USDA Grant Promotes Low-Income Online Grocery Shopping
The USDA is getting involved as retailers work to expand eCommerce options across income levels.
The United States Department of Agriculture (USDA) awarded $5 million to the National Grocers Association (NGA) Foundation on Thursday (Jan. 5) to help with and speed up the integration of Supplemental Nutrition Assistance Program (SNAP) Electronic Benefits Transfer (EBT) payment capabilities across digital platforms. The NGA Foundation supports independent grocery stores.
“Independent community grocers have been actively pursuing expansion of their online purchasing platforms, including online SNAP and mobile payment capabilities, to meet the ever-growing consumer demand for online shopping, but obstacles and a lack of resources have hindered the ability of many smaller retailers to pursue an innovative solution,” NGA Foundation Director Chelsea Matzen said in a statement, adding that the grant will enable independents to be “more competitive in their respective market areas.”
Since early 2020, online grocery use has increased significantly, although it continues to be primarily a luxury for those with higher incomes. Grocers may reach more types of customers with such actions by expanding their online audience and, in turn, their data collection and digital marketing capabilities.
With yearly salaries above $100,000, 43% of women and 58% of men reported purchasing groceries online for delivery to their homes. However, 28% of men and 26% of women with salaries under $50,000 made the same claim. Similarly, just 27% of men and 20% of women with low incomes said they used same-day delivery aggregators like Instacart to buy groceries, compared to 55% of men and 35% of women with high incomes.
Yet, as Ofek Lavian, CEO of third-party payment processor (TPP) Forage, which develops USDA-approved solutions for digital SNAP EBT payments, explained in an interview in August, there is demand for the technology should it become more affordable for lower-income consumers.
Given that many SNAP EBT participants live in areas where the closest stores do not offer healthy foods and that they are disproportionately likely to have disabilities, he pointed out that there is a market for the technology. This makes delivery and other more convenient grocery options all the more essential.
“What we realize is that there’s actually really strong product market fit [with online grocery], particularly for this demographic,” Lavian said. “Every hour they’re out grocery shopping might be an hour they’re not providing for their families.”
The NGA and the USDA have focused on advancing digital SNAP capabilities for a while. Back in September, the former pledged to quadruple the number of grocery stores that take SNAP electronically over the following two years as part of the White House Conference on Hunger, Nutrition, and Health. Around the same time, the latter announced that “thousands” of retailers, including 150 new supermarket chains, would now accept SNAP payments online.
Major supermarkets and markets have been following suit. Instacart, a leader in grocery technology, announced ambitions to provide EBT SNAP access to all of its supermarket partners by 2030 and expanded its SNAP EBT acceptance capabilities to additional locations throughout the year.
Additionally, both Walmart and the biggest supermarket chain in the world, Amazon, have been working to promote the usage of these advantages across all of their online food offerings.
