Dive Brief:

• Walmart introduced a trial of its Online Grocery Pickup service to let SNAP recipients order groceries online and pick them up at the store, reports CNBC. To minimize fraud, federal law prohibits SNAP EBT cards from being used online, so Walmart will need to verify benefits and accept payment when the items are picked up.
• The small-scale test currently involves just five stores: four in Boise, Idaho and one in Houston. In a blog post, the company said it intends to extend the service to more markets “through the holiday season and beyond.”
• In the post, Vice President of E-Commerce Operations Mark Turner wrote, “You’ve told us you love Online Grocery Pickup — it’s putting you in charge of your schedule and how you shop. … We think this is a service that should be available to everyone. … Convenience shouldn't be dictated by the way you pay.”

Dive Insight:

There’s no denying the fact that more grocery shopping is shifting online. This simple change from Walmart could have a substantial payoff in terms of added service and capturing more SNAP dollars. It will be interesting to see if more grocers follow suit and change their policies, too.

It’s expected that 20% of all grocery sales — representing around $100 billion — will come from online shoppers by 2025, according to data from the Food Marketing Institute and Nielsen. Unata’s 2017 Grocery eCommerce Forecast predicts that 31% of U.S. consumers are expected to order groceries online this year, a 19% increase from last year.

Grocery retailers have been making significant investments to ramp up their e-commerce capabilities, expanding click-and-collect programs and experimenting with home delivery services. Walmart is one of the industry's forerunners in this space. The retailer opened its 1,000th online grocery pickup location in Seattle earlier this month. The retail giant’s e-commerce sales grew 73% year-over-year in Q2 2017, driven mainly by online grocery.

With Amazon nipping at its heels, Walmart must use every angle it can muster to sustain its grocery leadership position. This means leveraging thousands of physical store assets to provide customers with added service and multiple convenient shopping options — whether in-store, through its click-and-collect program, or home delivery.

Allowing SNAP customers to now use its grocery pickup service is a smart move for Walmart. The retailer already attracts many customers on food assistance in its stores, so enabling the use of EBT payment via click-and-collect provides an additional convenience and service component. Plus, it’s something Amazon can’t replicate — at least not until it gets click-and-collect up and running in its physical Whole Foods locations.