How to Implement the Best Retail Audit
As the retail market continues to grow around the world due to increased income, awareness, accessibility and lifestyle changes, it is important that businesses develop tailored strategies for their markets. For brands selling outside their home country, it is critical to understand the unique challenges every market poses as a result of different economic, political and cultural environments.
Unfortunately, most brands lack an adequate data source and instead rely on information delivered from unreliable, third party companies that fail to provide actionable insights and data verification. In order for your business to increase revenue, profit share and market share, accurate data about on-the-ground conditions is critical to understand the true barriers to growth and create effective strategies that address these barriers.
What is a Retail Audit?
A retail audit is like a wellness check for your brand in the marketplace. Retail audits collect supplier data like: out of stock (OOS), visual merchandising, planogram compliance, competitive information and more. The result of a retail audit is a report card providing valuable insights into your brand’s overall health in store.
Did you know that a mere 8% of consumers identify as a brand or product loyalist? Gone are the days of brand loyalty; “brand switching” is the new consumer trend. With an overwhelming array of options for even the most menial purchases, consumers tend to venture towards brands with a seamless or enjoyable customer experience.
A robust retail audit program allows your business to collect on-the-ground store data unveiling and dissecting any barriers to growth and creating viable strategies to address and remove these barriers.
Historically, retail audits were executed by a brand representative or multiple brand representatives and completed with a handy-dandy pen and paper. This approach is inefficient and time-consuming, not to mention challenging and a massive drain on resources. Gratefully, technological advancements paved the way for valuable resources like crowdsourcing, which provides an accurate and efficient method of retail data collection.
Crowdsourced retail audits leverage a massive network of global contributors to collect data in real-time. This on-the-spot data collection provides the actionable insight necessary to help your brand optimize retail capabilities and scale locally, nationally or globally.
Retail Audit Checklist
There are four key categories of data your business should collect during a retail audit: location, demographic, in-store and competitive. These data pillars will ensure your business gathers the intelligence needed to improve customer experience on location.
Location Data
Information gaps are common in emerging markets due to insufficient resources on-the-ground. Location-based data collection provides peace of mind by ensuring accurate communication regarding product distribution, merchandising, compliance and more.
Demographic Data
Demographic data like neighborhood descriptions, store conditions and street view can help your brand paint a more holistic view of the physical location in which your products are distributed.
In-Store Data
In-store data is the true bread and butter of a retail audit with information regarding product placement, share-of-shelf, inventory levels, merchandising quality, planogram compliance and product location.
Competitive Information
Data assessment of a competitor’s performance in-store provides a benchmark from which to analyze your brand’s performance.
Why are Retail Audits Important?
If successfully executed, retail audits can maximize sales, increase market share, ensure retailers are compliant with your merchandising requirements and optimize the customer experience in-store.
Maximize Sales and Market Share
Real-time retail audit data allows businesses to make rapid adjustments to planograms, merchandising and shelf location based on consumer feedback. In addition, competitive information by way of retail audits empowers teams to make agile decisions based on predictive behavior and competitive trends. These retail audit “perks” optimize sell-through and expand market share as a result of adept movement in the marketplace.
Ensure Retail Compliance
Marketing and sales teams labor arduously over planograms, merchandising, signage and more, yet lack of planogram compliance alone loses U.S. retailers between $1 to $30 million in sales individually.
Retail audits examine retail compliance with placement, pricing and promotional agreements. Compliance ensures your business can effectively measure the success or failure of particular campaigns, SKU arrangements, marketing signage and more.
Optimize Customer Experience
According to Smart Insights, 86% of customers will spend more on a product or service that is accompanied with a pleasurable customer experience. In a sea of seemingly endless choices, quality customer experience can elevate your brand.
Retail audits help brands measure and monitor retail success by analyzing the shopper’s experience with your products in-store. Using a retail audit, your brand can identify the time it takes to find your products on shelf, the helpfulness of store employees, the scarcity or abundance of stock and more.
Like with most things, the quality of data collected plays a significant role in its effectiveness. Taking an insights-driven approach allows teams to optimize sales and marketing efforts.
Crowdsourcing Your Retail Audit
A retail audit can produce ample data for your team. A crowdsourced retail audit can produce even more. Here is how a crowdsourced retail audit can help your business:
- Product Placement: Assess product placement across multiple brands and products, including information about the use of discounts or promotions.
- Shelf Monitoring: Monitor your product on shelf including share-of-shelf, retailer compliance and competitors.
- Inventory Monitoring: Verify if products are in-stock at third-party retailers and understand inventory in comparison to competitor products.
- Visual Merchandising: Get visual confirmation of your existing merchandising in a wide range of locations.
- Mystery Shopping: Gather information about products and services at physical locations around the globe.
- Item Location: Clock how long it takes contributors from entering the store to finding your product on shelf.
Many brands lack in-store visibility. Collection of quality retail audit data can provide valuable insight into retail operations. With new technology and data acquisition, companies can gain greater insight into merchandising, efficiency, inventory, competition and pricing.
What is Mystery Shopping?
A mystery shopping program is the process of hiring an anonymous consumer to provide an unbiased evaluation of your company’s operations.
This retail audit tactic delves deeper into understanding your customer’s emotions and motivations. A successful mystery shopping program can help you identify and solve weak spots in your business model, improve your customer journey and increase market share.
Conducting a Mystery Shopping Program
In addition to the objective steps taken in a traditional retail audit (locating products, taking photos, scanning barcodes), a mystery shopping program tasks contributors with making a purchase of your product while taking note of the customer journey.
The unique, hands-on experience of a mystery shopping program encourages contributors to look at the minute details of their shopping journey. From the experience with sales representatives on location to a fully detailed product review, contributors can provide ample feedback on your customer experience (CX).
The data collected from a well-executed mystery shopping program can reveal weaknesses along the customer journey creating a starting point from which to strategize and adjust processes, product offerings, planograms and more across all channels.
A traditional shopping program requires ample manpower to recruit, quality, schedule, train and manage shoppers. Using a crowdsourcing solution, like Premise, can streamline the execution of your mystery shopping program making it easier on your team and your budget.
Traditional vs. Crowdsourced Mystery Shopping
A traditional mystery shopping program is time-consuming, expensive and provides after-the-fact data that may be out of date upon receipt. The slow timeline that accompanies this traditional method of retail auditing may cause your business to lose out on essential data that could improve your customer experience and boost your bottom line.
Consumers have a myriad of choices on the market. 75% of millennials would switch to a different retailer if they feel that their customer service has been sub-par. If there are kinks in your brand’s CX, customers will easily make the switch to a competitive product. You need verified, real-time data in order to stay ahead of consumer preference.
While a traditional mystery shopping program is valid in both function and contribution, crowdsourced mystery shopping programs offer a far superior ROI for businesses of all sizes. Intelligently crowdsourced mystery shopping programs regulate data through the collection of real-time, unbiased data from a set of diverse contributors around the globe.
Crowdsourcing Your Mystery Shopping Program
A crowdsourced mystery shopping program leverages a network of contributors to execute “tasks” established by your business on location, in real time.
With a crowdsourced mystery shopping program, as offered by Premise, you can acquire data at a mass scale through a global network of verified shoppers. Contributors can complete tasks on demand and submit their findings right in the Premise app. A simple click and your business can access user acquired data and actionable insights that allow you to spend more time preparing strategy and less time sorting through paper.
Crowdsourcing your mystery shopping program is a quick, low-risk solution to retail audits that provides high quality, reliable CX data. Premise has helped commercial clients conduct secret shopper campaigns around the globe. We can help you distinguish between invalid and imprecise customer-provided location data to a high degree of accuracy.
Even with outdated or inaccurate data Premise is still able to effectively conduct store audits and discovery campaigns. Mystery shopping feedback has empowered our clients with immediate action items to improve customer service and increase sales around the globe.
Read more about the benefits of mystery shopping in our blog post: Why Your CPG Brand Needs Crowdsourced Mystery Shopping.
A Global Brand Uses Premise’s Solution
Most brands have very little in-store product data, especially in emerging markets. The lack of data is often a result of fragmented distribution value chains that are typical in these markets.
One company came to Premise with trouble gathering product data post-distribution. See how Premise was able to help this global brand get the ground-level insights they needed.
Is Your Visual Merchandising Meeting Your Standards?
In the battle to win over customers, you may implement a robust marketing strategy including display graphics, fashionable mannequins, floor displays, mood lighting, pre-selected music or even a signature scent. “Visual merchandising” includes a wide array of strategies that are not always visual, but play a huge factor in landing that customer.
With physical retail continuing to battle e-commerce, retailers and brands alike need to do everything they can to entice the customer to make a purchase. Visual merchandising is one powerful way that brands and stores can pique consumer interest. But, how do you know if your visual merchandising efforts are effective?
Regularly monitoring your visual merchandising is a critical tactic to understand the full impact of your in-store marketing strategy. Premise retail audits can help you assess your visual merchandising efforts from both a consumer lens and a competitive lens while ensuring retailer compliance with planograms and merchandising standards.
Planogram Compliance
A planogram is a crucial roadmap developed to help retailers effectively place products, displays, merchandising and other components exactly where you need them to enhance the customer experience.
These planograms are generally developed with key demographic, foot traffic and sell-through data that ensure retail marketing efforts increase sales and market share. What good is a carefully executed planogram if your retailers are non-compliant? The answer is: no good.
Your planogram is developed with the intent to optimize and refine as you receive in-store data. Maybe the initial product placement in your planogram is not conducive to quick browsing or, maybe your end cap needs more visibility with contrasting designs… Retailer planogram compliance ensures that you receive accurate sell-through data to make insightful adjustments to your planogram in an effort to maximize efficacy.
A thorough retail audit and mystery shopping program can assess planogram compliance and give you peace of mind in knowing that the proper quantity of products are in their proper locations with accurate merchandising and displays. Or, contributors will provide data that exemplifies retailer non-compliance. The only way of truly knowing whether your planogram is effective is through regular audits.
Shelf Monitoring and OOS
Another common issue with retail partners is regular or frequent out-of-stock (OOS). While it is difficult to nail down the true monetary loss of OOS, your business (and your retailers) may be losing thousands, hundreds of thousands or millions of dollars in potential profit.
There are two reasons why your shelves are empty in-store: lack of supply or insufficient shelf replenishment. The reason for OOS is impertinent to the consumer; in fact, 39% of shoppers will leave empty handed if their preferred product is unavailable and 49% of shoppers will purchase a substitute product.
When your products are properly nestled on the shelf in full supply, your customer will make the purchase or repurchase and proceed with their day. OOS, on the other hand, interferes with CX and potentially severs your relationship with the customer.
Shelf monitoring through retail audits and mystery shopping programs allow you to quickly determine the root cause of OOS and address issues within the supply chain or with a particular retailer.
Conclusion
Market success requires timely and accurate data acquisition and analysis. With sufficient data, you can maximize sales and market share, improve your customer experience and develop more productive relationships with your retail partners.
Consumer behavior and preferences, as well as in-store activity, is constantly changing. Monitoring in-store conditions on a regular basis with crowdsourced retail audits and mystery shopping allow your business to quickly identify the early signs of change and adapt strategies in sync.