Target’s united effort aims to significantly dent the $13 billion in Supplemental Nutrition Assistance Program (SNAP) benefits spent at Walmart WMT -0.7 percent. Target TGT +0.9 percent is hoping to attract more low-income customers by allowing them to pay for online orders with food stamps. The 36.2 percent white, 25.6 percent black, and 17.2 percent Hispanic SNAP recipients in the United States represent a significant development opportunity for Target.
What You Need To Know About The Breakdown:
In October, the Biden administration began delivering an additional $20 billion in food stamps to around 42.8 million individuals. According to a Huntington Private Bank analyst, accepting food stamp payments online could help Target create customer loyalty and promote other products. The country’s seventh-largest retailer is still fighting to win over lower-income shoppers who typically buy at Walmart and are often disregarded when it comes to innovation.
As they have more access to the internet and digital financial services, lower-income consumers have become the fastest-growing sector of online shoppers. Currently, these customers prefer to purchase in traditional brick-and-mortar establishments because they can pay with cash or a SNAP card, but moving them online might be a game-changer. SNAP has assisted over 13 million African American families in putting food on the table, making this a prime target for client acquisition.
What Comes Next:
Walmart, Target’s main competitor, took part in the two-year SNAP pilot program run by the US Department of Agriculture’s Food and Nutrition Service in New York. According to Reuters, Target aims to begin taking food stamps online in late April. According to Fred Killingsworth, CEO of Hinge, “the bulk of consumers buying products on EBT are redeeming government benefits at Walmart…”