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Although synonymous with the retail market, lottery has been alive and thriving online for over 20 years. However, being an industry that is still heavily reliant on retail channels, meant that the impact of the lockdown was severe. Moving forward and maintaining growth as we transition into a new era will be a continual challenge for this sector.
We spoke with David McMorrow, Managing Director of the Scottish Children’s Lottery to get his perspective on the current market, the impact of the pandemic and how funding good causes can help regulatory issues.
The Scottish Children’s Lottery has over 400 retail outlets, how did the lockdown affect your ticket sales and what was the biggest lesson you learned that you will use to your advantage in the future?
“The lockdown meant that we were instantly selling around 50% fewer tickets than normal.
This was probably a combination of customers staying at home – but also combined with a decision to not overly promote retail so as not to be encouraging any non-essential visits. We would fully expect our retail to bounce bank as soon as restrictions are lifted and our promotions return.
One thing that is starting to work well for us is the recent launch of our retail monthly pass in shops. This was created both so that customers didn’t need to buy their tickets draw by draw but also to create a ‘retail subscription’ product to match something that is working well online for us.”
The pandemic has caused an industry-wide shift towards online, how much of a challenge is it to convert retail players to engage with your digital platforms? Is this something we can improve in the future?
“Online lottery has now been around for over 20 years and therefore customers don’t need to be introduced to this as a way of playing. Customers make their own mind up what channel works for them be it retail, online or both.
Retail transactions tend to be impulse and online transactions tend to be more measured.
We don’t have an active strategy of converting customers to one channel or another, we feel it is up to customers to decide. Nonetheless, the lockdown has driven a small proportion of retail customers online.
In terms of future improvements, it is a case of ensuring your customer journey is as easy as it can be both online and in-shop.”
What are your thoughts on the minimum age requirement for the National Lottery being raised? What impact do you think this will have on the future of player acquisition?
“My feelings on this are mixed. We’ve seen a lot of our freedoms been taken away this year by the government in the form of lockdown. For 16 and 17-year-old young adults, they may feel that this is another example of being prevented from doing something by the state.
In Scotland, the move is generally towards more freedom and responsibility for young adults, for instance, the voting age was changed to 16 in 2015.
Evidence suggests that society lotteries are a low-risk form of gambling and have the added benefit of giving to good causes.
It feels like this is a safe entry-level for young adults into the world of gambling before they can access a full range of products at 18. Having said that, we have a very low percentage of players at 16 and 17 playing with us online or in-shop. Any change to 18 would have a limited impact.
It could also be argued that it makes sense from a compliance point of view to have a level playing field for age of entry to all forms of gambling to ensure conformity. As a responsible operator, we will of course follow the government’s lead on this.”
How do you think the lottery industry could better promote the funds raised for good causes? Do you think this would help to mitigate the potential for more industry limiting legislation in the future?
“In 2020, over £2billion was donated to good causes through lotteries in the UK, the majority of this from the National Lottery.
Charities of all shapes and sizes benefit from this and wherever you see a charitable project there is a good chance some lottery funding will be behind it.
I think the industry does a good job already in promoting the charitable benefits of playing. The fact that we give to good causes is a way to ensure that we are at the soft end of any future legislative changes and to ensure that we continue to give generously in the future.”
Editor’s Note: After speaking with David, it seems clear that although there has been a shift to online because of the pandemic, most traditionally retail players will revert back to type once things open up again. As David mentions, lottery tickets are mostly bought on impulse or a last-minute buy at the shop counter, so it’s difficult to create a strategy to convert these types of transactions to online.
Retail lottery is definitely expected to bounce back but now lotteries will be looking to create experiences that merge both the online and retail world. Products such as the Scottish Children’s Lottery monthly pass is a prime example of this, a trend we’ll most likely see continue into the future.