PA LOTTERY AND A WHITE PAPER BY SCIENTIFIC GAMES WAWA INNOVATION. RESULTS. REVENUE. Driving performance for lottery and regulated gaming worldwide
PA LOTTERY AND WAWA A White Paper
Table of Contents Table of Contents Intro: Breaking barriers... 4 Background: Large chain challenges... 5 Opportunity: Wawa... 6 Trial & Evaluation: Piloting solutions... 7 Solutions: Custom problem solving... 8 Crucial: Added function...10 Added security...12 Player convenience...13 Employee convenience...14 Implementation: Putting the plan in place...15 Results: A success story...17 Partnership: A business within a business...18 Sources....19 About Scientific Games... 20 3
Intro Breaking barriers There s great news for lotteries seeking to grow revenue by expanding their retailer base, particularly among non-traditional, big-chain retail establishments. Barriers that prevented lotteries from recruiting these larger chains due to concerns about slower or disrupted counter sales are being removed. The same good news exists for large retail chains that want to grow same store sales beyond present levels. Today, lotteries and big-chain retailers can cooperate more easily to launch instant and draw games sales with full accounting compatibility and without concerns about hindering the speed or efficiency of sales at the counter. The experience, resources and flexibility to traverse these barriers is essential to setting and achieving big sales goals for growth in a mature industry. The lottery industry s first, fully self-service lottery solution that integrates the sale of instant and draw-based lottery products, prize validation and payment, accounting procedures and security standards into a single, one-stop shopping experience for the customer is now a reality. 4
Background Large chain challenges For the past several years, the U.S. lottery industry has been challenged to evolve its business model to better accommodate some larger chain retailers for example, large chain convenience stores and big box merchandisers that were hesitant to embrace lottery sales at their checkout counters. These retailers firmly believed that the slower transaction speed of lottery game purchases would hinder the efficiency of the overall sales transaction. They sought solutions to this challenge that were less labor-intensive and that could be smoothly integrated into their existing business models. Because highvolume convenience store chains have become more automated and process-driven, they focus on continuing to improve customer service by simplifying store procedures for managers and employees. compatible with its accounting procedures. The desired result is to better integrate the lottery category into the established business models of a new class of potential retail partners. Lotteries have challenged their vendors to develop technical solutions consistent with these retailers business models solutions that could minimize, or possibly eliminate the need for lottery sales at the counter. The solution would also need to meet the retail chain s reporting needs and be 5
Opportunity Wawa Wawa was the largest convenience store chain in Pennsylvania NOT selling lottery products. The company was at the forefront challenging the lottery industry to design and implement a more efficient selling solution. The Wawa chain built its brand, and indeed its business model, around meeting customer expectations for speed and convenience. Among the chain s core values are principles such as Delight Customers, Embrace Change and a Passion for Winning. These reflect Wawa s insistence on providing customers with the products and conveniences they expect. 6
Trial & Evaluation Piloting solutions Some years back, Wawa tested the sale of lottery games in their stores. Although sales were above average for their retail trade style, management decided to discontinue the pilot due to the drag effect of each product sale on their front counter from both a cost and service standpoint. All parties decided to retrench and evaluate the challenges that remained unresolved from the trial and find new solutions. to address many of the issues previously raised by Wawa and other large chain retailers. The main solution for Wawa featured the PlayCentral TM, Scientific Games' interactive self-service terminal for both instant and draw games. By 2010, Wawa was interested in revisiting lottery. They met with the Pennsylvania Lottery and expressed renewed interest in selling lottery games. The chain wanted to remain a leader in their category by continuing to provide customers with convenience products and services they needed and expected including lottery products. Wawa sought to learn what advances had been made in the lottery industry since their original market test. By June that year, the Lottery launched a new pilot to run in 21 Wawa locations. The Pennsylvania Lottery, together with its full-service supplier and business partner, Scientific Games, introduced several solutions 7
Solutions Custom problem solving What was learned in the original trial of lottery sales at Wawa was that a premium had been placed on a complete self-service solution that didn t require constant clerk involvement or significant adjustments to existing back-office systems or operations. The PlayCentral would be the key to meeting Wawa's needs. A joint team of Wawa, Pennsylvania Lottery and Scientific Games employees was established to meet on a regular basis to identify a list of tasks, develop an in-store test and ultimately produce a roll-out plan for all 200+ Wawa locations in Pennsylvania. In the spirit of true partnership, numerous discussions took place between the Lottery and Scientific Games together with Wawa s corporate and support teams to better understand Wawa s unique business model and unique requirements. features to verify that the outcome ultimately delivered actually matched or exceeded the proposed solution. Before going live, Wawa wanted to confirm that the added reporting features provided their stores with the correct information in the requested formats. They also wanted to see how effectively the added features met employee and customer needs in the stores. Scientific Games then integrated hardware, software technology and ingenuity to deliver solutions to enhance Scientific Games' PlayCentral self-service terminal s functionality. Adjustments were made to best meet the needs of the Lottery, its existing retail partners and its new partner Wawa to help increase the presence of lottery products within their stores. This information was used as a guide to develop and deliver real solutions, particularly through the PlayCentral terminal. After gathering requirements and initial development efforts, Scientific Games worked alongside Wawa to test the software changes and new add-on 8
One of the most critical solutions included: FailSafe TM The PlayCentral was modified to allow players to validate and cash their instant as well as draw game tickets right at the PlayCentral and receive credits in the amount of prizes won using the FailSafe bar code. This feature allows players the choice to immediately use the credits and play other games, receive their credits in the form of a lottery voucher that can be played immediately or at a later time, or present the voucher to a store clerk for payment. As an additional benefit, FailSafe allows clerks to quickly cash instant tickets without the need of entering a PIN number on the terminal. This saves clerks time and provides a more efficient way to help customers with their transactions. 9
Crucial Added function Along with a set of standard lottery sales reports, many retail chain accounts also require additional information and functionality to help integrate lottery product sales into their store accounting procedures and complete their back-office processes. Several special reports and functions were developed for the Wawa program: No Sale Profile This is a new business mode available on the lottery terminal, allowing the lottery to set a terminal into a cash only (validation of vouchers) status so sales are conducted strictly at the PlayCentral. This mode streamlines the accounting and reconciliation with the retailer s point of sale system. Deposit Functions for the PlayCentral Terminal These functions give the retailer added information, and records items such as when the PlayCentral is opened for servicing. The PlayCentral can print receipts containing the store s sales information and provide a banking deposit for an armored courier service. When the deposit function is selected, a pop-up confirmation appears which will clear the shift meters. The most recent Shift Report is automatically generated, immediately after it prints two deposit receipts. PlayCentral Log This process sends retailer logs from each PlayCentral to Wawa s headquarters; it provides details regarding the money collected, inventory on hand, and sales transactions for the unit. This log also contains the deposit function activity so the retailer s back office at headquarters can be reconciled with the bank courier s numbers for money collected. System Reports These reports allow the Lottery to review the PlayCentral sales reports in a similar fashion as the current WAVE lottery terminal reports. This enables lottery personnel to see the same level of detail at headquarters that the retailer sees in-store. PlayCentral Sales Reports on the WAVE Terminal These reports allow a retailer to request a PlayCentral sales report directly from the WAVE terminal without requiring direct access (at the PlayCentral) to pull reports. 10
WAVE Transaction Report Logs Detailed logs were created to share specific sales and transaction data for Wawa s back office use to reconcile the data between the WAVE terminal and Wawa s in-store cash register. For example, the report would facilitate the ability to match a cashed voucher on the WAVE terminal with the same transaction on the register. Chain Reports The Lottery has a retailer website that allows the chain/store headquarters to search for data on sales and lottery product inventory for any/all of their locations, using a password-encrypted sign-on. 11
Added security The necessity for heightened security to prevent external and potential employee theft, to control instant ticket inventory, and to enable review and research on any related issues was crucial to make the solution fit with the Wawa business model. The following security features were delivered to support their objectives: Disable Machine Remotely A key fob allows the retailer to disable PlayCentral sales remotely; this can be used to stop suspected under-age customers from using the machine to purchase or cash lottery tickets. Reports/Logs/Alerts Detailed Play- Central terminal event logs enable Wawa headquarters to stay informed about when any PlayCentral was opened, when a cash box was removed, when the instant ticket inventory was loaded or removed, and how much cash was inserted into the machine (to help track actual sales). The Wawa chain also receives email alerts whenever a hard drive in the PlayCentral has been replaced, because local accounting records and reporting are affected. Extra Cash Box An additional box allows the retailer to quickly pull the current cash box from the PlayCentral and bring it to a secure area within the store and immediately insert another cash box to allow the machine to promptly return to a selling status. PlayCentral Keys Separate keys for reporting, opening the PlayCentral and accessing the cash drawer allow the store manager to control access by employees. 12
Player convenience The main PlayCentral terminal screen was updated to allow players easier access to all available functionality: instant ticket and draw game products, coupon redemptions, help screens, cash vouchers, as well as online redemptions in exchange for additional purchases of instant or draw game tickets. Other conveniences include FailSafe, which allows players to redeem bar-coded instant tickets directly at the PlayCentral terminal. Once a player has scratched an instant game and found it to be a winner, the game ticket can be scanned and redeemed at the PlayCentral terminal up to a specified amount. In lieu of cashing, the balance (winning ticket value) can be credited to the player s account, or the player can simply hold onto the ticket and redeem it later. If the player has won a free instant game, it will be dispensed provided it is available in the PlayCentral terminal; if not, the free game s value will be credited to the PlayCentral's balance. 13
Employee convenience Aside from being free to continue their focus on satisfying customer s non-lottery purchases at the counter, Wawa store personnel can now access a deposit function at the PlayCentral terminal. The PlayCentral can print receipts containing the store s sales information and provide a banking deposit for an armored car courier service. If the clerk selects the deposit function, a pop-up box asks the clerk to confirm that a deposit is being requested which will clear the shift meters. A copy of the most recent shift report is automatically generated, immediately following the printing of two deposit receipts. Weekly sales reports were measured against a variety of benchmarks. Storeby-store stats enabled the Lottery and Wawa to gauge progress against goals and keep a pulse on the business performance. These enhancements, along with the Ambassador Program designed to put Wawa employees and customers at ease as they grew accustomed to automated lottery sales, have facilitated the remarkably smooth adaptation of Pennsylvania Lottery products across the Wawa chain. 14
Implementation Putting the plan in place In addition to enhancements designed to improve the purchase experience, better secure lottery products from shrinkage, and allow Wawa headquarters more control over the inventory and accounting process, the Pennsylvania Lottery and Scientific Games also assisted with Wawa s employee training. A plan was devised for installing and introducing Lottery machines, games and enthusiasm at each store location. The plan included: Training & Quick-Help Resources Customized trainer-training classes, documentation, reference guides and automated on-terminal reference material were created to facilitate the retailer s full, effective use of all the available technology and tools. Installation Plans The Wawa headquarters support team, along with Pennsylvania Lottery and Scientific Games employees, performed site surveys to detail the logistics for hardware, communications, and power/data setup. This was planned and executed in a way that upheld store standards. Signage The Lottery and Scientific Games worked with individual stores to determine the lottery signage that would work best at each location, based on store size and customer traffic flow. Some locations used Scientific Games' 22 multi-function Lottery InMotion advertising monitors to significantly enhance player awareness of lottery offerings and draw jackpot updates. Ambassador Program During the initial installation and for the first few days afterward, both the Lottery and Scientific Games employees were on-site to help Wawa employees with questions and helped customers get acquainted with the new self-service machines. The Ambassador Program remains an ongoing component of Wawa store support whenever extra care is needed. Project Planning Throughout the project, updated schedules and planning meetings were held to keep all participating parties informed about upcoming deliverables and the deployment schedule. Play Slip Holders The Lottery created play slip holders that mounted directly onto the PlayCentral terminal in order to keep the store 15
footprint efficient in locations where a lottery play station (an add-on unit that holds brochures, play slips, pencils, and other lottery information) cannot be placed. Call Center Scientific Games' National Response Center optimized service in concert with Wawa and the Lottery's call centers. This included customized procedures, workflow and electronic interfaces to streamline service requests. Together, these enhancements facilitated a swift and smooth transition for Wawa stores to begin selling the lottery products their customers were clamoring to purchase. 16
Results A success story Since the Wawa project began in May 2010, Wawa stores generated over $126 million in sales (CY2012) for the Lottery. This translated into over $6.2 million in retail commissions for Wawa stores and approximately $41.7 million to benefit older Pennsylvanians. After only a few weeks, some Wawa stores sold almost double the amount of products sold in other PlayCentral locations in the state. Lottery sales at Wawa continued to increase as customers became more aware of the lottery products being offered in these locations, and more comfortable with purchasing the games through a self-service terminal. Additionally, advertising and promotional activity at the stores increased sales. Both the Lottery and Wawa were very pleased with the results and worked for even greater success. Currently, Pennsylvania Lottery games are sold in all 210+ Wawa locations across Pennsylvania. The Wawa chain has averaged approximately $1.53 million in weekly sales through the self-service PlayCentral terminals. The PlayCentral s sales across the chain average about $7,354 per week. Both instant and draw game ticket sales are strong for Wawa stores, recently showing a 28.3% draw games to 71.7% instant games split. In fiscal year 2012, Wawa lottery sales reached nearly $72 million with a significant majority of 210+Wawa stores averaging $13,000 or more in weekly sales. Several Wawa stores appear regularly in the Pennsylvania Lottery s Top 10 Monthly Sales Performers. WAWA TOTAL CY SALES RESULTS $90M $80M $70M $60M $50M $40M $30M $20M $10M $0 $ 2,877,437 TOTAL CY2010 $ 47,457,678 TOTAL CY2011 $ 82,184,270 TOTAL CY2012 17
Partnership A business within a business By creating a self-service oriented lottery solution that fit neatly in Wawa stores, the retail chain has been able to retain its leadership position in providing exceptionally fast and convenient service with quality products to its customer base. Adapting the PlayCentral terminal to Wawa s business model by adding functionality, special security features, and increased reporting that link them with existing back-office systems enabled the chain to realize its objective to meet customer demand. Wawa also boosted same store sales with only minimal training of employees on how to manage and service a new and largely passive component to the business. The Pennsylvania Lottery, Wawa stores and Scientific Games had successfully launched a pilot project that provided a lottery industry first a full, self-service lottery solution that integrates instant and draw game sales, prize validation and payment, accounting procedures and security standards. The extension of lottery product sales into Wawa stores was a huge undertaking; it was one of the biggest the Lottery has initiated to recruit a key or chain account. Both Wawa and the Lottery correctly understood the great potential for a reward for both parties. Seeing the benefits unfold in profitable sales increases have convinced them of what can be achieved with thoughtful collaboration, clear communication, and a dedicated, experienced technology partner. Through a strong commitment to customer success, real partnership and well-planned execution, Scientific Games lottery technology professionals enabled both the Pennsylvania Lottery and Wawa stores to score a big win. The Lottery closed a sizeable gap in its retail network that now greatly enhances its ability to achieve its mission to fund programs for Pennsylvania s older citizens. Wawa stores closed a competitive gap in meeting the desires of customers who wanted to purchase lottery products in-store in the fast, convenient way they ve come to expect from Wawa. To learn more about how the lottery technology professionals at Scientific Games can assist in achieving your lottery s mission with retailers, contact your Scientific Games account executive. 18
Sources Sources Pennsylvania Lottery management and staff Scientific Games corporate and field staff Scientific Games Game Management System database Pennsylvania Lottery sales database 19
About Us About Scientific Games Scientific Games Corporation is a leading developer of technology-based products and services and associated content for worldwide gaming and lottery markets. The Company s portfolio includes instant and draw-based lottery games; electronic gaming machines and game content; server-based lottery and gaming systems; sports betting technology; loyalty and rewards programs; and social, mobile and interactive content and services. 20
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