Retail audit is a market information tool that has proven to be effective in monitoring and controlling companies' retail or retail strategies.
The retail audit is useful to establish:
- Market size, segmentation and evolution Strengths and weaknesses in distribution by area and type of point of sale Brand positioning and valuation Market share Price opportunities Sales and Purchases (volume and value) Inventories held by retailers (Warehouse and sales area).Supply (Turnover).Average price of sale to the consumer.Numerical and weighted distribution.Numerical and weighted depletion.Average of sales and inventory by stores.Distribution of offers of advertising material and preferential displays.
In other words, it is a good way to assess market trends by comparing product to product and brand to brand at the point of sale.
The main characteristics of retail audit are:
Detailed monitoring of the sales performance of a product within the category of the product studied at a point of sale.
It enables the selection of representative locations, in terms of product use and population profile within the point of sale.
It allows the determination of costs, sizes of the different spaces of a point of sale for the location of products and product lines.
In general terms, the retail audit offers results with a high dose of precision and comparability for making specific decisions in the areas of: product (characteristics, design, packaging), communication (merchandising, advertising, promotion), price and distribution or an aggregate of the four.
The first step of the retail audit consists of analyzing the product distribution flow, analyzing the entire chain from the producer to the final consumer, the questions that should be asked who intend to do an audit of this type are:
- Where is the product sold? You have your own points of sale, you work through retailers, you sell it in large chain stores. What is the product that is sold? Your brand, its characteristics, its technology, its design are sold. How much is the product sold for? what is the retail price at the point of sale, how much is the producer's margin, what is the retailer's margin.
The most recognized disadvantages are:
- High realization costs. It consumes much time. The management may not comply with its results, which would leave it without a floor. The information collected may be inappropriate.
