profits and multi-millions in residual sales from increased store traf-
fic? Developing that relationship with the C-store chains is critical,
and I applaud the lotteries for inviting us to be a part of the effort to
actually go in there and talk to them about what their needs are and
how we can help them accomplish their objectives.
Paul Jason:
Mark, what can Lottery do to get the managers to
raise the profile of lottery products in the stores?
Mark Hagen:
Lottery LSR’s tend to focus on tactics. Where to
put the POS and what the current promotions are, asking us to up-
sell, wanting to talk about on-counter displays, etc. 7-Eleven and
our other suppliers focus on mission and strategy before tactics
and details of implementation. For instance, store design and mod-
ernization is very guest-centric. We do a huge amount of consumer
research to find out what our target guest is looking for. And that
is done in conjunction with all of our major partners. The execu-
tives in the soft drink business, snacks, hot food, cigarettes and the
other major categories, provide input based on their own research,
and they work hand in hand with us on creating store designs that
will optimize the guest experience. These companies do extensive
research and give us comprehensive reports and analyses, backed
up by hard data that help us to understand consumer behavior and
the shopping experience that informs the store-design process. The
research and data provided by our suppliers guide us in our efforts
to appeal to our target customer.
Daniel Cage, Chief Executive Officer, Linq3:
One thing
that Mark is pointing out is that our ability to meet the needs of the
retailer depends on our understanding of the guest, the customer.
We need to acquire a better understand of the different customer
profiles, the variety of different buying motives and shopping be-
havior. There’s the core customer who comes into the store to buy
lottery tickets and also ends up buying additional products. There’s
the customer who comes into buy milk or snacks or cigarettes and
their attention is drawn to the promotion of lottery tickets and so
makes a spontaneous purchase of a lottery ticket. There’s the per-
son who just stops to buy gas without the intention of coming into
the store and so the goal is to get them to come into the store to
make additional purchases. There’s the casual player who plays
for the jackpot or some other lottery promotion but on a sporadic
basis. We need to appreciate the different needs of these differ-
ent customer profiles, and create a guest experience that appeals
to their specific needs. And we need to work more closely with
our retailers to better leverage the tremendous consumer appeal of
lottery to engage these different customer groups, to address this
wide variety of buyer motivations and consumer behaviors with
innovative solutions. They all respond to different approaches and
we want to apply all of them to maximize the appeal of Lottery to
all the different kinds of consumers. That’s how we will grow the
payer base. We need to communicate to our retail partners just how
and why our goals are aligned. We want the same thing so let’s
work together to make it happen.
Michele Argentieri, Transitional Vice President Sales,
Northstar New Jersey:
I think we all appreciate the retailer
point of view as expressed by Mark. And we need to apply the ideas
that Terry, Jeff, and David talked about. These are all pointing us
towards a productive path to forging a true partnership with retail-
ers– both corporate chains and independents. We are all develop-
ing flexible merchandising solutions at retail to attract new play-
ers. We need to attract their attention, capture their imagination,
and make it easy for them to start playing.
As Mark pointed out, much of it is basic blocking and tackling,
making sure the right games are properly stocked and displayed.
We’re piloting several strategies including menu boards and menu
mats to optimize the effectiveness of in-counter displays and help
people shop our products. It’s about optimizing every piece of real
estate that we work so hard to garner including solutions that or-
ganize games by families, or give them added attention in promo-
tional towers, like end caps in grocery stores. Maybe price-points
should not be the only way to organize our games.
We are doing many pilots to determine how to attract that new
consumer. And we are partnering with corporate chains to leverage
their loyalty programs and develop co-op couponing promotions—
not just building our own loyalty programs but building what we
call chain score-cards that essentially integrate our annual product
and promotion plan with their annual chain agenda. You might think
of as a combined scorecard action plan. We want to partner with
our retailers on everything from loyalty to merchandising to cross-
promotions. And to Mark’s point, we are working very hard to put
together an annual calendar so our retailer partners have the lead
time they need to execute. We’re not where we want to be, but we
are working hard to get there and share our successes and learning
with all lottery jurisdictions. In fact, GTECH is sponsoring a re-
tail innovation workgroup, working with our customers as part of a
comprehensive company-wide retail business develop plan.
On Implementing Multi-State Promotional
Collaborations with Corporate Retailers
Susan Strouse, Senior Director, Global Retail Strategy,
GTECH:
If regional lotteries got together to offer you a program
that could run across multiple states simultaneously, do you see an
opportunity to do more advertising? Could your regional circulars
and other communiques drive higher sales? Do you have any CPG
partners working this way today and, if so, could you share the
pros and cons and challenges to this type of broader scale promo-
tional execution?
Mark Hagen:
Yes. The answer is yes, absolutely. We would love
that. We do this type of a program all the time with our CPG part-
ners. And I know this is probably a crazy thought, but if there were
a common scratch ticket that were a cool licensed scratch brand that
we could sell in all thirty-three states that we sell lottery in, you
would see some unbelievable execution in 7-Eleven stores. I know
you’re thinking that is not possible. But you did it with Powerball
and Mega Millions, so why can’t you do it with Scratch? And when
the scale goes from one state to thirty-three states, the stakes change.
Suddenly we have advertising and point-of-purchase assets that are
available to us, resources that are very hard to get when you’re just
Public Gaming International • July/August 2014
18
