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Play at the Pump slow to take off in NC

North Carolina LotteryNorth Carolina Lottery: Play at the Pump slow to take off in NC
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RALEIGH, N.C. — In January 2015, the North Carolina Education Lottery joined an effort to make convenience stores more convenient for potential lottery players by allowing them to play the lottery digitally while filling up their gas tanks.

Play at the Pump, a cloud-based payment platform, allows people to play Mega Millions, Powerball and Cash 5 without going into the store. With the swipe of a debit card and a $1 transaction fee, players can get their numbers for the next drawing.

Linq3, an Atlanta software company, developed Play at the Pump to try to engage the 70 percent of convenience store customers who never enter the stores, instead likely standing idle at the pumps for the average three-and-a-half minutes it takes to fill up.

"It's about convenience and security," said Matt Lovelle, chief operating officer for Linq3. "Families don't have time to go in the store."

Sean Watson of Columbus County was buying gas in July when he noticed the Play at the Pump option and entered the Carolina Cash 5. "I'm always on the go," Watson said. "It's convenient." It also turned out to be lucrative for Watson, who claimed a $157,333 jackpot.

Despite the convenience, Play at the Pump has been slow to take off in North Carolina. After nearly two years, the option is available at only 208 of the roughly 6,330 gas stations in the state. Back in January when the Powerball jackpot reached a record high of $1.5 billion, Play at the Pump's Powerball game brought in $146,808 in sales, compared to more than $86 million for traditional paper-based tickets.

Part of the problem is technological. While Linq3 provides free installation, retailers must have updated pumps that support the Play at the Pump software. In a case study conducted following the Missouri Lottery's partnership with Linq3, the company noted that "[t]he software many retailers used at fuel pumps ... was outdated, prohibiting the simple onboarding process Linq3 typically offers."

But another hurdle for Linq3 is that convenience store owners remain apprehensive about a technology that moves lottery sales outside the store, where customers can't also buy a soft drink or a pack a cigarettes with their Cash 5 ticket.

Retailers make only about a nickel for every gallon of fuel sold, and commissions on lottery tickets are roughly the same, said Jeff Lenard, spokesman for the National Association of Convenience Stores. By comparison, retailers make 12 cents on the dollar for each in-store sale.

"The two lowest margin products in a convenience store are fuel and lottery tickets," Lenard said. "You want to be mindful of how you offer them, because they lead customers to other items."

Retailers get a 3 percent commission on each sale using Play at the Pump, with Linq3 getting 4 percent and the rest going to the lottery. Station owners have to weigh that commission against the potential loss of sales inside the store, said Gary Harris, executive director of North Carolina Petroleum and Convenience Marketers, which represents fuel retailers.

"It's a decision that each retailer has to make," Harris said. "Outside sales give retailers a smaller percentage than indoor sales. That's a disincentive."

Manish Gandhi, who owns an Eagles station at 4102 Tryon Road, has had the Play at the Pump for about six months. He said he thinks that it is good for his customers, but "hasn't been that great of a revenue center."

Staying relevant in digital age

Lovelle with Linq3 said he's not discouraged by the slow roll out of Play at the Pump compared to paper tickets..

"As with any emerging technology, it takes time to achieve full market adoption," Lovelle said. "We are very pleased with our current business performance."

Linq3 cites the success of Play at the Pump for fuel retailer Murphy USA, which has made the biggest commitment to the software of any retailer. Since the partnership, Murphy USA's overall lottery sales increased by nearly 5 percent, according to a case study conducted by Linq3.

However, they may be an outlier.

But Lenard notes that the majority of Murphy USA's more than 1,100 locations are in close proximity to a Walmart, as a result of a partnership between the two companies, and that takes some of the pressure off of in-store sales. Murphy Express, of which there are about 220 nationwide, is more of a kiosk, offering vending machines and other services with more fuel pumps but no "in-store" sales.

"People don't say 'I'm going to get a Murphy sandwich' like they will a Sheetz," Lenard said.

Concerns over customer autonomy threatening convenience stores is nothing new, said Lenard, who traced the beginning of this movement back to 1964, when the first convenience store operator began allowing customers to use self-service fuel pumps. Back then, state fire codes prevented anyone other than convenience store staff from pumping gas. Pay-at-the-pump service was first offered in the mid-1980s.

"The big concern was if you allow customers to pay at the pump, you've given them zero incentive to come inside the store," Lenard said.

For Lenard, these concerns have largely dissipated. These days, he said, it's all about convenience.

"We sell convenience," Lenard said. "It's about a customer coming to your store and not someone else's. You've differentiated yourself, you've made yourself more convenient and you may have even taken pressure off of your gas price."

Van Denton, communications director for the lottery, said that staying relevant in the digital age is biggest draw for store owners to implement this new technology.

"Any sales organization, whether it's the lottery or Target, grocery stores, they're all trying to take advantage of technology to meet customers where they are and stay relevant," Denton said.

News & Observer, Lottery Post Staff

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9 comments. Last comment 1 month ago by bigguy5.
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MaximumMillions's avatar - Lottery-013.jpg

Germany
Member #164603
March 8, 2015
639 Posts
Offline
Posted: December 4, 2016, 12:44 am - IP Logged

I wouldn't pay 1$ more than I would have to if I bought my tickets with my groceries or on lunch break.

Nolege is power.

    music*'s avatar - nw bookeep.jpg
    Happy California
    United States
    Member #157856
    August 2, 2014
    1549 Posts
    Offline
    Posted: December 4, 2016, 3:50 am - IP Logged

     I am waiting for online sales. So, I can play from home.  I hope that it will be kept simple at home. Players will have plenty of time to figure out how to play while in the comfort of their homes.

     Chi ha danari, trova cugini. (He who has money finds many cousins.) Italian proverb

      helpmewin's avatar - dandy
      u$a
      United States
      Member #106665
      February 22, 2011
      19964 Posts
      Offline
      Posted: December 4, 2016, 5:05 am - IP Logged

       I am waiting for online sales. So, I can play from home.  I hope that it will be kept simple at home. Players will have plenty of time to figure out how to play while in the comfort of their homes.

      What a Great idea I Agree! Party

      Let it Snow Snowman

        LottoAce's avatar - WWI Flying_Ace.gif
        N.C.
        United States
        Member #56005
        October 28, 2007
        877 Posts
        Offline
        Posted: December 4, 2016, 7:40 am - IP Logged

        For a state that fought against a lottery for so long.
        N.C. sure has come up with some clever ways to sell tickets.

        "know your limitations, but excede your expectations"

          LottoAce's avatar - WWI Flying_Ace.gif
          N.C.
          United States
          Member #56005
          October 28, 2007
          877 Posts
          Offline
          Posted: December 4, 2016, 7:42 am - IP Logged

           I am waiting for online sales. So, I can play from home.  I hope that it will be kept simple at home. Players will have plenty of time to figure out how to play while in the comfort of their homes.

          doesn't your state allow online sales?

          "know your limitations, but excede your expectations"

            Avatar
            Simpsonville
            United States
            Member #163189
            January 22, 2015
            700 Posts
            Offline
            Posted: December 4, 2016, 2:56 pm - IP Logged

             I am waiting for online sales. So, I can play from home.  I hope that it will be kept simple at home. Players will have plenty of time to figure out how to play while in the comfort of their homes.

            music* you know I'm an advocate of this.  Still surprises me sometimes to think that Kentucky did it with no fan fare.  Besides MM, PB, Cashball they've added Lucky4Life.  Also have a slew of scratchers available.   It is wicked simple, whomever designed it here did their homework. 

            I mailed a thank you card to the Massachusetts State Lottery for the four lottery hats they sent and how our on-line purchases work from a player's perspective.  So far the legislature hasn't allowed this up there.

              trulyblessed's avatar - yocco
              Durham, North Carolina
              United States
              Member #58710
              February 23, 2008
              6882 Posts
              Offline
              Posted: December 4, 2016, 8:25 pm - IP Logged

              If NCEL really wants to come into new age they will put pick 3 and 4 in the subscription service!!! Let me play from home!

              Lovies

                music*'s avatar - nw bookeep.jpg
                Happy California
                United States
                Member #157856
                August 2, 2014
                1549 Posts
                Offline
                Posted: December 5, 2016, 8:36 am - IP Logged

                doesn't your state allow online sales?

                No. California does not have online sales. We are behind the times with this opportunity.Dance

                 Chi ha danari, trova cugini. (He who has money finds many cousins.) Italian proverb

                  bigguy5's avatar - peace
                  charlotte.n.c
                  United States
                  Member #37585
                  April 17, 2006
                  368 Posts
                  Offline
                  Posted: December 15, 2016, 10:09 am - IP Logged

                  i  will  not  ever  play   at   the     pump        IRS   can  easy  track   you down     also  they  will  know  when  you  win   and  come  knocking    at  your  door.