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// PUBLIC GAMING INTERNATIONAL // September/October 2016
because the retailer requires it. We need
to capture this data and render it into the
forms that drive our own decision-making
processes. Collectively, Lottery spends
hundreds of millions of dollars on adver-
tising, product development, merchandis-
ing, distributional logistics, and every-
thing else that goes into supporting this
$70+ billion dollar industry in the U.S.
However, the return on that spending is
much less than it could or should be. The
rudimentary tools we use for data collec-
tion are just not adequate in today’s mar-
ketplace—not for our retail partners and
not for us either. The result is sub-optimal
performance which is in effect costing us
hundreds of millions of dollars in sales,
operational efficiencies, and ultimately
net funding. The API is the bridge to the
future in which Lottery becomes a profit-
driver for both our retail partners and the
beneficiaries of lottery funds.
The defining characteristic of Amazon,
for instance, is the sophistication of its
data analytics that powers its superiority
in logistics, its understanding of the con-
sumer, and its ability to identify trends
and develop market strategies at break-
neck speed. All made possible by technol-
ogy that records transactions in a common
language and converts data into business
intelligence. That technology is the API.
I realize we do not aspire to be Amazon.
But corporate account retailers are rapidly
adopting the best practices established
by Amazon, Walmart and other indus-
try leaders. Our competitors in the CPG
world are making sure their IT meets the
expectations of these retailers and we need
to work to keep up with them.
Although not completely API related,
I’ll give you another example of how sell-
ing a product that retailers consider too
labor intensive can have a negative effect
on growing that product.
Publix Supermarkets is one of our larg-
est and finest retailers. They sell Scratch
Offs from both a vending machine and
an in-counter dispenser with a higher
percentage of sales coming from the vend-
ing machine. We projected Publix could
increase their sales from the in-counter
dispenser by adding product facings.
Publix voiced concern about adding fac-
ings and inventory and after addressing
them we discovered one of the most im-
portant concerns to Publix was the time it
would take employees to write down the
beginning and ending book numbers for
their tracking purposes. A solution they
could embrace involved a wand that would
scan the books for number entry and save
employees time. Publix has agreed to pilot
additional facings in a small number of
stores to test the idea. Retailers need more
efficiencies and standardizing API’s would
provide those efficiencies and increase the
opportunity for product growth.
Without the technology to effectively manage
our category, we are ill-equipped to sell to
corporate accounts like Walmart.
T. Delacenserie:
It certainly puts us
at a disadvantage. The intent of a su-
percenter model is to meet all the cus-
tomer’s shopping needs once they enter
the store. A retailer like Walmart knows
a significant percentage of their custom-
ers buy lottery. They also know not hav-
ing those products could mean the cus-
tomer they work hard to attract goes to a
competitor for lottery and maybe some-
thing else they might have purchased at
Walmart. At the same time, they need
to know Lottery will operate with the
same level of consistency and efficiency
as their other vendors, especially when
it comes to sales data. We’ve had dis-
cussions with Walmart in the past few
years about doing a supercenter lottery
pilot in Florida and, while not approved
yet, we remain hopeful. However, even
if they did approve the idea, a success-
ful pilot and a “national rollout” are two
very different things. While I wouldn’t
presume to speak for Walmart, I’m quite
sure any discussion of rolling out lottery
nationwide would at a minimum require
the category provide the most basic lev-
els of data and reporting capabilities,
which an API could provide. No matter
how compelling the performance in one
store or even multiple stores within one
state, a national or multi-state retailer
must be able to accumulate sales data
consistently across their universe to see
the big sales/profit picture for products
it sells. That is why we need to work to-
gether as a community of lotteries to in-
vest in API to achieve our shared objec-
tive of expanding distribution of lottery
products in national accounts.
I would think that it is not just a matter of
getting our products into a Walmart. Don’t
they analyze performance on an ongoing ba-
sis and adjust their support accordingly?
T. Delacenserie:
Getting your prod-
uct in the store is just the first step and
does nothing more than give you the op-
portunity to deliver on the potential you
promised. The “Power of Powerball,” for
example, was on full display last January
in many stores including Walmart Neigh-
borhood Markets. Retailers like Walmart
see the potential Lottery has to drive store
traffic and residual sales and not just dur-
ing big jackpot runs. Yet we fail to clearly
articulate that potential and, by extension,
what the retailer’s potential with lottery is
because our reporting capabilities are so
inconsistent and fractured. We need to be
able to give corporate retailers real-time
data on a national scale for them to fully
grasp the impact that Lottery would have
as both a standalone product and traffic
driver. Go back to my mascara example of
1.6 tubes sold in Walmart every second.
Impressive, but Walmart saw potential
When it comes to using sales data to promote
the category, we’re still working with an abacus
while everyone else is using high speed computers.