Gala Coral looks to replicate Italian multi-channel success

A fortnight ago Gala Coral outlined plans to merge its two Gibraltar-based online businesses in order to perfect its multi-channel proposition in the UK, but we need to look further afield for a sign of how it hopes to perfect the multi-channel proposition.

In last week’s full year results disclosure, in which it announced a doubling of online EBITDA, the operator suggested the merger may have been somewhat influenced by the ability of its Italy-facing arm, Eurobet, to convert customers from its high street shops to its online products at a very healthy CPA level.

Eurobet is one of the leading gaming brands on Italy’s high streets and now holds a 12.4% market share after recently rolling out an additional 500 shops, with retail continuing to play a pivotal role in driving online growth.

According to Gala Coral, Eurobet’s retail division now contributes more than half of Eurobet’s online customer acquisitions with a CPA around 25% lower than in the UK, figures which will look appealing to Gala Coral’s UK arm in light of a looming UK Point of Consumption tax.

“Leveraging our significant retail presence in both the UK and Italy to drive online growth is a key pillar of our growth strategy,” the operator says in its results disclosure.

“In Italy, retail accounts for over 50% of our online customer acquisition. The enlarged retail estate will continue to a deliver significant proportion of Eurobet.it actives, a crucial advantage over other non-land-based operators in what is an ever increasingly competitive online market,” it adds.

Gala Coral says Eurobet’s ability to leverage its retail estate enables the operator to reduce its reliance on above-the-line TV advertising and therefore results in a lower overall cost per acquisition, with this potential yet to be fully realised in the UK.

“Our multi-channel offering has been in place for eight years and provides an indication of the potential upside in the UK,” the operator adds

It’s perhaps worth noting that Coral opened a net 42 new shops during FY14 and by channelling more acquisition through retail, the Gala and Coral online businesses are likely to not only reduce acquisition costs but also find itself transacting with players of greater value.

Multi-channel value

Data analysis carried out by research and consultancy company Kantar showed customers that regularly place bets across retail, mobile and desktop were on average 1.7x more valuable to operators than those who stick to just the one channel.

This means simplifying the customer journey between retail and online is critical for Gala Coral to succeed in an ultra-competitive UK market.

Gala Coral has already made great strides in this area and in Q2 the firm rolled-out its Coral Connect card, which effectively works as a single wallet across all retail and online.

By the end of September the card had garnered more than 160,000 sign-ups – about a quarter of 2014 online actives.

Although not discussed by the firm, it is expected the card will also enable a greater collection of data which can then be used in part to define more targeted CRM strategies.

The operator also used the results to reveal it had opted against any television advertising during last summer’s World Cup the “due to very high costs” involved, although the likes of Betfair, bet365 and William Hill were all prominent during ITV’s coverage of the event.

Despite this decision, Coral.co.uk attracted 136,000 new depositors during the World Cup and now seems likely, along with others, to scale back on television advertising to some extent next year.

With external pressures mounting, the ability to leverage a retail base and be truly multi-channel may just prove to be an invaluable asset in reducing costs and protecting margins in a PoC UK market.