The forgotten few…

food-stamps-MGNOver 6M Americans filed for unemployment and in LA county there has been an recent increase in 54% of applications for food stamps. There are millions of women, Infants and children receiving federal assistance under the WIC program. There are over 42 millions Americans receiving tens of billions of dollars in food assistance from the government.  The economic impact due to the pandemic will only increase this market. The new stimulus package that was signed recently increases funding for the food assistance program. A target market size.

So, what do they all have in common?  They need to brave a visit to grocery store to buy food.  Why?  Because our great technology divide has categorized them as “have nots”.

If you are the privileged few who have a credit card, you can use online grocery shopping which has increased by 25% paying higher prices for the same goods waiting for a slot to open up.  You can also order online and drive to the store for a clerk to load your car without any physical contact.

But, if you are on a government support program using EBT (electronic benefit transfer), paying with a ATM card, check or cash, you are not at top of the retailers elite customer’s list.  You need to go to the store, stand in line and pay irrespective of your age.  The online delivery service is not for you.

So, what does a retailer do to help a customer.  First, enable customers with all tender types to order online and provide a “equal” service. Next, think out of the box.

Some of these “essential” business retailers are chasing “large basket” size with premium pricing without a social conscious. Having personally worked with low-income, underprivileged people on social projects, I don’t see a need for a “business case” to serve these under privileged people.  It took media attention for retailers to open special hours for seniors.  If one were to serve the seniors, the retailers would have delivered their groceries without having them come into the store.

Amazon and Walmart are trying to help these customers but, you don’t get all your food from Amazon or Walmart.  USDA has approved a few other retailers to accept online orders for these federal supported customers and is trying to aggressively promote these services.

Congress authorized a pilot program for online shopping six years ago, but it took years to get it off the ground as officials grappled with significant technical challenges.

Interesting statistics that less than 40% of Americans pay for groceries using a credit card.  The rest of population pays using their ATM card or cash for unbanked, checks if you have one or food stamps. In stores that cater to low income or unbanked, credit usage is very less. You don’t have a lot of Apple Pay users.

Members of Congress are trying to increase online grocery delivery using food stamps and Governors from various states are asking the agency to waive requirements for food stamp program.

We need to support our frontline workers like health care workers, grocery store employees, first responders but, we also have an obligation to keep seniors and low income folks who are on the food assistance program safe.

Give the low income population equal choices seeing that we all need to eat. Pause chasing high margin profit and serve local community.  There is a potential 100B market guaranteed by the government.

Don’t forget the cash and ATM card users as we call them pin debit customers.  Find a way for them to be part of online community.