Retail audits allow retailers to utilize insightful details about product placement and display in increasing sales. The truth is, a retail audit is important for a brand’s wellbeing or success in the same way regular medical check-ups are for a human’s health.
Sadly, retail auditing is usually reduced to an inventory of products on shelves and in stock, to avoid out-of-stocks and guarantee availability for customers.
Even though this sort of retail auditing is vital, several other forms of audit data can provide valuable insights to the management of your business, allowing assessing ROI, the effectiveness of promotions, advertising impact, and marketing trends.
Before looking into why regular retail audits are important, let’s look at what the term, retail audit, means.
What is Retail Audit?
A retail audit assesses the condition of your retail location using recorded data. You can employ experts to comb through your store to collect valuable information on what’s working and what is not.
Some retailers use revenues as the primary yardstick to gauge business performance, but carrying out regular retail audits will provide way more analytics to get a more detailed picture of the state of your retail outlet.
When you run a retail audit, you’ll get insights on the following:
- Sales volume
- Stock levels (both on shelves and in stock)
- Damaged products
- Assessments of in-store displays and visual merchandising
- Summary of competitor behavior
- Planogram compliance (shelf location, number of SKUs present, number of facings present, inaccurate/missing shelf tags)
- In-store location of products
- Pricing strategy
Important of Regular Retail Audits
Now, let us look at the reasons why it is important to run regular retail audits.
Identification of Inconsistencies
Identifying and rectifying inconsistencies in visual merchandising, in-store presentation, and brand compliance is one of the most notable benefits of carrying out regular retail audits. As a retailer, identifying faults and making adjustments where necessary will help your business thrive and stay competitive.
Identification of Training Needs
Regular retail audits will help you identify areas where your employees need more training or guidance. The competence of your employees will be reflected in your business.
Efficient and Effective Task Management
Carrying out frequent retail audits will provide you with the insight needed to close the loop on task management, guaranteeing that every important task or action is completed.
Elevation of Financial Metrics
If you are looking to consistently boost sales, running frequent retail audits is the way to go. It will provide you with a framework to assess financial metrics, KPIs, and team performance, helping you make adjustments where necessary.
Creation of Better Business Strategies
When you run regular retail audits, you will be able to devise and implement result-oriented strategies that will take your business to the next level.
Relationship Building
Regular retail audits help retailers in building lasting productive relationships with their most valuable assets: employees and business associates.
Identification of Store-level Problems
Setting time aside to run frequent retail audits is arguably the most effective way to unravel store-level problems, such as operational issues and maintenance.
WHAT TO PAY ATTENTION TO WHEN RUNNING RETAIL AUDITS
Regularity
It is advisable to have merchandisers visit your store regularly so they can help ensure that your products are consistently showcased to maximize sales.
Any deficiencies identified should always be made known to the store manager both to ensure that store personnel are aware and can make the needed corrections when the merchandiser is not around.
Consistency of Data Collection
If merchandisers pay regular visits to retail outlets, the data collected on those visits must be consistent over time.
To successfully identify and analyze trends that can underline concerns throughout the retail supply chain, the data must be collected in a manner that enables easy reporting.
If audit questions and in-store surveys are continually changed, it would become incredibly difficult to create reports that pinpoint time-trend based issues.
The best way to keep retail audits consistent is to utilize a well-structured data collection tool, one that feeds or includes a reporting system.
Stock level reporting
There are various types of stock in a typical retail store. From the ‘on-shelf stock’, which is expected to always be full, to the ‘near-shelf stock’ (sometimes in bins behind or below shelving and sometimes situated in risers above the shelf) and so on.
Another type of stock that is noteworthy is the ‘backroom stock’. An excellent retail audit is expected to check all locations of stock to ensure that matters that may result in out-of-stock (OOS, also known as ‘stock-outs’) are spotted early. OOS can result in major problems for retailers. For this reason, it is important to monitor the availability of your products to prevent OOS. Regular retail audits can help you collect vital data that will help you better predict and prevent OOS. The best way to report stock is to report against pre-set ‘Low, Medium, High’ levels rather than aiming to get precise counts.
If you have worries about spending time in compiling reports, consider opting to invest in a store audit software. This will not only collect the data you need but will serve as your go-to store audit tool.
Using software for store audit will afford you the option to input complete audits, checklists, and track trends whenever you want. Apart from saving your time, this will also give you insightful data needed for making better business decisions, giving you a better chance at achieving success in the process.
Conclusion
In the end, whether you utilize software or use pen and paper, the main purpose of a retail audit is to get valuable data for modifying and improving your retail strategy.
As you have learned from this article, the benefits of carrying out frequent retail audits can benefit your business in several ways. Use your retail audits for more than just confirming task completion, and watch as your business gets propelled into new heights of success.
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