By: Hannah Walker, Vice President, Political Affairs, FMI
The food retail industry is crossing new boundaries at an unprecedented rate. Now, Boomers and Gen X are vying with Millennials and Gen Z for the title of online shopper superstars. As the new decade gets underway, the dynamics of ecommerce and omnichannel are growing in complexity. FMI is focused on ensuring our members can reach and serve all their customers, regardless of how they pay or shop for their grocery items.
FMI's Omnishopper Imperatives for Food Retailers study estimates online and in-store spending for food and beverage will reach $143 billion by 2025. There are several factors weighing into the latest projection including, retail foodservice, enhanced click and collect models, proliferation of two-hour delivery to homes, and more customers switching from purchases in-store to online.
Online SNAP Redemption Pilot Program
That’s why our advocacy efforts ensure individuals of all ages, demographics, and accessibility using the Supplemental Nutrition Assistance Program (SNAP) have the same access as other shoppers using ecommerce programs daily. We’ve worked closely with the United States Department of Agriculture (USDA) to identify the challenges and opportunities of online SNAP redemption, which launched a pilot program in the states of New York and Washington. This pilot program is an important step to address the evolving needs of U.S. grocery digital shoppers and works to improve access and options to all customers.
We expect additional states to launch their online pilots in 2020, and FMI will advocate for a nationwide rollout if the pilot proves successful.
What’s Next for Mobile Payments?
We know shoppers seek more than just online order/delivery or pick up models. As the omnishopper evolves so should innovation and speed of payments. SNAP retailers can currently launch their own click and collect, pay in store omnichannel programs. So, the question remains, what is next?
The 2018 Farm Bill directed USDA to authorize up to five state SNAP mobile payment demonstration pilots. The idea of moving away from plastic cards and into a digitally enabled SNAP card sounds like a logical next step, but it also comes with unique challenges. To date, there is no real “winner” with regards to the technology solutions for mobile payments. The global card brands push for near field communication (NFC) technology solutions for mobile, however, NFC comes with its own challenges and tradeoffs for both the consumer and retailer. In response, some retailers have opted to use an alternative QR code mobile payment solution to avoid some of the pitfalls surrounding NFC. These are only two solutions in an ever-evolving market. As USDA begins this process of considering possible mobile payment pilots, it is essential the retailer voice and unique perspective is heard.
FMI is actively sharing our initial thoughts with USDA on how a mobile payments pilot could work, and the need to ensure our members are not unfairly harmed or subjected to unintended consequences on the commercial side as we work to bring new solutions to SNAP. While there will be challenges on many fronts, it’s crucial we ensure SNAP customers are not left behind in the ever-growing omnichannel shopping world.
Download the Omnishopper Imperatives for Retailers Report