Amazon takes target market segmentation to a new level on an ongoing basis.
Whether it’s Amazon Prime luring us in with free shipping and other free stuff or showing us similar products that go with the one we just bought, the online shopper understands marketing and customer data better than most.
Now Amazon’s latest idea is to deliver groceries to food stamp recipients.
The company is one of seven online retailers chosen by the U.S. Department of Agriculture to participate in the Supplemental Nutrition Assistance Program (SNAP) to provide help to 44.2 million needy Americans.
Amazon’s drill down of the marketing data shows 80 percent of food stamp recipients live in or near cities where Amazon has warehouses.
The company sees an opportunity in adding deliveries to low-income housing since they are already delivering in the area. The infrastructure, processes and team are already in place so why not make additional deliveries at a low marginal cost?
The challenge is serving both the high and low end of the income scales.
Think about it. Walmart customers are mostly lower income while Costco’s customers are mostly higher income.
Can Amazon be the first major online retailer to meet the needs of both on a consistent basis?
Amazon said the company is committed to making food accessible through online grocery shopping, offering all customers the lowest prices possible and that their selection and competitive pricing can improve the grocery shopping experience for SNAP participants.
We’ll see if Amazon can be successful across both ends of the income spectrum.
If their track record is any indication, Amazon’s move to reach the low income market by delivering groceries to food stamp recipients will be another example of the company hitting the bullseye with their marketing.