manage publications, newspapers and magazines, and we’ve been
trying to get them to change some of their methods. In January this
year, we sent them a notice that said enough talk and mandated
that on May 5th we begin a new way of doing business. Some are
okay with it and some are not. The ones that do not comply will not
have their paper in our stores. That is not the route that we prefer
to go, and I can say that it is much more efficient for everyone
for these changes to be made on your own terms rather than in
response to customer fiat.
Bishop Woosley, Executive Director, Arkansas Schol-
arship Lottery:
If we ever hope to do business with the big re-
tailer in my state of Arkansas (Walmart), I can say that they will
almost certainly require compliance with upgraded reporting stan-
dards from Lottery.
On getting more involved in the strategic
planning processes of our retail partners.
Mark Hagen:
Other consumer marketing companies are much
more directly involved with 7-Eleven in the strategic planning pro-
cess. We meet with all of our major suppliers to put together an an-
nual plan, which includes the mechanisms to monitor and measure
performance and drive execution. We share our corporate plans and
strategies, our views on consumer trends, etc. And, they share theirs
with us. Armed with that information, in January we have our big
annual conference for 5,000 franchisees where we share our overall
direction for the company. Keep in mind that each store has 2,500
items. The franchisees have 10,000 they can choose from. They rely
on data to help them choose the right ones. Suppliers who provide
that data, research, and other information are more successful at
differentiating themselves and their products, and thereby gaining
more attention from the individual store managers.
Paul Jason:
What do lotteries need to do to have a voice in that
planning process?
Mark Hagen:
Try to work together and speak to us with a sin-
gular voice. If you could consolidate your story, and back it up with
data, we could give you the opportunity to directly tell our fran-
chisees your story, let them hear the value of lottery. To be candid,
not all of our franchisees have a positive view of lottery. And, so, if
you have an opportunity to directly communicate to them, it would
likely enhance their understanding and perception of Lottery.
Paul Jason:
Suggestions on how Lottery can improve its ap-
proach, to create a better narrative, tell a better story?
Mark Hagen:
First, it’s really about execution and having the
data and facts to support your story. Most lotteries need to im-
prove on many of the basics, like giving us more advance notice
of product and promotional launches, and visiting our store more
frequently to make sure we are stocked with the most current prod-
uct. But to your question, Lottery needs to find ways to consolidate
your message, your strategies, your data, such that we can under-
stand what exactly you think are the best ways to grow the lottery
business, how the lottery business fits into our broader objectives
that include driving store traffic that buys higher-margin products,
and how Lottery fits into the ultimate objective of creating a better
guest-experience.
We sell Lottery in thirty-three different states. So we deal with
thirty three different lotteries. Even though the product mix varies
a little, there should not be thirty-three different stories to tell, thir-
ty-three different hierarchies to deal with on every level of busi-
ness and marketing communications. You should work together to
consolidate your story into a more coherent, strategic, and action-
able presentation that enables us to understand how you think Lot-
tery will contribute to our goals and how we can work together
towards mutually beneficial goals.
Terry Presta, Executive Director, Kansas Lottery:
Mark
was just referring to the way in which the managers in different prod-
uct categories vie for attention from the retailer, for better shelf-space
and more promotional resources for their particular brands. Retailers
want to know how each product category, like snacks or cigarettes or
Lottery contribute to the guest-experience and overall performance
of the store. I think that we could do a better job of helping our retail-
ers understand the role of lottery if we sold it as a product category.
For instance, a few weeks after I started as director (January 6, 2014),
our LSR and I visited one of our retailers to tell them the exciting
news that we were increasing the number of games from twelve
to twenty games. I expected them to be happy, assuming that they
would feel that increased consumer choice leads to increased sales
and profits for the store. Instead, they had mixed feelings because of
the increased costs of managing more inventory and such. I think as
an industry that we need to overcome that kind of negative perception
of our product. And instead of twelve or twenty products, we need
them to think of Lottery as a single category of products. Unless we
formulate some smarter ways to present our product as a category,
retailers will never appreciate the profitability of Lottery, the power
of Lottery to drive store traffic and sales.
Doing more advanced planning and building a longer lead-time
is a top priority for us right now. We will be meeting with our re-
tailers, particularly our corporates, to build an annual planner. It is
not realistic to think that our whole product launch, promotional
schedule, and all the details of implementation can be set in stone a
year in advance. It is, though, reasonable for retailers to expect us
to at least try to apply a longer time-line to our plans, and to shape
it into a form that they can use. So we are already working to make
that happen.
Jeff Sinacori, Vice President Retail Sales Development,
Scientific Games:
I agree, Terry. Our retailers do not always
think of Lottery as a category. Some of the retail chains are gen-
erating $25 million in profit from lottery products and Lottery is
still not considered a category. Scientific Games has been working
hard to change that. We meet with the retailers to learn more about
their needs and to educate them on the role that Lottery performs for
their businesses. Corporate chains are building $8 million stores. If
we fail to communicate the full benefits of our products, how and
why should they be treated as a category that contributes millions in
Public Gaming International • July/August 2014
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