Retail Executive SummitNov. 5, 2013

May Scheve ReardonExecutive Director, Missouri Lottery

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It Only Takes One!

PGRI Retail Executive Summit

Lotteries & Retailers Share the Same Goals, Challenges and Opportunities

Mutual Goals1. Build the brand2. Attract new customers3. Increase sales4. Improve the

bottom line

Mutual Challenges

1. Aging player base

2. Fewer cash customers

3. Lack of Lottery standardization

4. New distribution channels

Consumer Adoption of TechnologyIs Accelerating

Lottery Player Base Is Aging & Shrinking

Fewer Customers Carry Cash

There is a Lack of Standardization in the Lottery Business Model

There is a “Perceived Threat” ofAlternative Sales Channels

Mutual Opportunities

1. Promote the Lottery brand and loyalty.

2. Introduce new technology and distribution channels.

3. Work to standardize Lottery operations.

Explore New Ways to Promote the Brand and Loyalty

CY2012 contribution to education: $681,298 Mr. T’s – Cardwell, Mo.

“We are so proud of our store’s sales and the support to education that we’ve generated. We hope to do even better next year.” -Nicole Poynor

Lottery Advertising Has a Positive Impact on “Brand Relevance”

Advertising ImpactsLottery Relevance

www.smari.com

Cell Phone 100

Travel 86Google 86Cable TV 85

Facebook 77Coca-Cola 72

Missouri Lottery 71McDonald’s 71

NFL 70

Casinos 61

Beer 57Starbucks 54

40 30

20

10

Cell Phone 100 Cable TV 87Google 85Travel 85 Facebook

76

Coca Cola 71

McDonald's70

NFL

67

Missouri Lottery 66 Casinos 58Beer 56 Starbucks 49

30

20 10

FY12 FY13

FY12 Q1

FY12 Q2

FY12 Q3

FY12 Q4

FY13 Q1

FY13 Q2

FY13 Q3

FY13 Q4

66 65 66 65

71 71 69 71

Missouri Lottery RelevancePhilanthropic ads

• Play It Forward has had a significant positive impact on the perception of Lottery relevance.

Retailers Are Changing and Embracing Consumer Demands

• Self-checkout/self-select and other operational cost reduction initiatives

• Digital in-store display and endless aisles

• Multi channel initiativeso Use of mobile in storeo Click and pick

• Bring the store to the shopper

Use New Technology and DistributionChannels to Capture New Customers,

Sales & Commissions

Work Together To ImproveStandardization Of Lottery Licensing,

Distribution and Accounting

Lottery and Retailer Collaboration Has Led to Record Sales and Commissions

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY130

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2,000

2,500

3,000

3,500

4,000

4,500

Lottery Industry Total Salesand Retailer Incentives

(in millions)

Total Sales Retailer Incentives

Sale

s in

Mill

ions

Ret

aile

r Inc

entiv

es in

Mill

ions

How Can We Step Up Collaboration?What’s In Our Future?

Brick-and-Mortar Retail Will AlwaysBe #1 To Lotteries

CY2012 contribution to education: $209,273 Hy-Vee #1552 – St. Joseph, Mo.

“We are so proud to be able to help sponsor and contribute to education. We measure our success not just on sales and profit, but also on how we improve the communities we are part of.” - Brad McAnally, Store Director

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Thank You!