Retail Audit is the study of particular stores to gather information regarding products, retailers, customers and competitors. Information like sales trend, sales volume, type of consumer of the brand, the company’s as well as competitor’s product display etc. In audit the compliance of the retailer is also checked. The right stocks of product, timeliness of placement of order for SKU, display of products, promotional activities for brand and right price of the brand to improve the performance of the brand in the market are the criteria of compliance of retailer.
It can be a surprise visit to the outlet or it can be done by informing the retailer. It can be done online or offline. With technology the audit can be done by filling already specified questions, taking pictures of outlet, video of outlet to study and analyze them later.
For online audits Webinars with retailers or use of applications like Flowfinity action etc. can be done. In these applications the audit information is stored in database, a report is generated by the software and can be disbursed almost at the real-time. So use of online methods can be time-saving, accurate and less tedious compared to the traditional method.
In an interview with Mr. Hitesh Mathur, Area sales and Customer Manager Kolkata East region, HUL, it has been conveyed that retail audit is a process of checking right brand at the right outlet in right quantity with right display set up. The main concern as conveyed by him is that whether that brand should be or should not be present at the outlet and what is the right SKU to be present in that outlet. The example stated by him to check right display was “Dove kept next to Hit does not help my business”.
The tool used by them to keep check is a planogram which gives the information about how the setup should be. The insight given By Mr. Mathur clarifies what is required in a Retail Audit and what can go wrong in an outlet. With the detailed study about Retail Audit it can be concluded that a retail audit has 4 main components
1) Your Brand
2) Competitor’s Brand
3) Retailer and outlet
Considering the first and most important component of audit i.e. “your brand” the various aspects like product volume, display set up, SKU etc. The next is the Competitor’s Brand which is vital, one cannot be myopic with his own brand, so competitor’s product and display strategy are also as imperative as yours. As conveyed by Mr.Mathur “Planogram will have the information about the placement of your brand and the other competitive brands”. So gathering and analyzing information about competitor is essential for a successful audit. The retailer should also have loyalty, conviction and right promotional activity for the brand. He is a big influence on the buying pattern of buyers and thus plays a major role in the sales of the brand. Also factors related to outlet like location and reachability are important as they influence buyer to buy or not to buy. Finally the buyer should also be analyzed in audit by studying their buying behavior, trends followed by them, factors like their lifestyle, time at which they come, car they are using, their income etc. Every minute detail of all the four component has to be checked and analyzed in the audit.
Feedback gained from retail audit helps in new product launch and to improve the performance of current brand portfolio. Retail Audit is directly aligned with the marketing objective that is to maximize profit, sales or revenues. It is a tool that is very dominantly used for a strategic move in the market to increase the share, meet target and helps in right distribution planning. Finally, it is a very helpful tool for every marketer to find an optimum Brand/Product portfolio for target segment with finest promotional activity and thus helps to design high product accessibility for the customers.