As the retail industry expands around the world due to greater wealth, knowledge, openness, and lifestyle changes, businesses must adopt market-specific policies. However, several businesses lack a trusted data source and must rely on information provided by untrustworthy third-party organizations that fail to give significant information and data verification. For your business to have more revenue, profit, and market share, it must have accurate data to understand the things that are hindering its growth and create effective strategies that address these barriers.
Retail Audit Best Practices
As the retail industry expands around the world due to greater wealth, knowledge, openness, and lifestyle changes, businesses must adopt market-specific policies.
However, several businesses lack a trusted data source and must rely on information provided by untrustworthy third-party organizations that fail to give significant information and data verification.
For your business to have more revenue, profit, and market share, it must have accurate data to understand the things that are hindering its growth and create effective strategies that address these barriers.
What is a Retail Audit?
A retail audit uses hard data to evaluate the condition of your retail location. This evaluation is done by vendors, employees, or third parties in your store to obtain information on the products that are selling well and those that aren’t.
A retail audit is how businesses optimize performance across their offices. The audit captures vital data regarding products, services, sales, marketing, agreement, pricing, store conditions, competitive knowledge, and many other factors that can influence retail sales.
In most cases, retailers use profits as the main way of measuring success; however, regular store audits will provide a lot of extra analytics that gives you a broader picture of the state of your business.
A retail audit will help you uncover insights such as:
- Goods that are damaged
- Stock levels, including those on your shelves and those at the back
- Volume of sales
- Activities of your competitors
- Visual retailing and in-store presentations
- Shelve position
- Number of fronting
- Available SKUs
- Misplaced/wrong shelf tags
- Your pricing scheme
- Position of products in store
Types of Retail Audits
- Marketing audit: This report studies the reaction of customers to your business, understands how they interrelate with your brand, and gives you an accurate insight into what your competitors are up to.
- Distributing audit: Gathers the entire information about your stock. Analyzes stock quantities, the efficiency of your merchandise pricing, presentation of merchandise, the effect of your current visible marketing and campaigns.
- Asset protection audit: Determines how effective your current prevention plan is, the items that are mostly stolen, where those items are located in your store, and the successful and unsuccessful schemes.
How often you carry out a retail audit depends on the type of audit you decide to use and what you aim to achieve. Whether you intend to do a swift inspection monthly or an in-depth audit quarterly, carefully think about the possibilities and create a system tailored to your retail needs.
Benefits of a Retail Audit
What do you intend to achieve by performing a retail audit? Apart from educating your employees about the daily affairs of your business, below are some potential benefits of a retail audit:
- Determining and solving inconsistencies in your company
- Identifying issues in the store, such as maintenance and operational problems
- Ensuring effective task management (previous tasks and actions must be completed)
- Discovering best practices
- Creating and implementing new procedures
- Having a framework for evaluating financial metrics, KPIs, and performance
- Building better relationships employees and associates
- Creating positive competition between other branches
- Determining training needs
Procedure for Performing a Retail Audit
Now that you’ve realized the value of retail audits, how can your business guarantee that it’s doing them correctly? Consider the following steps to help you make the most of every store audit.
1. Have clear goals
You can’t perform any activity without first carefully determining the reason behind it. Therefore, define what you want to achieve from a retail audit.
- Do you wish to analyze the products of your competitors?
- Do you want to evaluate the reaction of your consumers?
- Is this an audit to determine brand reputation or the activities of a store?
Put all these in writing and designate numeric values to it.
2. Create criteria for the audit
Choose the specific questions you’ll be asking throughout the audit, as well as the expected responses. Do you intend to ask “yes/no” questions or you want longer explanations? Avoid asking unnecessary inquiries; instead, seek knowledge that can help your business grow (such as overall performance, activities of your competitors, retailer compliance, and so on).
3. Standardize the retail process
A good retail audit helps ensure that your business complies with regulatory standards. Create sufficient to carry out a retail audit without interrupting your business activities and customer experience. It is best to perform regular retail audits before opening and after closing your stores.
4. Setup appointments
After you’ve determined what you hope to achieve from the retail audit, it’s time to put it into action. Strive for consistency.
Individual reps can become incredibly informed about their stores in this manner, as well as develop a connection with store management. Some businesses may wish to be contacted before representatives visit their store. Also, schedule reps for an appropriate amount of audits based on their given territory.
5. Collect data
Ensure that reps gather data that directly corresponds to the aims and criteria you’ve set. It might be a good idea to have some retail survey questions marked as “mandatory” if you find them very significant to the objectives of your business. Including pictures in audits is a good way to show exactly what’s happening in the store. This also promotes accountability and compliance.
6. Assess the findings
At the end of the retail audit, gather all data and present it in a format that is easy to understand. Analyze the results to see if you’ve attained your retail goals or not.
7. Implement the changes
After your evaluation and preparation of results, you need to implement the retail goals. If the audit report shows that a new product is not well received, you need to pull it back from the shelves. Also, if the audit shows a fall in the reputation of a product, improve it to provide better value to your customers.
8. Repeat the process
At the end of the audit, make the required changes to your retail process to tailor it to the unique needs of your business. Conducting regular audits will allow your brand to be as agile and quickly adjust to the ever-changing retail landscape.
To remain competitive in today’s marketplace, you have to design and implement a strong retail audit strategy. This is the best way for you to capture vital data that affects the health of your company and its products.
Retail audits can help you to determine what works and what doesn’t to make more informed decisions and adjustments to your retail plan.