Payment problems… As a global recession looms, ecomm giants are launching more affordable payment options — because more shoppers need them. Americans burned through their pandemic savings faster than anticipated this year as prices surged at the fastest pace in four decades. With consumers further tightening their belts, online retailers are trying to make shopping more accessible:
- Prime relief: This month Amazon launched an “Access” hub for customers to explore affordable options (think: discounts, coupons, and EBT SNAP payments — aka: digital food stamps). Shoppers who receive government assistance can get discounted Prime memberships, pay over time, and shop without cards.
- Full carts, can’t lose: Last month Instacart said it would expand its SNAP program in the coming years to help low-income shoppers buy essentials like diapers, which aren’t covered under food-exclusive SNAP.
- Delivering assistance: A growing number of food banks are using DoorDash and Amazon to deliver nourishment to people in need.
Unwelcome U-turn… Poverty is making a regrettable rebound. US poverty plummeted to record lows during the pandemic thanks to massive government stimulus. Now that federal aid has dried up and many pandemic benefit programs have disappeared, experts predict US poverty could soon hit a 50-year high.
- Less spending: Inflation-adjusted spending at stores and restaurants has dropped since April (barring an unexpected August bump).
- Missed payments: Shoppers who can’t pay for gas and groceries up front are racking up “buy now, pay later” late fees, and even defaulting on their loans.
It isn’t just corporate altruism… Companies like Amazon want to keep customers spending, even during hard times. Industry titans can actually boost their market share during recessions by keeping prices low (they can afford to): that’s what McDonald’s did in 2008. Amazon may be next: research suggests Americans are more likely to cut food spending than cancel their Prime subscriptions.