How to do Retail Audit
Retail boom in
EDLP or in more simpler term pricing strategy could be a competitive advantage for any retail but as per the Nash equilibrium, price as a competitive advantage is most easily available option but highly fickle for a long term brand image. It hits the revenue stream like worms to living beings. In case of Wal-Mart, their core competency is product availability and value proliferation with IT and supply chain as competitive advantage. EDLP is a just an extra value they deliver by affect of their competitive advantage.
Let’s take value as a hypothetical position.
“VALUE” is something which can reduce the cost to consumer during the entire process of shopping. Retail audit is a tool which will help a marketer to get that value. Every retail audit will check the retail shops on the following questions:
What our consumers are looking for?
What we have which can be offered?
How efficiently and easily we can offer them?
What is Retail Audit?
It is a tool that opens up new option for strategic move in the market. It helps every Marketer to find an optimum Brand/Product portfolio for target segment with finest communication vehicle and the flexible interiors for high product accessibility.
How to perform a Retail Audit?
To perform a retail audit the marketer should keep the following views in mind.
- Psychographics of consumers- To Draft Retail value chain
- Brand Portfolio –To fill retail value chain draft with brands and products
- Retail Format- To fill the retail value chain draft with resources.
- Service blue prints- Connect the resources and brand/products in a retail value chain.
Psychographic of consumers: The value chain blue prints of retail must be design with consumer psychographic in mind. The following questions must be answered while designing the value chain blue prints.
ü What is life style of your consumers?
ü How much time they plan for shopping?
ü What is the key driver for shopping (passing time, Money)?
ü What vehicle they use usually to travel?
ü What is their disposable income?
ü Are they brand, Price or value conscious or a subset of it (BPV Analysis)?
The POC (Psychographic of consumers) helps to draft the value chain blue print for a retail business. Moving further will serve the purpose to check what brands /product mix we have to fill the draft of value chain.
Brand Portfolio: It defines the brand /product span that we have to click the consumers. Every retail product line must have a combination of products for serving the two basic strategic purposes.
- Penetration builders
- Profit builders
Most of brand/product retail portfolio is based on proliferation but if you see the effects in the long term it will cause PRODUCT PLACEMENT INSUFFICIENCY. The symptoms can be concluded by the increasing footfall but stagnation of conversion rate.
Just ask one question to yourself.
Are my products placed at the right placed inside my shop?
There is a complete psychological process starts when a consumer enters in side the shop and till he buys and leave the shop. Your products and brand are in a phase of advertisement for that time. In the first two minutes consumer view a bunch of products and the combine brand position will creates a mind set of consumers. For instance in a show room display Rado and Omega’s latest wrist watch at the gate side (Guess the brand image your shop).
The second thing comes in mind of a marketer is what should be the retail product mix of
Penetration builders and profit builders.
Whom to target?
If you believe in buzz marketing then I suggest you to target those consumers for penetration who can create a tipping point in your footfall. J
Retail Format: It has to fill the value chain of retail by resources. The main objective of retail format should be to make consumers process of shopping very cozy. The factors which affect the process are:
- People involved
- System Involved
- Infrastructure (Show Room space, Parking space, interiors, sitting arrangement)
Service Blue Prints: It connects the brand or product with the resources for accessibility to consumers. Service is not only inside the show room but also outside (parking facilitating and others).
How to analyze your performance of retail audit?
The end result of RETAIL AUDIT must be to increase the profit /square feet. Behind this figure enhancement, you can guess the mechanism of each unit and factor under a system.
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