First of all, let’s acknowledge the elephant in the room; the word “Audit.” There are undoubtedly negative connotation attached to the word. Indeed, it will no doubt conjure up feelings of dread and resentment in anyone who has ever had the misfortune of being under the microscope in a financial inspection, where every minor figure is put under scrutiny. In a retail situation, however, the point of an audit is not to catch anyone out, but simply to carry out an inspection on how the business is running and figure out how it can be run more effectively.
Retail Audits are generally carried out by a third party agency who specialise in helping businesses maximise their sales, though in-house audits do also occur on occasion. It’s all about assessing the areas in which your retail outlet (or outlets) could improve and as such, it’s a truly invaluable service. A retail auditor will use their own bespoke methodologies to collect in-store data covertly and without upsetting the customers or employees.
What do they Measure?
As part of an in depth retail audit, numerous facets of the general retail experience will be measured, often without the knowledge of the store staff.
- The layout of the store and the location of promotional displays and signs might not seem particularly important, but there is often a genuine correlation between where products are stocked and in what quantity they are bought. For example, just putting the product at the front of the store doesn’t necessarily guarantee it’ll be bought. An audit will be able to measure the effectiveness of your current layout and reorganise accordingly, so that the displays engineered towards certain markets that drive sales, are in locations that make the most commercial sense.
- Corporate branding is all about consistency, making people feel as if they could be in a store in Manchester or Mumbai, but will still be getting the same (or at least a directly comparable) experience. An audit will make sure that all retail stores comply with corporate branding policies as well as signage guidelines. There’s also the factor of brand standards to take into consideration. Certain brands demand a certain level of quality and in some cases, a certain level of promotional space depending on deals that might be in place between the retailer and each individual brand.
- Stock levels are another facet that will be measured and improved by an audit. This includes the systems that let the store know when a product is out of stock and whether or not the stock levels of certain items are appropriate regarding how popular (or unpopular) they are. An audit will also make a note of any sales that are lost due to a stock shortage.
- Pricing is a tricky one, as it could be set by the individual brands, but when it comes to items that your business can control the retail price of, a retail audit will measure how effective certain products are at certain price points. If they feel a product is over-performing, they will probably increase the retail price, whereas the opposite will be true if it’s not selling particularly well.
- Competitive pricing is another important facet that will be measured by a retail auditor, who will use competitive price tracking to determine where you fit within local and national competing businesses.
- Brand and product recommendation is something that many auditing services offer. This is especially useful if they work often in your specific industry, as they will be able to recommend products and/or brands that are selling well elsewhere.
- Behind the scenes measures might also be taken if there are staff members or ongoing practices that don’t appear to be working effectively or making commercial sense. This is often a final measure though.
What do they use?
When a Field Marketing Company takes out a retail audit they’ll typically use a PDA or tablet, which can communicate directly with the higher-ups at the company and keep them up to speed with live reports as they happen. They will also use these devices to capture photographic evidence and signatures, which will be stored online and shared with the client. This means that issues can be dealt with in real-time as an audit is happening, and that any issues in the supply chain can be highlighted and corrected.
After the Audit
After the audit you will be provided with a complete report of everything they auditors have learned. This will be followed by a list of changes that they feel should be implemented to make your business run more effectively and maximise your sales. Of course, if this is an audit taken out by a third party agency, you don’t technically have to follow every piece of advice. But these guys know what they’re doing, so you would be wise to listen and learn. It could be the difference between success and failure!