Duncan Malyon, Sales Director at Camelot, explains how The National Lottery operator selects its retailers and how to apply for a terminal.
Research shows that one in every 10 customers visits stores because they want to buy a National Lottery ticket. On top of this, lottery shoppers in convenience outlets visit their store more frequently and spend on average almost a third more than non-lottery shoppers**, a figure that rises even more sharply between 5pm and 7.30pm on draw nights. All of this means that, to date, National Lottery retailers have earned over £4.4 billion in sales commission.
Taking all this together, The National Lottery can significantly enhance an independent retailer’s bottom line – especially when you take into account that minimal space is needed, there is very little maintenance and the only non-staffing cost involved in operating a terminal is the power needed to run it.
My weekly postbag is inundated with requests for terminals – and for advice on what retailers need to do to get one, how we judge them and the ways in which they can improve their chances of being selected.
So, to help you understand how we allocate terminals, I thought it would be a good idea to outline why Camelot has a selection process and what that process actually entails – and dispel a couple of myths along the way!
As operator of The National Lottery, Camelot’s objective is to maximise returns to National Lottery Good Causes through selling tickets in a socially responsible way. In order to maximise our sales potential – and returns to the Good Causes – it is imperative we get the best return on each and every one of our lottery terminals.
This means having the right number of terminals in place and making sure that National Lottery outlets are in the best locations to offer the best sales opportunities – and therefore the best returns to the Good Causes. Currently, more than 96 per cent of the UK population either live or work within two miles of a lottery terminal.
We work with nearly 30,000 retailers throughout the UK, ranging from small independent shops to large supermarket chains to petrol forecourts; with independent outlets making up the majority. To ensure we are fair and thorough, the same criteria apply across all retailers regardless of area or sector – with each case being ultimately judged on its own merits.
Our expertise gained with almost 18 years’ experience of running one of the most successful lotteries in the world shows that the 'accurate' siting of a new National Lottery terminal can generate substantial incremental sales. That’s good news for National Lottery Good Causes and good news for communities throughout the UK!
As I said, we currently trade in nearly 30,000 retailers throughout the UK, but our retail network will soon be 37,000 outlets-strong following the National Lottery Commission’s agreement to our proposal to expand our retail estate by a further 8,000 outlets as part of our initiative to raise an extra £1.7 billion in lottery funding over the next 11 years.
We have provisionally identified locations for these additional terminals using our fair and rational selection process to highlight those outlets which we believe offer the best opportunity to generate incremental sales – and therefore even more money for National Lottery Good Causes.
We are currently contacting, in person, those retailers whose stores have been provisionally identified as one of the 8,000.
I’ll go into a bit more detail about our retailer selection process in a moment but, in summary, this process involves a four-phased approach to outlet selection, with the overarching objective at all times being to maximise returns to National Lottery Good Causes:
If you would like to formally register your future interest in having a National Lottery terminal in your store, please complete and submit the form on our dedicated retailer website: www.lotteryretailer.co.uk.
If you have previously done so but your circumstances have since changed, you should update your details to ensure that we hold the most up-to-date information about your store.
Your details will be added to our database of potential retailers, which we assess on a regular basis throughout the year to identify the best opportunities to generate incremental sales, dependent on terminal availability at the time.
Please note that registering or updating your details does not mean that you will be on a ‘waiting list’ for a National Lottery terminal – I’ll go into a bit more detail about this later on.
We analyse the sales potential of each of those outlets on our database of potential retailers using a combination of market research and geo-demographic data, as well as additional information collected on an ongoing basis at ground level by our experienced sales executives. Based on their local insight, they provide recommendations that take account of factors such as the commitment and enthusiasm of staff, access to the outlet (including parking facilities), and store appearance and standards.
In all, we scientifically evaluate over 200 individual items of information and over 40 separate criteria – including current and projected sales, footfall, store size, access and potential demand – using a geo-demographic modelling system. This uses ‘heat maps’ to help us identify areas of the country that may be under- or over-supplied, based on estimated demand for National Lottery products.
Camelot’s Network Review Group (NRG) evaluates each selection nomination to identify which of them offers the best opportunity to maximise returns to the National Lottery Good Causes. The NRG, which consists of three senior sales managers plus a dedicated Location Planning Analyst, reviews each recommendation against all of the selection criteria and discusses any justification put forward by the Camelot sales team. The group also takes into account changes in the retail landscape and wider retail market trends which might influence the sales potential of the potential new outlet – such as if new housing estates or offices are built, stores open or close, new shopping centres open or even the road network changes which could affect shopping habits. The successful selection forms are then collated and passed to our Retail Services Department with instructions to begin the physical installation process.
If a retailer has been identified as a potential outlet, we will initially attempt to contact them by telephone, but this will be purely to arrange a visit from a Camelot sales representative. Camelot will never sign-up a retailer without first visiting the store.
All our staff or agents will provide full identification and credentials when they arrive in-store. At this initial visit, the representative will further assess the suitability of the store, and will discuss with the retailer our selection process as well as the retailer’s obligations if they were to be chosen to sell National Lottery products.
In addition, the retailer will be provided with various paperwork, which needs to be completed and returned to Camelot. Only once all of this activity has taken place will we get back in contact with the retailer to confirm whether or not they have been selected to become a National Lottery retailer.
As I mentioned above and contrary to popular belief, we don’t operate a waiting list for lottery terminals or select on a ‘first come, first served basis’. When a terminal does become available, we use our fair and rational selection process to identify those outlets from our database of potential retailers, irrespective of sector or proximity to other stores, which offer us the best opportunity to generate incremental sales – and therefore raise even more money for the Good Causes.
If, having registered or updated your details, you don’t hear from us, it doesn’t mean your outlet isn’t suitable – it just means that better prospects for maximising returns to the National Lottery Good Causes have already been identified in the interim.
Multiples vs Independents
We work with nearly 30,000 retailers throughout the UK, ranging from small independent shops to large supermarket chains to petrol forecourts. To ensure we are fair and thorough, the same criteria apply across all retailers regardless of area or sector – with each case, and therefore, each new selection, being ultimately judged on its own merits, regardless of which sector it falls into. There is no favouritism towards multiples – in fact, independent outlets make up the majority of stores that operate National Lottery terminals and, of the 8,000 new terminals that will be installed as a result of our extended licence, up to 6,000 are expected to be from the independent sector.
Charging for terminals
We do not ask for a deposit or administration fee for a National Lottery terminal, nor do we charge retailers for our terminals – installation and maintenance of National Lottery equipment is free of charge. If you are selected as a retailer, it will be purely on the grounds of the selection process as outlined above.
Once selected, you will receive a terminal – which will be installed by our supplier at no cost to you – a Playstation, a National Lottery Scratchcard dispenser, till rolls and play slips – as well as comprehensive training and support, so that you can become a successful National Lottery retailer.
Each and every one of our retail partners acts as an advocate for The National Lottery, and they have played a pivotal role in helping to raise over £28 billion for the National Lottery Good Causes so far. This money has helped to fund more than 380,000 lottery grants the length and breadth of the UK – the equivalent of 124 awards per postcode district. We will continue to work closely with them to build on this amazing achievement – and help them add further value to their businesses.
If you haven’t already registered your interest in having a National Lottery terminal or your store’s details with us, then log onto www.lotteryretailer.co.uk and add your information. If you make any changes to your outlet, which you think could have an impact on your possible future selection, then remember to update your details with us on the website. And if we do select your store to become a National lottery outlet, we’ll contact you with the good news.
** Source: HIM CIP 2010