Lazlo 326 sees titanic forces on the horizon for lottery at retail. Art Kiuttu, Senior VP Lottery & Gaming as well as veteran of venerable lottery organizations—both public and private—has navigated the lottery and retail waters for more than three decades. From his perch, he urgently advocates a change of course.
“I don’t know if the lottery industry as a whole realizes the scope of technology advancements in retail,” noted Kiuttu. “They have accomplished more in the last couple of years than in three decades in terms of technology.” Grocery and C-store retailers are looking for ways to improve the customer shopping experience by allowing consumers to bypass the checkout counter, a major pain point for shoppers.
The sea change at retail is propelled by consumers. “The biggest challenge facing the grocery industry is keeping up with customer expectations,” noted Mark Vela, Director of Customer satisfaction for Albertsons. “We have a clerk-less checkout pilot in one of our stores. It is loaded with problems, but the customers are demanding it.”
In a recent Forbes article on Amazon Go—the online behemoth’s entrée into clerk-less checkout grocery retail—one consumer described the thrill of breezing past the counter; it was like “shoplifting without the guilt of stealing.” Forbes estimates $4 billion in sales across 3,000 locations by 2022. None of the sales will be lottery products.
Lazlo 326 addresses these consumer needs. “Lazlo gives players the ability to purchase lottery products, using a retailer mobile app,” declared Kiuttu. “We have the ability—in partnership with retailers—to add lottery purchasing onto the retailers’ mobile app. This puts lottery products in the hands of consumers, including those that don’t buy tickets or buy them infrequently.”
Lazlo’s solution supports the physical retailer and steers clear of the controversy of what is legal under the Wire Act. “Lotteries sell paper products through retail locations,” stated Kiuttu. “Lazlo essentially supports that 100% and our solution is not iLottery. The player simply builds the ticket that they want in the app. They cannot complete the transaction until they are physically in the retail location.”
Lazlo emulates the process of buying a paper ticket. “Rather than giving the clerk a playslip, the consumer hands the clerk their phone. They scan the barcode on the phone—offering a frictionless process to generate a digital ticket,” he said.
One of Lazlo’s key benefits is that it leverages the millions of dollars retailers have already invested in digital mobile apps. “They have this tremendously large consumer base that they communicate with on a one-to-one basis with the consumer,” said Kiuttu. “If a retail location has 5,000 registered users using their app and there are 100 stores or 500,000 individuals that, with Lazlo, they can now begin to promote lottery directly with the consumers already in their database. That also means zero player acquisition cost for the lottery.”
Industry leaders readily recognize the need to improve the player experience. “We continue to grow in revenue from innovations at retail,” said Virginia Lottery Executive Director Kevin Hall at La Fleur’s Retail Trends econference in January. “I worry about our relevance. Customers demand more. We have to have a solution.”
Retail innovations lower cost and improve insights for a broad range of products. “Data collection is really important,” stressed Kentucky Lottery President & CEO Tom Delacenserie on the econference panel. “We don’t have the data to provide the national chains and show supply chain efficiency.”
As an example, Kiuttu described what’s involved in a lottery transaction. The player walks into a c-store. The player either gives the clerk a playslip or tell the clerk what he wants to buy. “The retailer has to walk over to the lottery terminal, generate the ticket, then the clerk goes to the cash register and enters the ticket sale and then collects the money from the consumer. There’s a multiple-step process and a large labor cost involved in generating a paper ticket for retailers,” said Kiuttu. Additionally, Lazlo can generate real-time, sales and transaction data that can be valuable for both retailers and lotteries.
Lazlo’s solution enables cutting edge technology to leverage lottery’s strategic advantage at retail. “Lottery 2.0—the evolution from Lottery 1.0 paper tickets to internet sales—hasn’t lived up to its promise,” noted Lazlo’s founder Mike Pinkus. “The result to date has been a digital experience whose only distinction from physical sales is increased friction. Along the way, we missed the opportunity to address some significant consumer pain points.”
Pinkus sees the potential to improve the experience for players by adding ease of use, entertaining content and ubiquitous availability. “The technology exists today to embed claim data inside digital files, preserving their value and security while maintaining their most convenient aspects,” insisted Pinkus “Sell me a ticket, then let me put it my pocket and walk away without hassle is the experience I want. Remove the friction of Lottery 2.0 and watch adoption grow.”
“Lottery is at its best when it’s an experience shared with others,” added Pinkus. “This creates huge opportunities to wrap games in fun, meaningful and personal content. Something fun like silly cat tricks or highly topical like something trending on Instagram. Expanding your thinking to video, memes, GIFs and other dynamic media could transform lottery into original and irreplaceable entertainment experiences.
Lazlo brings lottery play into the mobile world. “Everywhere is everywhere,” ended Pinkus. “It’s 7-Eleven, Publix, Walmart, Waffle House, CVS, the dry cleaners, Grubhub—even the backseat of an Uber. And if your goal is lottery expansion, Lazlo’s solution is the answer.