Scientific Games: Reaching the Instant Product’s Full Potential with Retail Business Intelligence

“We’ve been testing SCiQ in Texas since September 2017, and just started pilots in New York and Pennsylvania. Having real-time visibility of in-stocks has already helped us to minimize out-of-stocks to support sales growth.”—Mark Hagen, Senior Category Manager, 7-Eleven

Advancing lottery retail with the new business intelligence available from SCiQ® is a key driver for the next stage of growth in lottery games. Lottery instant games are the biggest consumer product category on the planet—bigger than the music and movie industry combined. Retail sales of instants topped $50 billion in the U.S. and $87.5 billion worldwide this year.

The instant product category continues to be the growth catalyst for every lottery in the U.S. and abroad. Engaging retailers in the operation and management of instant games to drive sustained growth is more vital to a lottery’s profits and returns to beneficiaries than ever before.

“The sheer magnitude of the instant product’s revenue potential if sold the right way makes the retailer the most important part of the lottery ecosystem. The lottery retailer—whether a major chain location or a mom and pop shop—is the last touch point before the game reaches the consumer,” said Randall Lex, VP Retail Solutions, Lottery for Scientific Games, who works with retailers throughout the U.S.

Lex said the store environment, merchandising, clerks and more all play a critical role in whether a consumer will make the choice to purchase and play a lottery instant game. And it’s getting more complicated.

With the ongoing expansion of convenience retail, retailer mergers and acquisitions that seem to be happening every week, and the introduction of new technology within store operations, it’s critical that the lottery product category be more accessible, convenient and attractive to consumers.

It’s no secret that retailers don’t manage instant games the same way they manage on-demand draw games, which do not have the same operational and management challenges as merchandised “on the shelf” products. Retailers manage instant products more defensively because of necessary unit level tracking, anticipated internal shrink (which can range from 1% to 2% of total gross sales), and numerous out-of-stocks that can cause lotteries millions in lost sales opportunities.

“Lottery sales reps have the knowledge and understanding of best practices to encourage their retailers to act, but no data to really understand what is happening at retail from hour-to-hour let alone day-to-day or quantify the loss by not exercising the tactics they bring,” explained Lex.

In recent years, the growth strategy for many lotteries is increasing instant game price points up to $30—and in some cases up to $50. What’s next?

“Data is paramount to any business succeeding or growing and the lottery industry is lacking the visibility of the business intelligence associated with the instant games product category,” said Lex. “With gaming competition increasing, now is the time to focus on where consumers are putting their game entertainment dollars and to completely understand the lottery instant product market basket, the out-of-stock impact, and how to streamline retailer operations.”

Scientific Games’ goal with the SCiQ instant game retail technology pilots currently underway in nine U.S. states is to increase lottery retailers’ engagement, and shift their behaviors when it comes to managing the instant product in their stores. To date, intuitive SCiQ systems are operational at more than 60 stores with 1,500+ facings. A new 300-store rollout in Ohio is scheduled.

“SCiQ is an intelligent instant game ecosystem that is proving to engage retailers, shift their behaviors with lottery products, and provide more retail business intelligence than we’ve ever had with just the push of a button,” shared Lex. “Sales reports and dashboards with insights at a high level or at a multitude of very granular levels are available in seconds.”

To sell instant games using the SCiQ system, the retail sales associate simply selects the games the customer wants to purchase through the digital ordering screen, dispenses the games with the touch of a button, and gives the games to the customer. SCiQ automatically tracks every unit, providing both retailers and lotteries greater visibility into instant game sales in real-time.

For consumers, SCiQ brings the ease and convenience of mobile technology to retail lottery purchases. The ecosystem has user-friendly features that, depending on the options selected, can further speed the purchase process and even allow customers the option to advance-order games before arriving at the store.

Many retailers and lotteries are evaluating SCiQ to better understand its impact on the operation of selling and managing instant products, as well as assessing the data it generates from unit level tracking to in-stock performance and out-of-stocks.

“Introducing technology to manage the instant game product at retail is a paradigm move from years of manual management. Changing this requires a ramp-up of training, support, and learning,” explained Lex. “And as with any new technology, there’s a curve to get all stakeholders aligned and understand the best strategies for driving forward with the new business intelligence available with SCiQ.”