Best Practices 2017 Best Retail Innovation: Pennsylvania LCB

Big changes arrived in the state of Pennsylvania on June 8, 2016. That’s when Governor Tom Wolf signed a new bill into law known as Act 39, which expanded many of the responsibilities given to the Pennsylvania Liquor Control Board (PLCB).

As a result, the PLCB was permitted to sell Pennsylvania Lottery tickets in its wine and spirits stores. Additionally, statutory language prohibiting stores from opening on holidays, limiting PLCB Sunday store operating hours, and capping the number of stores allowed to be open on Sundays was eliminated. Both of these measures offered the possibility of enhanced customer service and additional revenue for the state, and the PLCB worked tirelessly to implement changes in its stores as quickly as possible–in some cases, in as little as two days after the new laws took effect in August 2016.

Carl Jolly, Director of Retail Operations for the PLCB, says the agency was able to act so quickly because staff members relied heavily on data analysis to make timely, well-informed decisions. Working closely with Pennsylvania Lottery administrators, the PLCB staff carefully reviewed detailed sales information and surveyed other lottery ticket sellers located near the agency’s more than 600 Fine Wine & Good Spirits stores. When the agency identified which of its stores were ideal for lottery sales, staff members immediately set up site visits to install equipment, ensure system connectivity and train store employees.

“Two days after the act went into effect, we had 24 of our stores operating with lottery machines,” Jolly says. “Within the first week, we were up to almost 50 stores. By October 2016, more than 300 stores had lottery machines installed and operational.”

In addition to installing new store equipment and overseeing training for thousands of employees, the PLCB also developed internal policies for retail staff and lottery officials and created new promotional marketing materials. Their efforts paid off considerably: as of August 2017, 318 PLCB stores were selling lottery tickets and collectively generated more than $10 million in lottery sales revenue since the initial rollout a year ago.

The lottery component was just one of the major changes to the PLCB last year as a result of Act 39. Jolly and his team spent a great deal of time meeting with retail managers to determine which stores would likely be most profitable if they extended Sunday hours, and also which stores might benefit from being open on Sundays at all.

When the law took effect, the 188 stores already open on Sundays had their hours of operation expanded by three hours, and by the end of September, more than 300 stores were open on Sundays with expanded hours. That number has since grown to 326. Also, PLCB stores began opening on certain holidays for the first time over the past year to offer additional convenience to Pennsylvania consumers. Adding days and hours of operation to store schedules required a major shift in store staffing, along with new signage and revised training.

Fine Wine & Good Spirits brick-and-mortar Sunday sales for fiscal year 2015-2016 (before Act 39) totaled $88 million, while Sunday sales for fiscal year 2016-2017 have totaled almost $113 million. The PLCB is continually evaluating sales cannibalization on other days to make adjustments as appropriate and strike the right balance for consumers.

Jolly and his PLCB colleagues continue assessing the lottery and weekend retailing opportunities within the state, which have both been met with extreme customer enthusiasm.

“We’ll keep identifying stores that are a match for one or both of these initiatives,” he says. “We’re constantly looking at sales data to identify good fits. This is good for the state of Pennsylvania and it makes our stores more competitive with grocery stores that have similar products. It’s also good for customers. People have embraced being able to shop on Sundays and holidays, which are prime shopping days. They have more flexibility within their schedules now.”

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