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Retail Store Audits: Pitfalls to Avoid Before, During, & After Your Audit

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Retail store audits. For many stores, they are akin to taking your vehicle for a tune up. The technician uses a computerized interface to identify operational issues with your vehicle’s systems, and provides targeted fixes for those problems.

Retail store audits follow the same process but use different diagnostic tools and measurement criteria.

A store’s district manager or sales manager generally requests these audits, which evaluate a store’s performance in a specific operational area. The manager may personally conduct the audit or can delegate the task to a third-party company. Some stores receive advance notice of some audits, others may be completely unannounced.

Although retail store audits can deliver valuable benefits, they can also become a huge time waster if they’re not properly structured and analyzed. Learn about four pitfalls that can torpedo your best intentions, and how to avoid them.

Pitfall #1: Making Audits Too Broad

You’ve heard the old adage: “Trying to do too many things results in not doing any of them very well.” This maxim is certainly true for retail store audits, as attempting to cram too many activities into one audit makes it difficult to adequately address key problems. So, carefully consider your business’ needs, and schedule one retail store audit at a time.

To that end, it’s worth reviewing the types of retail store audits you can conduct:

Retail Operations Audit

This type of audit evaluates how a store carries out various operational processes to ensure that they meet the company’s standards. A retailer, for example, may audit how a store handles returns to see if the right procedure is followed.

Operations audits often occur at preset times throughout the year. Or, they can be designed as a before/after support mechanism for a special store program or seasonal offering.

Merchandising Audit

Merchandising audits are common occurrences. In these instances, the retail auditor examines the merchandising initiatives in the store to see if they’re up to snuff. Are the products displayed correctly? Did the shop comply with HQ’s planogram? Is the signage pointing in the right direction? These are some of the questions that a merchandising audit would answer.

Merchandising audits can follow a preset schedule, or can be tied to seasonal product offerings or in-store programs.

Customer Service Audit

A customer service audit is exactly what it sounds like — it evaluates the customer support practices of a retail store.

This audit often occurs at predetermined times. However, scheduling an unannounced (or anonymous) audit will provide an especially accurate picture of employees’ performance.

Loss Prevention Audit

Loss prevention audits are geared to reducing waste, risk, theft, and vandalism. These audits generally occur at certain times of year, and help reinforce the corporation’s commitment to decreasing this costly income drain.

Health and Safety Audit

Health and safety audits are typically scheduled throughout the year. These targeted audits are designed to gauge your store’s compliance with product handling guidelines and government regulations. Regular audits will also identify specific workplace hazards.

Pitfall #2: Conducting Manual Audits and Self-Assessments

Retailers that want to reduce costs may choose to conduct audits manually or rely on self-assessments. And while these methods may save money in the short-term, they can do more harm than good.

Let’s start with choosing the manual route. If your business still conducts manual retail store audits, you’re spinning your wheels by using this woefully inefficient process.

To start this time-consuming ordeal, you’ve probably asked an employee to fill out paper forms (which hopefully won’t get misplaced or thrown away). Next, someone must enter the data into a spreadsheet, ideally without making data entry errors that can completely skew the results. You compile the data, then draw conclusions. Objectively speaking, this outdated process takes valuable time that could be better spent elsewhere.

Self-assessments, on the other hand, put managers and employees in charge of evaluating their own stores, rather than having the district manager or a third party do the task. Self-assessments don’t do a good job at keeping the staff accountable. People who are grading their own work will likely let their biases get in the way and won’t be critical enough to truly evaluate their efforts.

So what should retailers do instead? For starters, do away with manual audits and switch to a solution that can digitize the process. Most retail audit software let you create checklists, schedule store visits, and even have communication tools in place to keep everyone on the same page. Yes, an audit software costs money, but the time and efficiency savings make it more than worth it.

And if possible, avoid self-assessments. Have a district managers conduct the audits or consider utilizing a third-party audit company or secret shopper. You want an auditor to see your store with a fresh and objective perspective, so they can spot issues and make the right recommendations.

Pitfall #3: Failing to Document Your Retail Store Audit Properly

Failing to adequately prepare your store for an audit, or doing a half-baked job of documenting the findings, can skew the audit results and reduce the benefits you’ll receive.

To avoid this, start by clearly labeling your store fixtures and inventory before the audit takes place.

If certain items are off-limits, make that very clear by placing “Do Not Inventory” (DNI) tags on the items. These extra steps are especially crucial if employees from other stores, or an auditing firm’s personnel, will perform the audit.

As for documenting the audit itself, ask the auditors to take extensive notes and photographs so everyone’s on the same page when analyzing results.

For example, let’s say several merchandise displays didn’t follow the planogram guidelines. The auditor noted these discrepancies, which then led to action items. However, the auditor didn’t document those issues with detailed descriptions and photographs, making it difficult to verify compliance with action item criteria.

Having proper documentation — i.e., detailed notes and photographs — will prevent such issues from arising, so brief your auditors about how to document their findings.

Pitfall #4: Not Following Up on Action Items

Let’s say a manager (or other auditor) conducts a squeaky-clean audit, and provides the store with several important action items. That’s great and all, but if the store’s staff members don’t do anything about those recommendations, the audit has been a complete waste of everyone’s time.

To avoid that unfortunate outcome, promptly address each issue as soon as your budget and resources permit. Assign tasks, purchase needed items, and put processes in place to resolve each action item. Even if you can’t make a change right away, put the framework in place so the issue doesn’t slip by the wayside.

For best results, use a solution that tracks these action items. For instance, if a task is created, set an alert or a follow-up prompt if the item hasn’t been acted on after a set period of time.

Ensuring That Your Vision is Brought to Life

Having a solid vision and strategy for how your stores should operate is important. However, vision alone won’t drive traffic and sales. In-store execution is critical, and this is why audits are a must.

By evaluating your store’s processes and compliance, you can ensure that your locations are operating according to your standards. This creates an excellent customer experience that’s consistent across all your stores, which ultimately leads to more visits and sales.

Need help in improving the in-store experience? Retail store managers use CB4’s app to ensure their stores are meeting shoppers’ needs each and every time they visit. Learn more.

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