Target plans to allow shoppers use food stamps to pay for online orders, Reuters wrote Friday (April 1).
This would position the retail giant alongside its big competitors Walmart and Amazon.
It would also help the company, the country’s seventh-largest retailer, gain a larger share of the lower-income market.
Target wrote that it planned to accept SNAP benefits as payments tentatively in April. That will be done via a service offered through delivery arm Shipt, though a spokesperson said there’s no official launch date yet.
The service will also offer drive-up and pickup orders.
Reuters wrote that around 21.7 million U.S. households use SNAP, the Supplemental Nutrition Assistance Program. Traditionally, the payments have been restricted to cold food items, nonalcoholic beverages and seeds and plants.
Reuters notes that offering this service might help Target fill in a gap in its eCommerce strategy, helping it reach households that might be purchasing groceries at places like Walmart or dollar store chains.
The report notes that Walmart and Amazon already take purchases via food stamps through their websites as of 2019, because of a program with the U.S. Department of Agriculture, which sends out food stamps.
Target’s move might be able to build customer loyalty and help it sell various products, according to David Klink, senior equity analyst at Huntington Private Bank. That institution has more than $30 million in Target shares, the report says.
PYMNTS wrote that Walmart has recently debuted a new strategy to link its consumer base with more brands.
Walmart Connect, a new domestic advertising arm, marks a new revenue stream that has become a $2 billion business.
“Every year, 90% of American households rely on Walmart for a range of products from must-buy brands, both large and small,” Rich Lehrfeld, senior vice president and general manager of Walmart Connect, wrote in a blog post. “And every week, more than 150 million customers shop with us in-store or online.”