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The pandemic has accelerated the digitalization of Stoloto, the largest distributor of all-Russian state lotteries. How has online sales outpaced retail, and what technology trends and IT solutions have played a key role?
How the pandemic spurred digitalization
The pandemic has led to a decrease in demand and traffic across all channels, the closure of 90% of specialty retail outlets and an overall change in the behavior of lottery players and business restructuring, as well as accelerating the transformation of the lottery market. This was an additional impetus to the previously launched digitalization. There was an external and internal request for a full-fledged reorientation to the “figure”.
A new challenge also arose: lotteries had to compete with online cinemas and games. According to GfK, about 63% of people in our country plan to give up participation in lotteries during the period of uncertainty, along with other entertainment, as essentials come first, and not going to restaurants, buying TVs and furniture.
In order not to lose contact with the client, Stoloto focused on the growth of digital channels, products and services and accelerated the process of organizational changes within. This was done in order to be able not only technologically, but also operationally to bring the product faster and with a better result. The company has focused on improving online services to target new audiences and has reduced the speed of launching new products from nine months to six weeks. The company has reduced Time To Market by an average of 50-60% compared to the pre-pandemic period. This made it possible to bring some products to market in about a month. Previously, it took several months. At the same time, Stoloto took into account that it is quite difficult for an offline player who cares about traditions and who remembers the legend of the Soviet era – the Sportloto lottery – to switch to online consumption.
This year, the legendary Sportloto lottery, which became a cultural phenomenon of the USSR, celebrated its half-century anniversary: Vysotsky and Boyarsky dedicated songs to it, and Gaidai made one of the highest-grossing films of that time, Sportloto-82. During the period of its existence, lotteries have gone through more than one transformation. At first, circulations could be watched on TV. Now the winning numbers are determined, for example, by a random number generator or a high-tech lottery drum, and you can watch the broadcast of the draw on the Internet. If earlier there were paper tickets, which could only be bought at specialized kiosks, now there are also electronic tickets with the possibility of buying and registering winnings online.
The infrastructure of lotteries today is not inferior to the infrastructure of fintech companies: banks, insurance companies, payment services. About 400 draws are carried out per day, and the core of the company’s technological landscape is a processing system, a proprietary development that can process up to 800 financially significant transactions per second. This allows us to cope with peak loads, for example, before and after the Russian Lotto New Year’s draw in 2020, when more than 23 million tickets were won.
Cyber security solutions also play a special role in the period of mass transition to online. Since the beginning of the pandemic, 13 large DDoS attacks have already been recorded with a capacity of up to 80 IP addresses and a duration of up to five days. In addition, to protect lottery participants, 24/7 monitoring and detection of fraudulent and phishing sites is carried out. This indicates a comprehensive and comprehensive approach to detecting phishing on the Internet and ensuring the safety of lottery participants. All this once again confirms that lotteries in our country are the same fintech.
Today, the best analogy with a lottery ticket is an OSAGO policy. It, like a lottery ticket, can be bought in paper form or online, and checked in the PCA database in the same way as a ticket in the Stoloto database. Any ticket and history on it are transferred to the Ministry of Finance and the Ministry of Sports, where an independent control system is organized. Policies are controlled in the same way.
How online sales grew
Offline and online shoppers are different categories with different consumption scenarios. During the first wave of the pandemic, Stoloto was able to transfer no more than 1% of participants from offline to online. But on the other hand, they managed to attract more than 1 million new participants online, which is 35% more than in the same period in 2019. This is a completely new type of player: residents of large cities, many of whom have discovered lotteries for the first time.
The number of online lottery participants now only slightly exceeds the number of offline users: 52% to 48%. Physical contact is important last: hold a paper ticket in your hands and cross out the numbers with a pen. For them, Stoloto continues to develop not only its retail network, but also expands the opportunities for prompt receipt of winnings.
Up to 70% of the population of the USSR participated in the Sportloto lotteries. Lotteries provided up to a quarter of the budget of the Summer Olympics-80 in Moscow and made it possible to build and reconstruct sports facilities throughout the Soviet Union, which are still significant in holding landmark events. And the goal of lotteries remains unchanged – the formation of targeted deductions from lottery activities to the budget of the Russian Federation, which currently exceed 14 billion rubles. The total contributions and fees to the budgets of different levels since the beginning of the distribution of the Stoloto state lotteries have already exceeded 28 billion rubles.
The company is currently working on several strategies for 2021. They rely on positive forecasts: digital channels will help equalize demand and offset the negative effects of 2020.
What IT solutions help the transition to digital
Stoloto approached the pandemic with an IT architecture that is comparable to the architecture of any major financial institution – more than 140 systems in the landscape, including solutions from SAP, SAS, Oracle, as well as its own developments in Java, C ++ and React, and more than 2 thousand . integration interactions between them. Among our own developments are a boxed solution for online cash registers, multi-channel solutions for interacting with online audiences, and IT platforms. Stoloto uses its own IT developments to guide the buyer at every stage: selection, purchase, holding online raffles, receiving winnings. The resources of Next Mobile’s own mobile operator allow you to connect to different networks for the best connection.
To unite all stages and services, the company is building a single ecosystem within the S8 Capital holding. Here, Stoloto adopts the experience of the largest international ecosystems, which were also formed around the global financial, banking or insurance services. The basis for the ecosystem will be a huge client base, and the technological base will be IT solutions and services created jointly with SAP / SAS, Oracle, Microsoft, Group-IB. The ecosystem based on the lottery business is very similar to the ecosystem of a financial institution and allows you to establish a unified communication with customers, even if they interact with the services in different ways, and most importantly, provide a positive and lasting customer experience.
2020 has shown that simply moving online is not enough: a deeper transformation is needed. First of all, by personalizing customer experience with the help of innovative tools. Stoloto strives for a Data-driven Organization – that is, a company whose development is based on Big Data. Using data and artificial intelligence, the company analyzes customer experience and offers personalized products and services. All the company’s solutions are of its own design, including solutions for integrating partner agents into the cash register software. Thanks to this, during the pandemic, all products and services remained available both offline and online.
For this, an integrated data factory is used, which allows you to store and process large amounts of data online. Based on this data, algorithms for forecasting sales, as well as product balances at distribution points, were improved. In order to attract a younger audience, user experience gamification (that is, online games and applications) is used – for example, the integration of lottery products into game worlds. Like any fintech, the company pays great attention to the protection of data and online assets, especially in the field of payment transactions.
An innovation laboratory was created at Stoloto to launch new products. Here they develop, test and launch IT solutions. Since the launch, in the second quarter of 2020, the laboratory has worked out more than 30 cases, three more products are now in the MVP stage (Minimal Viable Product, a test version with a minimum set of functions), which will enter the market in the very near future.
What will digitalization of lotteries lead to?
According to Market Insights Reports, the global lottery market in 2018 amounted to $302,3 billion, and by 2025 it will grow to $379,7 billion. In the outgoing 2020, the lottery market lost more than 10% due to the coronavirus pandemic. So in 2021, companies will win back this fall in every possible way.
The goal of Stoloto, as the largest distributor of all-Russian state lotteries, is to maintain and increase deductions for the development of physical culture and sports in the country, support the construction of appropriate infrastructure and support the implementation of the strategy for the development of physical culture and sports until 2030.
The digital transformation of lotteries is a chance to get ahead of the trend and be in the lead. And the entry of new players into the lottery market and healthy competition always contribute to the improvement of products and services.
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