Dive Brief:
- Retailers like Walmart say they’re eager for a pilot that will offer online ordering for Supplemental Nutrition Assistance Program (SNAP) recipients to begin, according to Supermarket News. After a delay this summer, the program is set to begin sometime next year.
- The two-year pilot includes eight participating retailers across nine states: Alabama, Maryland, Iowa, Nebraska, New Jersey, New York, Oregon and Washington. In addition to Walmart, participants include Amazon, FreshDirect, Safeway, ShopRite, Hy-Vee, Hart’s Local Grocers and Dash’s Market.
- This fall, Walmart started its own online purchasing test in five markets, including four around Boise, Idaho and one in Houston. The program allows EBT users to order groceries online, then pay when they pick up the items in-store.
Dive Insight:
Mandated under the 2014 Farm Bill, the U.S. Department of Agriculture’s online pilot is the first step toward ensuring 44 million SNAP consumers have access to a modern ordering platform that could greatly benefit them.
As the USDA pointed out last year when the program was first announced, many SNAP beneficiaries live in neighborhoods with limited access to fresh foods. Allowing them to use their benefits online could improve their access to these items, especially if grocers offer home delivery. For retailers, the program could help them acquire new customers by effectively expanding their coverage area.
Supermarket operators should be eager to court more SNAP customers. A recent report from the USDA shows SNAP consumers spend the same amount of money on the same item categories as other consumers. This includes 40 cents out of every dollar that goes towards “basic items” like meat, produce and dairy.
The USDA pilot has been slow to roll out due to the increased online security measures retailers and the USDA have to put in place.
“SNAP online purchases must have a higher level of security than most other online purchases,” Jessica Shahin, Associate Administrator, Supplemental Nutrition Assistance Program in Food and Nutrition, wrote in a blog post last year. “For example, unlike other online electronic financial transactions, SNAP debit transactions require a secure customer-entered PIN.”
In addition, online purchasing systems must work with states’ EBT systems, Shahin pointed out.
Despite these complications, the USDA remains committed to eventually launching the program nationwide. “Our goal is for this to be a national option for SNAP participants, once the pilot phase is complete and USDA can incorporate lessons learned into program rules,” the agency noted in a press release.
Retailers involved in the pilot, and any that might eventually offer online ordering to SNAP recipients, should consider offering free or reduced-price shuttles to low-income neighborhoods. Store pickup, which is cheaper than home delivery, will likely appeal to SNAP customers, and having a convenient transportation option should encourage loyalty in addition to bigger baskets.
