The article in the url below details yet another example of how Amazon is able to adapt to and take advantage of our growing desire to shop online:
"Ian Babcock used to take the bus from his home in northern Michigan to get groceries, a trip that was inconvenient before the pandemic made it dangerous. For the last several months, he's been using his food-stamp benefits to get groceries delivered by Amazon."
Demonstrating great flexibility, it seems that the government agency in charge of administering food stamps in the U.S. (the Department of Agriculture) was responsible for allowing them to be used for online shopping, an option that is now available "for shoppers in 46 states and the District of Columbia." It has clearly been beneficial for many in navigating the pandemic and associated lockdowns this year:
"Babcock is among one million-plus U.S. households now using government benefits each month to buy groceries online. Their numbers spiked 50-fold this year after the spread of Covid-19 prompted the U.S. Department of Agriculture to make it easier for food-stamp recipients to shop on the web."
Perhaps predictably, the greatest beneficiaries of this move (beyond the customers themselves) is those companies large enough to deal with the bureaucracy of the U.S. government:
"While the USDA declined to provide an industry breakdown of such purchases, the main beneficiaries are Amazon.com Inc. and Walmart Inc. -- the only retailers in most states to take part in the agency's online shopping pilot."
And why would Amazon and Walmart bother with this? Of course because it increases their market share, but also because there is a lot of money to be made in serving the needs of those who have been hit the hardest by the pandemic and subsequent recession:
"For Seattle-based Amazon, the USDA program is an opportunity to get a chunk of the $55 billion that food-stamp recipients spent last year, purchasing that surged 20% in the first four months of 2020. It also lets the company court a cohort that has traditionally patronized Walmart or other discount grocers. Amazon is nearing saturation with higher-income U.S. households and has few other sources of new, potentially loyal customers in its most important market."
The spread of the U.S. government's Supplemental Nutrition Assistance Program (SNAP) program, and the obvious value it is creating for those in need, is apparent in the graph that accompanies the article:
As with Walmart, and any other large retailer that dominates its market, Amazon is succeeding because it is delivering what people want and, in cases such as this, cannot get elsewhere:
"When Michigan joined the program in May, Babcock, who suffers chronic health problems and has a suppressed immune system, started using his benefits to buy groceries on Amazon. The 55-year-old former financial planner, computer programmer and self-described veteran of Detroit's hardcore punk scene, also has a discounted Prime membership available to holders of Electronic Benefits Transfer (EBT) cards. Referring to Amazon Chief Executive Officer Jeff Bezos, he said 'the guy is making money hand over fist, but he's providing a service I can't get elsewhere.'"
What started out as a pilot program by the USDA looks set to become even more popular as the virus rages on. It is difficult to imagine people shedding the convenience once life returns to something resembling normal:
"Ruth Ilano, a comic artist in Massachusetts with multiple sclerosis, was making a quick trip to the store in May when she collapsed. She hasn't gone inside a supermarket since and is using SNAP benefits to help pay for groceries online. 'Online delivery was previously a nice touch,' she said. 'But now it's absolutely essential to my life.'"
Have a good weekend
David
David Chandler
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Amazon Lures Food-stamp Shoppers as Online Buying Surges 50-fold
By Matt Day
November 11, 2020
Bloomberg Businessweek
