In a challenge to independently owned small business newsagents, Tattersalls is leading the way in online lottery sales in Australia (and maybe the world). They have an easy to navigate website and an excellent marketing campaign. This puts their product on computer desktops across the globe. While their website is very clear in explaining where (geographically) Tattersalls is licenced to sell product, it seems easy to get around – unless they check the IP address for country of purchase.
The Tattersalls promotion of their website is a concern for existing Tattersalls outlets because it is a strong corporate competitor. The growth of online will slow or even decline the goodwill value of Tattersalls outlets. I expect Tattersalls would disagree with this assessment. They would not want their existing network to consider that Tattersalls’ moves online could harm the value of the existing network. But think about it. It must. I accept that Tattersalls online will gain incremental sales. However, they will also pull people off the existing network to an online purchase only situation and that’s where the cost will be to the existing bricks and mortar network. Having said all of that, it’s an appropriate development for Tattersalls and one I would take if I were them.
Newsagents need to engage with Tattersalls and leverage a portion of revenue. This is justified because of the considerable real-estate given over by newsagents and other Tattersalls outlets in brand promotion. It’s this brand promotion which builds sufficient trust to enable consumers to comfortably purchase online. Tattersalls could not build an online model without such a high profile bricks and mortar network.
Tattersalls sales in newsagencies are a vital traffic generator. Even though their sold alone percentage is high – 65% in suburban stores – there is evidence that customers who purchase Tattersalls product in a newsagency today are back multiple times in a week to purchase other product. If they stop making the Tattersalls product purchase trips these other visits are at risk and that, in turn, puts the newsagent business model at risk.
Newsagents need to be discussing these challenges with each other, with Tattersalls and with other retailers who rely on Tattersalls product traffic (publishers, card companies etc).
The Tattersalls move is but another supply chain related challenge for Australia’s independent small business newsagents.
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