Expert Column: The 'SNAP' Effect Has Changed the Way Americans Shop
Imagine what it must have been like to be a merchant during an era when:
- Nearly a quarter of all households depended on government food supplements
- More than two-thirds of homes receiving assistance were households with children, accounting for nearly 40 percent of all children.
- This impoverished group was growing larger every year
Consumer marketing and retailing must have been very different. Actually, this era we’ve just outlined is…today.
The Supplemental Nutritional Assistance Program ("SNAP) has changed the way America shops.
Snap benefits now drive 10 percent of total food spending in the grocery and mass merchandising sectors, and this program quadrupled over the past give years to $74.6 billion in 2012. This CPG spending influence is not going away; the CBO estimates that the program will continue providing benefits near current levels for the next 10 years.
SNAP dollars can only be spent on food made to be consumed at home. This means that supermarkets, superstores, as well as small specialty stores can all qualify to take SNAP EBT cards. In practice, 89 percent of SNAP dollars are spent in grocery and mass merchandising.
This supplemental assistance has grown so much that retailers and manufacturers cannot ignore it. Every retailer and manufacturer should know how much of their current sales are driven by SNAP, which products, where, and how they can serve these households better.
- Do you know how big the "SNAP effect" is in your category? For your products?
- Do you know which stores at your retail partners experience the biggest SNAP sales spikes?
- Did you know that each state has its own SNAP distribution timing cycle which greatly affects the timing of redemptions?
- Do you tailor your merchandising and promotions to adapt to each state’s unique SNAP distribution timing? By category? By store cluster?
Edgewood Consulting Group has studied this phenomenon and its implications for our CPG clients and their retail partners. Edgewood’s PrecisionEdge Targeted Solutions combine big data with advanced analytics to focus on shoppers, stores and timing.
Some categories can spike by 25 percent or more during SNAP distribution weeks, and even more in certain neighborhoods. We can help you learn which shoppers, neighborhoods, stores - and which categories - are most affected. We can also help with the tactical strategies to optimize your distribution, logistics and promotions accordingly.
Whether you are targeting SNAP shoppers, upscale shoppers, core-loyals, the elderly, Hispanics, or any lifestyle, condition, age, income, ethnic or behavioral shopper target(s), Edgewood helps clients refine targeting strategy and act upon it. Edgewood’s precision-targeted assortment, shelving and promotion strategies and analytics are tailored to yield significantly better results for categories, retailers and shoppers alike.
Let us share our best practice learning about SNAP consumers, products, timing and location to capitalize on the opportunity that retailers and manufacturers have to increase sales and help serve this large, growing and deserving consumer base in ways that earn their business and loyalty.
To read more, download our white paper, or to discuss, contact us at:
973.644.9788