Lotteries

Intralot has started previewing their offer to newsagents and other retailers. It looks exciting and is bound to shake up over the counter soft gambling. One challenge is how retailers who currently offer Tattersalls product navigate bringing Intralot into their business. Tattersalls has effectively quarantined real-estate at the counter. Newsagents gladly provided this when they had the full suite of products. With half the range (scratchies and some online product) soon to disappear from the Tattersalls offer one would expect that some of their real-estate would be freed. At the moment that does not appear to be an option.

I hope that common sense prevails. The last thing I want is to have to increase counter space commitment to sell close to the same value of product. I’d hope that Tattersalls releases some of their real-estate. This would be fair for newsagents and also facilitate better customer service. the last thing customers want is to have to purchase scratch tickets and online lottery products from two different places in a newsagency.

We confirmed for a customer yesterday that they had one first division in Saturday night’s lottery draw.  They thought they had won but were thrilled with the confirmation.  The lottery kiosk they purchased the ticket from, in our centre, was closed – as they are every Sunday.  While that’s their business, it diminishes the Tattersalls brand to have outlets in seven day trading centres closed.  This is retail after all!

I am grateful for the run of Super 7’s OzLotto jackpots in recent weeks. The $20 million first division prize pool, which went off last night, made for some excellent additional traffic and strong sales – not only this week but over the last three weeks as it built up. Every week the dreams of the punters grew – I like that about lottery sales, you get to hear some wild dreams. Oh well, it will jackpot again soon…

The $22 million Powerball jackpot this Thursday has slowed sales of tickets in the $30 million superdraw scheduled for Saturday December 29. If Powerball jackpots again the impact will be even more significant.

Why does this matter? Well, it alters the traffic patterns in newsagencies. Thursday this week will be up between 10% nd 20% because of the jackpot. Even more so next week if it jackpots again. And all this at Christmas! It pulls focus from the Saturday superdraw and risks making it an average Saturday.

So, what’s the answer? None really. You can’t change the lottery results, as far as I know. So, we embrace every opportunity and cop it if it means superdraw sales are affected. The key this time of the year is to remind people of the opportunities – without being pushy.

It is good to see Michael O’Brien, Shadow Minister for Gaming in Victoria, drawing public attention to prospect of existing lottery agents losing business following the decision of the State Government in Victoria to shift some lottery products from Tattersalls to Intralot.

O’Brien has also drawn attention to the prospect of lottery products being sold by mobile phone – further cutting out the retail network.

O’Brien late last week wrote to Victorian Tattersalls agents to advise us of this activity. Sure he is a politician jumping on an issue he knows will interest us? Nothing new in that. That O’Brien wrote to agents and briefed us on his activity is most welcome. It’s more than others have done on this issue.

We have wallpapered the wall in front of our lottery counter to promote our syndicates in the end of year superdraw. We do this with all superdraws. It works well.

Syndicate sales are rarely single sales. In addition to multiple syndicate tickets, customers usually pick up a regular ticket or two.

The idea behind the wall is to create a sense of celebration – the end of the year and all that.

We have created the collateral for the promotion ourselves. While Tattersalls will continue to judge us only on name badges, up-selling and placement of their posters, we feel that unique effort such as our wall – and similar promotions other proactive agents run – ought to be part of the Tattersalls measurement. It is frustrating that they measure agents down to the lowest common denominator – but that happens often in the newsagency channel.

Today’s Herald Sun reports that Tattersalls has advised its suburban retail network that they cannot sell the soon to launch lottery products from Intralot. As I blogged here a month ago, at the time of the Intralot appointment by the State Government of Victoria, both the Government and Intralot want a different outlet network. This was made very clear in their respective press releases.

While existing Tattersalls outlets ought to try and get Intralot products, none of us should be surprised if Intralot says no and or Tattersalls upholds its contract and says we cannot do this. Think about it, if Intralot products were sold in existing Tattersalls outlets, what would all the change have been about other than to split lotteries revenue with Intralot. No, too much noise has been made about broader consumer choice for the same outlets to be used.

The time for action on lottery licences in Victoria was a year ago, back when the lottery agents association and the local newsagents association were sitting on their hands.

Victorian Newsagents are registering with Intralot to sell their lottery products when them come online next year.

VANA, the local newsagents association is also inviting newsagents to register interest with them.

The Lottery Agents Association is hosting a meeting this afternoon to brief members on the impact of the Government appointment of Intralot – an appointment they said would not happen. The meeting should be about sacking their CEO and the Board.

Based on the sales increase over the last five days, I am hoping the OzLotto jackpots again tonight. Sales data shows that OzLotto has been the best game over the last year at generating additional traffic.

This report in today’s Adelaide Advertiser reports the likely impact on small business newsagents as a result of the decision by the State Government to sell keno in TAB and PubTAB outlets. TAB is SA is part of Unitab – the Tattersalls subsidiary. Newsagents have served Keno players well and have an excellent track record for responsible sale of gambling products. There was no need for this move.

What is it with governments and lottery product? In Victoria the State Government prefers supermarkets over newsagents. In NSW the State Government prefers 7-Eleven over newsagents and now in SA the State Government prefers TAB outlets over newsagents.

We were mystery shopped by Tattersalls a week ago and failed – no up-sell, no query as to whether they had a Tatts Card and no good luck at the end. While we should have done these things, we were busy and the failings are the exception and not the rule at our newsagency.

I wish the mystery shopper reported on Tattersalls products up-sell promotions away from the Tattersalls counter, the promotion of Tattersalls products outside our shop in our widely circulated newsletter, our entertaining house syndicate campaign and our above network average sales growth.

I guess these above average activities don;t matter to the examiner who has been asked to measure all outlets by common, average, criteria.

The report card from Tattersalls makes us feel like naughty schoolboys as it focuses only on getting us to be average while ignoring where we are exceptional.

With OzLotto jackpotting last night, we can look forward to around a 15% to 20% kick in lottery generated traffic and a bigger kick in sales. We’ll drive that with some major in-store moves starting today as well as dressing the lottery counter to maximise up-sell opportunities.

Newsagents in Victoria are starting to ask questions about the probable loss of scratch lottery products. It’s a bit late, the time to ask questions and take action was February this year. Inaction by newsagents is part of the reason the Government has got away with this anti small business decision. Here is what the petition said:

We, the undersigned, are concerned citizens who urge the State Government of Victoria to ensure that lottery ticket and scratchie games are sold only in independent small businesses in Victoria to protect jobs and to ensure these tickets are sold by well trained staff committed to ensuring responsible gambling and, specifically, not in big supermarkets such as Coles and Safeway / Woolworths.

To sign this petition, click here.

In a more practical sense, my software company, Tower Systems, is offering free help to newsagents to quantify the potential knock-on impact of the loss of scratchies on their business.

We have established assistance for newsagents using the Tower software who would like forecast the impact on their businesses of losing instant scratch ticket sales – in the light of the Victorian Government’s announcement two days ago.

We will confidentially analyse basket data from participating newsagencies for the last six months in a way which can be used to project the impact sales on other departments. This information will help these newsagents better plan for the future – maybe a future without scratch ticket sales.

If you would like to access this free service please email our support team.

We will review basket data for the participating newsagencies against basket data we have for our broader community.

Tattersalls started a promotion this week around the Cox Plate. People who buy a 50 line lottery ticket get what appears to be a free entry. They open this and then send a text message with the code word printed on the ‘free’ entry to see if they have won. The text message costs 55 cents. One customer threw the scratch ticket away, angry at being asked to pay for what they felt ought to be a free entry. I agree with them. This kind of competition which costs money to enter can do more harm than good to a brand.

Jumbo Corporation and Yahoo!7 have announced an alliance to bring lottery products to the Yahoo platform. Yahoo!7 Lotto, as it is called, is a very interesting move – especially in the light of the report two weeks ago that the Yahoo!7 partnership is planning to get into the free classifieds space.

Lottery products are important traffic generators for newsagents. Our bricks and mortar network has no connect with the expanding online offerings – except in Queensland where the agents association negotiated a small trail commission for online customers who purchase their card in a retail outlet.

Newsagents need to watch for a migration of lottery sales online and make capital investment decisions accordingly.

So, the Tattersalls monopoly in Victoria comes to an end. See the ABC news report here. The press release from the Government and reports in local media are thin on details – none identifies where instant scratch tickets will be sold. Intralot has previously identified supermarkets as a retail network they favor.

Regulars here may recall the petition I started and blogged about on this matter – newsagents who did not complain at the time will have no excuse if they lose scratch ticket sales. Here is part of what the Geelong Advertiser said at the time of my petition:

The Lottery Agents Association of Victoria said the State Government was unlikely to approve Intralot’s opportunistic application.

Association CEO Peter Judkins CEO said Mr Fletcher’s petition meant well but even if the unlikely approval was made, changes would not come before mid next year.

I’d like to catch up with Peter Judkins and see what he has to say now.

With Christmas not really started yet, the lottery jackpots of next week will drive some excellent traffic to newsagents who sell Tattersalls, Golden Casket, NSW Lotteries, SA Lotteries and LotteryWest products. This traffic boost is an excellent opportunity to configure the store layout and the counter to drive the up-sell. Candy, pens, crossword books, ZOO magazine, lost cost food magazines – these all work at the lottery counter as long as it is not cluttered.

We have a few seconds at the counter with the additional traffic and I don’t want to have my team act likes the monkeys in Coles and Woolworths petrol outlets with their u0psell gibberish. No, we will use the counter and store itself to drive the up-sell. Newsagents ought to decide on a daily offer and put it at the counter to drive the silent up-sell. With the anticipated 10% to 25% increase in sales it is excellent timing. It is also a good opportunity to hand lottery customers a flyer – promoting the business and with an offer to lure them back in.

If only a publisher had a special offer for the lottery counter. I have pitched this previously to Lovatts for a crossword offer without success.

I will be angry if instant scratch tickets are to be sold in supermarkets and convenience stores as appears may happen according to reports in the press today. It would be another example of government turning its back on small business.

There is considerable disquiet among NSW newsagents about the apparent decision by NSW Lotteries, wholly owned by the Sate Government, to put some lottery products into the 7-eleven convenience stores. This move is certain to impact newsagent revenue and viability. For a Government which claims concern for small business, the Iemma Government in NSW appears to be quiet on this issue. Maybe it is money talking, who knows?

Newsagents have served in the lottery space for decades, providing convenient locations at a minimum cost to the government. now that they have well established the brand and built the traffic, the ever opportunistic US based 7-eleven corporate wants to shift profits from lottery retail offshore. Yes, My Iemma, that’s smart small business policy.

Aon has written to Victorian newsagents pitching their lottery agency insurance package. While that is their right, the wording of the letter is concerning and is likely to confuse some. They tie the requirement to purchase insurance such as that they offer to the recent NSW Lotteries case. The implication was that the NSW case led to insurance cover changes being required. Our existing policy was fine so we filed the Aon letter in the bin.

Despite the whack from Tattersalls last week for using part of the lottery counter (which I pay for) to promote non Tattersalls we are heavily promoting syndicates in this weekend’s superdraw. In fact, we have been promoting syndicates in the superdraw for weeks. We promote our syndicates on the wall in the photo and elsewhere in the shop – certainly outside the space where lottery products are usually promoted. Our approach to superdraws is structured and consistent. But it’s not enough to protect us against the challenge of construction – 50 stores around us are closed. The centre is going through a major re-vamp. Given that magazine and stationery sales are up, this tells me lottery sales are affected by the construction. Around 50% of lottery sales in our shop are impulse and with traffic dramatically cut the sales dip stands to reason.