Whether your retail business operates one location or a dozen, store audits are an effective way to monitor how you're doing. From examining the effectiveness of your displays, keeping your inventory in check, ensuring you’re presenting the best possible version of your store, and verifying that inventory management tasks are completed on schedule, store audits offer deep insights into your retail business.
And with advancements in modern technology, store audits have taken on a new role for retail businesses, offering more insights than ever before. But for retailers that are new to store audits, the task can seem daunting. But here, we’ll cover the benefits and process of completing a store audit so it’s simpler to get it done without delay.
What is a Store Audit?
Essentially, a store audit assesses the health of your retail location using hard data. Retailers, staff, or a third party combs through your store or pop-up shop to collect information on what’s working and what’s selling (or what isn’t).
Some retailers may use revenues as their primary success metric, but when you perform regular store audits, you have plenty of additional analytics to get a more comprehensive picture of your store’s health.
When performing a store audit, you’ll glean insights like:
- Sales volume
- Stock levels (inventory both on your shelves and back stock)
- Damaged products
- Assessments of visual merchandising and in-store displays
- Summary of what your competitors are up to
- Planogram compliance (shelf location, number of facings present, number of SKUs present, missing/inaccurate shelf tags)
- A look at your pricing strategy
- In-store location of products
You also need to choose the type of audit that best suits your needs. Some of the most common types of store audits include:
- Market audit: Survey customers for brand sentiment, get a sense of how passersby interact with your store, and take a close look at what your competitors are up to.
- Merchandising audit: This type of report compiles all your inventory data. Highlight stock levels, the effectiveness of product pricing, how products are displayed, the impact of your current visual merchandising, and product promotions.
- Loss prevention audit: Is your current loss prevention plan working? What products are stolen most? Where in your store are they stocked? What strategies are working and which aren’t?
Depending on the type of store audit you conduct and your goals, the frequency will vary. You may perform a quick spot check once a month or a more thorough audit once a quarter. Weigh your options and set up a game plan based on your business needs and your resources.
Why Store Audits Are Important
As the retail market changes, so do your business processes. Store audits may seem like a dated way to track your operations, but as your sales channels grow and become more complex, it’s important to stay on top of the goings-on in your retail business.
Retail cloud solution firm StorIQ sums up this sentiment: “The store audit is a vital component of retail operations. As retailers begin to implement omnichannel retail strategies and click-and-collect comes of age, store experience has become more important than ever. And it’s down to field teams to make sure the customer experience is top notch.”
Keeping enough inventory to meet your in-store needs and any of the other channels you’re currently supporting requires up-to-date, accurate stock numbers. Not having enough stock in store and not having shelves set and displayed properly can make for a poor shopping experience, and store audits are one way that you can ensure customers walk through the best possible display experience in your stores.
FURTHER READING: For more on creating enticing store displays, check out Visual Merchandising 101: Shore Up Sales With High-Converting Product Displays.
According to Balance Innovations, store audits are also great “opportunities to improve your business and develop your employees.” By using the results of the audit for more than just monitoring numbers, employers can use the audit as a learning opportunity to work with their employees to better the business in general.
“Understanding the reasoning helps employees be more aware of when they aren’t compliant with corporate policies and work harder to maintain your standards. The more education you invest in your people, the more value you’ll get out of employees and stores.”
The Benefits of a Store Audit
What specifically do you gain by doing a store audit? Aside from teaching your employees more about the day-to-day of your company’s business, StorIQ lists the following as potential store audit outcomes:
- Identifying and solving inconsistencies in-store presentation, visual merchandising, and brand compliance
- Finding store-level problems, such as maintenance and operational issues
- Closing the loop on task management, ensuring previous tasks and actions have been completed
- Uncovering best practices to share with other areas/stores
- Creating and implementing new in-store processes and procedures
- Providing a framework to evaluate financial metrics, KPIs, and team performance
- Build better relationships with your most important asset: your store managers and associates
- Foster positive competition between your stores
- Identifying training needs
Doing Your Own Retail Store Audit
1. Get Your Store Audit Scheduled
So, how can you complete an effective store audit for your retail business? Make sure you schedule enough time to complete the audit without disrupting the customer experience. The best time to complete audits is during slow times when you have enough staff to effectively finish the audit and still be able to maintain regular business.
You can also complete the audit while the store is closed, but keep in mind that would require scheduling extra resources outside of retail hours.
2. Determine Your Goals
Come up with a list of objectives before you start the audit — what you hope to accomplish as well as areas that you think will require extra attention. Are your in-store displays looking less than ideal? Be sure to set aside appropriate time to analyze each display.
Don’t forget to include the exterior of your building in the audit as well. This is, after all, the first impression that your business makes on customers walking through the door — something as simple as a burnt-out light or overflowing garbage can could alter how someone views your brand.
3. Take Thorough Notes As You Go
As you go through the process of completing your audit, take comprehensive notes (or get the third-party vendor conducting your audit to do so).
Also take pictures as you go, documenting the audit results, so you can compare before and after pictures of the fixes as they’re made.
4. Delegate Fixes to Staff
Once you’ve completed the audit, assign tasks to employees, contractors, or external agencies as soon as your resources and budget allow. Even if you can’t afford to make a change until next quarter, getting it scheduled and on the books ensures that nothing is missed or left to pile up until the next scheduled audit.
Using the Right Tools for Your Store Audit
Store audits can be time-consuming and difficult. What tools can you leverage to make it easier for you and your business? To unload the task completely, look into companies that perform store audits in your area. Generally, businesses that specialize in this process will come to your retail location(s), conduct the audit, summarize the results, and provide you with either just the data or with strategic recommendations based on their industry expertise.
If you’re looking to complete the audits internally but still need some help, consider working with a retail audit software provider like Compliantia. These companies provide you with the resources you need to conduct quick and easy audits, including calendars, automated scorecards, action plans, and performance data over time.
This type of audit software also makes it easy to keep all your data organized and in one place and lowers the margin for human error often associated with manual checklists.
Store Audits: Planning for the Long Term
After each audit, you’ll want to implement any fixes or changes as soon as possible and check the status during your next store audit. Regular store audits are also a great way to track your business over time — so be sure to look at the progress after each quarter and year.
Audit checklists are just one source of data that you can use to capture long-term progress, so be sure to compare audit results with inventory checks, sales over time, and resource allocations to get a bigger picture of your retail business.
What changes have you made to your retail business based on the knowledge you’ve gained from store audits? Have you seen a positive long-term trajectory after starting store audits? Tell us about your experiences in the comments section below.