SNAP Analytics (1) - Funding and spikes.

Back in August I took a quick look at SNAP, the US government's "Supplemental Nutritional Assistance Program", formerly known as "Food Stamps". (see What's driving your Sales? SNAP?).  

In 2011, approximately 15% of the US population received SNAP benefits that they can spend on most food and beverage items in store.  SNAP funding has doubled in the last 3 years.

SNAP can create large spikes in demand at the store and yet, because of the way these funds are distributed , this is typically hidden from analysts looking at aggregate data. (see Do you need daily Point of Sale data?... )

If you do not know which products, stores and dates will see spikes in demand how can you ensure product is on-shelf?  Ignoring SNAP may be costing you sales.

This is the first in a series of posts covering Analytics around SNAP and opportunities for driving incremental sales.

The table below shows the days of the month (highlighted in red) when each state distributes SNAP funding (click on it to enlarge):

US SNAP funding patterns by state and day of the month.

At the top of the table, we have the States that distribute all their funding on just 1 day of the month. Out of the 54 States, Districts and Territories shown just 10 of these distribute on one day and (thankfully) they are not the ones with the biggest sales. But, if you are selling a SNAP responsive product you will want to ensure you plenty of stock in-store and on-shelf on the first for these states. 

The States are ranked in terms of the impact SNAP distribution is likely to have within each state: the size of the sales "spike". Fewer SNAP distribution days and the spike will be higher. Perhaps less easy to explain but the closer that SNAP distribution days are to each other, the more their shoppers overlap in store and the higher the sales spike. Consequently, Utah with 3 dispersed distribution days may have slightly lower sales "spikes" than New Jersey with 5 distribution days in a single block.

Somewhere along the line between Nevada (ranked #1) and Missouri (ranked #54) SNAP stops mattering to you because the distribution of fund is so dispersed through the month that you see no sales spikes at all.

74% of funding is distributed on 10 days or less and 10 day distribution can still generate, on average, a 20%-40% increase in sales $$. BUT, some products are more responsive to SNAP distribution than others; some stores will have many more than the average 15% of their shoppers eligible for SNAP. So, within the same State expect huge variations in the size of demand spikes. It may not be the average that's causing a problem.

Do you know which products, stores and dates are at risk? If not, how do you know how much demand went unfulfilled?  

next>  SNAP Analytics (2) - Purchase Patterns