Washington s Lottery: Retailer Focus Groups on Next Generation Lottery Vending Machine SUMMARY OF RESULTS. April 2009

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1 Washington s Lottery: Retailer Focus Groups on Next Generation Lottery Vending Machine SUMMARY OF RESULTS April 2009

2 Table of Contents Background and Objectives 3 Methodology 4 Executive Summary 6 Detailed Findings Effectiveness of Current Vending Machine 8 Suggestions for Future Vending Machine 14 Initial Impressions of Powerball & Mega Millions + Powerball Concepts 25 Appendix Retailer Prioritization of Suggestions in Focus Groups 27 2

3 Background and Objectives In early 2009, Washington s Lottery wanted to gain knowledge about the effectiveness of current Game Point vending machines from local retailers. They were interested in gaining suggestions for future lottery vending machines, and commissioned Ipsos to conduct a series of focus groups to address their objectives. The study objectives were to identify features and capabilities desired by appropriate personnel of major grocery store chains. Specifically: Gain understanding of effectiveness of current lottery vending machines; and Gather feedback and suggestions for future lottery vending machines. In addition to the primary objectives (and if time permitting), Washington s Lottery wanted to briefly run two new game concepts by retailers to gain their initial impressions. The game options were to either add Powerball to current Washington Lottery games, or add a joint game consisting of Mega Millions and Powerball together. 3

4 Methodology A total of five focus groups were conducted to gain insight into the following: Understand the retailer process when working with the machine; Gather key benefits and drawbacks/barriers of the vending machine for retailers; Understand the perceived player process of interacting with the machine; Gather perceived key benefits and drawbacks/barriers of the vending machine for players; Gather suggestions based on both retailer and perceived player perspectives; and Prioritize suggestions into three categories: Extremely beneficial features; Somewhat beneficial features; and Nice to have but not that beneficial features. Smaller focus groups of 5 to 7 participants were recommended to allow for more individual interaction with the lottery vending machine (one Game Point vending machine was placed in the room operating in test mode). 4

5 Methodology, ctd. Focus groups were conducted in Seattle, WA on March 24 th, Respondents were recruited by Washington s Lottery and consisted of personnel of retailers who normally interact with or are responsible for current generation of Lottery vending machines. Recruits were based on: Convenience of attendance; and Representation of three store categories of Albertsons, Fred Meyer, and Independents (including bars and restaurants). All groups were moderated by senior Ipsos moderator Jeff Etherton. 5

6 Executive Summary

7 Executive Summary Overall, the current Game Point vending machine delivers functionally to both players and retailers. There are no deal breakers. However, the biggest barrier with the vending machine is that it is not obvious about offering Washington Lottery games other than Scratch. This should be the primary focus for the next generation of vending machines. Consider: More prominently displaying Washington Lottery game logos offered on the machine; Better utilizing the top space of the machine replace scrolling Mega Millions jackpot message and it s good to play sign with scrolling tutorial video; and Showing step-by-step instructions (possibly with voice component) on touch screen. There are some player usability issues that can be addressed, including: Not offering change back (either give change or create better signage to alert players); and Language barrier with Spanish and other non-english speakers (consider adding at least Spanish to the interface to better reach these consumers). Retailers also have some usability issues. Some issues are universal (all want one-key entry or coded entry); while Other issues depend on whether they are a big / high-volume retailer or a small / low-volume retailer (big retailers like offering change concept, small retailers do not) 7

8 Detailed Findings Effectiveness of Current Vending Machine

9 Vending Machine Delivers Functionally Functionally, the current Game Point vending machine performs well for both retailers and players. Retailers like the full service aspect of the machine, and appreciate that it reduces the number of lottery players at customer service counters. Retailers feel that players also like the full service aspect. Players find the machine easy to play and saves them time once they know what the machine actually does. The machine does not have any deal breakers or major barriers for retailers. The full service aspect of it is great. Also the convenience; it is taking away from the customer service desk so they can better deal with returns, etc. Overall, the vending machine is considered an improvement compared to the previous generation vending machine. Key improvements include: Being able to purchase online games; Ability to run reports; Digital screen / touch screen; Easier to extract money from the machine; and Better design of money drawers (previous machine had metal drawers that would swing open, now it has a handle to keep closed). 9

10 Machine Lacks Appropriate Awareness and Educational Messaging The biggest barrier to wider use of the vending machine is that it does not provide enough education and awareness of what it offers. The machine is not obvious. Once players know how to use the machine, they love it. However, because the machine is not obvious, there is a big barrier for beginner users. The machine lacks proper signage that advertises the other Washington s Lottery games (or games other than Scratch) that are offered. When you are standing 50 feet from the machine, you can tell loud and proud that it sells Scratch tickets. But you can t tell about the other games. The machine lacks other key signage that could help address awareness and educational barriers. This is the most critical issue. Players are not aware: How to play (beginner users); That the machine does not give cash back; That they have to agree they are 18 on the touch screen before playing; Where to pick up their tickets; and Where to put their money (they often put money in the playslip slot). They keep wanting to put money where you put the playslips. People just walk up and put it in the first slot they see it accepts it but doesn t give tickets. 10

11 No Deal Breakers, but Some Common Usability Issues While there are no deal breakers, there are some general usability issues with the current vending machine. Common player usability issues are: No tutorial/step-by-step instructions on how to play; Interface is only in English; Machine does not give cash back; and Playslips occasionally can not be read by the machine. When [players] fill out playslips, the reader doesn t work. It has to be brand new to work, but at the customer service machine, it works. [Players] don t know that you have to push the playslip all the way to the left. The slot should be the same size as the slip. Common retailer usability issues are: The two locks are in different places and can be difficult to access; Scanner with a cord makes it hard to reach everything; Bill acceptor/printer occasionally goes offline; and Larger tickets get stuck in the machine. Some of the longer tickets get caught up. When it lets go in the shoot, it can get curled up in there. It gets caught up inside the door. We don t have a problem with the 6 inch, but the 8 inch ones get caught up. We get three to four jams a day. 11

12 Retailer Issues can Vary by Size / Volume of Store Retailer issues and preferences can vary depending on whether they are from a large / high-volume chain or a smaller / lower-volume retailer. There will not be one machine that will completely satisfy everyone. Some of their needs vary depending upon the size, capacity, and volume of their store. Large / High-volume Retailer Trends Larger retailers (Albertsons, Fred Meyer) are more inclined to want the machine to offer change, and / or allow players to redeem their winnings from the machine (up to $20). Larger retailers like grocery chains are already used to stocking machines in their store with money (like UScan) and do not see this as a huge undertaking. Larger retailers are more likely to have a problem with the touch screen message that requires players to agree they are 18 years or older in order to play mostly because players do not notice this message. Larger retailers want the screen to beep / blink to draw attention to this. Larger retailers do not have a problem with the brightness of the machine. Their stores already have strong lighting and signs like it s good to play are not overly bright for these environments. 12

13 Retailer Issues can Vary by Size / Volume of Store, ctd. Smaller / Lower-volume Retailer Trends Smaller retailers are less likely to want the vending machine to offer change or allow players to redeem winnings. They do not want to be responsible for making sure the machine is properly stocked with money and worry this could create more accounting issues. Smaller retailers are also less likely to have an issue with the over 18 message on the touch screen. Many smaller retailers (like bars) do not even receive this message as all patrons are over the age of 21. An issue smaller retailers are more likely to have a problem with is the brightness of the it s good to play sign on the machine it can be too bright for bars/restaurants. Smaller retailers want a dimming switch for bright signs. We took out the it s good to play sign because it s just too bright [for our bar]. 13

14 Detailed Findings Suggestions for Future Vending Machine

15 Help Users Overcome Initial Barriers The most important suggestions for a future vending machine relate to improving awareness and education about what the machine provides. The logos of all games should be shown prominently on the machine and the touch screen, so potential players can tell what the machine does. Consider better utilizing the top space of the machine to show logos and a screen with a rolling tutorial of features and how to play the machine. The current rolling ticker that shows Mega Millions jackpots and the it s good to play sign are seen as nice to have, but not necessary. Advertise the game logos that are offered on the machine here. Consider adding a video screen that loops various messaging such as local winners, games offered, and how to play the machine. Make better use of screen where it says it s good to play. Replace it with an ad for games. The reader at the top is great but not necessary. All it says is look at me I m a reader board. 15

16 Help Users Overcome Initial Barriers, ctd. While the machine is easy to use for experienced players, beginner users need more guidance. Consider adding step-by-step instructions to the touch screen, possibly with voice. Retailers praise the instructional videos (with voice) of Coinstar or UScan that help customers understand how to use the machines. Some retailers thought adding sound might be annoying to the customer service desk, and wanted a volume control/mute option for voice instructions. Retailers like the Coinstar instructions because they are clear and easy to follow. Run through steps that show what to do. People are worried that they are going to break it it s a computer. 16

17 Help Users Overcome Initial Barriers, ctd. Make the machine as obvious as possible so there is less confusion. Make the buttons on the touch screen for touch screen to play and instructions more prominent and easy to see. First-time players (and even repeat players) often do not realize they have to agree they are 18 years old on the touch screen before they can play. The touch screen should blink or beep to draw attention to this. Create signage explaining that players can check to see if they have winning tickets at the machine most are unaware of this feature and use the customer service line. Players also get confused about where to insert money; many put it in the playslip slot because it is green, and green indicates money. Change the color to be the same as the playslips (red/orange) to reduce this confusion. Since green = money, change the color of the playslip slot so players do not try and insert their money in the wrong area. 17

18 Address Player Usability Issues While most aspects of the machine are easy to use, there are some key adjustments and/or additions that would be beneficial for many players. Consider adding at least a Spanish language option to better facilitate play among Washington s sizeable Spanish population; consider other common languages too. Make the playslip slot the same size as the playslip itself players do not realize they have to put their playslip all the way to the left so the machine can properly read it. Consider enabling the touch screen so that players can enter their preferred play numbers digitally, instead of using the playslip. Move the ticket slot higher or have stronger signage that directs players to ticket slot. Create more obvious signage that points out this is where players can pick up their tickets, or move it up higher. The take ticket here sign needs to be higher. People try and take it out of playslip slot. Make it flash or something. 18

19 Improving Retailer Usability Retailers interact with the machine often (daily) and appreciate efforts to make the machine as efficient as possible. Retailers have a difficult time accessing the locks to open the machine, especially if the machine is up against a wall or next to another machine (like a Coinstar). Consider creating a one-key entry in an easier to access location; or Consider having a touchpad entry that opens the machine instead. Streamline the keys. Make one key for the whole thing. Or access code through the touch screen It takes longer to get in to the machine then to load it. The scanner has a cord that makes it a challenge to reach everything. Retailers suggested a cordless scanner (Bluetooth). The scanner with a cord is really annoying. It should be moved up where you can scan easier or it should be wireless like Bluetooth. The larger sized tickets (8 inch) can get caught up in the machine, requiring retailers to open the door to access the stuck ticket. The smaller sized tickets (6 inch) are less likely to catch, and most prefer this size. 19

20 Improving Retailer Usability, ctd. Busy retail locations require regular stocking of tickets. Bigger ticket packs would help to decrease the frequency of stocking tickets. Some retailers were not aware that they could tape ticket packs together, which would also decrease the frequency of stocking tickets. Make the ticket packs bigger. I can load it on Sunday and it will be out on Monday already. I was told not to tape them together anymore. Retailers like the idea of having digital faceplates because they would be more eyecatching to players and could solve the issue of voided / out-of-stock Scratch tickets. Another popular request was to enable the Scratch tickets to be retrieved by players immediately under their faceplate. If not feasible, more obvious signage is desired to show current pick-up location. Digital faceplates could be more attractive to consumers and could show an out-of-stock image when Scratch tickets are temporarily unavailable. Consider enabling Scratch tickets to be picked up under faceplates. 20

21 Improving Retailer Usability, ctd. Retailers are required to run daily shift reports from the vending machine, and want the machine to auto-clear after each evening so the reports do not run together. It should be a self-clearing machine. If people don t clear it then the money all runs together in the report yesterday s money will run with today s money. Retailers can get confused with the two different shift reports offered by the machine. They would like the shift reports to either be the same (the full report) or be labeled differently so employees can more easily differentiate between them. The shift reports access them from different areas and they are different. Either combine shift reports as one total with online sales, or call it something else Topline Report vs. Detailed Report. Don t have the same titles. In order to better organize and keep the machine clean inside, bigger supply shelves and a cleaning kit were requested. Lastly, retailers do not like the alarm that goes off when the vending machine door is open, and requested it be removed or have an alarm that is easily disabled. Alarm is annoying if you hit the door. Hello, I know the door is open [I] don t need an alarm to tell me. 21

22 There are Many Transactional Issues to Consider The vending machine needs to better address the issue of no change either offer change or create better signage to alert players. Most retailers expressed interest in giving change back to players (up to $20). Stocking the machine with money is not seen as a big issue for large retailers, as many are already are used to doing this for other machines like UScan. Some retailers (especially independents) had some concerns about having to constantly monitor and stock the machine and keep additional bookkeeping records. Consider offering two machines one with cash back, and one without. If giving change is not an option, more obvious signage is required to inform players. Players can get very frustrated that they have to have exact change to play this is seen as an inconvenience that possibly deters people from using the machine. [Customers] would like [giving change back] but we wouldn t. We would have more issues. We wouldn t have enough $1s and $5s to give. At least advertise better that the machine does not give change. A customer enters $5, then tries to do two $2, and then realizes there is no $1 dollar ticket. This happens once a week. 22

23 There are Many Transactional Issues to Consider, ctd. Similar to giving change back, retailers expressed interest in enabling the machine so that it can dispense player winnings. The machine could either give players their money immediately (up to $20), or allow players to use their winning credits to play again on the machine. Retailers thought this would save them time because personnel would no longer be the only source for dispensing player winnings in the store. The machine could also give out redeem vouchers (similar to Coinstar) for winning tickets (larger retailers like this). Have the ability to redeem money a cash-out voucher to redeem tickets. They can take a voucher to any check stand and give cash back. It would just be another accounting issue, but not that big of a deal. Many retailers liked the idea of a player rewards card, but wanted to know more. Offering a rewards card was thought to be more interactive and personal with players, and more versatile than just accepting cash. Retailers wanted the option of storing winning credits on the card and being able to offer different themes during holidays so people could give them as gifts. However, retailers were concerned if players lost their cards (players might expect retailers to reimburse them) and that it might overly encourage gambling. 23

24 There are Many Transactional Issues to Consider, ctd. Another option is for the machine to accept debit cards, but retailer reactions were extremely mixed. Retailers felt that players would appreciate this option, especially since many consumers do not often carry around cash. However, there was confusion over where the money would go (would retailers still get a cut?) Others thought this would create more accounting/bookkeeping issues. If [the vending machine] didn t give them money back [from their card], we would have to give them refunds. It wouldn t have anything to do with our business, but our customer service has to resolve it. Debit cards scare me. 24

25 Detailed Findings Initial Impressions of Powerball & Mega Millions + Powerball Concepts

26 Powerball Concept Well-Received, Joint Concept Not Retailers initially liked adding Powerball to Washington s current lottery games, but felt creating a joint game would create issues. Retailers had a positive or neutral reaction to Powerball in general but had some questions. Some thought Mega Millions and Powerball were the same game, just offered in different states. Retailers believe that the option of picking one s own numbers is a necessity. Most retailers expressed concern over the joint game because it could limit player options, but thought many players would play anyway. Many players play using a $5 bill, and they could not play the joint game (because you have to buy in multiples of $2). Others thought it was unfairly forcing players to either play both games or none at all. The jackpots are different and people will want to play only one. People are going to think you re trying to tell me what I have to play. It s a good idea but I still think there should be an option to separate it. 26

27 Appendix Retailer Prioritization of Suggestions in Focus Groups

28 Prioritizing of Suggestions in Focus Groups While in the focus groups, participants were asked to sort their suggestions in to three categories of extremely beneficial, somewhat beneficial, and nice to have but not that beneficial. Group 1: Extremely Beneficial (Mainly Independents) Pick #s using touch screen Instructions option Scrolling step by step examples on screen Change color of slip insert (not green) Bigger ticket packs Different language options Spanish language options Larger signage for exact change only Refund for out tickets Group 1: Somewhat Beneficial (Mainly Independents) Advertise the machine (commercials, etc.) Ads Buy Lotto here! etc. Put a screen for advertising at top of machine 2 to 3 faceplates per game Code for disabling alarm Advertise jackpot amount Change scrolling message to advertise Lotto Message for check for winners here Group 1: Nice to Have but Not that Beneficial (Mainly Independents) Player Cards (lotto cards) Put a dimmer on the lights Tone down backlit signage Take ticket here up higher Voice instructions Self-clearing machine (shift report) 28

29 Prioritizing of Suggestions in Focus Groups, ctd. Group 2: Extremely Beneficial (Mainly Big Retailers) Redeem tickets cash out voucher Player Rewards Card (personalize machine and ID each player) Red play slip slot (not green) Voice instructions Faster register of credits Digital screen at top for ads/ jackpots, etc. Redeem and play again (scan the Scratch tickets) TV on top Refund for out tickets Blue tooth scanner (cordless) One key entry Does not give change more prominent Group 2: Somewhat Beneficial (Mainly Big Retailers) Does not give change in touch screen instructions One shot button Dispense at display button Digital locks on machine Keep lock next to other lock One key for cash and machine Pick number on touch screen Playslip slot same size as slip Place for supplies Language selection Load image of ticket (digital faceplate) Group 2: Nice to Have but Not that Beneficial Lottery cards (Mainly Big Retailers) Machine brighter yellow Place for pencils Shorter more horizontal design Take ticket higher Banner above machine advertising Advertise on touch screen Take debit cards Provide a Scratch or online screen Make change 29

30 Prioritizing of Suggestions in Focus Groups, ctd. Group 3: Extremely Beneficial (Mainly Big Retailers) Online play area different color No change more prominent Scan Scratch tickets Bigger ticket packs for $10s and $20s Move the bottom lock higher Put Take ticket here higher One-key entry / Coded entry Redeem up to $15 machine Bigger touch screen / TV on top Play slip holder (remove) - move to front Move bottom Ticket come out under photo Bigger, bolder play slip entry Group 3: Somewhat Beneficial (Mainly Big Retailers) Writing ledge inside Big arrow Buy Online Games Here! Pick numbers on touch screen Magnetic card entry Audio warnings Audio (voice) information Redemption voucher Group 3: Nice to Have but Not that Beneficial (Mainly Big Retailers) Indicator money box is full More bins Lottery gift cards reloadable Shorter more horizontal design Changeable top Banner above machine advertising Use full color pictures Put a shelf in bottom Debit cards 30

31 Prioritizing of Suggestions in Focus Groups, ctd. Group 4: Extremely Beneficial (Mainly Big Retailers) Pay out on Lotto tickets under $20 Reloadable Lottery card Pick numbers on the touch screen Bilingual touch screen Easy disabled alarm Pop open roller plate Redeem voucher Advance draws for online games Deeper bins Digital touch display for Scratch Display jackpot amounts Payout Scratch up to $20 Raise the locks higher Give change One key entry Replay button Group 4: Somewhat Beneficial (Mainly Big Retailers) Accept debit cards Digital the top w/ advertising Pick numbers on touch screen Change play slip from green Multipurpose slot for slips and tickets checking Move the slip insert next to the reader A space for Scratchers & pencils Tickets come in rolls Ticket fed under image (individual) Reset at 0 everyday automatic clearing day s total when you hit shift report Group 4: Nice to Have but Not that Beneficial (Mainly Big Retailers) A bin for second chance drawings Make machine lower Alcohol tickets (for cleaning) Cleaning kit Voice instructions Wireless scanner Reboot-able hand scanner 31

32 Prioritizing of Suggestions in Focus Groups, ctd. Group 5: Extremely Beneficial (Mainly Independents) Constant loop video messages Log on machine from main terminal Voice instruction w/ volume control Static signage play Lotto here Accept debit cards On screen tutorial Redeem Lotto tickets the machine Scratch tickets Move lock up Group 5: Somewhat Beneficial (Mainly Independents) Print winning numbers Pick numbers on touch screen Cordless scanner Play slip insert red Separate inserts move Activation download w/ size, etc. One shift report w/ both online and Scratch Storage shelf in the bottom Reloadable Lottery card Group 5: Nice to Have but Not that Beneficial (Mainly Independents) Redeem voucher Make change Video top w/ local winners, etc. Bring back one-shot button Take ticket here higher 32

33 Top Suggestions in Focus Groups While in the focus groups, participants were also asked to individually recommend their top three suggestions for improving the vending machine. Popular mentions include: Popular Retailer Suggestions for Next Generation Lottery Vending Machine Offer ability to dispense player winnings (up to $20) or give cash out vouchers through vending machine (9 mentions) Advertise other games through tutorial video, etc. (7 mentions) Touch screen to take player numbers instead of playslips (6 mentions) Have one-key entry to machine (4 mentions) Sign for no change or offer change (3 mentions) Dispense Scratch tickets under their faceplates (3 mentions) Offer a Player Rewards Card (3 mentions) 33