The half-year results from Tabcorp make interesting reading. Lottery retailers need to understand the results given that a core part of their business is reliant on revenue from Tabcorp products. Purchase through digital platforms grew by 20.9% over the previous period. This is excellent growth for Tabcorp.
Now, look at the percentage of lottery revenue from digital since 2016:
This is a graph from an investor advisory business.
The growth trajectory for the purchase of lottery products via digital platforms is set. Retailers need to take note, especially given the considerable capital and other assets Tabcorp requires them to invest.
Digital is growing faster than overall lottery revenue. Over the last six months, for example, lotteries revenue grew by 1.6% while the percentage of lotteries revenue purchased over digital platforms grew by 20.9%. That is the gap of concern for retailers.
If your shop is not experiencing a decline, others will be, they have to be on the Tabcorp results.
Personally, thinking of small business retailers, I would like to see Tabcorp reduce obligations on retailers in terms of the space in-store they demand, especially from entrance to the counter and at the counter itself. I would also reduce the visual noise from lottery products and free some of this space for retailers to be, hmm, retailers.
I would like to see Tabcorp enable retailers to make decisions that improve the viability of their businesses outside of lottery products. This could make the businesses stronger, which would be beneficial to Tabcorp.
I am not talking about tearing down signage or making retail lottery outlets look as dishevelled and inconsistent as what we see in the US. Rather, I am suggesting an easing of the space required in retail by Tabcorp and the barriers to other products being placed in the lotteries area. This could be done in a structured, co-operative way, a way that does not reduce lottery product sales in retail.
At the very least, Tabcorp could offer newsagents an easier retail model like they allow with On The Run.
Now, to those who will say here he goes, he hates Tabcorp blah, blah, blah. All very ho-hum. This post is acknowledging the evidence in Tabcorp’s numbers. If I had a product category in business over which I had control and which was experiencing this level of migration from over the counter to digital I would make a significant move to mitigate the impact of the trajectory before it actually cost me anything. That’s business.
Change is occurring. Smart retailers will move to minimise the impact on their business. Tabcorp is demonstrating its commercial preference.