My opinion is that steering people into spending more than they are prepared to spend just turns them away from viewing the bike as a viable means of transportation or utility riding (grocery runs). Let them buy the department store bike if that's what the budget allows. That's still one more bike on the road, one less car.

Often the used market is suggested as an alternative to department stores, but let's awknowlege that there is a lot more junk than 'gems' on Craigslist. Maybe some take it for granted, but choosing what used bike to buy often requires a certain mechanical know-how, something which first time buyers are unlikely to have. Furthermore, some people, for whatever reasons, are not comfortable meeting with a random person and buying a bike on Craigslist.

So let them ride that department store bike or Amazon single speed. If they get 'hooked' they will willingly want to spend more when the time is right. Even if all they do is leave it parked in the garage and ride it a few times a year, hey, it's still one less car for those few days , and who knows, they might inspire someone else to ride, and that person might inspire someone else, and so on. That's the way to get people on the bike, imo.