Last Updated on February 26, 2023 by hassan abbas
The success or failure of a retail business cannot be measured by the yardstick of daily sales figures alone. Many other crucial metrics are involved, and the assessment is often non-linear. Well-planned and regular audits help to measure all important retail store parameters. These include daily/weekly/monthly sales, inventory levels, loyalty program enrolments, customer satisfaction indices, etc. The success of the merchandising plan, damage/pilferage count, and even competitor metrics are part of an in-store audit checklist.
5-Fold Strategy to Conduct a Successful Retail Audit
The productivity of a retail audit depends on several factors. The accuracy of business mapping, the training level of auditors, the audit software used, scheduling, and several other checkpoints matters. Industry stalwarts have recommended these five innovative ways to ensure highly productive and well-optimised retail audits:-
1. Creating a Holistic Audit Checklist based on In-Store and Business Objectives
Every retail business has financial, operational, logistic, and customer-centric objectives for which the audit is conducted. Some businesses even incorporate competitor metrics to assess how the store is performing. A standardised checklist covering all of these objectives is necessary to conduct a hassle-free audit.
2. Using the Right Retail Audit Software and Automation
Retail audit automation is the buzzword in the global retail industry today. Especially in the aftermath of the Covid-19 pandemic, cost optimisation is a huge priority. Conducting manual audits is both time-consuming and expensive. Centralised audit software for retail chains helps relay real-time data on all important metrics to the business headquarters.
3. Automated Inventory Tracking
Most major retail chains have adopted retail automation to avoid the expense and tediousness of auditors travelling store to store. However, not all retail SMEs and boutique stores require this level of automation. AI-driven inventory management is the best system to ensure highly effective retail auditing for them. Automated inventory control ensures round-the-clock tracking of in-store merchandise, warehouse stock, and items in transit. It will ensure timely replenishment and prevent overstocking.
4. Real-Time Information on In-Store Compliance Checkpoints
Audit checkpoints don’t just include accounting figures. These also cover day-to-day SOPs that encompass the operational efficiency of the retail outlet. Daily store compliance checkpoints are best assessed by apps that relay real-time data. Provisions for pictures, digital signatures, and other mandates help enforce employee accountability.
5. Incorporating a Watertight Loss Prevention Plan
Retail stores selling high-value products and luxury merchandise should have a dedicated audit section for security and loss prevention. These premium outlets don’t have heavy footfall like that of hypermarkets. Hence, keeping track of every piece of merchandise is the index of a successful audit here.
While the above strategies ensure a robust auditing approach, the type of retail business and vertical are also important determinants. For instance, the audit checklist of a large-format FMCG store will be different from that of a luxury watches shop. Even within the same verticals, retail businesses selling high-end apparel/accessories have different SOPs than those selling budget apparel/accessories. Similarly, a vast multi-store retail chain will use distinct audit software compared to standalone stores. Business format, customer profile, pricing, and store size, determined based on product categories, is an ideal auditing approach.