The Importance of Retail Audits for Optimising Store Performance

Types of Retail Audits

There’s a lot of variance in the information that you record during a retail audit. You can segment the audits based on the type of data. You can use various audit forms to collect and reflect the data getting collected during an audit.

Retail Market Questionnaire

Some brands want to know where their products are stocked or can be stocked. Hence, the brand’s representatives document the following details:

• Store’s appearance and location
• Is the retail store clean and well-organised?
• Is the store in an urban or suburban area?
• Consumer’s sentiment towards your brand and your competitor’s brand
• How does the customer interact with your brand?
• List of emerging brands in your category
• Quantitative and qualitative information about other brands in the store

Competitor Survey

You cannot overlook your competitors as it reveals and gives you an idea of how your brand stacks up against your competitors. You might also want to find out the below details:

• Who are your brand’s direct and indirect competitors?
• Pricing strategy of your competitors
• Space allocated to your competitor’s products in the store
• Are your competitor’s products placed near the checkout counter or at eye level?
• Are your competitors running any promotions?

Merchandising Report

The primary concern of merchandising report is the performance of the brand. Representatives add the following details to it:

• Inventory levels
• General shelf appearance
• Condition of products
• Stockouts
• Retail price
• Amount of available shelf space
• Units ordered

Promotional Report

This report helps your brand track the success of a sale or promotion. It helps you understand how the sale or promotion is performing in the short term and how it can be improved. The report constitutes of the following details:

• What type of promotion is being used?
• How effective is the promotion?
• What is the duration of the promotion?
• What are the sales results?
• Which are the featured product SKUs in the promotion?
• What is the in-store position?
• How are the consumers engaging with your brand’s products?
• Are retailers complying with the promotional materials’ placement or not?

Retail Audit Process

Now that you understand the importance of retail auditing, here are all the steps to the retail auditing process.

Determine Your Objective

You need to answer the following questions for this step:

• What is the main objective behind the retail audit? This will help you articulate your goals.
• Are you concerned with monitoring your competitor’s activity?
• Do you think about the swiftness with which your product moves off the shelf?

Jot down everything you are trying to measure through the audit and what is the parameter of success.

Design Your Audit

Select the questions you want to ask in the audit and the types of answers acceptable to them. You can decide whether the question will be a yes/no type, have write-in responses from representatives, or be answered on scale of 1 to 5. Avoid any frivolous questions and ask questions that’ll improve your business.

Schedule Your Appointments

Once you know what you will be gaining from the retail audit, aim to be consistent. Decide who you send to which accounts to become knowledgeable and build rapport with store management. There might be a few retailers whom you might need to inform beforehand. Make sure you schedule representatives for audits beforehand.

Gather Photos And Data

Ensure the representatives gather the data that directly corresponds with the goals you have laid down. Mark some questions in your questionnaire mandatory if you find any of them significant to the company’s objective. Including photos in the data is a good way to depict what is happening at the store. Review the mediums your representatives use to collect data and try optimising them.

Evaluate Your Results

Once the audit is done, organise the data you gathered. Depict the numerical values graphically. See the results you achieved and how they stack up against your pre-determined KPIs (Key Performance Indicators).

Execute The Changes

Analyse the findings and execute what you need to do short term. You might find one of your SKUs is performing worse than other retail stores. Those SKUs might need to be shelved. Hence, you can also make long-term business decisions based on it.

Repeat The Audit Process

After conducting several audits, make adjustments to your retail audit strategies and tailor them to your company’s requirements. Conduct audits regularly to gauge the rapidly changing retail landscapes.

Outcome Of Retail Audit

At the end of any retail audit, you need to ensure you and your team are equipped to collect the right data. This ensures that the process of retail auditing was effective. You need to focus on three types of data:

• Sales data
• Activity data
• Observational data

Sales Data

This data indicates the number of products sold at certain stores over a certain period of time. It can be something you are already tracking. This data gives you a sense of store conditions and activities that lead to the highest sales.

Activity Data

This data encapsulates specific actions your team took to improve the store’s execution. Tracking and measuring this data helps you understand how and what is impacting the sales.

Observational Data

It gives the brand representatives clarity on in-store conditions, number of facings, competitive activity, stock levels, and more.

Bottom Line

A retail audit helps you assess your retail execution strategy’s effectiveness. Retail audit customer insights obtained from retail audit depend on the quality of the audit that was conducted. Use the best retail audit best practices and streamline data collection, audit schedules, and analyse. If you want to outsource the retail audit, do check out V5 Global’s retail auditing services.