What Is a Retail Audit?
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RMGT Retail ManagementProfessor CrookerDarren KruseDecember 13, 2017What Is a Retail Audit?Retail audits are studies of selected retail outlets performed by brand representatives or retail store employees for the purpose of collecting data about the health of the brand’s products. For the audit I performed, I’ll be discussing the retail audit as it pertained to our internal control review processes. Some of the categories that we must pay attention to when performing an audit are: Sales volume, shelf stock levels, descriptions of in-store displays and promotional materials, competitor activity, planogram compliance (shelf location, number of facings present, number of SKUs present, missing/inaccurate shelf tags), pricing, location of products, and product damage.Importance of an AuditThe benefits of conducting internal retail audits are twofold. On the one hand, they serve as a tool for managers and directors to ensure that retailers are complying with pre-established agreements on product placement, pricing, and promotion. On the other hand, they allow managers and directors to accurately measure their success in the retail environment. They do this by using a system of scoring each retail station to ensure that the unit is performing according to a pre-determined base percentage.Equally advantageous is the priceless commodity of data that audits provide. By aggregating data from various retail locations over time and comparing results, managers and directors can make actionable decisions that reduce inefficiencies, and ultimately drive sales.There are many factors that are challenging in conducting an internal retail audit. Businesses with limited budgets and multiple locations are now turning to technology to manage the colossal amount of data associated with conducting an internal store audit. It becomes paramount for each business to explore its priorities and evaluate the current audit process and where it can be improved. Businesses can adapt mobile technology into the retail audit process. Mobile technology can enhance audit productivity, make improvements in audit reporting, and expand communication for operational effectiveness.The benefits of conducting retail audits are twofold. On the one hand, they serve as a tool for our account managers to ensure that we are complying with pre-established processes and policies on product placement, pricing, and promotion. It also allows us to accurately measure how our brand, and to accurately measure our vendors success in the retail environment.Most audits are conducted from the outside in whenever possible and sections should be laid out to match the natural flow of a visit (a district manager physically walking the store). With the types of accounts that Touchpoint has, (located within another facility) starting with the exterior (the parking lot, the window in a mall location) is not as necessary as other similar accounts as we are designed to service the patients and their families within our location, and that population typically stays within the hospital. However, we do have staff assigned to the facility, we do receive visitors from the surrounding neighborhood, and those customers have choices beyond our account. When considering this fact, we must use a combination of retail audits in order to ensure that we stay competitive with outlying stores, so setting up the form according to the environment will be different for each account.
For our accounts to stay competitive in today’s marketplace, it is imperative to design and implement a strong retail execution strategy. Utilizing retail audits is the best way for an account to capture critical field data that affects the health of our account and its products. By analyzing longitudinal data, our directors and managers can make more informed decisions and adjustments to each of their respective retail plans.Equally advantageous is the priceless commodity of data that audits provide. By aggregating data from various retail locations over time and comparing results, our managers can make actionable decisions that reduce inefficiencies and ultimately drive sales. Types of Retail Audits With so much variance in the information that can be recorded in a retail audit, it makes sense to segment audits by data type. Different audit forms should be used to reflect the respective data being collected at a given store visit. Examples of the types of retail audits that our account might employ are listed below.Retail Market Audit In some cases, our account might simply want to know the lay of the land and where our products are being stocked (or could potentially be stocked in the future. Managers might document the following:Consumer sentiment towards the brand and its competitors as discovered by surveying customers within the café and observing how they interact with our brands or the brands we are offering.Is the café or operation well-organized and clean? Is it located in a suburban or urban area? How does the entrance and dining area of the cafe appear? Qualitative and quantitative information about other brands present in the store. How many facings do outside brands have on the shelf? Are there mostly emerging or established brands in certain categories in our cafes? Merchandising Audit This type of store audit is primarily concerned with the brands in our cafes performance. Café managers uses merchandising reports to log: Inventory levels, stockouts, condition of products, amount of available shelf space, units ordered, retail price, and general shelf appearance.Promotional Audit If a brand that our café is carrying presenting a special type of promotion, it’s important to track its success so as to know how it’s performing in the short-term and how to improve upon the marketing of the program in the future. It’s key to report on: