Having a lottery terminal can make a huge difference to a convenience store. Apart from the obvious footfall benefits, lottery shoppers spend on average 62% more than non-lottery shoppers, and 67% of them buy something else when they buy their ticket, according to HIM.
Ever since the National Lottery was launched in November 1994, terminals have been highly prized by retailers and, with lottery sales now back in growth, demand for terminals currently outstrips supply by more than three to one.
With this background, the selection procedure for terminals has always been a bone of contention for retailers so, in recent times, Camelot has employed increasingly sophisticated methods to make it as fair and transparent as possible.
The key thing to remember is that the selection process is underpinned by one overriding principle - to maximise the returns to good causes.
Camelot’s director of sales Steve Lucas explains: “Every week, my postbag is inundated with requests from retailers for a National Lottery terminal - what they need to do to get one, how they will be judged and how they can improve their chances of being selected.
“As operator of the National Lottery, our core objective at Camelot is to maximise returns to the good causes through selling tickets in a socially responsible way. So one of our main concerns has to be ensuring players have easy access to our games - currently 97% of the UK adult population either live or work within two miles of a lottery terminal.
“In selecting our retailers - the ‘face’ of the lottery - we operate a fair and transparent policy, with each case judged on its own merits. The split is roughly 60/40 in favour of independents and we don’t expect this to change in the foreseeable future but, like any business, we need to maximise our sales potential - and returns to good causes - which in practical terms means we need to get the best return on each of our terminals. So we need to ensure that National Lottery outlets are in the best locations to meet player demand. Our experience shows that the accurate siting of a new terminal will generate incremental sales of around 50%.”
Camelot maintains a database of around 100,000 UK retailers that meet the company’s basic eligibility criteria. These names and addresses have been provided by a number of independent external suppliers and so, Camelot claims, if you are a candidate for a terminal then the company already has your details unless you have specifically asked for them to be removed.
The sales potential of each outlet is scientifically analysed using a computer modelling program called Optimum. This is a mapping system which helps to identify areas of the country that may be under or over-supplied, using ‘heatmaps’, based on estimated demand for National Lottery products. In all, more than 200 items of information about a store and 47 separate criteria are examined, including current sales, projected revenue, footfall, store size, access and potential demand levels based on a combination of market research and geodemographic data.
The Camelot sales team collects additional information at ground level on an ongoing basis, usually through mystery shopper visits. Representatives identify the best prospects for selection in their local area and provide recommendations based on factors such as the commitment and enthusiasm of staff, access to the outlet (including parking facilities) and store standards.
All the information on a store is updated quarterly to take into account changes to the network and any feedback from the Camelot field force. Retailers can update any changes to their details at any time through Camelot’s Retailer Services Department.
There is no ‘waiting list’ as such, retailers are instead periodically nominated and assessed.
Each selection nomination is evaluated by Camelot’s Network Review Group, which consists of five independent senior managers from the company’s Sales Division Team, to identify which of the nominated outlets offers the best opportunity to maximise the return to the good causes. The group reviews each recommendation against all of the selection criteria, discusses any justification put forward by the Camelot field force and also takes into account wider retail market trends that might influence sales potential. Once the Network Review Group has made its final decision, the successful selection forms are collated and passed to the Retail Services Department to begin the process of installation - which can take a while.
There are currently just over 26,000 National Lottery retail outlets nationwide. Around 1,400 new terminals have been introduced in the past two years, meaning that the highest-ever number of draw-based terminals are currently on-line, but there is no stock of spare terminals.
Lucas explains: “Independent research shows that this is currently the optimum number of terminals needed to sustain further sales growth, so new installations will come from situations where an existing National Lottery retailer has, for whatever reason, had their terminal withdrawn.
“Unfortunately, only a few new terminals become available each quarter and, when they do, we have to assess the entire retail estate rather than a particular geographical area and select those retailers who offer us the best opportunity to maximise sales and returns to good causes. We cannot - and do not - operate a ‘one for one’ policy in selecting a new retailer.”
In other words, if a lottery retailer in your vicinity closes down, you will not necessarily get their terminal while, at the same time, if you operate a store in a high-demand area, a number of retailers relatively close together may all get terminals.
So, rather like the lottery itself, getting a terminal involves a lot of technology and a little bit of luck. Lucas adds: “If you don’t hear from us, it doesn’t mean your outlet isn’t suitable - it’s more likely that better prospects have been identified somewhere else.”
Camelot is committed to maintaining up to 1,000 ‘community outlets’ with protected status. A community outlet is one that has no other outlet within two miles and one that, were it to be removed, would mean all surrounding households would have to travel at least five miles to reach their nearest terminal. Community outlets must still meet Camelot’s operational standards of performance, but sales need not meet the minimum weekly sales target of £1,000.
I have been on a waiting list for some
time. why have I not heard anything?
There is no waiting list of applicants for National Lottery terminals. Once you have registered your interest you do not have to re-register. We will continue to evaluate your potential as a National Lottery retailer every 13 weeks or until you ask us to remove you from the database. A member of Camelot’s Retail Sales Team will contact you if you are successful.
I have been a Lottery retailer for some time now. why have you now selected the retailer next door to me?
Each selection is made using a wide ranging list of criteria. However, our aim is to maximise the return to good causes. If we believe there is the demand for a new National Lottery retailer we may select retailers close to one another.
A store with a terminal has closed just down the road from me. Can I have the terminal?
We do not operate a one for one policy with regard the selection of a new retailer as one closes. With a limited number of terminals available each year it is important that we select those retailers who offer us the best opportunity to maximise sales to good causes. This means we have to assess the entire retail estate rather than just a particular geographical area.
I am buying a shop that currently has lottery. Will it stay?
A National Lottery terminal is supplied to an individual and the retail agreement is signed by them. Should that retail outlet be sold on, the retail agreement will be terminated and the terminal will be removed. That said, we review each case on an individual basis and will assess each against the usual selection criteria.
I am sending in a petition signed by my local MP and customers to support my case for a terminal. will this help me?
Petitions do not up-weight the decision of Camelot to select a retailer.
I have sent back my Survey Form. When can I expect to have a terminal?
The Survey Form allows us to accurately record a retailer’s details on the database and guarantees that the retailer will be reviewed with the other 100,000 applicants every 13 weeks. But it does not mean the retailer will automatically be selected.
Questions answered by Steve Lucas, director of sales at Camelot.