It’s been more than a decade now since lottery operators incorporated digital interactive platforms into their distribution network. And consequently reaping the benefits of access to a broader demographic customer base, operational and agent fee savings and a higher level of engagement. However, even in the most established e-commerce markets, the Lottery land based distribution network continues to play a crucial role in a lottery operation’s market presence and sales.
The land-based distribution agents are, for all practical purposes, the ambassadors of state lottery operations and fundamentally constitute their greatest asset. Yet, despite their crucial role, we consistently witness long-term operational strategies that sideline the land-based agents, as evidenced by the steady reduction in agent fees.
A land based distribution network offers several advantages for lottery operators:
Wide Reach. A land based distribution network allows the lottery operator to reach a more diverse customer base across different regions. Retail locations strategically placed in high-traffic areas provide convenient access for customers who prefer in-person interactions.
Accessibility. Land based distribution networks provide customers with easy access to purchase lottery tickets as part of their regular consumer routines. This is particularly beneficial for customers who may not have access to online or digital platforms, may be less familiar with e-commerce, prefer anonymity and exhibit impulse purchase behaviour.
Customer Engagement. Physical retail locations enable lottery operators to engage with customers face-to-face. Retail staff can provide information, answer questions, and offer personalised recommendations, fostering loyalty and enhancing the customer experience.
Cash Transactions. Land based distribution networks facilitate cash transactions, accommodating customers who prefer using physical currency or lack access to digital payment options.
Marketing and Promotion. Retail locations serve as valuable marketing platforms for promoting lottery games and special promotions, creating brand presence and awareness, and generating interest among potential customers.
Trust and Transparency. Physical retail locations help establish trust and transparency in the lottery industry. Some customer demographics may have more confidence in purchasing physical tickets from authorized retailers, alleviating concerns about digital engagement and the risk of fraud or scams.
Competitive Advantage. In licensed gaming markets the retail network also provides a competitive advantage as many commercial gaming operators predominantly distribute their products and services online.
Community Engagement. Lottery operators with a land based distribution network can actively engage with local communities, supporting retailers through joint marketing initiatives, sponsoring local events, or contributing to charitable causes. This enhances brand reputation and builds positive relationships within the community.
By leveraging a land-based distribution network, lottery operators can cater to diverse customer preferences, maximize market potential and create stronger customer relationships. This complements online channels and offers a distinctive edge in an industry where digital platforms dominate.
While we agree that digital interactive platforms will inevitably become the major point of contact, we argue that an omni-channel distribution network should be exactly that. As online sales continue to grow, lottery operators need to strike a balance between these two channels and develop strategies that reduce the gap and support the customer’s transition. Some good examples we find in the industry include the introduction of self-service terminals, mobile terminals and e-ticket mobile applications.