Customer Experience Challenge: The Lottery experience

Generally the prime retail positioning for Lottery sales is the kiosk at the front of the store within the top four grocery multiples. This positioning ensures Lottery tickets are a high profile and high revenue sector in the major multiple stores and it is against this backdrop that we evaluate the performance of specialist retailer Forbuoys against the might of Tesco, Asda, Sainsbury’s and Morrisons. Forbuoys operates around 1,200 outlets nationwide and is the largest newsagent operator and largest retailer of newspapers across the country. It is the largest Lottery retailer in the newsagent sector with 900 stores offering this service. The Lottery category was worth over £5bn in the year to 31 March 2006, an increase of £246.7m on the previous year (Source Camelot). There are now a wide array of different Lottery games and cards available and this potentially confusing choice demands a high level of customer service as well as speed of customer handling to minimise queues and potential customer dissatisfaction. GAPbuster sent experience evaluators into 10 outlets nationwide of each of these five retailers to measure the typical customer experience.

VARIABLE 1: SPEED OF SERVICE

The top performance was seen by Tesco and specialist retailer Forbuoys with a perfect 100% score, while Sainsbury’s and Asda also scored strongly, both with 90%. Morrisons was let down by its queuing time which brought its score down to 80%. With Lottery purchases, speed of service is a key driver of customer satisfaction,an issue which is highlighted later.

VARIABLE 2: STAFF FRIENDLINESS

A very strong performance by Tesco, which ended up a clear winner of this section with a score of almost 94%. This section measures the friendliness and sincerity of the greeting and farewell to the customer, as well as the quality of the interaction with the customer during their shopping experience. It is clearly very important for members of staff to be natural and not just appear to be “complying”with robotic, mechanical standards of service. This is a key service measure and one that all of our GAPbuster evaluators note within this section. All retailers performed at the 80% level or above on all three measures within this section,which is a strong and consistent performance, and meets the GAPbuster target for basic levels of customer satisfaction.

VARIABLE 3: STAFF INTERACTION

GAPbuster evaluators asked the store staff two questions to test product knowledge and the quality of advice offered. This month they asked about the minimum age for playing the lottery and also enquired about how any winning monies could be collected. There was a very inconsistent performance from each retailer apart from Morrisons, which won this section with a score of 80%. Typically staff interaction is one of the key drivers of customer satisfaction and these scores indicate consistency of delivery of this key attribute is an issue that needs to be addressed. Specialist retailer,Forbuoys,would be disappointed with its score of just 61%, which is well below the GAPbuster basic satisfaction target of 80%. It scored just 70% in answering both questions and just 30% in inviting a further purchase. However, this score of 30% in asking the customer “if there is anything else they would like” is actually substantially better than all of the top four multiples,which all scored a poor 10% on this measure. As a reminder of the saying “if you don’t ask, you don’t get”, major multiple retailers are clearly not going to get those incremental sales and are missing out on additional revenue opportunities.

VARIABLE 4: PRESENTATION

Asda delivered excellence in the area of staff and store presentation, scoring 96% in this month’s evaluations. Scoring 100% in the areas covering tidiness and staff presentation, a full sweep in this section was only denied the retailer by scoring 80% in “wearing name badges”. All other grocery retailers scored above 80%, but Forbuoys fell well short of the basic target with a poor score of just 64%,with just 50% of staff recorded as wearing a uniform.

OVERALL CUSTOMER EXPERIENCE

This month Tesco was a clear winner with a strong score of 87%, followed by Asda with 83% and Morrisons and Sainsbury’s on 82%. Specialist retailer,Forbuoys, will be disappointed to trail leading grocery retailers by between 4% and 9%, and scored just 78% overall. This month’s results highlight the inconsistency of delivery of customer service across all retailers,with different players winning each of the five sections and no one delivering a consistent level of service across the whole customer experience. In the retail jungle, consistency is king and it will be the most consistent player over the remaining nine months that will follow Morrisons as the overall 2006/07 GAPbuster Customer Experience Champion. GAPBUSTERWorldwide is the world’s leading customer

ROUND 2: CUSTOMER SATISFACTION

IN ADDITION to measuring the actual experience, GAPbuster evaluators also measure the impact on customer satisfaction from the in-store experience. Every customer has a perception of that retail brand when entering a store, and it is key for retailers to match and exceed that expectation. This month we have analysed overall satisfaction and speed of service for each retailer and ranked all five competitors.

GAPbuster shoppers are asked to rank their levels of satisfaction, based on their own experience from that individual in-store evaluation. Customer satisfaction is measured on a five-point rating scale as is level of speed of service. What these results show is that speed of service is a key driver of customer satisfaction when purchasing a Lottery ticket. Typically, a purchase can be on impulse and a long queuing time can result in dissatisfied customers, leading to potential loss of loyalty and lifetime customer revenue.

Forbuoys is meeting expectations on service delivery time and is satisfying its customers. The opportunity it has is to improve the quality of staff interaction to create a strong service differential versus ita major grocery competitors, as this is clearly a key sector for the company.

THE INSIDER

Steve Lucas, sales director, Camelot

2006 was a landmark year for Camelot, with National Lottery sales showing their biggest annual rise in eight years. Retailers have been pivotal to this success and remain by far the largest distribution channel for The National Lottery, accounting for over 90% of sales. EuroMillions is a growing part of the portfolio of games and is particularly important in driving excitement and returns to the UK good causes. This year has already seen two recordbreaking jackpots boosting sales by up to 500% on a normal week – with tickets selling at about 500 per second at peak times and the first draw-based game designated to raising funds for the London 2012 Olympic and Paralympics Games – Dream Number – went on sale in July 2006. National Lottery permanent point of sale typically occupies only 1%* of floor space in store but generates high sales, at relatively low cost, resulting in high net cash margin. According to research by Harris International, The National Lottery is a proven driver of footfall and additional spend in-store, contributing to the overall profitability of lottery retailers. Lottery shoppers visit their store more frequently and spend on average 67% more than nonlottery shoppers, rising to 80% between 5-7pm on draw nights. We are constantly looking for ways in which we can work with our retail partners towards achieving our shared objectives of further growing lottery sales and returns to Good Causes. Customer convenience and service remains a priority in continuing to drive sales – and maximise returns to good causes, which so far total more than £19bn.

*Source: PricewaterhouseCoopers, March 2006