Trends in retailing have accelerated from the self-service checkout lane to the self-service store. Clerks have become redundant in the new Amazonian world where customers simply put an item in their basket and walk out of the store without ever stopping at a cash register.

“I have been doing some research on trends in retail,” said Art Kiuttu, SVP, Lottery & Gaming, Lazlo 326. “The lottery industry has been focused on the aging player base and younger audiences are not engaging with lottery. Competition from casinos and ultimately some from sports betting if sports betting that may not be managed by the lottery.”
But another risk to how business is currently transacted for lotteries is occurring at brick and mortar stores.

“Most lotteries may not be aware of what’s happening at retail,” said Kiuttu. “As we have heard, Amazon purchased Whole Foods and they are now in the grocery space. Amazon plans to introduce 3,000 Amazon Go locations in the next three years. These non-lottery locations will compete against the small grocery and C-stores that sell the majority of lottery products in the major metropolitan cities in the United States. I would encourage you to google Amazon Go because new technology is offering a clerk-less environment. In other words, the consumer simply places their food items in a bag and completes the checkout with their mobile phone. Walmart and Kroger have also introduced similar mobile Scan & Go shopping solutions in addition to online ordering and pick up at the store or home delivery.”

Kiuttu offered another example for a prominent national lottery retailer. “7-Eleven now allows consumers to pay for food items and gas with Google Pay and Apple Pay. By simply downloading the 7-Eleven rewards app, customers can join the reward program, earn points (by scanning grocery items with the app) and roll in rewards. And, why not? A recent NACS article that stated 67% of millennial shoppers opt to pay with mobile and 66% are more likely to shop at a retailer with a rewards program.”

Following the lead from Amazon, Walmart, Kroger and 7-Eleven recently announced they will introduce a Scan & Pay solution that allows consumers to shop, pay and skip the line with the mobile app.

Why this technology shift at brick and mortar stores? “Dealing with the stress of a limited workforce, high labor costs and competition from the likes of Amazon and Costco—and now with the European grocers entering the market—I think we will see this new technology widespread in the U.S. in just a few years,” Kiuttu predicts.

Major convenience store chains, including WaWa, Circle K, QuikTrip, Racetrac, Jacksons and others are investing heavily into mobile apps.

What does the mean for the lottery? “New retail environments that don’t offer lottery products, much less exposure to physical retail and eliminating clerk checkout and impulse lottery purchases where lottery products are sold,” predicted Kiuttu. Although there will always be a place for paper tickets, we can expect new technology to have an adverse effect on traditional lottery sales.

Now more than ever, a mobile digital solution for lotteries is critical. “Currently, over 90% of consumers 18–64 own smart phones and the industry predicts that within two years more than 95% of consumers in these age groups will own smart phones. If you’re like me, I can purchase nearly everything on my smartphone, except lottery products. Mobile digital lottery products will dovetail nicely into the Scan & Go solutions being implemented by retailers and allow consumers to purchase digital lottery tickets on their smartphones,” explained Kiuttu.

The Lazlo platform can be integrated into a lottery’s existing gaming system, integrated directly into a lottery retailer’s POS and become the ideal lottery solution for a changing retail landscape.