Pulse
The Future of Retail: removing friction from the process
By William - 14 January 2020
Having discussed staffless betting environments from platform provider’s perspective in last week’s blog, G3 discusses the implications for cash handling with OKTO’s Simon Dorsen.
There has been increasing talk of staff-less betting shops being the future of retail gaming. In a staff-less environment, the retail environment would become less of a social space for punters. What would the added advantage be to a customer in a staff-less retail environment that they do not currently enjoy and have access to online?
In today’s fast-paced digital world, we’re seeing the expectations of tech change in just about every interaction we have. This is especially the case for betting in-shop, and those looking for a way to bring the best of digital into the retail space can find plenty of ways to enrich the retail environment.
The betting shop of the future is going to be all about self-service. Fast, convenient and easy to place bets are key to the next era of retail. Cashless payments are going to be essential to making this work, ensuring transactions take place quickly, winnings are received fast and bets placed again with ease.
We’re already seeing this in action with the new futuristic ‘concept’ betting shops opening, offering a truly next generation feel. Combine that sleek, comfortable environment with the social aspect of the betting shop, and you’re looking at an environment that bridges the best of both worlds. After all, the shared moment of a big win is hard to beat – mix that in with the instant receipt of your winnings without even having to walk up to the counter, and it becomes an experience that’s hard to match.
It is cheaper and easier for operators to remain online than to adapt for the high street. What is the advantage for operators in maintaining a retail presence?
The key strength of retail is the personal interaction that comes with it, and operators need to find the right balance of automation by creating a highly personalised service with reduced staff levels to stay profitable. In such testing times for the UK, estate optimisation is a priority, and maintaining an efficient retail operation means moving towards self-service. Not only does this mean a leaner operation in terms of costs, but it also means bets can be placed faster, more conveniently and with ease – all while keeping the social environment that makes the betting shop so popular.
The situation is very different across other markets – with varying degrees of dominance between retail and online. In some markets, retail accounts for the majority of GGR, and it’s unlikely to change anytime soon. Even with the growth of online that we’ve seen over the last few years, it will still take years for GGR to catch up to anything close – which means operators won’t be walking away from retail anytime soon. Of course, the retail presence needs to be modernized and maintained in line with evolving customer expectations – but that’s another matter.
Gaming is becoming increasingly cashless. How will retailers adapt if over the counter (OTC) transactions are no longer a viable option? Is this a positive thing for the industry?
Cashless is going to be a hugely positive thing for the industry. As it stands, the cost of carrying cash for gaming operators is increasing significantly, and many are having to ‘float’ a large portion of cash to regular players that keep regularly coming back within a short period. For operators, the cash ‘float’ isn’t sustainable, and for players, elongated withdrawal times in a digital age are proving to be a significant pain point.
Today’s demographic wants the freedom to receive their money fast and in a safe, secure way that allows them to spend it how and when they choose. Digital wallets, including ours, are the solution, reducing friction in payments and enabling funds to be accessed whenever and wherever players want them. Instant cash-out addresses the player’s need for instant gratification but also provides a serious competitive advantage for operators. But it doesn’t stop there, we’re also able to tweak the standard digital wallet offering to augment it towards providing a tailored betting experience. Whether that be notifications or automated KYC processes – the possibilities are endless.
A quarter of UK betting shops have been slated for closure following restrictions cutting the maximum stake of FOBTs from £100 per spin to £2. What is the future for betting terminals?
So much of this year and last has focused on the fallout from FOBTs. We need to move on from that; self-service betting terminals (SSBTs) are key to the future of retail and operators are catching on fast. We’re already seeing change happening in real-time, with many of the more forward-looking operators revamping and modernising their shops with a focus on enhancing customer experience.
This digitised, in-store convenience is set to be a major part of retail’s re-vitalisation and cashless payments will be a key part to making this experience work. Payments technology integrated with SSBTs will not only make the self-service experience fast and paperless, but also intelligent.
At the end of the day, it’s all about providing for a betting environment that customers want to spend time in. As well as giving players the freedom to enjoy the experience more by making bets and payouts faster, payments technology also ensures that players receive notifications on progress and be ready to place another bet. Our aim is to make the time spent processing a transaction as short as possible, which is especially valuable when the start of the race may only be seconds away.
Innovative new technology has flooded the retail sector, particularly mobile-first solutions. How have operators reacted?
Mobile-first solutions are an excellent indicator for the direction we’re going in as an industry. Players want a mobile-based experience with a wealth of information at their fingertips because it provides that level of convenience that they are accustomed to. Operators of course want to give the players (and the public) what they want.
However, different operators are also at different states of adoption, and there’s a long way to go before true mobile-centric solutions are integrated across the board. We’re certainly heading that way now, with alternative payment solutions – particularly mobile – becoming increasingly widespread. The wallet revolution, for example, has already become mainstream with leading providers Revolut and Apple Pay achieving high adoption.
That surge in adoption is permeating the gaming arena and the market has become increasingly saturated with companies targeting the betting industry as operators ramp up their digital offering. Customers love the convenience while operators benefit from lower transaction costs and quicker processing times. Betting operators are becoming increasingly interested in understanding how they can leverage our OKTO.WALLET to give a better player experience, streamline operations and minimise costs, and we expect to see plenty of progress in 2020.
How will the gap between the retail betting and payments experience be bridged? How do you keep players engaged in such an environment?
When it comes to keeping players engaged, it’s all about speed. Today’s SSBTs offer nearly as many betting markets as online, and keeping players engaged with a fast, frictionless and convenient transactional experience ensures they stay tuned into the action.
If operators want to ensure that retail can remain profitable, the expectations for a fast transaction in line with the digital experience is essential. Bridging that gap is where we come in. The technology we provide not only makes the self-service experience fast and paperless, but also intelligent. Players can enjoy the best of digital in-store, with instant bet notifications and pay-outs, ensuring they’re always ready to get in on the action with another bet. This is especially important during high traffic periods, with payments technology enabling transactions to take place in milliseconds; ensuring no player misses out on placing a bet due to queues at the counter.
Increased regulation and financial restrictions around AML have caused massive disruption to traditional payment models. How can you onboard and keep customers engaged in this environment?
The solution is easy. Get a payment system that is interoperable across channels, flexible to different environments and responsive to change. Separate licenses for online and retail that limit movement of funds between the channels can be challenging. This is where licensed third-party providers such as us come in. By bringing in an already approved regulatory solution, you’re good to go with a ready-made provider.
Increased regulations, financial restrictions and anti-money laundering requirements are all causing huge disruption to operators and traditional payment methods. Gaming operators offering retail and online products need to find ways to efficiently manage KYC without creating friction. With the relevant licenses, PSPs are well positioned to integrate onboarding and identity checks into the overall payments process, leveraging the best technology and security software available.
Choosing the right partner can help operators optimise the identification process in a compliant and cost-effective manner that actually boosts customer engagement and helps establish a trusting relationship from the get-go.
What is your vision for the retail gaming market in 2020 and beyond?
Retail’s future success will be driven by focusing on providing a unique environment, stronger customer relationships and an experience underpinned and enabled by digitisation.
For today’s customer, betting shops need to have a modern, comfortable feel. In effect, making it a place people want to spend time in beyond just placing a bet. The automation which we’re currently seeing now will be a key enabler of this, allowing a stronger focus by staff on the ‘value-added’ delivery of customer services. The key strength of retail is the personal interaction that comes with it, and operators need to find the right balance of automation by creating a highly personalised service with reduced staff levels. Get it right, and operators can use technology to reduce net costs and ensure higher betting turnover during peak times.
