Custom Risk Model Transforms Retailer’s Operations and Risk Assessment

“Without the Custom Risk Model, our losses would be 25-30% higher than they are today.” – Risk & Compliance Manager at a leading food retailer​

THE SITUATION

With 16.5 million customers in and out of its 2,550 stores each week, security is a significant undertaking for this leading food retailer. For more than 10 years, the company has relied on crime risk insights from CAP Index to drive its security strategy, optimize operations, and safeguard its business, even as the organization and the crime impacting it has evolved.

2,500 stores nationwide | 16.5 million customers weekly | Diverse store footprint | Rising theft and violence

For this business, no two locations are quite the same. With stores located everywhere from subway stations in busy city centers to urban residential areas and even dozens of shops on remote islands that serve as the only grocery in town, the organization couldn’t rely on a one-size-fits-all solution to its security strategy.

The crime risks plaguing its stores aren’t uniform, either. In recent years, a rise in theft has led to an increase in confrontation and violence across locations. In 2023 alone, store employees experienced 1,100 physical assaults, even after interventions were put in place. This increasingly volatile crime landscape has made implementing the right security solutions even more of a priority.

THE INTERVENTION

To help combat these safety threats, this organization turned to CAP Index for a Custom Risk Model. CAP Index collaborated with the retailer to build a model that combines the company’s own internal shrink and loss data with CAP Index’s best-in-class crime risk scoring system. The model automates the risk assessment process by identifying the risk levels of each location, guiding the merchant’s security strategy and helping to optimize resource allocation. Updated quarterly, the model has become a foundation of its risk assessment process throughout the year.

Using the Custom Risk Model, the company now has:

• An objective framework for evaluating thousands of diverse stores on a national scale
• Data-backed insights that eliminate the risks of subjectivity and ensure confident decision-making
• A deeper understanding of the enterprise’s operational challenges
• Protection against liability for security risks

“The Custom Risk Model really is a cornerstone of our risk assessment or a location.” – Risk & Compliance Manager at a leading food retailer

• With many of its stores requiring a security guard, the organization needed a data-backed way to assign and manage personnel to maximize ROI on a strict security budget. The Custom Risk Model allows the company to share forecasts with guarding suppliers for when and where resources will be required, ensuring cost efficiency.
• Security technology is evolving, and the retailer needed to ensure its technology investments would have a significant impact. The Custom Risk Model helped it identify where to install safer display cases and AI-powered security cameras, as well as locations where employees should wear body cameras

BEYOND SECURITY

Helping Retailers Optimize Security and Enhance Operations with Data-Driven Insights

The Custom Risk Model’s benefits don’t end at security. While this retailer had already been relying on the model’s crime risk assessment capabilities for years, it also saw the potential in using it to understand the impacts of internal processes on shrink and loss. 

To pinpoint stores affected by operational issues rather than crime, the loss prevention team leveraged the Custom Risk Model to identify locations experiencing high losses but a low risk of crime. This helped direct them toward the appropriate operational interventions at those stores.

GIVING BACK

Investing in Community for Safer Stores

For this retailer, ensuring the safety of its stores and employees goes beyond investing in security measures. To address the root causes of crime, the organization allocates a portion of its profits to community programs and initiatives every year. The Custom Risk Model identifies specific crime concerns around its stores, guiding its support of charities that create meaningful change rather than just temporary solutions.

A DECADE OF COLLABORATION AND CUSTOMIZATION

CAP Index and this leading food retailer have worked closely together for more than 10 years, developing the Custom Risk Model mutually as the relationship has evolved. The organization is supported by CAP Index’s willingness to collaborate on a solution best suited to the retailer’s needs and experiment with new ways to solve loss prevention challenges. Today, the Custom Risk Model that is helping retailers optimize security globally is a cornerstone of the organization’s risk assessment process, powering more than just security allocation by acting as a foundation for data-driven decision-making across the enterprise.

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