Retail Audits: What they are, how they work, and why reliable audit data is a must for brands and retailers.
Setting and maintaining standards and best practices is an important part of running any successful company. Retail is certainly no exception. However, for brands and retailers, the number of moving parts and operational considerations involved in the selling process makes measuring performance and compliance a particularly challenging task.
This is why retail audits are so important.
In this post, we’ll discuss the function of audits and how, when done properly, they can dramatically improve operations across the entire retail lifecycle – merchandising, inventory, the customer experience, sales, brand standards and compliance, and more.
What is a retail audit?
An audit as a study or review conducted by a brand or retailer in order to gauge how effectively stores and retail outlets are presenting brands and products, and how well customers are responding to merchandising, product placement, promotional materials, pricing and other variables.
Good auditing, a crucial business asset
The importance of having strong retail audit capabilities can’t be overstated. They provide brands and retailers with insights that are essential to both short and long-term success. What can a retail audit tell a company?
- Brands conducting audits will learn if retail stores are in full compliance with contracted standards regarding product placement, pricing, store displays, promotional materials, and other pre-negotiated items.
- An audit also tells both brands and retailers how well products are selling by store, region, day period and any other pre-determined variables.
- An audit can also shed some important light on competitive brands and products. How do their displays look? Is their shelf space well merchandised? Do they seem to have excess product on shelves or are they outselling you?
Retail sales and merchandising information gathered during an audit might include:
- Sales by unit
- Stock levels/available inventory
- Displays/merchandising/product placement
- Store condition (cleanliness, appearance)
- Shelf space/merchandising
- Brand standards compliance
- Cmpetitive intelligence
- Marketing and promotional materials
What types of retail audits can you do?
Think of retail audits as checklists that catalog and report data on specific aspects of retail operations. The following are the most common types of audits a brand or retailer might conduct.
With this type of retail audit, a field representative will visit an individual store or retail location to collect data regarding product and shelf displays. Data points and questions a merchandising audit hopes to answer include:
- Is visual merchandising in compliance with brand standards?
- Is the store or location clean and inviting?
- Is there ample product available on shelves and is it faced properly?
- Are there any stock or inventory issues?
- Are products correctly priced?
- Is sales volume meeting projections?
Brands and retailers make tremendous investments in marketing and promotions initiatives in the hopes of generating added and immediate sales. A promotional retail audit can help these companies measure the success of efforts like special sales and discounts, seasonal offerings, BOGO packages and much more. It’s vital to track the performance of promotions in order to make immediate adjustments if they’re required, but also to help shore up better promotions and best practices for the future. Promotional data points collected and analyzed might include:
- Promotion category (reduced price, rebate, volume discount, etc.)
- Marketing and promotional signage
- Pricing strategy
- In-store product positioning/display positioning
- Coordinated advertising
- Sales volume to date
- In-store engagement strategies
- Length of promotion
- Time of year/season
They’re looking at you, so you better be looking closely at your competition. This type of retail audit seeks to provide insight into the strengths and weaknesses of competing brands or retailers. Data points might include:
- Competitor product packaging
- Pricing structure
- Shelf space/displays (do they enjoy prime real estate in the store?)
- Current promotions
- Number of different products in store
An Audit Is Only As Good As The Final Report
Here’s the thing about retail audits. It’s not enough to simply track and compile important store, product and customer data. You won’t reveal a single retail mystery, unless you’re able to distill all that data and intelligence into a clear and digestible format – the retail audit report.
Reports are key to any audit. If they’re not accurate and actionable; if they are not easily read and understood; if they don’t provide clear insights into the subject being audited, then they serve little purpose.
After all, the point of an audit is to provide decision makers with clear data and information by which to make informed and effective business decisions. Good reports inspire confident and impactful moves. Substandard reporting leads to uncertain and ineffective decision-making.
Retail Technology To The Audit Rescue!
As with most aspects of life and business, advancements in software and technology are revolutionizing how brands and retailers conduct audits. New intelligent data technologies are eliminating the guesswork from audits, dramatically reducing human error, saving time and money, and making the job easier for everyone involved.
Eduardo Santaella is the Chief Operating Officer and General Manager of Mobile Insight®, a provider of retail management and auditing software to some of the world’s top brands and retailers. He puts it like this, “The Mobile Insight® solution gives brands and retailers real-time data and insights into every aspect of their operations. This is critical when conducting store audits, promotional audits, or any other type of performance measure. Using our intelligent data capture solutions, Mobile Insight® can capture relevant analytics to measure the effectiveness of merchandising, marketing, product placement, store appearance, available stock, sales volume and more. Data points are backed up by real-time photos and then distilled down into clear and customized reports that spell everything out for key decision makers.”
The Pitfalls of Paper. The Audit Advantages Of Digital Data.
Believe it or not, many brands and retail businesses still use pen and paper methods to conduct store audits. The issues that go along with this antiquated audit approach are many, and going digital can help you avoid them.
Relying on personnel to catalog and report audit findings using pen and paper is fraught with data errors – wrong boxes get checked, data gets overlooked, reports can even get lost.
Audit software integrated with smartphones or mobile devices allow personnel to capture data at the touch of a button and back it up with real-time photography. Reports are automatically compiled and digitally stored, so they’re never lost.
Time & Money
Collecting and reporting data by hand is monumentally inefficient. Field reps spend far too much time in each store or location only to create reports that are not 100% reliable because, let’s face it, no one is perfect.
Intelligent audit solutions streamline the entire data capture process, so field reps spend less time in each store, yet yield far more accurate and insightful reports.
Lag Time To Analyze Intelligence
Developing and audit report by hand doesn’t just waste good amount of time, it also means the vital information gathered is not readily available to everyone who needs it in front of them to make critical adjustments and decisions. There’s a big lag from the field to the boardroom.
Retail management and audit software provide decision-makers with real-time access to audit reports. They can be called up at any time from any computer or mobile device the very minute the report is complete. Digital audit solutions get data and insights into the hands of decision-makers in real-time, so they can take appropriate action immediately.
If you’re a brand or a retailer audits will surely help you measure the effectiveness of your operations. However, remember that an audit is only as reliable as the process by which the data was collected. New retail management and audit software is revolutionizing the industry and it is something any company looking to make more aggressive and confident decisions should consider. If you found this post helpful, learn more about retail management and audit technology atwww.mobileinsight.com.
Mobile Insight® is the only retail and merchandise management solution designed to meet the brick and mortar sales challenges of high-value brands and retailers. Unlike hardware and software providers that focus on fast-moving goods, the Mobile Insight® platform delivers assisted sales solutions for more complex, interactive, and customer-centric environments. Combining data from in-store systems, 3PLs, employee and partner activity, Mobile Insight® enables informed, smarter decisions that drive sales and operations excellence. For more information, visitwww.mobileinsight.com.
Seeing is Believing. See Mobile Insight® in Action.
Experience game-changing insights that will improve your retail operations and drive revenue.