LPRC - CrimeScience – COVID-19 Series: Episode 1

Episode Date: April 9, 2020

The LPRC would like to introduce our new series of COVID-19 CrimeScience episodes. In each weekly overview, Tom Meehan (CONTROLTEK) will talk vulnerabilities in technology, Tony D’Onofrio (TD Insights) will discuss the new normal from current events, and Dr. Read Hayes (LPRC) will cover the LPRC initiatives related to the pandemic. The post CrimeScience – COVID-19 Series: Episode 1 appeared first on Loss Prevention Research Council.

Hi, everyone. Welcome to Crime Science. In this podcast, we aim to explore the science of crime and the practical application of the science for loss prevention and asset protection practitioners, as well as other professionals. Co-host Dr. Reid Hayes of the Loss Prevention Research Council and Tom Meehan of ControlTech discuss a wide range of topics with industry experts, thought leaders, solution providers, and many more. We would like to thank Bosch for making this episode possible. Take advantage of the advanced video capabilities offered by Bosch to help reduce your shrink risk. Integrate video recordings with point of sale data for visual verification of transactions and exception reporting. Use video analytics for immediate notification of important AP related events and leverage analytics metadata for fast forensic searches for evidence and to improve merchandising and operations. Learn more about extending your video system beyond simple surveillance in zones one through four of LPRC's zones of influence by visiting Bosch online at boschsecurity.com.

Welcome everybody to another episode of LPRC's Crime Science, the podcast. Today I'm joined by Tony D'Onofrio and Tom Meehan. These are special COVID-19 episodes that we'll be doing weekly. And we'll be focusing a little bit on what we're hearing here at the LPRC and what we're doing to engage and support the industry, practitioners and solution partners alike. We'll also be getting great information from Tony D'Onofrio on what's going on out there in the world. What does the new normal look like? What are we doing to prepare going forward and so forth?

And then we'll be going over to Tom Meehan to talk a little bit about, all right, what are some of the risks? What are we seeing? What's evolving? What should we be looking out for and preparing for? And ways we might even address that will be some of the topics covered by the team each week. So with no further ado, let me get rolling here. LPRC, one of the first things we tried to do was set up a series of five cluster calls

where we have termed them. And in that case, what we're doing is we've set up a series of calls with our retailer members of which there are 65, 70 of those major chains, inviting them to get involved in the calls, get their team on the calls. And it's segmented, roughly segmented by type of retailer. uh, wild enough to try and get six to 10, uh, callers on there and get a lot of dialogue and interaction, um, uh, to get 60 to 70 is, would be beyond chaotic and frustrating. So it's gone really well. We've had our first three, um, some of the big takeaways. Um, and so far we've got big box specialty stores.

We've got small box specialty stores and and we've got fuel and convenience stores, the convenience and fuel store group in the can so far. We've got coming up, we'll have department and mass merchant, and then we'll have also food and drug. But some of the big takeaways, we're looking at the dynamics of the theft, fraud, and violence issues that they're having and looking at what's been switching, as you can imagine, in the supply chain. And we're having some good dialogue and getting some of the APLP executives that are protecting the supply chains working the logistics side as well as the store side are, even in their case, what's happening in their distribution centers and through their supply network,

not just shortages, but even they have noticed theft of things like sanitizer, wipes, and so on. So some of the cleaning and hygiene products that they are either using themselves or pushing through the supply chain to their stores, they're having some interesting problems there that they're dealing with. They don't normally put Lysol or other cleaning items into lockup like you might have electronics, as you can imagine. So they're adjusting to how do we protect hot products, regardless of what those hot products might be. So some good discussion around that. In each case, what will happen is a retailer will bring up that executive, an issue that they're dealing with, how they're dealing with it. Some of the retailers are reporting a dramatic increase in burglaries,

particularly of, of course, stores that have been closed down. They've been shuttered. I had a retailer yesterday telling me when they got the orders shut down, they had all stores, thousands of stores shut down in four to six hours. They shut them down and they were out of there. Now they've seen some burglaries. They're dealing with those. We're working with them and talking with them. Are they seeing clusters by location type of brand timing hours? What about the format or layout of the actual stores themselves? Should they, some of the discussion is around,

should we make a board up the stores? Should we look the same as other stores on that block or in that area or be different? And why would you and why would you not? If we block the ability to look into the store, well, now the offender might not see what we've got and then attempt a burglary. But at the same time, if somebody is in the store, of course, it can preclude them being spotted in the store. They're looking at different burglary and anti-burglary options. So it's just like with the COVID-19 virus, still early days, a ton of data out there that it's trying to be collected and analyzed to look at that.

So just some of the trends around the burglaries. Other stores, we had one electronics retailer, a major chain report. They've actually had a decrease in burglaries since shifting to curbside service. They've got reduced staffing now, which is a big element. We talked about guardianship before and we're seeing a lowered guardianship level

well at each of the strata. We don't have employees in the stores like we did. Sometimes no employees if the store is shuttered. So we don't have some of that natural protection by the place managers and their teams. We don't have the natural surveillance of customers that are flowing through the stores that can disrupt or increasingly report with their mobile devices. the stores that can disrupt or increasingly report with their mobile devices. They're gone, or there are not very many of them. We don't have passerbys outside like we did, vehicular or walking that are more increasingly prone to dial in, call 911, or at least take pictures and post. And then finally, we don't have the formal guardianship that we normally have from law enforcement. Many of them are out sick or they've been reprioritized. Their responses are down.

homelessness and some of what's happening as far as not just being there, but being aggressive, assertive, stealing, and other things where in one area, a major city, law enforcement agencies, we don't respond to homeless events right now. So now the retailers are forced to try and figure out how do we deal with an aggressive or even violent person, the fact that we've labeled them homeless means that we're on our own. So there's some of those dynamics to think about how we communicate, partner, what relationships do we have established before an event occurs, and so forth to think about. And so we'd like to hear from all the listeners. Please, you know, operations at lpresearch.org, always reach out and communicate with us. A couple more. One of our team, Diego, was very interested in understanding in states that have set up roadblocks and other supply

chain hindrances. Is that affecting the supply chain flow for the retailer. The state of Florida is a good example where on I-10, trying to slow down or stop or turn around or quarantine potential infected people from New Orleans or Louisiana area coming into Florida. The same thing with I-75 and 95, people that might be coming from heavily hit hotspots in the Northeast flooding into the state of Florida. And then, of course, airports are with some of the new enhanced screening is that slowing down. Now, the retailers that we've been talking to have reported they're not. Some cases, law enforcement is conducting those roadblocks and screening mechanisms, but they're allowing freight and supply chain products, you know,

or the merchandise to flow through so that the supply to the citizens are not cut off or even inhibited. So some of the high points from some of those discussions, it was a time to experiment. This is a time to experiment with front end and buy online, pick up in store. A lot of discussion around that. Some retailers have never done it, never thought about it. Others thought about it. Now's the chance to do it. And then others were pretty good at it.

So they've been scrambling there to figure that out. There's a lot of discussion around infected merchandise coming back in through returns. How do we handle returns and restocking hygiene issues and exposing employees to that? Some retailers have put returns on hold for a week to a month or more, depending on what the guidance they might be getting as far as infection rates and the survivability of a virus on packaging or on products. And then, of course, other products that have their own inherent hygiene issues. So returns were particularly interesting. Some of the fraud is there. They're seeing it. Most of the team members that we're working with are not involved very heavily in online fraud. Those are the kind

of things that Tom Meehan can address. PPE, personal protective equipment, insured supply and pushed into the healthcare community right now. But some retailers are experiencing sick call-ins, people that are just expressing, I'm not going to work in a store or distribution center right now because I live with an elderly person and those kinds of things. So the retailers are, of course, adjusting to how do they accommodate those kinds of issues with the manning issues. Some retailers on the macro level, very interesting.

They've furloughed employees sometimes by the hundreds or thousands. Very concerned. Many of those have now been hired, maybe as temps, but hired by other major retailers that are not shuttering their stores because they're food drug online? Will those people come back? And are they cherry picking some of the employees that have been furloughed for executive positions? So that's sort of a macro issue that the retailers are trying to deal with and understand the fallout because of what's coming next. A lot about

getting back to work. what are screening mechanisms that are accurate, that are not discriminatory other than disease exposure, virus exposure. So, you know, temperature, checklists, questionnaires, other observable symptoms, things like that, symptoms, things like that, so that fellow employees or customers don't feel at risk. A lot of talk around how to have markings inside and outside the store for distancing, for physical distance issues, what are technologies that might support in that area. We talked a lot about aggressive or assertive behaviors, particularly with people who are trying to intimidate,

get people out of the way by coughing or acting like they're symptomatic. So we could go on and we will on future podcasts as we hold more of the cluster calls and have more discussions. But what we're trying to do here at LPRC is document all this and the results of the five cluster calls, which are pretty extensive, as well as individual calls, we're going to put down into a white paper for LPRC members. We'll also have a special podcast and webinar, those two episodes focusing again,

a little more detail on some of these so i'm going to go ahead and turn the microphone virtually over to tony d'onofrio tony's always got the big picture he is talking to any and everybody around the world he can as well as reading what's being put out so tony if i might go over to you i thank you very much reed so pleasure to be with all of you again this morning. What I've been trying to follow and define is the new normal and where we're going next in terms of retail. I've also been tracking the data a lot and I've exactly what Reid said. In fact, I was on a call just prior to this one, listening to some London retailers to see how they're doing and reacting

to this exact crisis. So So what I'm going to share with you on these podcasts is some of the data that I'm seeing from different sources. One of the ones that's actually been very active is the IHL Research Group. And a lot of the data I'm going to share this morning is from their surveys that they recently did. So just going into the year, we actually had a very strong year. We ended 2019 strong with retail actually in the U.S. up $82 billion. And the first two months were actually really, really going well. Retail revenue in the U.S. was up $37 billion. All sectors were up except for department stores, and all sectors really had decent growth.

Then COVID-19 hit, and what you saw is major, major changes going on. For example, foot traffic in grocery stores spiked from 80% to 200%. Delivery apps, downloads of delivery apps spiked 25 to 200 percent and we went on a almost on a hoarding with uh my favorite being toilet paper being hoarded everywhere and it became actually a worldwide phenomenon and that along with other things like hand sanitizer which spikes 600 and so on so a lot of hoarding and a lot of changes really outside of the food, drug, convenience and mass merch. The rest of retail shut down exactly to what Reed said. And that was a phenomenon that was rolling around the world. The good news and the data is coming out

of China now. They're actually coming back and they're actually coming back stronger than I expected. And I will talk more about that in a future podcast in terms of countries that are coming out and how they're coming out of this crisis and what they're actually doing. Going back to the U.S., the new near-term normal, so U.S. consumers having to shop at 46 more stores to find the essentials. They also started adopting more of what were considered futuristic kind of things in services much more aggressively. So just over half of U.S. consumers actually were adopting things like bulk, bulk, so buy online, pick up in store, delivery of groceries, carry out, restock delivery. So buy online, pick up in store, delivery of groceries, carry out, restock delivery.

So a much larger portion of the population started adopting these services. And again, I can attest even my 90-year-old father in Italy was ordering groceries and having them delivered, which that's a major shift that will have an impact on retail that, again, we'll talk about in future podcasts. And finally, from this data set, the power of Amazon really was present. Seventy-three percent, for example, of the respondents from the survey had Amazon Prime. And in fact, Amazon Prime has now reached 150 million people worldwide. The other question that I've been asked a few times is, what are consumers going to do with the stimulus checks that are coming from the government? And again, there's some really early data that's already been done from surveys. Again, this was from the IHL group. And what consumers plan to do with that stimulus, 59% plan to send it back to the bank in terms of paying mortgages, debts, and about 20%

would plan to put it in the savings. About 33% is going to go to the retail. The unfortunate, when you look at the data, again, you're going to see similar kind of trends that you're seeing right now near term. Places like clothing are not going to see a lot of business. In fact, clothing was only 1%. Plans to do anything with clothing or cars or vacation, very low categories. Home improvement was about 3%.

The majority is going to be on staples, spending on 23%, which makes sense. So about 33% of the stimulus is actually going to go back into retail spending, which helps the retail market. And finally, I have also been tracking in terms of data what's happening in the crime world. And I'm asking, again, asking global retails. And there is some new data that came out of different cities in the U.S. So, for example, in Philadelphia, property and violent crime went up 16 percent during the COVID-19 and retail theft went up 59 percent after the DA, the district attorney, decided they wouldn't prosecute those crimes. New York saw a 75 percent increase in burglaries andails was especially getting hit. In fact, between March 12th and March 31st, there were 30 burglaries in supermarkets and bodegas. And that's from the New York Times.

And even D&D, which tracks crime data, saw robberies comparing this time versus last year. Robberies are up 21 percent%, burglaries up 53%, and even debts in retail up 14%. So crime is going up because of this crisis in different cities, depending on where they're at in this process. process. And I can tell you again, because I've been participating in a weekly seminar with global retailers, including based out of London this week, with the trends that you see here and you're seeing in other parts of the world where exactly the same kind of process, either the governments are trying to figure out how to provide stimulus. Retail is trying to react and go through the strategy exactly as Reid said. And so we're headed to a new normal. And that's what we'll talk about more as we go through this series. So with that, I'm going to turn over to Tom to talk about some of the risks.

Thanks, Tony. Thanks, Reid. Great information. Today, we're going to talk a little bit about risk, and I want to really start with this call today, this podcast. Normally, we'd be in a studio environment or remote, and today we're on Zoom, a conference call app that if you've been reading the news, got some negative attention. But it serves as a reminder of the risk of working from home. I think we, folks that are used to working in an office, when they get home, feel like they're actually more insulated when usually it's the opposite.

Your office settings have a lot of security protocols in place, advanced firewalls and things that you don't have on your home network. And specifically with video conferencing, there was a lot of negative buzz around Zoom. And we're actually using Zoom today, so I think it's important to say it. But the reality here was, yes, there were some security deficiencies in Zoom, but a lot of it had to do with the use cases. For instance, if you leave a Zoom meeting open and don't require a password or a check-in, anybody who has that meeting number can access it. And there were some scammers and hackers that took advantage of that by just

randomly putting in numbers. It's important to note that just about every video conference app has a similar deficiency or vulnerability. So when you are working from home and you're on your calls, take that extra step of precaution of either allowing people to not go in without being let in by the meeting host or putting a password on. It may seem like a minor thing. It may seem like an inconvenience for you. But those are the things that would really help with some of those things. It's kind of the same reminder as using a good password. So in these times, unfortunately, there are folks that are out there that are looking to take advantage of the situation. And that's just one of the ways. So every week, I'm going to try to talk about kind of

a work from home tip to kind of help run through that. The other thing I want to talk about is email phishing. And for those of you that aren't aware what phishing is, it's when you get an email that looks like it's from a legitimate source and it's not. And I know that probably over the years, people are accustomed to get that email about their bank account and it's not really their bank having an issue or a package that was delivered and just sign in to see what that is. Today, scammers and hackers are also really taking advantage of COVID-19 and sending out emails that are seemingly harmless when you look at them with attachments to give you an update about COVID-19.

So it's important to remind everybody to really, really think about cybersecurity hygiene and remind yourself to not click on links and not open attachments if you're not familiar with who it is. It takes an extra 10 to 15 seconds if you get a business-related email to do a quick Google search to see on their website

if that information is available. And I personally have seen multiple emails come to me that at first glance look very legitimate. They look like they came from an online merchant or retailer that I do business with, and it's giving you an update. And then when I look at the attachments, it's very clear that it's a phishing or a malware attempt. The attacks are through the roof globally around COVID-19. Addition to the phishing attacks, the other thing to look for is, and I call it the too good around COVID-19. Addition to the phishing attacks, the other thing to look for is,

and I call it the too good to be true email. The email with the recipe for the cure or really positive news. Let's all be realistic with each other. If there was a cure, you would hear about it on the news. You'd see it everywhere. I can't tell you how many emails I've gotten in the last two weeks

and through both Control Tech and the retail industry and talking to people where, what do you think of this email? There are a lot of folks out there that are just really trying to get you to click on that link. So it sounds pretty obvious when we're talking about it in this forum, but the reality is when things like this are going on and people are getting furloughed, that email with the answer sometimes is the easiest email to read and it's also the most dangerous. So it's a real good reminder to pay attention to those emails that are coming out and pay special attention to the ones coming from government sources like the CDC or the WHO. If you're not on the CDC or the WHO's mailing list, they're not going to

email you. So it's important to keep that in mind. One of the comments that I was speaking to a personal friend of mine, and he said, man, these CDC phishing emails are crazy. And I said, well, have you ever gotten an email from the CDC before? It's kind of that same thought process of if you're signed up for the CDC and WHO emails, then you'd expect to see them and it would make sense. If you're not, there's a likelihood that that's not correct. And then the last thing I'll talk about, which I'm definitely going to talk about every week, is take the extra step to validate facts that you get. If someone forwards you a news report, if someone gives you information,

I can't stress enough how important it is to do some fact-checking now. Facebook actually just made an announcement yesterday, officially, it was in the Wall Street Journal today, that they're in Facebook Messenger and WhatsApp, they're actually going to limit the ability to forward messages because there was a huge percentage of misleading information being forwarded through Facebook and WhatsApp, and it was reported. And they've actually taken a very drastic step, which I'm not a fan of, to say, hey, we got to limit this. We'd rather turn this feature off and stop the misleading information from getting out there, then leave it on. And it's super, super important today for each and every one of us on this call to stay tuned to podcasts like this and talk to our peers to try to dig through what's real and what's not.

And I'll leave everyone with this. In the United Kingdom today, there was a viral social media post about how 5G cell phone technology somehow was related to COVID-19. And people were setting cell phone towers on fire. And this was what seemingly, when you read it the first time, said made no logical sense, but very quickly blew up into this mass hysteria. So it's very, very important to fact check and to help your friends, family, and peers fact check. If someone has information that is clearly not accurate and there's valid sources to show that, help them. Spread the word the right way because the information that's being fed through social media, through these channels, is dangerous. It is actually dangerous in a time like this where someone could take an action based on that information. So that's all I have for today. I'm going to turn it over to Reid.

Thanks. Fantastic insight from both Tony and Tom, and very much appreciated. appreciated. And what we'll do is I'm going to kind of ease out by listing two or three things that the LPRC is doing that you can take advantage of to stay up on this. Next time, we'll talk a little bit about other crimes that might be masked by the COVID-19 crisis, just like we're seeing and hearing about in the medical profession where other illnesses are being edged out or otherwise deprioritized sometimes, a lot of times accidentally. We'll talk about some of the differences we're hearing about between the United States, Canada, Australia, and what they deem as serious or not. And then a little bit about reopening checklists and future practices. So having said that, you can go to lpresearch.org. We've got a lot of great information, including a special COVID-19 landing page, which will go out

with this podcast. You'll find that more cluster calls are going to be happening. We'll probably have around two. On the solution partner side, we just sent out a survey to all of our 78 corporations that provide security technologies and other solutions, asking them if they have unique repurposed or new solutions or solution sets that might support the retail companies now and as they reopen and go forward in a new world. as they reopen and go forward in a new world, that's going to result in a special podcast episode and a webinar episode as well. So a lot going on here to support our membership, 160 plus corporations, as well as the industry and the world at large. With that, I want to thank Tony D'Onofrio,

Tom Meehan, our producer Kevin Tran, and all of you out there. Stay safe. So from Gainesville, thank you for listening in to another Crime Science Podcast. Thanks for listening to the Crime Science Podcast presented by the Loss Prevention Research Council and sponsored by Bosch Security. If you enjoyed today's episode, you can find more Crime Science episodes and valuable information at lpresearch.org. The content provided in the Crime Science podcast is for informational purposes only

and is not a substitute for legal, financial, or other advice. Views expressed by guests of the Crime Science podcast are those of the authors and do not reflect the opinions or positions of the L.S. Prevention Research Council.