Wedding Bells Are Ringing
Wedding Bells Are Ringing
Wedding Bells Are Ringing
While not an industry in itself, the wedding business is a key revenue contributor to a diverse mix of local businesses, according to industry research firm IBISWorld.
Weddings are customized, and therefore not prone to efficiency, and they often occur on an irregular timeline. The clients (bride and groom) dream of perfection, while someone else (their parents) usually pays the bills.
In the same way department stores rely on the holiday season to help define the ultimate success of their year, many small business operators depend on the number and extravagance of wedding events to distinguish a good year from a bad one.
This article provides a quick evaluation of the wedding industry's contribution to local economies and the small army of business service providers that support it. Highlighted here are the health of the wedding business, the size of the market, and the reliance of key industries on wedding-related revenue.
Going to the Chapel
Weddings are big business. From the proposal to the return flight of a honeymoon, a typical wedding will have a direct and indirect impact on more than 100 industries. The list ranges from gold mining to travel agencies, but in this article we will look only at industries directly affected by the wedding event. While this categorization whittles down the industry impact considerably, the wedding market remains a sizable $47.2 billion sector.
Let's put this revenue in perspective: If weddings were compared to holiday-generated spending, they would rank just behind Christmas and easily ahead of Thanksgiving. The infrequency of weddings is more than made up for by their extravagance. They generate more revenue than Valentine's Day, Mother's Day, and Easter combined.
One cause of concern is that the number of couples tying the knot has been in a persistent decline. Marriage rates have tumbled over the past few decades, falling from about 10 marriages per 1,000 people in the mid-1980s to 6.8 marriages in 2009. This decline is a result of social influences (fewer couples looking to commit) and attitudinal changes, as consumers hold off for financial and lifestyle reasons. However, the fall in the marriage rate has not resulted in a complete disaster for the industry. In fact, the decline has led to a higher-than-average wedding spend, meaning even greater profits for those involved.
The Wedding Industry and the Economy
Coming off of 2005 and 2006, two of the most prosperous years in the wedding industry, the sector plummeted as the economy entered recession. Revenues fell from a high of $67.5 billion in 2005 to $42.9 billion in 2009. Industry performance is expected to improve in 2010, expanding an estimated 10% to $47.2 billion, but still far below the years, so businesses need to put in place appropriatemstrategies to capture that increasing demand.
The average engagement time in the United States is 17 months, so long-term targeting and retaining strategies must be implemented. Additionally, businesses need to take proper financial considerations into account because the product or service in demand may be months away from payment and delivery. Planning for the future, along with having a good customer base, is essential for those involved in the wedding industry. Unlike other industries, sales are not typically day-to-day transactions. They are sizable decisions that take time to plan and implement, for both the customer and the company involved.
The Wedding Industry's Seven Core Sectors
IBISWorld has identified seven core sectors within the wedding industry. These sectors are grouped together because they represent key inputs to the high of just five years earlier. The wedding market is expected to remain on this upward trend through 2015, with 2009 expected to be the low point for the sector.
While swings in the economy greatly affect spending per wedding, the underlying demographics are slowly improving. The decline in population growth of the 20- to 34-year-old age bracket bottomed out between 1997 and 2002, and those in that bracket who are contributing to the rising population totals are quickly approaching the median age for first marriages.
Annualized growth in the 20- to 34-year-old group over the five years to the end of 2013 is projected at 1.2%, a significant improvement over the growth rates for the prior two five-year periods, which were 0.6% and 0.4%, respectively.
The positive revenue outlook for the next five years offers wedding-dependent companies great opportunities to build business and increase their competitiveness. Thousands of weddings were put on hold during the recession because couples and their parents were financially strapped. There will likely be a strong uptick in weddings over the next three...click here to read the free complete article on the wedding industry.
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http://www.articlesbase.com/economics-articles/wedding-bells-are-ringing-4391912.html
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