49 PUBLIC GAMING INTERNATIONAL • NOVEMBER/DECEMBER 2023 happening because of good partnerships between lotteries and vendors,” she said. “We bring solutions to them which help solve concerns they have. Once their issues are visible and clarified, we can then make connections and develop solutions that show we understand that one size does not fit all. Continuing this dialogue will be critical to making sure the retail experience is as seamless as the digital.” Versatility and flexibility will define the future, Tonya said. “We need to help define what retailers should expect from lottery,” she said. “Retailer needs change quickly and sometimes we’re not as nimble as they need for us to respond to these changes. Consolidation of retailers has only increased the pressure for lottery to be more responsive and on a timelier basis. The downside for lotteries is that it can be costly to modernize and keep up with what retailers see or get from other consumer products vendors. The new lottery vending machines, for instance, are costly but our retailers want them and the only way we’ll expand our footprint is by offering this technology. This is one example of how we need to change the way we think and do business if we want to meet the expectations of our retail partners. We need to be prepared to offer customized solutions, particularly to our largest retailers.” Terry owned a convenience store chain before becoming Kansas Lottery director (and eventual Abacus head-of-business) so he brings a wealth of experience on the needs of retailers. “You must have a modern strategy and smart tactics which support that strategy,” he said. “If you look at the lottery industry’s tactics over the past 20 years, it’s been effective especially on the scratch product side of the business with increased price points and payouts. These tactics have been great for sales. Eventually you reach the point of no return where the price and payout to player is so high it’s hard to increase the bottom line. The move to digital will help attract new players but in the end, it’s about keeping players happy, whether that is through new products or new technology.” Max reiterated the importance of making sure players are aware of jackpots and understand how to play the lottery. “Some of the changes lotteries need to make are simple, such as upgrading to new jackpot signs that have the ability to display jackpots in the billions instead of stopping at $999 million,” he said. “Other changes, such as building a digital signage network, can be introduced over time. Lotteries can start with a pilot, testing use cases and building out a digital communication platform. STRATACACHE’s digital signage software makes it easy to add new digital experiences, building a more sophisticated signage network over time while conveniently managing all digital signage content from a single browser interface.” Continuing to offer technology and platforms that make lottery easier and more enjoyable to players is high on Paul’s radar screen for the future. “Apps, loyalty programs – these are direct conduits to the player that exist today. And they’re among the tools that will continue to strengthen our ability to provide services to players that improve the playing experience,” he said. “Apps now include notifications to communicate changing jackpots. Apps also allow players to scan tickets for quick results and allow proximity marketing to reach players when they are near retail locations. And we have an opportunity to further strengthen our value to our retailer partners. If someone buys a ticket from a vending machine, it’s a relatively anonymous purchase. But by allowing the ability to capture the retailer’s consumer identity from their loyalty programs and feeding it back to the retailer, we allow them to gather a more complete picture of their consumer and work with lotteries to market to those players. The ongoing sharing of player data will help forge better relationships with retailers and ultimately help drive sales.” Drew wrapped up the panel by focusing on the relationship with retailers and what panelists are hearing from them. “We want more money,” is the number one thing Tonya is hearing from Missouri retailers. “And while we can’t change their commission rate or give them more money, we can give them the tools they need to sell more lottery products and that will make them more money. They want the transactions to be quick and keep them protected from theft. And the major vendors are working on all that. The retailers also expect us to be collaborative and have a two-way dialog. When a strong communication channel is created, retailers consider lottery to be a true partner.” Paul said the bigger the retailer, the bigger the demands. “The top 20 retailers generate about 25% of all sales and comprise one-fifth of all locations in the U.S., so they not only receive a lot of our attention, they appreciate lottery and what it brings to them,” he said. “The flip side to that is that they are demanding on the operational aspects of things, particularly with respect to data. They want real-time data and nightly reconciliations to the penny. They are so important to our future revenue that we have to listen to them and create systems that provide them with the data and operational features they need.” Terry agreed that helping retailers with their operations is one important piece of the lottery relationship. “When Abacus talks with retailers about our in-lane solutions, they all like it and at the same time want to make sure we don’t add complexity to their work,” he said. “All too often, retailers see lottery as adding to their workload at a time when they are trying to contain labor costs. But many now see an opportunity to get control of the lottery category and merge it with all their other POS transaction processing systems, instead of the historic two system situation that has existed for as long as there’s been lottery. Retailers are also pleased with how lottery has built up loyalty and is pushing players to return to retail. We are doing things that help retailers and we need to continue to focus on their needs.” Retailers expect us to speed up our reaction time, according to Krista. “I think lottery is a bit siloed at retail and we move slower than some of the other industries that sell in the retail environment,” she said. “It’s important to start talking to our retailers about some of the big opportunities in front of us. The retail world is constantly evolving and while it is a huge investment of time and money, if we don’t evolve at their pace and bring solutions for today’s needs while futureproofing for changes that lie ahead, retailers are going to outgrow us and leave lottery behind. Continue the collaboration with retail and the results will be good for everyone – retailers, lottery, vendors, and players.” n
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