Wal-Mart is a lot like the computer: Wherever it goes, entrenched business models are turned upside down.

So, Hillenbrand Inc., which owns the world’s largest casket maker, Batesville Casket Co., is watching Wal-Mart closely as it enters the business Batesville Casket has navigated for a century in its namesake southeastern Indiana community.

Wal-Mart quietly began offering caskets on its Web site late last month. Buy a casket, and Wal-Mart will FedEx it straight to the funeral home.

Retail sales of caskets isn’t new. Sears peddled them in the dark ages, and Costco put them in stores a few years ago only to pull back after customers complained. Nevertheless, Costco isn’t Wal-Mart, so the upshot of its online venture remains to be seen.

It won’t be easy for Wal-Mart to dramatically undercut funeral directors. Mortuaries used to charge $6,000 or so for a casket, but the cost covered all the services. Now caskets and various services are priced individually, so directors have cut casket prices and compensated by increasing prices for services.

Wal-Mart models start at $895 and range to the $2,899 Sienna Bronze Casket. However, add shipping, and the prices aren’t much different than what funeral homes charge.

Wal-Mart, by the way, isn’t buying its caskets from Batesville, but from an Illinois startup, Star Legacy Funeral Network.

Hillenbrand spokeswoman Teresa Gyulafia says she doesn’t know if Wal-Mart approached Batesville about making its caskets. And she won’t discuss prices it charges funeral directors.

However, while acknowledging Batesville is keeping an eye on Wal-Mart, Gyulafia says it isn’t a threat because the companies operate so differently. Batesville lavishes funeral directors with custom touches from embroidered lids and hobby-themed corners to ensuring the casket is unpacked and dusted off with “white-glove service.”

“We have a completely different business model,” Gyulafia says. “A casket is not a box. A casket is not a commodity.”

Stock in Hillenbrand, which churns out $600 million a year in sales, has slipped a couple of dollars since the Wal-Mart news got out but is still above $19 a share.

How would you react if you were a Hillenbrand executive? And how do you feel about buying caskets online?

 

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