56
// Public Gaming International // March/April 2015
Conclusion
The Power of Now is unleashed through the effective use of real
time lottery sales force automation solutions. With features sup-
porting enhanced instant ticket management and merchandising
tactics based on real time retail intelligence, as well as managerial
tools providing more effective route planning and retailer commu-
nication, a new generation of sales force automation systems are
allowing lotteries to harness the Power of Now, and are serving a
rapidly-growing role among forward-thinking lotteries in their ef-
forts toward increased sales.
“The Pennsylvania Lottery relies heavily on real-time data to
optimize and increase sales,” said Deputy Executive Director for
Retail Operations Eric Grubbs. “We can’t afford to allow an un-
derperforming game to take up precious shelf space, so our sales
representatives use this crucial data to keep game inventories fresh
and tailored to an individual retailer’s needs.”
There has never been a better time for lotteries to harness the
benefits of the Power of Now. Increasing collaboration using more
flexible and customizable platforms like gemIntelligence, lotteries
can more rapidly turn innovative new sales and inventory man-
agement ideas, like those presented in this article, into automated
software applications. Those applications can then quickly be en-
hanced over time as measureable results and experience is achieved.
By combining this more rapid translation of innovation into ac-
tion, with increasingly powerful and cost effective mobile devices
and reliable high speed communications, lotteries can accelerate
toward the next level of “Retail Intelligence;” the ultimate benefit
of the “Power of Now.”
■
Authors & Contributors
Written by Lapis Software Associates
Contributing Writers:
Jan Kessinger is President of Henderson Kessinger Consulting
Dr. Stephen Wade, serves as Research and Development Manager for
Washington’s Lottery and provides consulting services under Lottery
Management Consulting, LLC.
week for a $10 game), and then take this down to a daily rate.
Further, if we know that retailers statewide have activat-
ed one million dollars’ worth of these $10 tickets in the life
of the game, and that likely sales to date have amounted to
$700,000, we can estimate that the current value of inventory
in Lucky Diamonds is $300,000, over all retailers. A game with
$300,000 of likely sales from an inventory of $300,000 has a
turn rate of 1.0 per week: retailers are turning over the value of
their inventory once per week.
This sounds pretty fast, but again, compared to what? This is
where we compare games within categories—for instance, all the
$10 games. If all the $10 games have a current value of inven-
tory of $1.2 million and if likely sales of all of them amount to
$0.6 million, then the turn rate of the $10 category is 0.5 per
week. Lucky Diamonds has a turn rate twice that of the category
to which it belongs. This quantity- the ratio of the turn rate of
the particular ticket to its category—is what I have called the
Popularity Index, in this case is 2.0.
With real time visibility and alerts triggered by emerging popu-
larity of games, lotteries can now adjust not only their inventory
mix and quantity, but also the merchandising. Adjusting inven-
tory and merchandising more quickly to the real time velocity of
demand, the higher the sustained turn rate, and thus revenues.
Fine Tuning
Real-world experience tells us that it is useful to also consider the
“types” of stores and the associated “turn rates.” Player and trade-
style segmentation can provide a good answer to this question.
Lottery marketers typically think of applying segmentation to
answer the question; “How many kinds of players do I have?” A
segmentation analysis usually yields not just a number, but a brief
description of what really matters to each player segment, and how
important each is to your total business. This is meant to help focus
marketing efforts. A “Turn Rate” segmentation of your retailer base
would let you group retailers according to the preferences expressed
by their customers. By studying the velocity of how particular
games have moved through each store in the past, lotteries may
have additional insights to group the stores into more meaningful
segments for more real time inventory management actions.
The Power of Now
When the next jackpot draw game rolls over multiple times,
lotteries know it is time to increase and stock up on all consum-
ables from play slips and pencils to ticket paper rolls. The focus
is not on the historical or average demand for these consum-
ables, rather it is on taking action to make sure the short term
increase in popularity is fully met by each retailer. Running out
of supplies during a jackpot sales spike would be unthinkable.
The Power of Now means lotteries can apply the same real time
game management practices to instant tickets.
What you need to know now is information that can be
tracked in real time, acted upon in real time and, when inte-
grated over a meaningfully broad and consistent base, offer new
insights into inventory optimization.
