BuSiNeSS PlAN - California Lottery

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3.3 Consumer, Retailand Technology TrendsThe following are significant trends in consumer behavior, the retailindustry, and technology.Consumer Shopping Habits Continue to ChangeConsumer shopping habits are constantly changing. The directionof these changes indicates that consumers are increasingly:• Time starved• Value oriented• Moving toward new shopping venues• Developing new shopping habitsFigure 3.11 compares the percentages of households that visited differenttrade styles for 1999 and for 2005. Dollar stores, warehouse stores,super centers, and online shopping are gaining significant market shares.4.11 Consumer Shopping TrendsFigure 3.11 – Consumer Shopping TrendsHousehold Penetration by TradestyleHousehold Penetration by Tradestyle100%70%70%19992005Percent of Households70%60%50%40%30%20%10%0%Grocery Convenience Drug Dollar Warehouse Supercenters OnlineShoppingSource: GTECH CorporationMost of the CSL’s existing retailers are not well positioned to addresschanging consumer needs. Recruitment efforts must be directed atretailers that provide the shopping experience that consumers prefer.California Lottery 2007–2010 Business Plan – 37 –
Technology TrendsAll of these technologytrends point to a societythat is moving towardeasily accessible andcustomizable content,consumer conveniences,and digital interactions.Major technological developments are occurring in wireless communicationsand mobile computing. High-speed wireless networks are being establishedin numerous locations to allow everyone access to this service. This willexpand society’s ability to communicate in different ways than in the past.Mobile phones are becoming increasingly sophisticated with additionalfunctionality being introduced regularly. Text messaging continues to growand is increasingly used to provide personalized marketing. Mobile phonesand personal digital assistants can now be used to play MP3 music files,watch television and videos, support network gaming, and make purchases.Information is readily available and often customizable to meet user’sneeds. Technologies like Rich Site Summary (RSS) allow for syndicatingnews and the content of news-like sites to be personally deliveredto consumers. More services are being made available that allow peopleto subscribe to services and receive information and updates on specifictopics at their convenience.All of these technology trends point to a society that is moving towardeasily accessible and customizable content, consumer conveniences,and digital interactions.3.4 Lottery Industry Trendsand Best PracticesIn the United States, lotteries operate in 42 states and the District ofColumbia. The following is a brief overview of some significant industrytrends and best practices over the past 10 years.Higher Payout ScratchersBolstered by the success of state lotteries like Massachusetts and Texas inthe 1990s, virtually all state lotteries have been increasing their Scratchers prizepayouts and enjoying significant sales and profits gains. The CSL has alsofollowed this trend and enjoyed major sales gains, although to a lesser extent.Higher Price Point TicketsIn the 1980s, all lottery Scratchers tickets sold for $1 throughout the country.In the early 1990s several states experimented with $2 tickets, and theirsuccess led to the introduction of $3 tickets and $5 tickets. In most cases,the more expensive tickets were also large in size and they featured higher– 38 –California Lottery 2007–2010 Business Plan
Page 3: CommissionersJOHN MASS, of Los Ange
Page 6 and 7: Introduction
Page 8 and 9: IntroductionIn order to fulfill the
Page 10: focus on huge jackpots and more foc
Page 14 and 15: Figure 1.2 - 2004-05 K-12 Percent o
Page 16 and 17: 1.1% General Operating ExpensesGene
Page 18 and 19: SupermarketsAlthough supermarkets h
Page 20 and 21: handles all Spanish language advert
Page 22 and 23: Fantasy 5Value Proposition: The bet
Page 24 and 25: 1.6 Organizational Structureof the
Page 26 and 27: ITSD consists of four offices and t
Page 30 and 31: Integrity,Security,Honesty,and Fair
Page 32: The CSL not only employsinternal au
Page 35 and 36: Since its inception, the CSL has wo
Page 37 and 38: Last year, the California Problem G
Page 39 and 40: Marketanalysis
Page 41 and 42: EthnicityThe following charts show
Page 43 and 44: GenderThe household incomeof past m
Page 45: 3.2 Consumer ProductSales Compariso
Page 49 and 50: are large, to maintain sales in lot
Page 51 and 52: IntroductionIn FY 05/06, the CSL re
Page 53 and 54: Figure 4.2 is a list of some of the
Page 55 and 56: Figure 4.4 - Overall PRIZE PAYOUTS
Page 57 and 58: Figure 4.5 shows that in terms of p
Page 59 and 60: Raffle GamesRaffle-style games are
Page 61 and 62: Pursuant to section 8880.64 of the
Page 63 and 64: Fig. 5.12 CSL Scratchers Game Growt
Page 65 and 66: As shown in Figure 5.13, the lotter
Page 67 and 68: Fig. 5.15 Sales per RetailerFigure
Page 69 and 70: etailers with special “Check-a-Ti
Page 71 and 72: Gaming System ComplexityThe CSL’s
Page 73 and 74: Fig. 5.19 Budgeted Per Capita Adver
Page 75 and 76: There is an opportunity to reverse
Page 77: Public Relations and OutreachOur fr
Page 80 and 81: Ticket Dispenser RestrictionsThe re
Page 82 and 83: IntroductionA careful analysis of o
Page 84 and 85: Unfortunately, increasing jackpot s
Page 86 and 87: Key StrategicInitiatives
Page 88 and 89: Shift the Jackpot ParadigmOur strat
Page 90 and 91: 12. Recruit Non-traditional Retaile
Page 92: www.calottery.com600 North 10th Str

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