Considerations for Casinos and Gaming Operations

By: Matthew Klyman, Chief Information Officer, Marshall Retail Group

I've been working in retail industry for 35 years. I started off at a company which doesn't exist anymore and also had a chance to work with a fast growing company. When I joined the organization we had 450 stores by the time I left seven years later, we had 1200 stores. So I had a chance to work in an environment of exceptionally rapid growth and in the company that used technology to both technology and marketing to drive business.

Later in my carrier I have worked for a number of retailers and had a chance to expand from being en end user computing and then in merchandising systems to having the chance to be an senior IT leadership and. And have had the opportunity to be the chief information officer for a number of companies. I came to Marshall about 18 months ago and I started as a consultant. The company had asked the firm I was working with to take a look at their IT strategy, roadmap, and help to redefine it, given who the company was and what they wanted to do. I had a chance to do that and then asked me to stay on for awhile and start executing against that roadmap and one thing led to another. And so I've been their chief information officer since February of this year.

Major Challenges affecting the Gaming Tech

Our businesses were doing well and we were seeing record numbers. We had hoped for record numbers in Las Vegas for this summer. And obviously what we couldn't envision was that we would see COVID-19, which shut down every business.

"We don't want retail to be a cold and sterile environment and we love the fact that we have a four wall environment that we get to talk to our customers"

We were shut down by government authorities, whether it was in Nevada, New Jersey, Washington, Pennsylvania, all our businesses were shut down one after another. We went through a cycle of operating 185 stores to operating at one point, few stores. And our business has split between airports and casinos. We only had a few of our businesses remaining open because they were central businesses operating in airports. So again, the first challenge that we've had is a return to a more normal business for our partners.

We've seen that both Las Vegas and Atlantic City now have reopened casinos and also Florida and Washington. So we're seeing that our partners are reopening and we're seeing an interesting mixed bag. Some of the locations that we're operating in are outperforming last year, which is interesting for us, some of them aren't doing as well. Their occupancy rates are lower and our businesses are a small percentage of what certainly would have been this year, at this point last year. The challenge that our partners and we are having is one of them is trying to figure out what we do over the next several months and how do we operate in an effective way that meets our customer's needs.

Again, for any of these environments, when you're operating at 25 percent of your volume from a year ago, you still have a number of the overhead components that you need to operate. We certainly do as well. There's a minimum staffing requirements for cleaning and so on have become a challenge and keeping customer safest is probably the single highest priority. We and our partners want our customers to feel comfortable and safe in the environments that we provide them. And that said that has a fair amount of costs that we wouldn't have incurred last year.

Some of the other pieces in our case because we are a retailer; and again it's the same for the casinos our partners. So obviously the casinos have issues in their supply chain such as how much food should I bring in? How much liquor should I bring in? The ones who are operating retail on their own, how much retail product should I bring in? This is a tough time to operate. Most retail and restaurant environments; when you look at their business day in and day out, it is predictable. For instance, if I asked the head of food and beverage at a casino in Las Vegas, what do you think? tell me what your total revenue will be for your eight restaurants, how much food and what's the nature of your food requirements between produce and so on. They'd be able to tell me that week in advance but in today's world, they can't. Their ability to predict using historical data is compromised and so they are struggling to figure out what the real numbers should be like to ensure that if a customer wants to buy something it's provided. But that they don't end up buying excess food and in our case, excess retail product that we may struggle to sell. And in their case, that may be some restaurant product that has to be thrown out.

Another piece of the struggle is even if I have enough people where people want to be there, I can't have all my customers on my gaming floor because they can't be that close to each other. So there's a whole host of these issues that everybody's dealing with. We're trying to figure out and do it in the best way to do it, but it's a learning exercise. And I don't know that any of us have figured it out yet and I think we're all figuring it out as we go. It's tough to figure out, what’s the best thing to do for our customers that still allows us to operate in an effective way. So that's the biggest of the challenges.

Latest project Initiatives

One of the big projects we've been involved with is rolling out a new point of sale system. There are a couple of elements that we're looking at. One of the things that we have done successfully is we have created a contactless environment for customers. So a customer that comes into one of our stores essentially doesn't need to have a lot of contact with us. We are there to help our customers understand the product; help them pick the right things. We don't want retail to be a cold and sterile environment and we love the fact that we have a four wall environment that we get to talk to our customers. But for many customers who are concerned, we want to make it as easy and safe as possible. And that includes that they can pick their product quickly, come up have the product scanned it at a register and then again, without using either their phone or card. So they don't have to touch or do anything else and walk out the door. So this was the area that we had looked at as part of this project was self service and it was on our roadmap for late this year. So this is an area that we are looking at moving much more quickly than what we would have done but we've that dramatically up on the roadmap from a late 2020 or early 2021.

Similarly we're moving on with several of our partners in building a tight integration. So that customers that come into our store in a casino and want to easily transact business with their player card, with the room charges that we want to support that in today's world. We have partners where that's a manual system which was fine until now. Since things have changed dramatically in a short period of time we want to build an interface that allows customers to make their lives easy. So that's another area that we've moved up on our list of things where we want to automate that with as many partners as possible.

What’s Next?

One of the pieces that we've spoken to one of our partners about, for instance, was the ability to allow customers to order in their room, whether that's by the phone or on TV screens and have it delivered to their room which we don't tend to do that. It's not the way we've done retail but customers are getting used to deliveries and e-commerce purchase and delivery has been a single fastest growing part of retail. So that's an area that we've talked to a couple of our partners about and we'll start looking at that seriously late this year.

Piece of Advice

One which is drawn both myself and I would tell you the vast majority of the folks who work at Marshall Retail; we think retail is fun. We love serving customers and enjoy the personal experience. We hope that there's always going to be a place for that personal experience but one of the learning lessons is that there will be a percentage of customers who do permanently change their behavior and look for quick and safe.

It's incumbent on companies like ours to provide that for those customers to ensure that they can have the shopping experience that they want and expect. So that's certainly one of the learning things. I think that keeping customers safe is the single byword for the next, I don't even know how long, certainly between now and the end of the year. Customers have to feel comfortable first and safe before they are going to even set foot in stores or make purchases. And we want to let people know we take that seriously and it is our highest concern.