Bridging the gap between retail and digital
The lottery sector has built its success in partnership with its extensive and established retail network that acts as its trusted resellers. As the world has become more digital, lotteries have had to adapt and change their approach to stay relevant to a new generation of players. During the COVID-19 outbreak, having an online presence has never been more important as many retailers were forced to temporarily close. In a three-way dialogue, Dan Beebe, Director of Lottery Strategic Development at BCLC; Stuart Godfree, Managing Director of mkodo; and Jennifer Westbury, Executive Vice President, Sales & Customer Development at Pollard Banknote, examine the link between retail and online sales platforms, how lotteries can best integrate their retail and online offering as well as protect the relationship with their retailers in the wake of an increased digital offering.
How can lotteries initiate and grow their online presence, while still reinforcing their existing brick-and-mortar business model?
Jennifer Westbury (JW): “We have seen that lotteries can successfully increase their online presence and still continue to grow brick-and-mortar sales. Lotteries can begin by complementing existing instant tickets with digital game enhancements as well as leveraging their second chance and loyalty platforms to drive players back to retail. Our digital enhancements and player engagement platforms are designed to effectively bridge the gap between an internet gaming experience and traditional scratch play, while maintaining the lottery’s critical retail network as central to the transaction. Our approach to these products is built on the premise that the entire experience begins and ends at retail.”
Stuart Godfree (SG): “Lottery retailers are still the gateway into the product for the majority of people, but as a new generation of players emerge, there has to be a merger of the retail and digital purchasing experience. One way to do this is to build a digital fingerprint of the player from the retail point of sale to slowly integrate digital elements. By, for example, allowing players to pick their lucky numbers on their phone and scanning a QR code at a terminal at the till, lottery operators can start digitally tracking the player and start offering information about relevant products and services. This way, the retailers remain an important part of the lottery eco-system in the shift to digital.”
"With an increased online focus and a shift in consumer behavior, lotteries are seeing the importance of having more integration between online and retail initiatives."Jennifer Westbury
Dan Beebe (DB): “The growth of our online products highlights that, more so than ever before, it’s time to accelerate our focus on a seamless, omni-channel player experience that converges digital and retail. The key is to offer players a customized, cross-channel journey whether they are playing games online, at land-based facilities or at retail. We are also exploring the adoption of greater digital integration within our bricks-and-mortar retailers, including tests to support our partners’ ‘Buy Online, Pick Up In-Store’ and online home delivery as the market adjusts to a post-COVID world.”
How can lotteries best maintain their relationship with retailers while increasing the digital offering?
SG: “One thing that lotteries are currently looking into is the concept of association. This is similar to the affiliate programs that are very common in the gambling industry were a financial reward could be given to a retailer if it successfully gathers data from a player which moves online to play. Another option would be to introduce virtual coupons offered after an online transaction that could be used with the retailer to ensure that the revenue generated from other goods associated with a lottery purchase (e.g. a can of soda and a chocolate bar) is not lost.”
DB: “While we continue to grow our digital offering, our lottery network includes 3,500 retailers that are extremely important business partners who build brand loyalty with our players through exceptional, personalized and responsive customer service. The COVID-19 pandemic has underscored the importance of our retail network more so than ever before. Despite an increase in online shopping overall as the public follows social-distancing recommendations, our research indicates that many players still prefer the experience of visiting their retailer to purchase lottery tickets. We remain focused on supporting the evolving needs of our retail partners, including changes to our compensation structure that address realities like rising labor costs and working to increase engagement through performance-based incentives.”
"Lottery retailers are still the gateway into the product for the majority of people, but as a new generation of players emerge, there has to be a merger of the retail and digital purchasing experience."Stuart Godfree
Have traditional lotteries been slow in embracing and adapting to digital?
SG: “The lotteries themselves do look to innovate within the legislative and infrastructure constraints in which they operate. It can be slow-going as the infrastructure that supports lotteries is huge, bulky and expensive and cannot be easily changed. Current platform incumbents also don’t have much incentive to innovate as they are running a profitable business model. However, since many long-running contracts between lotteries and suppliers are soon expiring, operators are currently exploring future options to become more digitally focused.”
DB: “We have tried to react to market changes as quickly as possible and launched our free Lotto! app in 2016 to support players in checking their physical tickets on mobile devices. We enhanced the app in 2019 to enable players to purchase tickets on our online gambling site PlayNow.com. PlayNow.com, is the only regulated online gambling site in British Columbia and is now the fastest growing channel of our business, with growth of almost 25% in the last fiscal year.”
How do you help your lottery clients in their journey to become more digitalized?
JW: “We have developed a suite of digital engagement products, the Space Between™, that sits in the space that exists between the brick-and-mortar retail activity and the purchase of lottery products over the internet. Our playON™ Loyalty Program Solution and gameON™ Second Chance Solution help lotteries begin to learn more about their players at any stage of their digital journey to be able to customize exclusive offers or rewards which can be collected at retail.”
SG: “At mkodo, we deliver the digital customer experience and integration piece. We design and build web and mobile app products that integrate into the lottery back office and also into the retail environment using the best technologies available. From the retail lottery purchase point of view, we can be that interface connecting the two separate worlds, and we do so by using the mobile phone as a conduit.”
"The key is to offer players a customized, cross-channel journey whether they are playing games online, at land-based facilities or at retail."Dan Beebe
How can online and retail integration increase the player experience?
SG: “Integrating digital is vital to engaging a new generation of players that expects to do everything with a mobile phone. By merging the two worlds, operators will be able to introduce new and exciting products that will improve engagement and retention. A digital offering will also increase accessibility for people living in remote places or that find it hard to leave their homes to buy a ticket.”
JW: “With an increased online focus and a shift in consumer behavior, lotteries are seeing the importance of having more integration between online and retail initiatives. It is increasingly vital for lotteries to give players what they want – where and when they want it. As mentioned above, we have developed the Space Between™ suite of digital engagement products, playON™ Loyalty Program Solution and gameON™ Second Chance Solution with the ultimate goal of supporting the online-retail relationship. These products not only help generate data every time a player interacts with them, they also offer players a fun and engaging way to extend the life of instant tickets and expands their interaction with lotteries. In turn, the intelligence lotteries gain through these digital offerings is crucial to allowing them to communicate to their players in a personalized, timely, and relevant way – ultimately elevating the player experience.”
DB: “As we continue to bridge digital and bricks-and-mortar player experiences seamlessly, account-based play is one way that we will reposition our business to become more player-centric across all channels. By prioritizing entertainment, convenience and how-to-play information, we can offer our customers more options to play with BCLC through digital integration within retail environments.”