Wouldn’t it be nice to be able to determine the volume and types of crime to expect at a certain location before you open a store – or, even better, before you purchase the property or commit to a lease?

Doing so would give you a greater sense of the crime-prevention systems you’d need to install, how much security personnel would be required – or it might indicate that an alternative location ought to be considered.

Some retailers have a pretty good idea of how much crime to expect for given locations. Target, for instance, incorporates predictive data from CAP Index with information it has gathered internally to predict how much crime is likely to occur at any given store. It uses this information to invest in anti-crime measures, in terms of both technology and security personnel.

“We like to say we ‘Targetize’ the CAP Index scores by taking the risk that CAP Index assigns to a given location and adding information that we believe reflects the risk associated with what we have actually found in our own business,” says Rod Borsch, senior manager of assets protection for Target. “We can make our stores safer for customers and our employees.”

Until two years ago, Target “just took the information out of the box from CAP Index and used it,” Borsch says. “Now we can tailor it to our environment. We can give heavier consideration to certain factors that we consider an element of risk that might not be as big a factor to other retailers.” Exton, Pa.-based CAP Index is “very good at working with us so that we can tweak the process as needed.”

CAP Index utilizes a form of predictive crime forecasting that “scores” a specific address based on the likelihood of crime. A score of 100 is considered average risk, while 500 indicates greater investment in anti-crime measures is warranted.
 

	CAP Index uses a scientific method of analyzing a wide range of data to assess crime risk; company executives say that more than three dozen variables are put into the mathematical formula before predicting the likelihood of crime at a given location. Race and ethnic make-up of the neighborhood are not considered as factors, but
other demographic information – including actual crime reports – is.

“We understand all the risks that go into predicting crime, so retailers don’t have to rely on a few hunches,” says Jon Groussman, president and COO of CAP Index.

Alternate applications
Retailers also can use the CAP Index for other purposes. Some companies rank their stores based on the CAP Index scores, and then compare actual crime results. In so doing, they might find that a store that was expected to have a high crime rate actually had a lower rate than stores with better CAP Index scores. Retailers can investigate to determine what the store with the low crime rate is doing right and apply those lessons to other stores. A retailer can use it to identify stores that aren’t meeting expectations in terms of crime prevention.

“You can be more cost-effective if you make your security decisions based on actual risk rather than what you believe is the case,” Groussman says.

Target has used CAP Index data to evaluate the security performance of individual stores. “Our job is to make sure we have the right leadership,” Borsch says. “We have high expectations when it comes to preventing crime. This helps us evaluate the leadership in the stores.”

Using the CAP Index, retailers can work with their real estate departments to better “understand the crime risk associated with each new property under consideration,” Groussman says. The scores “would not tell a retailer not to locate at a particular location, but it is something retailers might want to think about if there are different locations under consideration; they’ll need to factor in the additional cost of security for certain locations.”

And if several locations are under consideration, the data may aid the decision-making process. “We do this by block groups,” Groussman says. “Sometimes a retailer may find that if they locate a store one-half mile to the south, there is a high risk of crime; if they move the store one-half mile to the north, the situation is much better [even though] both locations would serve the same neighborhoods.”

Target considers crime-prediction scores when it is scouting new store locations, but they are “certainly not a deciding factor,” Borsch says. “If we thought one location would get more foot traffic than another we might locate there even if there was more crime risk.”

Crime score profile
And while the purpose of the CAP data is to predict the likelihood of crime against persons or property, many retailers have found a strong correlation between the CAP score and the volume of shrink, other types of loss and workers compensation claims filed at specific locations, Groussman says.

“Crime is often a sign of social disorganization within a neighborhood,” he says. “If we know a specific store has a high crime index, we can predict that there is a strong likelihood of other forms of social disorganization.” (Target has not used the CAP Index information for predicting workers compensation claims, but it is considering adapting the information for other security purposes, Borsch says.)

Because “a lot of crime is never reported to the police,” CAP Index also has 81 of the Fortune 100 companies “reporting to us about crimes at their individual stores,” Groussman says.

Retailers can get crime predictions online in real time; in most cases, a retailer can get a score for a particular property in about 90 seconds. Information is typically updated annually.

“We do a good job in mitigating risk, but we do find risk may be increasing in certain regions,” Borsch says. “We typically do not see a dramatic change in risk from year to year at any given store, but we do sometimes note subtle increases in the risk at certain stores and we know how to react if we can see those changes.”