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Amazon has gone head to head with Walmart recently as they begin to target Walmart’s key audience; low income customers. Amazon has started offering a reduced Amazon Prime subscription to US consumers who receive monetary assistance from the government. Not only is this move another example of Amazon broadening their horizons once more, but it also directly competes with Walmart’s newest features: free shipping with no fees, curbside grocery pickup, and E-commerce acquisitions. 

Morningstar reported that nearly $1 out of every $5 in food stamps were spent at Walmart last year, amounting to roughly $13 billion.

Given that 43 million consumers received $66.6 billion in annual Supplemental Nutrition Assistance Program (SNAP) payments, this venture sets Amazon up with a much broader consumer base to tap into. Amazon are hoping to convert these low-income consumers into lifetime Prime customers.

Amazon’s CEO held nothing back about the company’s intentions, “Our goal with Amazon Prime, make no mistake, is to make sure that if you are not a Prime member, you are being irresponsible.”

Amazon has already broken into the upper-income market, with 82% of households making $112,000 being Prime subscribers, so their move to target low-income audiences is just another step towards their goal of retail domination.

Amazon breaking into this new segment is a long-term strategy, it will result in a high growth potential and is a blow to Walmart who stands to lose key customers that will migrate over to Amazon.

While low-income individuals may have difficulty accessing transport to get themselves to physical stores, 74% of people below the poverty line have internet access. Not only does Amazon Prime offer free delivery, but also music and video streaming, original content, photo storage, and doorstep delivery. With such a rounded, full package, it’s difficult to see why you wouldn’t be subscribed.

It seems that Amazon won’t stop until they dominate the entire retail industry, and they go to the effort of perfecting their systems to ensure they aren’t just a jack of all trades, but a desirable option.