Light in the darkness: what now for UK retail? – Part 2

Having explored the need for an overhaul of the look and feel of the UK’s licensed betting offices, the second part of the feature looks at the technology that could help shape the sector’s sports-led future.

The majority of the UK retail sector appears to be focusing on automation, rather than renovation, however. In particular, operators are embracing self-service betting terminals (SSBTs).

“We want to remove pinboards of the Racing Post pages. We want the slick, large screens, live content, touchscreen terminals and a more vibrant, clean and modern environment,” Woodfine says.

Pettit says SSBTs have been designed with the novice punter in mind, providing them with an interface designed to help them navigate their way to placing a bet.

“What is an SSBT but a very big mobile phone that can be played without registration? What we’re offering is a much more intuitive interface, which is proven to be effective in educating new customers. So if anything, that gives me confidence that they will encourage new players to have a bet,” he says.

“For novices, it’s much easier to work out a betting site on 22-inch screens than it is on a mobile phone or website.”

Woodfine adds that the current retail content offering is “nowhere near as rich” as what’s on offer online – something he says operators have to address as a priority.

“You have all the markets but none of the content, and we’re providing the corresponding pictures to that,” he says. “It’s a very small [step towards] producing parity with what’s available online – you have to move closer to the online experience to offer something to everyone.”

This, he says, can be achieved through SSBTs. Further linking online and retail can be achieved through an omni-channel strategy. While it has become something of an industry buzzword, it works – omni-channel bettors, according to Ladbrokes Coral, are cheaper to acquire, and more loyal to their preferred brands.

Having a single wallet means that retail bettors can take their winnings home in their online account. Should they decide to bet online, they will almost certainly use the account for their retail brand. After all, the money’s already in their accounts.

Dave McDowell, CEO of sports betting platform FSB, admits that he was initially dubious of the omni-channel concept but says it is the option to bring online customers into the retail environment that makes it interesting.

“One of the things I’ve heard from our operators is that when you take a withdrawal online, it takes a few days, and there will be players who want to immediately access those funds, so they will come into a shop to withdraw in person. And that’s where the omni-channel journey starts to make sense.”

Woodford adds: “If you have a player who is a very strong online customer, if they go into a retail environment that they don’t regularly use, then the operator would want to treat that customer in the same way.” This, he suggests, incentivises players to bet in- store rather than solely online.

Retail principles
However, McDowell suggests the fact that events are less competitively priced in retail compared to online may prove a stumbling block.

“You can get a different price over the counter, a different price on your mobile, and a different price on an SSBT,” he says. “How can a betting shop have different prices within five feet of each other?”

Pettit, however, argues that the focus should not be on pricing in the lower- volume retail environment, where turnover was £8bn for April 2017 to March 2018, according to the Gambling Commission, compared to £26.9bn for online. Instead, he is in favour of betting shop operators focusing on retail principles, such as buy one get one free, or offering extra percentages back on certain bets.

Customers are more likely to look at returns than pricing in the channel, he says, pointing to the operators’ aggressive bonusing strategies around this year’s Cheltenham Festival.

“It’s a simpler message for the customer,” he explains. “You might have less competitive pricing but offer more back in bonuses, which is better understood by the end consumer.

“Price will become less front of mind as retail issues such as win bonuses on certain selections become more popular as a promotional tool, such as a free in- play bet and the like” he adds.

To date, operators appear to have taken the stance that if it ain’t broke, don’t fix it. There has been little desire or motivation to revolutionise the retail experience. Until 2013 there were a few examples of challenger brands looking to offer a new betting experience, such as Samvo, though none succeeded in gaining any traction in the market.

“In 2012 and 2013, the moves were a little bit early,” Woodfine says. “The products, in terms of hardware and software, have dramatically improved and now you have a stronger appetite among the majors to change.”

However, a lot of work needs to be done, and few in the industry have gone public about their plans for the future of retail. Those that go into shops today tend to do so because it’s how they have always bet. SSBTs will have to do a lot of heavy lifting to achieve the sort of results that can return retail to growth. And investment will be needed to end some deep-rooted preconceptions about betting shops.

Ultimately a change is coming. And many would argue it’s long overdue.

McDowell suggests that in their current form, there is no future for betting shops: “For betting shops, it feels like the Blockbuster Video business model. The utilitarian part of it – I want to watch a movie tonight, or I want to place a bet – has moved online,” he says.

Unfortunately, at this stage it’s impossible to offer any concrete answers on what the betting sector needs to do to survive in this new regulatory climate. But if the focus shifts from trying to survive to trying to make retail betting thrive, it will have a much better chance of a long-term future.