Establishing foundational excellence for your company demands compliance to various requirements, and we offer our clients customized auditing programs that focus on their specific opportunities. Two common opportunities that an audit program can address are merchandise availability and pricing accuracy:
Studies show that the primary reason customers leave stores without purchasing is because they cannot find the products they want to purchase. In fact, one such study found that customers left without purchasing three times more often because of not finding merchandise than for lack of, or discourteous, service*. The vast majority of these “walkout” customers assume that the merchandise is out of stock or unavailable because it's not located in the area they expect it to be; in reality, the merchandise is often just misplaced in the store. Ensuring merchandise is out on the selling floor in its proper place is a very basic but very profitable opportunity for all retailers and manufacturers. No customer should leave empty-handed and disappointed because merchandise isn't placed per planogram specifications or because it's hidden in back rooms, upstock, and other storage areas.
As outlined in a report by the Federal Trade Commission, failure to comply with pricing accuracy laws can lead to the imposition of substantial fines and administrative or judicial orders. The Department of Weights and Measures regularly sends inspectors to retailers to verify that prices are posted and that shelf prices match checkout prices. Violations typically occur when a store exceeds a two percent error rate*. Over a five-year period, just in the state of Arizona, an automotive supply company was fined more than $170,000, and a retail chain was fined more than $450,000. In Michigan, a retail company agreed to a record $1.5 million settlement to resolve claims that it committed repeated pricing violations.
In addition to legal risks, inaccurate pricing causes customer inconvenience, dissatisfaction, and distrust. It only takes one overcharge incident to significantly damage your relationship with a customer, and some customers won't give you a second chance. It is estimated that one to three percent of customers will completely stop shopping at a particular store if they discover they have been overcharged*.
Even undercharges are detrimental to the bottom line. When prices show higher on the selling floor than what they truly are at checkout, sales are deterred and customers' perceptions of your competitiveness are negatively impacted.
With over 27 years of experience, we can help you understand which critical opportunities you need to address for your business, and we can customize an auditing program for your specific needs. At BestMark, we understand operations, technology, and research, and we know what it takes to implement an exceedingly effective auditing program:
Audit results will only provide value if that data is actually used to improve conditions at the location, so it is critical that the data is useful at the operator level. With that in mind, BestMark created GuestLink, a proprietary web-based reporting system that allows clients to create, update and track data at all levels within the organization for performance feedback, coaching, and issue resolution. BestMark clients are also able to dynamically create ad hoc reports on the fly and update customized "Action Plans." With store managers directly accessing audit results via GuestLink, issue resolution can occur at the front lines almost immediately. In addition, our auditors can share the audit results on-site with your location management to bring their attention to any issues that need immediate attention.
Contact Us to learn more about how BestMark can unlock your company's potential for ever-increasing success.
1. Customers left without purchasing three times more often because of not finding merchandise than for lack of, or discourteous, service. Source: Hathcote, Jan M. (1995). Consumer reasons for store 'walkouts' and the impact on future store patronage. International Journal of Consumer Studies 19, no. 1: 49 – 55.
2. Violations typically occur when a store exceeds a two percent error rate. Source: Federal Trade Commission Report. October 22, 1996. http://www.ftc.gov/reports/scanner1/scanners.shtm
3. One to three percent of customers will completely stop shopping at a particular store if they discover they have been overcharged. Source: Garry, Michael. (1993). Scanners: Error Control. Progressive Grocer (June): 105