The Roundup: Retail Initiatives

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Mobile Cashing

In September of 2021, the Massachusetts Lottery launched the mobile cashing feature within its existing app, allowing registered users to claim prizes of $601 to $5,000 securely through the app. Currently, about 20% of all eligible claims are being transacted through the app.

Over 19,000 prize claims totaling over $24 million have been fulfilled through the app.

“In addition to providing convenience for our customers, the environmental benefits are many. Eliminating vehicle trips to Lottery claim centers for these transactions has preserved over 38,000 gallons of gas, saving customers over $140,000 in gasoline costs and resulting in a 737,000-pound reduction in carbon emissions. The environmental impact of mobile cashing is being tracked on our website,” Christian Teja, Asst. Exec. Dir., Communications, Massachusetts Lottery, said.

Retail Commissions Increased from 10% to 30%

OLG launched several unique Lottery Retailer Initiatives in the last year and half that have provided increased commissions on the sale of a variety of lottery products. In January 2021, in what may be an industry first, OLG launched the “Support Local” initiative that returned all profits to retailers for three months’ worth of sales on the new Instant Plinko game. Based on the success of the initiative, other programs quickly followed for such games as Lightning Lotto and Instant Top Up. The commission increase on these products ranged from 10% to 30%.

A similar initiative started in March 2022. OLG planned to give all the profits from the sales of $3 Instant Crossword and $3 Instant Bingo for four weeks. “However, we received such positive results in just the first few days of the initiative, that we extended this program, for a total of eight weeks,” Vanessa Theoret, Senior Director, Retail Sales & Account Management, OLG, said. “This initiative was designed to thank our valued lottery retail partners for their hard work.”

Approximately C$6.6 million in additional commissions is expected to be paid to retailers throughout the duration of this incentive program.

The Best Way to Promote Lottery at Retail

“We have identified what we think is the best way to promote Lottery at retail. A digital menu board acts like a billboard at the counter. The on-counter digital jackpot sign draws attention to our jackpot games. The STVM is a great way to promote lottery and adds an additional purchase point within retail. Having all three in place in one location really makes Lottery stand out within a store and is our long term goal,” Tom Campbell, Sales Director, Colorado Lottery, said.

Colorado Lottery worked with Schafer Retail Solutions + to test a digital menu board (DMB). The Lottery tested five locations for a 15-week time period. The DMB locations outperformed locations without by 18%. The Lottery also purchased digital counter top jackpot signs from Carmanah Signs, and is currently working to place 500 of these signs at retail locations. “We also purchased Carmanah jackpot signs that sit on top of the STVMs at Walmart locations to help draw attention to the low profile machines,” Campbell said.

The Lottery also plans to place 500 SCiQ (24-game) units. “We are requiring that any retailer that agrees to place the units must also include the digital menu board that comes with it,” Campbell said.

The Lottery is also working on a self-return process. It wants to increase the percentage of retailers that activate new Scratch games within five days of launch. “Retailers are reluctant to pull active games because they fear they could be stolen and validated. A self-return process will allow retailers to put active packs in a pending return status, which means the tickets cannot be validated,” Campbell said.

Major DMB Expansion

A major accomplishment for the Connecticut Lottery Corp. (CLC) was the implementation of a Digital Menu Board (DMB) pilot program. Retailers’ feedback from these locations has been very positive. “They are excited to present lottery products with a clean, innovative, and modern look. They see it as an additional way to engage and educate players. Traditional scratch ticket-only players are now trying other games like Fast Play because of the increased awareness,” Diane Geary, Sales Manager, CLC, said.

The pilot’s results are promising. The sales lift, although not consistent at every location, points to a general increase for draw game and Fast Play sales. From that initial group of 7 retailers, 3 saw an increase in overall sales, averaging 10% growth. Over half of the locations had increases in both Fast Play and total draw games sales. “We are bringing this program to 50 of our retailers and should have all locations installed by the end of this fiscal year,” Geary said.

99%, Vending OOS, Curbside Sales

The Kentucky Lottery Corp. (KLC) expects to grow by 6%. One of the major drivers of this success has been maximizing performance on launch day. All year, 90% of the Lottery’s retailers have activated and displayed new games on the first day of launch. For the past two launches, that number has been close to 99%.

Cashless touchscreen vending machines drove a 6% increase in vending sales. The Lottery has also established a 5% or less vending Out of Stock (OOS). “We added a bonus tier to our incentive plan this fiscal year related to OOS below 5%. Our statewide OOS number are under 4%. We averaged more than 5.5% in FY21,” Amy Drooker, VP of Sales, Kentucky Lottery said.

The Lottery is also testing curbside sales of Scratch Off tickets. “Customers really embraced this option during the pandemic – and we believe not being in this space is leading to lost sales opportunities,” Pete Ramsey, VP, Corporate Accounts & Business Development, KLC said.

Debit LVMs, DoI Store

Washington’s Lottery will be adding Debit to their Lottery Vending Machines (LVMs). The Lottery also plans to add a new feature to the LVMs that they call “cart.” “It will make buying a lottery ticket from an LVM very similar to buying from Amazon. We hope to start with a few stores in mid-June and be fully functional sometime in early July,” Ron Smerer, Sales & Marketing Director, Washington Lottery, said.

Like most states, Washington has seen an increase in crime. The Lottery has seen an increase in the number of incidents and the amounts that are stolen have reached record proportions. The 300 LVMs will help reduce incidents. “We are looking at the possibility of some sort of ticket x ticket sales,” Smerer said.

Washington’s Lottery’s biggest accomplishment in the past year is still the “Department of Imagination” (DoI) store in Spokane. “It continues to sell above our expectations and as a result, we have expanded our hours to seven days a week, and we are open during all of the Mall hours,” Smerer said.

Increase in Crime Rates Forces Lotteries to Find Custom Solutions

With higher price points and payouts, interest in instant games has never been higher for players. Unfortunately, it also draws the attention of thieves. With crime rates rising across the United States, many lotteries are experiencing a higher rate of theft at the point of sale. Retailers who are often not indemnified are demanding solutions.

Take-A-Ticket has developed three different custom-fit solutions to help lotteries deal with this issue. “We are working hard to mitigate the threat to on-counter dispensers,” said Seth Tigner, President, Take-A-Ticket. “We developed a security bracket for the California Lottery that goes over the dispenser and is bolted to the counter. We use powder-coated aluminum, and we can print the lottery’s logo on the bracket, so it is a security feature and branding device. We can customize a solution for all on-counter dispensers.”

Many retailers struggle with “reach-over” thefts; when the clerk is distracted, the thief reaches over the counter to grab a ticket. Take-A-Ticket’s solution is a retrofitted kit for their ICM dispensers. “We had a recent conversation with the Minnesota Lottery about security issues. We’ve developed a locking cover that is a quick and easy way to lock and secure the existing in-counter dispenser.”

Take-A-Ticket has also developed a series of lighted menu boards that puts the tickets entirely out of reach. A lighted sign board shows all the tickets in an attractive, eye-catching format, allowing retailers to store the live tickets in a remote, secure location. “One of the safest things to do is use static, high-impact displays on the counter. The lotteries and retailers more and more are saying get the live tickets off the counter. It is too susceptible to theft and robbery,” said Tigner.

Tigner and his team work collaboratively with lotteries and their retailers to solve unique challenges. “Many of these security innovations have come about through trial and error,” said Tigner. “Working the materials to make it attractive and secure required working closely with the lotteries and retailers. One lottery suggested using a mobile lock instead of a carabiner. That way, the clerk cannot lose it. When it gets into the stores, that is when we get meaningful feedback.”