Amazon Seeks $13 Billion In Grocery Stamps Of Approval From Lower Income Customers

CBx Vibe:Sneakin’ Up On Ya” FU-Schnickens

By Sabrina Lynch

  • Amazon is negotiating a deal with the “Propel” app to provide low income customers access to its online grocery store
  • SNAP helped more than 13 million African American households put food on the table, making this audience ripe for customer acquisition

Amazon (AMZN -0.48%) is negotiating a deal with the “Propel” app to provide low income customers access to its online grocery store. The multinational tech company continues its fight to win over lower-income shoppers that traditionally head to Walmart (WMT -1.42%) and are generally overlooked when it comes to innovation. These collective efforts by Amazon are geared towards making a massive dent in the $13 billion of Supplemental Nutrition Assistance Program (SNAP) benefits that are spent at Walmart. Amazon’s partnership with Propel which targets U.S. consumers receiving SNAP benefits of which 36.2% were white, 25.6% are Black and 17.2% Hispanic, presents an important growth opportunity.

Why This Matters: The online retail giant is hedging its bets on digitally savvy consumers for whom time, and savings, are a precious commodity. Amazon plans to take a stronger market share among lower-income families. Nearly 20% of the U.S population who receive SNAP benefits are already being offered a discounted $5.99 Amazon Prime membership per month. SNAP helped more than 13 million African American households put food on the table, making this audience ripe for customer acquisition considering the average customer at Amazon and Walmart is a 46-year-old White woman.

SNAP helped more than 13 million African American households put food on the table, making this audience ripe for customer acquisition

Moreover, the average Amazon shopper has an annual household income of $84,449 versus the average Walmart shopper income of $76,313. Compare this to the average mean income of a Black household at $40,258, and there’s no denying the chance to gain more customers from this demographic is high, when appealing to a heightened sensibility to save. The potential partnership with Propel supplements Amazon’s current initiatives to diversify its Prime Member audience beyond higher-income groups, such as the launch of a bargain section on the site, and including Medicaid recipients to the program.

Situational Awareness: Notwithstanding, the fact that more than one million U.S. households bought groceries online in September using SNAP benefits, consumers are still restricting their shopping trips to essential purchases during the pandemic. Physical bricks and mortar stores where discounts are in abundance are still a game-changer when it comes to saving money. Having cash-in-hand to spend on bargains you can hunt for in a store, cannot easily be replaced with online browsing.

CBx Vibe:Sneakin’ Up On Ya” FU-Schnickens

CONTRIBUTOR

Sabrina Lynch

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