Bridging the CPG Coupon Digital Divide is Good for Shoppers, Bottom Line
Layoffs, inflation, and the end of the expanded child tax credit during the pandemic have put added pressure on the 42 million households that use SNAP/EBT benefits each year.
This is a time for brands, retailers, and their partners to take a fresh look at their in-store promotional strategies for people in need. If you deliver ads, offers and incentives through digital-only solutions, you’re missing a significant share of shoppers across all demographics due either to their preference for printed coupons or lack of access, including 113 million consumers 18 and over who are not engaged with digital platforms for shopping or savings.
By working together to address the digital divide, grocery retailers can help these shoppers -- as well as older consumers and people with disabilities uncomfortable or unable to use this with technology -- stretch their dollars further and earn their loyalty.
The FCC reports† 19 million U.S. consumers –6% of the population--don’t have access to quality internet service and, according to Pew Research Center‡, 15% of adults don’t own a smartphone, which rises to 39% for those 65 years and older. Combined, as many as 100 million consumers can’t afford or don’t have easy access to broadband internet connections. This lack of connectivity makes it harder for them to find product information, compare prices, or easily access grocery apps or websites that deliver incentives and promotions. And those with no access to email or text messaging have difficulty using grocery delivery or pickup services.
Government is stepping in to help close the gap. Coupons in the News reports Illinois and New Jersey are among the states considering legislation that requires retailers to offer print coupons with the same value as digital ones. At a federal level, the FCC is administering a new Affordable Connectivity Program, part of the 2021 Infrastructure Investment and Jobs Act, which increases the number of eligible households to 200% above the federal poverty line but reduces the monthly benefit from $50 to $30.
Purchase-based shopper insights from Catalina show more than 7% of all grocery transactions use some form of SNAP/EBT benefits, and these shopper baskets average a 35% higher spend than typical baskets. While 10% of all customers use benefits, these shoppers average 20% of grocery sales.
From March 1 to April 30, 2023, Catalina’s audience profile for Families on a Tight Budget shows that they are 5X more likely to buy Canned and Frozen Meats compared to the average shopper. They fill their baskets primarily with brand name products but compared to a year ago are increasingly turning to private brands for Dry Hearty Soups (+13%), Yogurt with Fruit (+13%), Frozen Pizza Dough (+11%), Cooked Refrigerated Meat (+16%) and Poultry (+10%).
These budget-conscious shoppers continue to spend their limited grocery dollars on staples such as fresh Bread (69%), Milk (60%), Eggs (48%), and Cereal (39%), but still treat themselves to snacks such as Regular & Premium Ice Cream (32%), Cookies (+41%) and Potato Chips (+40%). Families on a Tight Budget are defined as those with an income of 1.2X the US poverty level.
Retailers introducing solutions that address digital gap
To help these consumers stretch their food budget, retailers have introduced a variety of options to address the digital divide, from offering free Wi-Fi in stores to providing grocery delivery and pickup services without requiring an email address or phone number.
Several regional grocery stores, including Meijer, Tops, HEB and Wakefern, have paired with nonprofits to provide printed offers and incentives to those who need them most through the Double Up Food Bucks & Gus Schumacher Nutrition Incentive Program (GusNIP), which matches dollars spent on fresh fruits and vegetables for those receiving SNAP/EBT benefits.
Retailers can participate by identifying a nonprofit partner, such as Feeding America, or local and state governments, and providing a monthly file of SNAP customers. Catalina helps by assisting with the grant application and managing transaction data. For example, shoppers can receive a dollar-for-dollar match of the money spent on produce as part of an in-store incentive. Or they can earn dollars off their next fresh fruit and vegetable purchase when they spend $10 or more.
CPG marketers can also respond by reinvesting their promotional dollars – especially for commodity- based categories—to address the $26 billion funding gap that’s been created by the March 2023 sunsetting of the American Rescue Plan Act’s increase in SNAP benefits during the pandemic. These moves will be especially pertinent this summer, when the 20-to-30% of students who receive subsidized lunches in school will be on break.
Design your 'digital divide' strategy
Retailers, CPG brands, and their agencies should look for a partner who can help create a more inclusive approach to promotions. They should design strategies that give equal access to offers and incentives by combining digital coupons with 1:1, personalized, in-store/in-lane media.
Working together, our industry can institute thoughtful and strategic instore promotional plans that close the digital divide by delivering meaningful offers and incentives that meet every value-conscious and older shopper in their preferred channel of engagement whether that is digital or print. Catalina would like to help, contact us today.
†FCC Broadband Progress Report, 2021
‡Pew Research Center, 2023