1 State of the Convenience Store Industry – Lottery Focus.
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1 State of the Convenience Store Industry – Lottery Focus
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Transcript of 1 State of the Convenience Store Industry – Lottery Focus.
1
State of the Convenience Store Industry – Lottery Focus
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C-store State of the Industry – Lottery Survey
Retailer Concerns
Labor
Sell time and redemption time
Store employee sales training
Control
Track inventory (major control issue)
Store theft of lottery scratch tickets/lotto affect profits
Marketing
No category management strategy for the lottery category analyzing the impact of lottery customer buying habits, loyalty or value
Promotions by retailers are limited due to perception of increased customer traffic
Support from State Lottery Commissions
Low commission percentage
Online lotteries are a concern to convenience store owners
Retailer concerns represent opportunities
Does your company see growth potential for lottery?
YES
People continue to look for new games
Sales have continued to increase with the installation of the new vending machines
Opportunity to manage inventory better, more like other categories
NO
Competition from other lottery or gambling
Store size
This is not an area we typically look to grow due to the low margin % and unpredictability of jackpots
3
70%
30%
YesNo
4
Findings
Survey respondents represent a cross-section of chain sizes and geographies.
What they have in common is an interest in seeing their lottery business prosper but a woeful lack of understanding about their current lottery business and ongoing training for their sales associates.
Opportunity
Provide retailers the data they need to fully understand, appreciate, and leverage the lottery customer’s impact on their business.
In addition, due to employee turnover rates, an ongoing program of training is required.
Retailers Need Information
Where is instant lottery situated in your stores? What is your single biggest issues with lottery products today?
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Instant S
cratch
Games
on top of fr
ont counter
Instant S
cratch
Games
under gla
ss in fr
ont counter
Instant S
cratch
Games
hung fro
m the w
all (w
aterfa
ll disp
lay)
Play St
ation (in
cludes
play sli
ps, pen
cils, e
tc.)
Instant T
icket
Vending M
achine
0%
10%
20%
30%
40%
50%
60%
70%
80%
25%
25%50%
Theft of tickets/fi-nancial lossTime to bal-ance POS sales/cash-ing/lottery reportingLines at my counter
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Findings
Most retailers offer lottery the way they have for a long time, at the counter.
The viewpoint that lottery is mainly a “control” issue and not a sales driver is still prevalent as is the perception that lottery tickets are labor-intensive.
However, their own responses indicate the labor involved is not that onerous.
Opportunity
Emphasize the sales driving potential of lottery without ignoring lottery inventory and sales management issues.
Address those issues with the latest information and training.
Perceptions Die Hard
Do you know how much total business loyal lottery customers are worth to your stores? How do you measure lottery performance in your stores?
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11.1%
10%
90%
Yes
No
80%60%
10%10% 10%
Commission income
Lottery sales dollars
Customer counts
Total store sales dollars
Market basket (or total transaction with a lottery purchase)
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Findings
Most respondents have experienced growth in lottery sales and expect future growth.
The vast majority, however, cannot measure their lottery customers’ impact on their total business.
However, these respondents are eager to learn and they are receptive to new ideas to expand lottery’s appeal in their stores.
Opportunity
Work with key accounts to research and develop key metrics for lottery that link lottery sales and marketing performance to total store sales and gross profit performance.
Room to Grow
How does lottery measure up to other categories? How do the lotteries measure up to other suppliers?
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Lottery is important to bringing customers, especially repeat customers, to my stores and I would like to leverage it more fully.
Lottery is a "necessary evil" that we put up with while trying to minimize its negative effects on our labor, customer lines, and control issues.
Very Sa
tisfied
Satisfi
ed
Neutra
l
Dissati
sfied
Very Diss
atisfi
ed0%
10%
20%
30%
40%
50%
60%
70%
LotteryNon-Lottery
10
Findings
The perception that lottery is a “necessary evil” with control issues and unworthy of category management resources persists.
While at the same time, most retailers expressed satisfaction with the level of vendor (i.e., State Lottery Commission) support they receive.
Opportunity
Seize the opportunity to elevate the lottery/retailer relationship beyond the level of satisfactory supplier to preferred partner by providing operational excellence, actionable information, and ongoing training.
Contrary Perspectives
11Preferred partners have a “place at the table” i.e. influence
Recommendations
Aspire to Preferred Partner Status
Develop a category management approach to lottery performance
Information
Training
Services
Identify c-store accounts by willingness to partner
Work with these “thought leaders” to employ proven strategies and tactics to grow lottery sales
Focus not just on lottery sales growth but total stores growth by driving ancillary sales in the key related categories
Create a “tool kit”
One size does not fit all, but principles and practices are almost always applicable
Tailor to retailer size, resources, needs, and potential accordingly
