By David Hochman, owner of DJH Marketing Communications Inc.
For the first 30 years or so, casinos in Las Vegas thrived, raking in obscene profits simply because options for legal gambling in the U.S. were few, far and in-between.
Things started to get a bit more difficult for the casinos by the 1970s. State-run lotteries, especially instant lottery scratch cards, were established in most states by the late 70s, in the same decade New Jersey elected to allow casinos in Atlantic City. By the time Ronald Reagan finished his second term as president, several states were following New Jersey’s lead and with the passing in 1988 of the Indian Gaming Regulatory Act (IGRA), the drop-off in both visitor arrivals and gaming revenue continued.
But if there is one thing you can be sure about, its that the job category “casino operator” tends not to the type of business owner that would easily surrender themselves to external economic factors and changing demographics and simply accept the “inexorable” decline in revenue (and profits)—and, of course, that’s the opposite of what transpired.
What follows, is a short recap of how the Vegas casinos implemented the right changes, stopped the revenue slide and ushered in 20 years of explosive growth in revenue and profits. Its all instructive to the modern c-store operator who finds him or herself buffeted from all angles by advances in point-of-sale (POS) technology that enables more and more customers to pay-at-the-pump, skyrocketing gas prices, encroachments into the c-store market by other categories of retailer, etc.
Court New Demographics
Las Vegas is simply a municipal entity located in the State Nevada. “Vegas,” on the other hand, was the gambler’s Mecca. A sparkling oasis of a city built by gamblers, for gamblers. Wives, girlfriends (and mistresses) were welcome to the party, but children certainly weren’t. By the end of the 80s, industry entrepreneurs decided to widen the customer base. Vegas would reinvent itself into a vacation destination for the whole family. In short order, a number of “megaresorts” with billions invested in attractions and spectacles that had nothing to do with betting, like the Bellagio’s world-class fine art collection and Treasure Island’s moat featuring mock battles between life-sized pirate ships.
Although, Fast Froward 20 years into the 2000s and watch Vegas again re-brand itself from “family fun town” back to adult playground, replacing the pirates with scantily clad showgirls and launching the ubiquitous “What Happens in Vegas…” ad campaign, at the time. The new customer base gambled much less, however, there were many more of them, and they ushered in an era of immense economic growth for Las Vegas. This shift allowed Las Vegas casinos to benefit from mass marketing and a larger pool of potential visitors.
The c-store segment also needs to widen its demographic base. The mainstay mid-30s blue-collar type affectingly nicknamed “Bubba,” who kept many a store in the black with nightly stops for smokes and coffee before the factory shift and beer and chips for after, is now just as likely to be banned from smoking by his company’s health insurer—random nicotine tests included—and get free coffee at work (if he even still has a job)
Alter Your Surroundings
According to a recent article in The New Yorker magazine, “Royal Flush How Roger Thomas redesigned Vegas by Jonah Lehrer March 26, 2012,” a former gambling addict named Bill Friedman wrote the book on modern casino design.
Literally, the book’s title is “Designing Casinos to Dominate the Competition,” and in a nutshell, it served as just that—an analysis on how casino design impacted gamblers’ in their “decisions to stay in a casino for a period of time,” covering everything in exact details from the location of tables, entrances, amenities, colors in the casino, amount of light right down to the ceiling height.
The article goes on to provide a compelling narrative about how a one Roger Thomas, the head of design at Wynn Resorts, tossed Friedman’s playbook and created an environment of opulence and luxury. The results speak for themselves. Wynn’s Bellagio “generated the largest profits for a single property in Las Vegas history,” and “The Wynn Las Vegas and a sister hotel generate 15% more revenue per guest room than the Venetian and its sister hotel do.”
To be completely clear, no one, (least of all me) is advising c-store owners to emulate Steve Wynn and install fine-art exhibitions next to the milk cooler and stage a Cirque du Solei-like performance act in the parking lot to try to attract a different type of customer.
If you want a customer more concerned with safety than the “bubbas” or the teenagers, (i.e. single women, moms with kids and seniors) to patronage your location more, just spend some time and effort researching design elements that serve to create a sense of security. Elements like bright lighting inside and out, clear views into the store, clear signage, and warm and inviting color palettes throughout the store will do the job just fine.
While there are threats all around the Like the Las Vegas Casinos in the 1970s experienced, the c-store industry must find a way to truly re-invent itself and leverage those threats into opportunities.
David Hochman is the owner of DJH Marketing Communications Inc., a New Jersey-based marketing consultancy specializing in PR, social media and content marketing. DJH has over a decade of experience servicing clients who are suppliers to the c-store category. Find him on LinkedIn at http://linkd.in/DaveJHochman. He can also be reached at (732) 222-7111 or via email at [email protected].