Retail Radar 27-Aug-2024
Lawrence Lerner
I Help Companies Build and Scale Products by Translating CEO Vision into Insightful Strategy, Meticulous execution, and Strategic commercialization | Digital Strategy and Growth Consultant | X PwC & Cognizant
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Grocery Delivery Serivces: A Food Desert Lifeline?
Amazon recently expanded its grocery delivery subscription program to offer monthly and annual plans. This service provides Prime members and eligible EBT cardholders unlimited grocery delivery on orders over $35 from Amazon Fresh, Whole Foods Market, and other participating retailers.
Key features:
Estimated cost per delivery:
The actual cost per delivery can vary depending on the size and frequency of orders.
Subscriptions, utilities, and opportunities
Amazon's grocery delivery subscription service is potentially a transformative opportunity for individuals in food deserts and assisted living facilities—particularly those who rely on government assistance programs like EBT (Electronic Benefit Transfer).
This subscription service, which now includes monthly and annual plans, provides unlimited grocery deliveries on orders over $35 from Amazon Fresh, Whole Foods Market, and various local grocery and specialty retailers. It includes delivery in over 3,500 locations, creating an opportunity to support these locations.
Focusing just on the grocery and delivery aspects, can this subscription become a utility for these populations?
Understanding Food Deserts and Assisted Living Needs
A food desert is a geographic area where residents have limited access to affordable and nutritious food, mainly fresh fruits and vegetables. These areas are often characterized by a need for grocery stores, farmers' markets, and healthy food providers.
Food deserts are most common in low-income urban neighborhoods and rural areas where poverty, lack of transportation, and limited market interest discourage the establishment of full-service grocery stores. The U.S. Department of Agriculture (USDA) defines a food desert as a location where at least 33% of the population lives more than one mile from a supermarket in urban areas or more than 10 miles in rural areas.
Assisted living facilities, on the other hand, cater to older adults or individuals with disabilities who may have limited mobility and require help with daily activities, including shopping. Residents of these facilities often need help accessing fresh and nutritious food due to their dependence on facility-provided meals or the logistical challenges of leaving the facility to shop.
The Role of Grocery Delivery Subscription Services
Amazon and other grocery delivery subscriptions are particularly well-suited to address the challenges faced by food deserts and assisted living facility residents.
Here’s how:
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Access—The primary challenge for those living in food deserts is accessing healthy, affordable food. Grocery subscription service brings fresh produce, whole foods, and other grocery essentials directly to the doorsteps of these residents. With this service, individuals who might otherwise rely on convenience stores or fast food—typical in food deserts—can access a broader array of nutritious options.
This can significantly improve dietary choices and health outcomes, addressing chronic issues like obesity, diabetes, and heart disease that are prevalent in areas with poor food access.
The service provides a crucial lifeline to varied and fresh food options for assisted living or other mobility-restricted people who may struggle to leave their homes. Even in cases where facilities offer meals, ordering personal groceries can enhance residents’ autonomy and allow them to meet specific dietary needs or preferences that standard facility menus might not fully address.
Affordability Through EBT and Subscription Services
Amazon has made the grocery delivery subscription accessible by offering significant discounts to EBT cardholders and Prime Access members who qualify for government assistance. At just $4.99 per month, the service is affordable for low-income individuals and families. The annual plan, which costs $99.99 for Prime members, provides even more savings, making it cost-effective for those who regularly use grocery delivery services.
The service is especially beneficial for EBT cardholders. EBT programs are government-funded benefits designed to assist low-income individuals and families purchase food. The integration of EBT with Amazon’s grocery subscription means that individuals in food deserts or those with mobility challenges can use their benefits to access healthy foods that might otherwise be out of reach.
Convenience and Reliability
The reliability of Amazon and other delivery services enables residents in remote or underserved areas to benefit from consistent access to groceries. The growing ubiquity of delivery services, infrastructure, and schedule gives people a predictable cost model. It becomes a utility-like service. Speaking of utilities:
Income and Smartphones
As of recent data, approximately 76% of homeless individuals in the U.S. own a smartphone, and this figure is even higher among low-income individuals. Among those with household incomes below $30,000 annually, 27% are considered "smartphone-only" internet users, meaning they rely solely on their smartphones for online access because they do not have broadband internet at home.
Smartphones have become vital tools for homeless and low-income individuals, serving as lifelines for communication, access to services, job opportunities, and online food ordering.
Reliance on smartphones is particularly critical in this demographic due to the lack of alternative internet access, highlighting the ongoing digital divide between lower—and higher-income groups.
This trend underscores the importance of mobile connectivity for vulnerable populations and points to the broader implications for public policy and social services, where ensuring access to affordable or accessible internet services could significantly impact these communities.
Opportunities for Growth and Impact
As the service grows, Amazon could further tailor its offerings to these communities by partnering with local farmers or food co-ops to provide even more fresh, locally sourced options. This could boost the local economy and provide additional variety and freshness to the food available through the service.
Final Thoughts
It's controversial, but an opportunity for grocery delivery subscriptions to be more than just a convenience—it’s a new tool in the fight against food insecurity and a means of improving the health and well-being of some of the most underserved populations in the United States. With local and government support, grocers have several opportunities beyond profit-making.
Onward.
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