In this episode, ReelMetrics CEO, Nick Hogan, and VP of Professional Services, Don Retzlaff, introduce Demand Driven Inventory Management (DDIM), the company's updated best practices model for building and maintaining world class slot mixes.


Nick Hogan:

At ReelMetrics, we collect and analyze a ton of slide data and we’re hit up frequently for insights, tips, and tricks. So, we decided to do a webcast in which we present, discuss, and otherwise nerd out on our work. Coming to you from our offices in lovely Leiden in the Netherlands, welcome to ReelCast. Good morning, Don. How are things today in gateway to the West?

Don Retzlaff:

Good morning, Nick. Everything’s fine. Nice winter’s day.

Nick Hogan:

Okay, lovely. Yeah. Have you noticed I keep trying to find new nicknames for your part of the world? So, I’ll just keep doing that. So, all right. So, here we are, first episode of our second season and I guess that’s an accomplishment of sorts. We arbitrarily decided that we’d synchronize the seasons with the calendar, so not exactly a call for champagne or confetti here, but when we look back at why we decided to do this podcast, I must say that I’m pretty happy with the results so far. A lot of industry people have reached out to us with compliments and questions. Really some of these interactions, I have to say, have surprised me.

So, first, it’s a very diverse group of people, both functionally and geographically. We’ve heard from people from all over the world, operators, consultants, journalists, pretty much every flavor of banker imaginable and product folks on the supply side. So, that’s just phenomenal. Secondly, when we’ve asked for feedback, the depth of the observations has definitely exceeded my expectations. So, the adjectives practical and actionable are on pretty heavy rotation in these conversations, but I’d say that the main thrust of what they’re saying is that when it comes to topics like analytics, marketing, player behavior, segmentation, in the gaming industry, there’s simply too much noise out there. Some have shared examples.

One that came to me from multiple sources was either it was an op-ed or a blog post. I don’t remember which, but it had market segmentation in the title then went on to discuss nothing but floor layout. The comments were, “Hey, this isn’t segmentation. This is just layout.” Seeing how people are isolating that distinction and conveying a real thirst for the nuance that we’re really striving for here, I must say that it’s incredibly encouraging. It’s just always great to learn that your audience is smart. It really makes our jobs a lot easier. So, thanks to those who’ve reached out. We have day jobs. We’re doing this for free. It’s not sponsored or paid in any way, and we typically record these things on the weekends. We’re doing this one on a Sunday night.

So, your encouragement really keeps us going, and we can’t thank you enough for all that positive feedback. Okay. So, season two, episode one. Now if you recall, we devoted our last podcast to our top 10 insights of 2022. The number one position was held by the insight that the best practices models out there in the industry for inventory management are obsolete and must be updated. As we’ve alluded to in a number of podcasts, ReelMetrics has actually created a contemporary best practices model that takes into account all the changes that we’ve seen to the industry’s data landscape over the past decade or so. We refer to this model as Demand-Driven Inventory Management or DDIM.

So, rather than throwing that best practices observation out there and doing nothing with it, we thought it would be a cool idea to devote a few episodes to DDIM and walk our listeners through it, thumbnail, exposing them to the main principles and techniques. So, before we dive into that, let me state at the top here that we’d love to tackle any questions that anyone listening may have. So, if you have a question about what we’re presenting or something you’d like us to present, please drop us an email at reelcast! Again, that’s R-E-E-L-C-A-S-T Our policy is to keep all questions anonymous, so please speak directly and don’t worry about us revealing your identity. That’s not something that we do.

So, today, we’re going to open with the first steps in DDIM, the first in particular, which is really serving the floor and getting a solid notion of your operational baseline and then also introducing a number of analytical methods, which although some utilized versions of them here and there are not generally in the quivers of your slots and P&A departments. So, that’s really our topic for today. But before we dive into that, we want to cover four points that we have to assume are in place before we start diving into this survey. So, number one is that you’ve already committed to pursuing a new best practices model for managing inventory that uses player demand as the foundational vector driving every slot decision you make.

We’d also strongly recommend and this is hopefully not controversial for anybody hearing this, but that marketing has a seat at this table. It really is a unique thing about the gaming industry that marketing doesn’t have any role in the products that we’re putting in our environment. So, there are a lot of reasons for this. We can go on about that for days, but suffice to say, we strongly recommend that marketing is involved. Secondly, you’ve decided that what you’re going to do as part of this is you’re going to target the bulk of your CapEx and OpEx spend to your top player segments, the people who are really driving all the performance of your casino and that we’re going to prioritize based upon that demand and patronage.

Third, you’ve made a conscious decision that within this realm, this is the domain of proven product, not blind experimentation. For experimentation, you’ve committed to getting far more systematic about it, allocating a small percentage of the floor share for experimentation. This is the domain where you take chances and put…

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