What frequency should you be auditing your stores?
Shelvspace is working with several companies that are using their own field teams to conduct store audits. We also have several companies that use outsourcing or crowdsource as a way to monitor their activity to our partners.
One of the first questions we often get asked is, “How often are others going out to stores and performing audits?”
Our answer to them is, “It varies greatly and for several different factors.” However, in our experience, the common Industry approach usually falls into one of these buckets:
1. Spot Check – Let’s collect information randomly when we can and share it. Unfortunately, many that leverage broker networks and don’t have their own field teams, or those that have not truly baselined their retail execution fall into this trap. Initially, It feels good to get some extra visibility, but tends to fall short when it comes to finding and fixing root causes. This technique however can be effective for cases like validating a new product launch or confirming execution of new promotions.
2. Random Sampling – This is the most economical store audit approach. A company does a sampling of their key accounts on a periodic basis. Some managers are skeptical of this auditing approach since they are not getting a full picture of the entire retail coverage. However, so long as you set the right sampling size and frequency this can be very effective at systematically finding issues and providing facts to the people needed to fix them.Remember that retail execution doesn’t always require hardcore statistical modeling. You just need to make sure your products are placed correctly on the shelf, and to know whether or not they are your best selling accounts. Doing as little as 10-20 store audits per month or every two months across a wide set of accounts will provide your team with a good foundation for problem and opportunity identification.
3. ABC Sampling – Brands might use many methods of sampling, but one method is to group their stores into A, B, and C accounts based on top selling brands. One of the best examples of ABC Sampling is to sample 10% of the top accounts and then 10% of the bottom accounts. This allows you to collect additional facts beyond data to help improve your sales team. With additional information, you’ll be able to answer questions like, “Are the sets different? Are stores having out of stock or other issues? Are your competitors doing things differently?” Pictures can also help answer many questions compared to relying only on what the data provides you.
4. Full Account Audits – The last approach is auditing all of the stores.The economics of this sometimes work if you are a top selling brand and/or there are a large number of retail execution issues that require resolution. The ability and ease of doing this has greatly increased recently due to crowdsourcing options and is also sometimes effective for doing initial baselining before moving to a more sampling based effort.
Have a store audit gameplan
In summary, don’t just spend money to spot check accounts without a game plan, or use a repeatable system of performance management. Instead, have a process to actually fix it. The last thing you need is another random data point that tells you things are off with no way to take action.
The good news is doing all of this has become way easier today. Try a free store audit by Shelvspace or demo the solution for free. For more information on audits or on execution fixes to common store condition problems, please reach out to us here.