Love ’em or hate ’em, doing store checks is an integral part of the job for anyone in international sales or product management. This kind of retail audit example is just as essential as your regular merchandising reports but is often overlooked during the induction of a new international business development manager.
Shouldn’t an International Business Development Manager be Focusing on Higher Value Tasks?
Well, yes & no…
I’m not saying that as an area sales manager you should be spending your valuable time writing down prices on a bit of paper that you later transfer to an excel sheet. That is one of the most soul destroying & thankless tasks in the retail world. However, as with many other tasks, it’s an essential part of auditing your distribution partner so you need to have an understanding of what to look out for and why.
Even if your partner prepares all of the data for you then you need to see the shelves yourself to get a feel for the market. Consequently, doing store checks should be part of almost every visit to an international partner.
Yes, they take a lot of time if done well, but the insights gained will more than make up for that.
What advantages does this kind of retail audit example have for a brand?
The prime reason for doing store checks is to see how your brand is performing in the market. Sometimes it becomes clear when you stand in front of the shelves WHY a particular problem can be observed in the sales figures. eg. if one SKU isn’t selling well it could be because the listings are not really as comprehensive as they need to be.
Of course, doing store checks isn’t only an integral part of an export manager’s life, but also for anyone who is selling consumer goods. However, when you’re working internationally this is probably the single most important place for you to see HOW your distributor is working. So you need to pay attention to the basics of:
- how are my products displayed?
- are my products selling well?
- how are the sales team working?
I like to take lots of photos that I can use to illustrate points later in further discussions or perhaps presentations back at home. Tip: take a photo of the store before you enter so that you know afterwards which shop it was.
Should you go alone for store checks or together with your importer?
There are cases to be made for both options.
- If you go alone, you know that you are seeing the shelves as they really are without any special preparation from your import partner.
The truly hard core version of this is to do store checks without them even knowing you are in the country, but I wouldn’t recommend doing that unless you have reason to believe you need to terminate the cooperation. You have to be prepared for someone to recognise you and report back to your partner – happened to me in Lebanon one time when I was considering changing the then importer 😬.
You can also end up spending a lot of time on the road if you have little idea of the geography of a city and how far things are apart from one another.
- Going with your importer means that you can discuss any issues at the shelf, and get the background insights into WHY certain things happen. If you have the right distributor, you can gain a really great picture of the market dynamics and drivers during store checks if you ask the right kinds of questions.
You can also potentially ask questions of store owners about which products are moving well or why consumers don’t like a certain SKU – these are harder to ask if you do store checks incognito.
This kind of retail audit example has the risk that your partner may prepare “perfect shelves” for your visit, meaning that you don’t see the true picture on the market.
I often had the experience that if you do store checks with a top manager (or owner) of your importer that they themselves often have no idea where in the store your products are located and are sometimes surprised if there are problems at the shelf.
Personally, I like to get a list from the distributor of where he’s listed and the districts, and then to pick a different district from the last visit so that I determine which stores are visited if possible. Also, don’t just stay in the capital city – take the time to make regional visits. Of course you have to weigh up the importance of the capital vs other cities (Tallinn represents at least 70% of Estonian retail spend so of course you would want to focus your efforts there) but it’s still important to get that contrast. When I was responsible for sales in Taiwan, I used to take the high speed rail for the day down to Kaohsiung on average once per year as well as visiting other cities periodically.
It’s not just about control
It’s really important for you to get a good feel of how the market works and how the shelves look, not just so that you can see if your distributor is doing a good job. Doing store checks together gives you the opportunity to brainstorm on the back of what you see about how you could increase sales or about new ways to market your product for your mutual benefit.
As an International Business Development Manager your function is also to be the bridge between your head office and the distributors. Taking the time to understand really WHY a certain partner is having problems may allow you to explain this also to your marketing team. This can be hard to really grasp if you haven’t seen the issue with your own eyes, as a problem may not seem logical from thousands of miles away.
Spending a half or full day really focused on the presentation of the products allows you to recognise best practices being used by competitors as well as to identify and find solutions for any inconsistencies in your brand appearance in that market. These are topics that you might not be able to solve alone as the international sales person responsible for Greece or Egypt but that you need to discuss together with your global marketing team.
What are the Key Components of your Retail Audit Checklist?
Like I said before, just because these questions have to be asked and answered, it doesn’t mean that you as the brand representative have to run around with a clipboard and do all the data collection and entry yourself. Automate and delegate the collection of as much of this as possible – ideally you should receive this data in advance of your visit in the form of a dashboard and report with photos. That way you can spot check how correct it is, but otherwise focus on discussing the details and implications with your importer. You can focus your time on discussing measures to improve the sales, as there’s always something you can improve. Just use a retail audit checklist to ensure you don’t miss anything critical – I’m a big fan of checklists!
- is the store generally appealing (what kind of location is it in)
- does this store match with your brand image? You probably wouldn’t list premium champagne in a discounter like Aldi, nor would you waste your energy trying to list discount baked beans in Fortnum & Mason
- how is the in store lighting? This can make a huge difference to the appearance of your shelf.
- is it clear from your shelf position & appearance what your brand stands for? Do the marketing materials support your brand values?
Price Checks and Comparisons
- what is my brand’s price positioning vs competitors (on a product group level, but perhaps even looking at individual SKUs depending on the category)
Remember that in some markets eg the EU law requires that a comparable weight price be started on the shelf (usually a kilo price) – this makes the comparison more transparent for consumers
- how are my products priced compared to my agreed recommended retail prices and the product calculation agreed with the distributor?
- what is the price index of my products compared to the category leader for my price segment? (low, mid, premium, ultra-premium prices)
It should be agreed with your importer how often his team record the prices and in which format this needs to be reported to you, or uploaded into your system. This is a basic task in this kind of retail audit example of whoever carries out the merchandising function.
Make sure that net weight, VAT rate and the parent company as well as the brand name are recorded as this will help with international comparisons. As the person responsible for an international sales area then you also need to consider how are my prices in market A vs market B. eg Lithuania vs Latvia or Poland…
Where is my brand on the shelf?
- vs my key competitors?
- vs the agreed planogram?
- is the consumers’ eye drawn towards my products?
- does my packaging make the brand easily visible? (This visibility is also affected by which competitor you’re placed next to and shouldn’t be underestimated)
Sometimes just standing as far back from the shelves as you can & squinting will give you a kind of top level impression of how your products are represented in that particular store. I know that sounds a bit weird, but trust me, it works 😂.
Competitor Analysis – a really key part of the Store Check Sheet
- which brands (international and local or regional) are on the market?
- are any new players present?
- how many SKUs do the competitors have listed compared to my range?
- are there any new products listed?
- what promotions are the competition running?
- what kinds of marketing or display materials do they have on the shelves?
- does anyone have a brand or labelling redesign since my last visit?
- are there any new product sub-categories?
- are there any new packaging formats?
This is one of the hardest parts to get a handle on when you start out in international sales. You can fairly quickly learn about your own products but it can be hard to understand what all of your competitors stand for and how they’re positioned. Remember that not all brands approach their export business systematically, so you may find discrepancies in the approach between countries.
Is my brand placed according to my brand guidelines?
Do you have guidelines for your distributors about where and how your products should be placed within their category?
- eg. should my products be placed in a block or according to their sub-categories? (a block makes it easier to see your brand when a consumer approaches the shelf)
- are all the “core range” of products listed, or any new SKUs?
- are any products out of stock (OOS)? If you have 20 flavours of crisps then it probably isn’t such a big deal if one is OOS for a couple of days. If it’s the top selling item and you realise your distributor is OOS across the whole market then it’s a different topic of discussion.
- Shelves also shouldn’t be overstocked and cluttered – this is just asking for something to get broken or consumers to be put off buying
- are the agreed promotions being implemented with all the appropriate materials?
- what about shelf signage and wobblers?
- are all the displays and products clean? (It can be hard in some climates, especially in small stores, to avoid dust settling but that’s hardly attractive)
- are all the displays in good repair – this can be a topic with cardboard short term displays that are easily damaged. Just remember that they are not ideal in most humid climates either as they just absorb moisture and then collapse…
- are the products on the shelf with the freshest expiry dates at the back?
- are all the products within your defined remaining minimum shelf life for being in retail? You might have a period defined with your importers that differs from whatever is usual in that market. eg your brand guideline might say to remove products from the shelf 1 month before expiry, whilst retail would sell until the last day (this question goes hand in hand with the returns policy). In many Asian markets, products are often returned several months before expiry creating a real headache for the distribution chain.
- is anything expired 😬 ? This gives you a good opportunity to discuss the returns policy with your importer and also to talk about stock management if he should happen to have a problem with expired goods
- is the packaging in good condition with no rips?
- are your products accessible for consumers? eg heavy items on a low shelf, nothing too high for consumers to reach
Your distributor needs to recognise, that you know which are the key points to pay attention to when merchandising the shelves. It’s your job to have that “bird’s eye view” and perhaps spot things which he hasn’t seen because he’s caught up in the day to day details – think strategically about what needs to be listed where. Great category management and merchandising can increase sales by 15-20% so this isn’t a topic to be taken lightly.
How much space do I have for my brand?
- what is agreed with this chain for this format size? (or agreed with the store if it’s an independent or traditional type outlet)
- do I have a share of shelf which corresponds to my market share?
- are all the SKUs visible which are listed for this store format (& if not, why not?)
- how many facings do my products have, also vs the competition?
In some places it’s typical for the sales reps of one company to “spread their elbows” when managing the shelves, leaving you or other competitors suddenly with less space and visibility. This has to be remedied at a higher level as soon as possible as otherwise it becomes the accepted norm, or escalates into a tit for tat to & fro that doesn’t benefit the consumer in any way.
Other Topics which you can Usefully Discuss During Store Checks
- Are orders shipped via a central warehouse or to each individual store? What is the delivery rhythm?
- What is the visit frequency of the field sales team & which tasks are they expected to perform in store?
- Is your importer using merchandisers (in-house, store own or 3rd party service)? If yes, how much time do they spend in each store and how often, and which points are they reporting? (This is probably a large basis of the data you should have received prior to this retail audit visit).
- Is your importer working with promoters at the shelves? This is probably more frequent in Asia. Again how often and for how long are they at each store type? How does their training look?
Obviously you’re not limited to these topics but they certainly lend themselves to being discussed whilst you’re out doing store checks.
If you are visiting small stores where the owner or a senior member of staff is stood at the cash desk, use the opportunity to ask questions (through an interpreter if necessary).
- what are the top selling products?
- why does competitor SKUx sell better than my product?
- FAQs about the category from customers?
- what should we as a company improve? (This can be a sensitive topic as it may imply criticism of the importer so you may need to be careful about how you ask that one.)
What about a Retail Audit App or external Retail Audit Services?
There are many companies out there who will carry out store checks for you. However these tend to be local solutions (although perhaps international companies) and cater for the needs of the distributor rather than the aggregated data that an international business development manager needs.
The same goes for retail audit apps. There are many apps out there which can be used to do a retail audit ranging from Salesforce through to smaller providers such as Storecheck. You do need to do your homework though to find out what would be best for you.
For example, if you are running worldwide operations and have your own sales teams in most territories then it probably is worth you looking at a huge solution like Salesforce to run all of your sales processes – it would be total overkill to try and use it simply for store checks, not to mention prohibitively expensive.
A solution like Storecheck has some nice functionality (pulls information such as prices out of photos etc) however I don’t know of anyone using this to aggregate data across multiple markets.
If you have a solution that you’d recommend to me, then please do reach out and let me know as I’m always looking for better ways to manage this task!
With the types of robots that supermarkets are experimenting with (DM in German, or Walmart did something similar pre-Covid) perhaps this data will be offered in future for a fee, however in most markets that is unlikely to be a practical answer to cover the full retail universe.
Follow up actions for the International Sales Manager
As I mentioned at the beginning of this post, ideally as much of the data as possible required for a retail audit should be automated and delegated, so that you have a report in front of you before you enter the first store.
Your task during the day is then to verify, and try to obtain additional insights. That way you can discuss the most important points with your importer and together you can analyse for trends (eg do we need to adjust prices? are there gaps in the listings? should the inventory management be improved? could we introduce additional SKUs to the market), define action plans to drive future sales growth and help prevent problems before they happen.
As the responsible person for the territory for your brand it’s important that you don’t get bogged down in collecting data, but instead spend your time analysing the insights and deciding which measures to take to grow sales & brand awareness.
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