A store audit is a great tool to measure just about everything. But to ensure your audit scores predict actual performance outcomes and reflect the practices you’d like to evaluate, it may be necessary to audit your store audit before you audit.
We like things that do more, provide more, and especially those things that combine more.
Like a watch that takes calls, sends text, and can warn you of a heart attack. Or a phone whose call-making abilities are far less important than its ability to take wide-angle selfies.
The All-In-One desire isn’t new. Humans, or at least those in Western Culture, love the idea of efficiency. We’ve been on a long quest to create those things that solve many problems.
When I was around five, my brother joined the Indian Scouts (sort of a Boy Scout thing). Even at that age my idea of “roughing it” was staying at a hotel that didn’t offer room service. So, when he went on a father and son camping trip, I was more than pleased with my consolation prize.
My feigned sadness over not spending a weekend sleeping on the ground in a bug-filled forest earned me a very impressive all-in-one camping knife.
And yes, in 1971, apparently it was entirely reasonable to gift a five-year-old a device that contained two knives of different blade lengths, a nasty looking sawing tool, scissors, and a spoon, and a fork, and more.
I loved the idea of the thing. The ability to fight off imaginary beasts with its four-inch blade and then immediately use the spoon to enjoy some Count Chocula cereal. And the handy saw made short work of any cardboard cereal box. I could even sew my clothes. And if I ran out of cereal, I could use the attached special tool to fish for my breakfast.
Life Lessons Sometimes Smell Like Spoiled Milk
As I said, in theory, I loved my camping knife and was proud to have it snuggled in its leather holster attached to my belt.
In practice, however, I discovered that while each tool worked its purpose, having all those tools together made using any one of them difficult.
The spoon and fork made the hilt especially hard to grasp when using the knife or the saw. And eating cereal with the large spoon almost always resulted in some of the milk dripping into the enclosures.
My all-in-one super tool soon had the pungent odor of spoiled dairy.
But I also discovered two crucial life lessons.
One: Don’t eat cereal with the same device you use to cut fish.
Two: Just because something can potentially do “anything” doesn’t mean it’s the most effective way to solve “everything.”
Efficient But Dead Mr. Spock
Efficient function is an admirable goal, but often the cost of solving many problems with the same device is the quality of that resolution for any single issue.
Star Trek’s Mr. Spock said: the needs of the many outweigh the needs of the few or the one. An excellent observation and perhaps even right many times.
But Spock dies like two minutes after that proclamation.
More evidence that we need to consider exactly what we are giving up for the many.
That is: What is the cost to individual effectiveness when choosing overall efficiency?
Which, believe it or not, brings me to store audits.
I’ve been developing retail audits for almost twenty years. And on the surface, the usual approach to creation makes complete sense.
If we’re going to be in a location for two to three hours, then why not collect all the information we can?
Well, the reason not to is because using time efficiently can impact the effectiveness of the audit’s purpose.
A Broken Crystal Ball
As most loss prevention and operators know, audit scores don’t always correlate to shrink, sales, or guest service results.
Sometimes a location with great audit scores returns higher shrink and sometimes those who fail an audit can still return great results.
The ability to use an audit as a prediction tool is directly related to its ability to correlate scores to the factors that contribute to the condition we’re trying to predict.
Researchers understand that when testing A’s impact on B they have to control C, D, E, and anything else that might also affect the results. The more variables to contend with, the less chance we’ll be able to discover any correlation between A and B or define any relationship as causal.
Consequently, the more category questions we add to an audit, the less likely the total score will predict any single category’s outcome. Since the final audit score is an average of all the questions, the more questions we add, the more variables we create.
Also, the more variables there are to deal with the greater the opportunity for less important things to mask the more critical items.
All we will be able to state is that based on all the questions we’ve asked, this location averages X.
Well is X good or bad? Does X mean Y?
Who knows? Truth is I don’t know if the knife’s saw tool was ineffective or if the problem was the spoon and fork forced an improper grip. It works the same way as scoring the presence of associates wearing name tags is masking the things that impact store losses.
Forest for the Trees
In business, it’s important to see the big picture. To not get mired so deep in details that we forget the real purpose of our business. Audits are the same. The real purpose of an audit isn’t to score well it’s to use the results to identify, understand, and correct issues that detract from our actual business goals.
If rising audit scores don’t correlate to improved operations, lower loss, or better customer service then they don’t serve their purpose.
Likewise, if a store with low audit scores performs excellently regarding loss, customer service, and sales (or whichever metrics you define as success), then you have to ask “what are these scores measuring and of what value are these questions?”
Trees for the Forest
There is nothing inherently wrong with an all-in-one audit. When starting an audit program, an all-in-one approach can help you cover much ground and understand the points of weakness.
But not by looking at a single score.
For the all-in-one audit to have practical value, you have to get into the details. That is you have to examine all those trees that make up the forest.
If your goal, however, is to build predictions and understand correlations between conditions and outcomes then you need to trade in your all-in-one for a better-designed tool. One that serves only the problems you wish to identify and fix.
Six Steps to a More Effective Audit
If you already have an all-in-one audit, you don’t necessarily need to throw it away and start from scratch.
Using these six steps in HS Brands free downloadable eBook, there are ways to fine tune your existing audit to extract higher value.
However, as Marie Kondo suggests, you’re going to need to get rid of any questions that don’t bring you joy.
Director of Business Development & Marketing
HS Brands Global
Raymond Esposito has over 28 years of loss prevention experience, working within the department store, specialty, and grocery segments of retail. He has developed and executed loss prevention programs for over 125 retailers in the U.S., Canada, and the United Kingdom. He holds a bachelor’s degree in psychology from the University of Connecticut and is an expert witness.