The Future of Weddings: $50 billion up for grabs

Posted by Leonard Fuld on Sep 3, 2015 12:32:39 PM

WeddingRings

Our daughter is about to be married and we look forward to this special day.

What we have not enjoyed is the process. I’ve never encountered such a complicated, messy and unsatisfying business in my entire life. When I say messy, I mean my wife and I have had to work with a tangle of over forty categories of vendors, from hotels, catering, bands, photographers, and so on.

Considering that over 2 million people are married each year in the United States alone and that it’s a market valued at more than $50 billion, why hasn’t this business been Uberized? Despite the mostly pleasant (and a few very unpleasant) people I’ve met along the way in planning our daughter’s big day, few of these vendors talk to each other and if they do it’s not to lower your costs.

The wedding business is ripe for disruption. And, yes, a number of 21st century startups have begun take some of that $50 billion off the table, improving efficiencies along the way. More about these firms later.

It was this notion of finding efficiencies along with my Uber-like thoughts of simplifying as well as improving the consumer experience that drove me to walk the length of Boston’s Greenway to interview a couple dozen millennials (most future wedding buyers). As they were having their lunch, I asked them what they thought about the wedding business. Some participants were married, most were not. Listen to what they have to say.

  • Down with formality! Nearly two-thirds (64%) do not need a formal wedding venue, such as a hotel or house of worship. Most would be happy to have it on a beach, a farm or in a park.
  • Forget the band, just give me a playlist on Pandora or assembled on my iPod. When we asked which of the service elements could be changed or eliminated, the band was top of the list with 36% voting it off the list.
  • Registries with built-in problems. While most wanted to have a gift registry (73%), the participants who were married discovered they were moving shortly after the wedding and could not anticipate where to ship their gifts, or they could not truly anticipate the gifts they would need when they lined up the registry very early in their engagement.
  • Beware, travel agents! Destinations are out. Nearly three-quarters (73%) of respondents do not believe in destination weddings. Among the most often heard response was “selfish,” or “expensive” when they considered this option.
  • Crowd source photos. Crowd out photographers. Not everyone felt this way. The nearly one-quarter (23%) that do adamantly believe they can hash-tag or Instagram their guests into contributing all their wedding photos into one bucket. They have no need for formal photographs.

When the wedding industry is about to face such a vocal future customer base articulating a simpler, less costly way to run a wedding – their own wedding – it must listen.

The disruption may have already begun. Just follow the money. In the first four months of 2015, venture capitalists have invested nearly $189 million in wedding-related startup companies (many Internet-based) designed to either lower costs, become one stop shops or just simplify the process. The investment level has risen dramatically from $85 million in all of 2013.

Laura Holliday, head of marketing at Zola, one of the new Internet wedding consolidators, said that her company has focused on improving the customer experience for gift registries and wedding services.

“Couples register all at once, often without thinking what they will need or where they are going to be after they marry,” says Holiday. A typical registry return rate, Holliday reports, is 30-40 percent.

“Zola allows couples to decide when they want the gift to be shipped. Ship it now or hold for shipment later. They can even do virtual exchanges before even touching the item. As a result we have a less than 2 percent return rate,” she concluded.

Zola may just be the beginning. Other consolidators are in the wings to be sure. One day we may see Group Purchasing Organizations (GPOs) formed to help wedding consumers buy services at a discount, similar to the way healthcare GPOs that have given tremendous buying power to member hospitals across the United States.

I dedicate this article to all parents who love their children and all those sons and daughters considering making a wedding of all shapes, sizes, and costs. Just as we wish our daughter and her future husband a wonderful and happy life together, we wish the rest of you the same.

If only we could get our not so silent partner in this exercise – the wedding industry – to help us along by making the process easier, less costly, and more pleasant. Perhaps I hear the rumble of disruptive thunder approaching from the distance. What a welcoming sound!

Topics: Competitive Intelligence, Consumer Goods, Brand Insights, Innovation, Market Analysis, New Market Entry, Technology/Telecomm, Travel/Hospitality, Industry Convergence, Merger and Acquisition, Competitive Strategy

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