How will the world be different when we come out of this crisis - and how will the lottery industry, retailing, consumer shopping and recreational behaviour be different? 

I think we will be a much more virtually connected world with digital communication channels being even more prevalent than before. At Tabcorp we already supported flexible work so we moved quite seamlessly to working from home and many team members are seeing benefits to their personal lives. However, people are also saying they miss the physical face to face connection so the human element will always be needed. This crisis has accelerated the adoption curve of many things but the challenge will always be achieving the right balance in the future.  This poses some interesting questions around what that means for our big cities and supporting infrastructure such as transport and retail precincts.

Bricks and mortar retail has stood up particularly well here in Australia throughout this period with the vast majority of lottery retailers being able to continue to trade under the Government’s guidelines. As we start to emerge from the crisis, demands on retail will continue to be around a heightened emphasis on ‘COVID safe’ venues and practices along with solutions like contactless payments to minimise person to person contact.

We have gone from being time poor to time rich and values have shifted to be more focused on family, safety and community. I think our products fit extremely well with those shifts and in particular products like our Australian Set for Life game with its annuity prize will do very well.

What might lottery operators be doing to position ourselves for success in the post-coronavirus world? 

For many lottery operators, it will be to continue to drive our businesses in the direction they were going. Focussing on what our customers want and delivering the products they enjoy playing. Having product strategies that mirror the variety of player motivations across our portfolio offerings will continue to be important. The Set for Life game was identified as an opportunity for us in a post GFC world and it’s important we stay connected to societal sentiment and ensure our products remain fit for purpose as our society works its way through its biggest shock in generations.

In Australia our well-established CRM and customer membership program have enabled us to engage with our players in a more personalised and relevant way. We have seen growth in our active customer numbers and we intend to use our capability in digital marketing, data and customer experience to build on the opportunity to strengthen enduring relationships with our customers.

There is also an opportunity to educate our players about the contribution we make to our community. We are doing this by highlighting how our community partners are responding to the COVID-19 pandemic, so customers know our donations and support continue to benefit others.  To put this philosophy into action, we donated $1 million to The University of Queensland’s School of Chemistry and Molecular Biosciences, one of six research facilities worldwide tasked with developing a vaccine against COVID-19 by the Coalition for Epidemic Preparedness Innovations. The donation was made from Golden Casket unclaimed prize money.

Lottery has performed better than other sectors in past economic recessions.  How severely will the economic repercussions of coronavirus impact Lottery? 

Australia’s lottery market was quite resilient through the GFC but we did not see unemployment of the same severity as was seen in some places around the world and certainly that is being predicted now across many markets. I think lotteries remain resilient to economic downturns but are not immune from severe and sustained unemployment and constrained household disposable income.

What opportunities will emerge in the post-coronavirus world?  For instance, won't people be travelling less, and if so, might that be an opportunity to appeal to locally-grown forms of recreation like Lottery and casino gaming?  For instance, in spite of months of social distancing, can't we expect that humans will quickly return to our natural state as highly social animals?

I think our core offering gives us real reason to be optimistic. Our products offer hope, fun and entertainment and raise critical funds for good causes in the process. No one else engenders the water cooler conversation quite like our businesses and I’m not sure we need more opportunity other than continue to do what we do well and be true to our purpose. I think with people travelling less, working from home, spending more time with their immediate families and witnessing the hardship throughout the world, has offered time for reflection. It’s difficult to imagine us rushing back to the old normal but our core lottery proposition has stood the test of time and will continue to do so.

How might we reinforce and build upon the symbiotic relationship that Lottery has always had with its retail partners?

I think our experience in Australia in recent weeks has reinforced our belief that our omni-channel focus is as relevant as ever. Despite the challenges of people being restricted in movement and far lower footfall across retail, retail sales have remained strong across the board in Australia in both draw games and instant tickets. I think this is a testament to the strength of the model and proves how important it is to focus on the customer and provide choice and convenience.

 What are some of the new challenges and obstacles that we will need to adjust to in the future?

From an operations viewpoint, I think it’s defining what the return to the office looks like and redefining how we function as a business internally and with our key partners. In many ways the move to isolation at home was easier. Bringing our teams back whilst maintaining social distancing requirements and keeping our people safe is a lot more complex.

Our marketing teams have already quickly adapted to an increasingly changing market, ensuring all promotions and offers are relevant, engaging and enticing while keeping in line with consumer sentiment and responsible gambling guidelines.

Responding quickly to large changes in the retail landscape if and when they occur and the depth of the economic impact and the pace of recovery per the above response could pose further challenges.

How severely will the economic repercussions of COVID-19 impact the Lott?

While other areas of the gambling industry have temporarily closed in Australia, such as casinos, pubs, clubs and other wagering venues, the vast majority of our retailers remain open for business. We have armed them with the tools and resources they need to enforce social distancing and hygiene measures required by our Federal Government to keep them and their customers safe.

For those players who are self-isolating or reducing their visits to retail stores, they can play online via our app or website.

Participation in Australian lottery games has remained solid.

How has the Lott reinforced and built its relationships with retail partners during COVID-19?

As many people have said during this time, we are all in this together. The Lott is Australia’s largest franchise network, with over 3,800 retailers across the country selling our products. Supporting our retailers during this time has required us to adopt extra resources and new ways of working.

With the situation changing so rapidly, we have provided a constant flow of communication to retailers with daily updates, responses to frequently asked questions, video messages from our team leaders, virtual visits to stores by business development managers and more. We have also suspended site surveys and audits during this period, giving retailers more time to focus on their business.

To assist cash flow, we have temporarily changed the settlement terms for our Instant Scratch-Its products so retailers are not charged until they are sold to customers.

Australian Context:

The Australian Government response to COVID has been swift, with coordinated Federal and State Governments placing widespread restrictions on our movements since mid-March and significant restrictions on business. Outside of essential services, many businesses across Australia, as has been the case around the world, have faced significant downturns.

Consumer behaviour has been erratic to say the least throughout the pandemic, from panic buying in supermarkets early, to a surge in office supplies and monitors as the work from home movement started in earnest.

As we’ve all seen, different societies, economies and indeed lottery markets have been impacted very differently around the world. Depending on the severity of the COVID outbreaks, we’ve seen complete shutdowns, to loss of retail trading, to no impact at all. Each situation and its Government response has been unique, as have been the economic flow on effects.

Sue van der Merwe

Profile

Sue van der Merwe is the Managing Director – Lotteries & Keno at Tabcorp, Australia’s leading gambling-led entertainment company, listed on the Australian Securities Exchange (ASX).

Prior to this role, Sue was Chief Operating Officer – Lotteries at Tatts Group. Since Tabcorp merged with Tatts Group in December 2017, Sue has played a crucial role in integrating the two businesses and identifying future growth opportunities.

Sue has more than 29 years’ experience in the lottery industry having first started her lottery career in marketing in 1990. During this time, she has held key management positions and played an integral role in the successful development and growth of the lottery industry in Australia.

Today, she oversees the expansion of Tabcorp’s Lotteries & Keno division, which operates in seven of the eight Australian lottery jurisdictions, generating sales turnover of more than AUD$5 billion. She leads a team of more than 350 people that operates and markets Australia’s official lotteries through a range of traditional and online retail channels.

Sue is committed to growing Tabcorp’s portfolio of lottery games in order to drive profitable revenue growth and sustainable long-term success.

Sue holds a Bachelor of Social Science, Marketing and Economics, and is Chairman of the Asia Pacific Lottery Association and member of the World lottery Executive Committee. She was inducted into the Public Gaming Research Institute’s (PGRI) Lottery Industry Hall of Fame in 2016, recognising her contribution to world lottery excellence and integrity.