Gaining a Competitive Advantage through Retail Audit
by George Efstathiou
If you want to improve something, measure it first! If you want to gain a competitive advantage compare your performance with that of your competitors!
This is especially true when you work in a highly competitive business environment, such as the Cyprus Retail Market.
The relative standing of your products to those of your competitors in terms of availability, visibility, promotional tools, price, etc is a decisive factor for the buyer as to which product to choose.
Knowing what you are doing better than your competitors and, most importantly, knowing what you are doing not as good as your competitors, is a very valuable piece of information and a very effective improvement tool.
You can enjoy this valuable competitive advantage by regularly performing Retail Audits.
What is actually a Retail Audit? A Retail Audit is defined as a systematic and structured study of a selected sample of retail outlets in order to gather information on a brand's sales volume, sales trends, stock levels, effectiveness of in-store display and promotion efforts, and other associated aspects. Effectively, Retail Audit is an insight into your product’s relative standing.
Why is it important for an FMCG distributor or seller to possess and be able to analyse and understand such information?
The need for a holistic approach to Marketing is nowadays greater than ever. The knowledge on one’s stand in the marketplace in comparison to its competitors is vital for surviving in a competitive environment.
Continuous monitoring of trends and changing consumer attitudes is a valuable lead indicator and a most useful tool for planning a marketing strategy and establishing a policy on pricing, promotion and distribution of your brands. Furthermore is a most useful tool in designing preventive and corrective actions.
What is actually a Retail Audit checking for? Depending on each client’s needs and requirements a Retail Audit is designed to collect information on aspects such as:
Availability of a brand on a retail outlet shelf
General condition of goods on the shelf / visibility
Position / placement within the retail outlet
Availability of price tags
Implementation of the FIFO principle
Availability and effectiveness of promotional material
Ease of access for the consumer
Volume of shelf space (also in comparison to competition)
Number of SKUs (also in comparison to competition)
The use of technology such as Tablets and 3G Communication optimizes the Audit Process, reduces reporting time, reduces human intervention and errors, provides immediate identification and meaningful presentation of problems and facilitates fast response and corrective action.
Today the need for a holistic approach to market information for the FMCG professional is greater than ever. In a highly competitive business environment under difficult economic conditions, only the smartest and the better informed shall survive.
Retail Audit puts in the hands of the FMCG seller and distributor a most valuable and effective competitive tool.