Retail Audits

What is Retail Audit

Retail audit is the study of selected retail outlets for collecting data about the health / visibility of a brand’s products. This is a primary physical research process, wherein a trained auditor visits the establishment and validates information such as:

• Sales volume
• Stock levels (shelf and backstock)
• 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
• In-store location of products
• Product damage

Importance of Audit

There are dual benefits of conducting a retail audit. One, the audit serves as a tool for suppliers to confirm that retailers are adhering with pre-established protocols on product placement, pricing and promotion. Two, the audit allows brands to precisely measure their success in the retail atmosphere.

Audits are of Two Types - Retailer Audit & Distributor Audit

Retail Consumer Questionnaire

In some cases, brands want to know the disposition of their products which are being stocked and stacked (or could potentially be stocked in the future). The parameters are as follows:

• Consumer sentiments are measured by interacting scientifically with the potential customer at the shop. The process involves Entry & Exit Interview.
• Retail outlet survey also includes below factors:
• Cleanliness & Layout
• Location of the store basis footfall
• Visual Merchandise of the store
• Competition's qualitative and quantitative information will also be covered under the survey, for example:
• Visual appeal of multiple brands presents on the shelf?
• Are there any emerging or established brands in the client's category?

Retailer Audit

The objective of retailer audit is to measure the brand's performance. TechSci uses merchandising reports to track:

• Inventory levels
• Availability of the products
• Quality of products vis a vis competition
• Shelf life
• Reorder Level
• Maximum retail price
• Discounts and other BTL activities vis a vis competition

Promotional Report

If a brand is holding a sale or other type of special promotion, it's important to track the success of the BTL activity to understand the likeability across target customers and to know how it's performing in the short-term. This helps in improving the features. Also, it's vital to report:

• The type of promotion for example tasting, demo, price reduction, etc.
• The duration of the promotion
• The featured product SKUs
• The position of the brand in-house
• The result of the sale
• Effectiveness of the promotion:
• Are consumers engaging with your brand?
• Are retailers complying with the placement of promotional materials?

Distributor Audit

Distribution Audits /Competitor Survey

One audit that brands shouldn't overlook is the competitor's survey, which reveals invaluable insight into how their brand is positioned against the competition of that category. TechSci identifies:

• Who are direct and indirect competitors present in the store?
• Pricing strategies
• Is your brand being significantly stacked?
• Location of the competitor's products
• Prime placement at eye-level or near a checkout counter
• Location (high- or low-traffic area)

Types of Retail Audit

Marketing Audit

A marketing audit gives a systematic analysis of the business marketing environment of an organization, covering all internal and external aspects. This type of audit is performed to analyze problems or opportunities to determine the best course of action for meeting the business needs. A well-conducted marketing audit will enable decision makers to build strategies based on facts and in-depth data. Conducting a market audit involves the following steps:

• Defining Market Goals and Objectives
• Creating Customer Personas
• Identifying Competition
• Describing Products or Services
• Mapping Out Inventory
• Analysing Data and Drawing Outcomes

Merchandising Audit

Merchandising audit involves collecting your entire stock information. The auditor checks the efficiency of your merchandise costing, how merchandises are put on display, the impact of current strategies and marketing campaign on the sale of merchandise. Sometimes, the representatives also check up on the store’s appearance, knowledge of store employees about the product, etc. Merchandising audit helps the management to determine what is working well and what is not as well as encompass all pertinent data to make necessary strategic changes to retail execution strategy.

Loss Prevention Audit

Loss prevention audits are designed to reduce waste, vandalism, theft, and other issues that might incur a financial loss to the retailer or the company. This type of audit is a preventive approach to reduce cost disruptions and build up a relationship between the head office and the store.

Competitive Analysis Audit

Keeping an eye on your competitor by identifying what they are offering, doing, or saying can be extremely helpful to create a unique identity of your brand in the market. Before conducting a competitive analysis, it is crucial to consider the scope and data that you want to gather through your representatives. Steps to conduct competitive analysis involves:

• Identifying 3-4 direct competitors for a specific product
• Considering the pricing strategy of competitors
• Special promotions and offers provided by competitors
• Analysing marketing strategy of competitors
• Determining locations where your representatives should visit for audit
• Consulting with your retail partners and employees on floor

Health and Safety Audit

Health and Safety Audit is performed to check compliance with government regulations and protect companies from any lawsuits, claims, or brand tarnishing events. A regular emphasis on health and safety audits can keep everyone involved and informed and support best operational practices at the store. The health and safety requirements are different for every kind of business. Thus, auditors must ensure that right the procedures and processes are in place. For instance, at a furniture shop, the auditor can check whether cords, ladders, bunk beds, and décor are secured, while at a pharmacy shop, the auditor must ensure that medicines are properly stored and dispensed.

How we do it?

TechSci has a continuous audit process to ensure that the client's business values and standards are being followed in every single supply chain process. TechSci monitors every leaflet distribution campaign by:

• Using a tracking app (along with the geo coordinates, date and time)
• Pre-designed retail tracking templates for quick turnaround time