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A retail audit within the framework of a trade audit is usually understood as research aimed at a comprehensive analysis of the assortment, availability and stocks of goods, its value, overall representation in retail outlets, the availability of advertising materials, the quality of staff work, as well as the pricing policy of competitors.
This type of research is in demand because many factors simultaneously influence purchasing power, each of which must be carefully monitored and controlled.
Retail audit can be carried out both by specially created departments within the company and with the help of retail audit firms in India specializing in the provision of such services.
As part of the audit, to identify the advantages and disadvantages in the operation of retail outlets, as well as to solve more complex marketing problems, the following studies and activities are usually carried out:
- Monitoring of the current availability of goods, its stocks and prices
- Control of display and rotation of goods
- Assessment of compliance with merchandising standards
- Availability and efficiency of using POS materials
- Control and evaluation of promotions, availability of promotional materials
- Evaluation of the work of promoters
- Assessment of staff performance and quality of customer service
- Monitoring compliance with corporate rules and standards
- Analysis of competitor activity (prices, advertising, etc.)
- Control over the fulfillment of obligations for the distribution of goods
The information collected and the research carried out, among other things, allow us to get answers to such pressing questions as:
- Sales volume in the company, in competitors’ retail outlets and in the market as a whole
- Network turnover
- Volumes and market share of certain product groups and manufacturers
- Availability of unoccupied niches on the market
- Effectiveness of current positioning and understanding of what can be changed and what can be left “as is”
- Profit from the sale of goods to the end consumer
- Outlined “general market” trends, regional demand
- Other cost aspects affecting pricing
Taking into account the data obtained, it is possible to better understand the features of the segment occupied, which in turn will allow to competently approach the formation of the product range and outline promising outlets for the most successful distribution of goods in the retail network.
For example, when you observe a drop in sales, you can try to quickly and at random to correct the situation, “patching holes” in the directions in which, presumably, shortcomings were made, but not everything is so clear and there is no guarantee that the problem is exactly where it is expected to be seen.
As a result, the cost of a mistake can be high if the reasons for the failure in sales are not identified and quickly eliminated, and this is where experts of retail audit companies in India are needed.
A competent retail auditor will first of all start with determining the occupied market share and, if it has not changed, the drop in sales can be explained by temporary fluctuations in demand (for example, seasonal).
However, if, along with the decline in sales, there is also a simultaneous decrease in the market share, efforts should be directed towards the analysis of distribution, current prices, established methods and channels of promotion, and the marketing techniques used.