LPRC - CrimeScience – COVID-19 Series: Episode 13 with Dr. Read Hayes, Tony D’Onofrio, and Tom Meehan

Episode Date: July 2, 2020

In this LPRC CrimeScience COVID-19 Series episode, Read Hayes, Tom Meehan, and Tony D’onofrio discuss LPRC initiatives, face masks in retail, government approval rates during COVID-19, 5G, discretionary spending, business reopenings, cyber security attacks, online forums, and more. The post CrimeScience – COVID-19 Series: Episode 13 with Dr. Read Hayes, Tony D’Onofrio, and Tom Meehan 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. We would like to thank Bosch for making this episode possible. Be a leader in loss prevention by implementing integrated solutions that enhance safety, reduce shrink, and help to improve merchandising, operations, and customer service. operations, and customer service. Bosch integrated security and communication solutions span zones one through four in the LPRC's zones of influence, while enriching the customer experience and delivering valuable data to help increase retail profitability. Learn more by visiting Bosch online at boschsecurity.com. Welcome everybody to another episode of Crime Science, the podcast. I'm joined today, this is Reid Hayes by Kevin Tran, our producer, by Tony D'Onofrio and Tom Meehan. We're going to talk a little bit about what's going on in the world, what's going on at the LPRC, always with a focus, always with a focus for our members,

the practitioners out there, and others in need of information. So what we do is strive for the week before to collect any and everything we can around retailing, COVID-19, some of the civil unrest, but most importantly, some of the effects of the demonstrations on retailing and other organizations. on retailing and other organizations. So, and how do we get engaged in positive ways to reduce problems and maintain good practice and good results? We know that masking is something that was in widespread use, I understand, by doing some research back in the 1918 global flu pandemic with many jurisdictions asking and some others requiring masking when in contact with others for everybody's protection.

Same thing happened here. It started out from the WHO and even from our own Dr. Fauci and CDC and other guidance that masking may not be required. Could even be counterproductive evidently, since a couple dynamics, one face mask would be in huge demand by the healthcare workers that were in close contact by the nature of their jobs all day every day to infected or suspected infected individuals. And so for their own production and the protection of their families, let's prioritize the second that because masks are not normally worn by humans, there's a tendency for us to continually touch them, move them, not treat them as something that could be, should be sterile, and also maybe transmit more potential COVID-19 RNA from our face, the mask, to our

hands and vice versa and moving around. I guess as research has emerged that masks are a good, very good idea. Again, we're trying to reduce the spread to the vulnerable. And I think there's a couple of dynamics going on here as we read and understand and talk to experts in the area that clearly the masking is designed, just like with surgeons and other healthcare workers in the surgical suite, the idea of masking is so that you don't transmit what you may have to a patient. In this case, what we might have, and we know that anywhere from 20 to almost 50% of COVID-19 positive individuals, we have no symptoms or are very, very low or mildly symptomatic, so may not know, but yet are shedding the RNA, shedding the virus. And if we are breathing, talking, singing, yelling,

coughing or sneezing, spitting and everything else, we are spreading the virus. So the mask helps retain a lot, if not most of that material and reduce the chance of spreading an infectious dose and particularly a seriously infectious dose. I think the other thing we're looking at to ourselves and others are not only if we don't wear a mask, are we potentially infecting those that are vulnerable or those that go back infected now and are with vulnerable people, but that vulnerable people's behavior is being suppressed. And so when we don't wear a mask, we're not only not thinking of ourselves, we're thinking of ourselves only. But we're now suppressing others. They don't feel comfortable.

They don't feel safe. They can't emerge from their house, get some fresh air, maybe put a mask on and go to the store. But their mask only provides a certain amount of protection and so on. So I think that's what's under study now is to get retailers, to get shoppers back in the stores, get employees back in their workplaces, everybody to start to feel a little more confident and comfortable and safer, that that's what's a key component here, that others don't feel safe. And most people are not going to say anything. They're just going to conduct what we call avoidance behavior. And that's what we look at with fear of crime. Now we're looking at fear of infection as well and so if people aren't feeling safe because all or most people or some

people are not wearing masks, then that's a real issue and we know the other side of that is the who enforces that. I know where we are in Alachua County. Here in Gainesville, we've had mandatory masking in side spaces, stores, and others for weeks and weeks. And you still see mild to significant compliance here, but you see enough people not compliant. And that's suppressing shopping and other positive behaviors. So there's more to look at as scientists and as retailers trying to understand how do we affect this, what are subtle nudges we can do. We've all seen, or many of us have seen the video of individuals that refuse to wear masks, that are becoming violent or aggressive. And we see sometimes customers that are concerned or scared becoming the same. But again, most are not expressing their concerns.

That way, they're expressing their concerns by staying home and ordering offline. So we'll look at the stress confrontation levels. The other thing is looking at sensors and dashboards. One thing that I heard recently is being hypothesized is that there's not going to be a normal. There's never actually been a normal, but you were going to see more rapid new normals. We talk a lot about micro moments in criminology,oments in shopping, how we're trying to understand people's perceptions and their responses and then affect them in micromoments for the green shopper or the red. But now what we're looking at is what sensors and dashboards might we have that will help us understand the continuing upcoming disruptions. It might be very strategic, could be tactical, that that store operator, as well as the overall company, need to understand, hey, there's an, okay, here we go, we've got another new disruption, it's coming our way. Here's how that's going to affect consumer demand, what types of

products, how much, how people are going to want to buy them, and so on. So intelligence is going to be huge in understanding problems going forward. At the LPRC, we're excited to participate in and be a co-conductor, if you will, on a little more minor level of the Global Retail Summit. Look forward to participating in that. Impact is October 6th through 7th, virtual experience. We've already got 200 registered in the first week of open registration. So we're excited on presenting the 12 different sessions that we've got. They're going to be powerful, good content. LPRC has really for the last 16 years been known for a lot of powerful content and interaction that's combined with science. So look forward to that.

The new LPRC Knowledge Center 2.0 is now available. Kevin Tran informs me. And so just go again to the lpresearch.org. Go to our website. You'll see pointers there to the Knowledge Center and ways to interact with that. Those that have downloaded the free app off of iTunes or other app locations can also access in part the Knowledge Center. Look for LPRC also is being featured on upcoming broadcasts, or excuse me, podcast episodes on LP magazines. Got to find podcast program going. LPRC will be a focus of one of those coming up very soon. crime analyst for law enforcement analysts, for those that are looking at mapping and data and other uses to understand crime analysis to be more focused, which is, of course, very critical.

Look for LPRC to be featured on one of those podcast episodes coming up very soon. Also, you'll see that we've got some exciting topics and guests coming up on Crime Science, the podcast as well. We've got criminologists of different types talking about very significant and important things. We'll reveal that later, as well as practitioners and others. So stay tuned for that. LPRC, we continue to work away on the R3, the rapid response research. Curbside, we've now been getting the 3D footage in preparation. We'll be working in three retailers' parking lots. I had an experience the other day where I went to participate in curbside pickup,

and it was nothing short of unproductive. But so there's a lot of opportunity to make that a more cost efficient and a better customer experience. So look for that. We're also looking, as I've mentioned, on HazardNet and some other things we're doing with AI.

We're very excited again with the initiative having NVIDIA. We have Malang is a powerful leader in there. Ever seen technology? We've got Sensormatic. We've got Bosch. And we've got quite a few others coming on board here. So the artificial intelligence, particularly computer vision, but also look at things with human language recognition and understanding coming up soon here, as well as

some very cool robotics initiatives. So with no further ado, I'm going to go over to my colleague and friend, Tony D'Onofrio. Tony, if you could make us whole. Thank you very much, Reed. So I'm going to continue on the mask team. And actually masks are becoming a big fashion business and they're growing like crazy. So I'll start with DIY Joann Fabrics, which kicked off their second program, which they're calling Masks for Schools. With every pre-made mask purchased from Joann, they will donate one to a school in need. And this actually follows a program that they ran called Make the Give campaign, which passed over 200 million face masks donated last week. So Joanne is using it as a way to engage consumers in a proactive pro-consumer approach. Etsy sold 12 million masks in April,

sold 12 million masks in April, totaling $133 million. So they're becoming a fashion item. And in fact, I even saw politicians in Italy, for example, wearing a mask that was the Italian flag. So you're going to start seeing a lot more different ways to showcase what actually masks look like going forward. Also of interest this week is new data that came out of China on their mid-year shopping festival. So China has singles day, which I've talked about a lot, which is in November, but they also have a June mid-year, and it's called 6-18 because it runs from the 1st of June to the 18th of June. And they do a really good job of running these events, these events sales programs. So Alibaba had gross merchandise volume in those 18 days of 99 billion.

JD.com had gross merchandise volume of 38 billion. And HSBC expects gross merchandise volume in the second quarter to grow 32% for Alibaba and 110% for GD.com. I mention that because I think that is an opportunity that the U.S. needs to discover more, how to hold these holiday shopping events and drive more consumer engagement to digital and physical, but primarily digital. engagement to digital and physical, but primarily digital. Also this week, I saw some data in terms of the top, the best and worst rated national COVID-19 responses. This was a YouGov survey, which looked at countries with the net worst or best net approval ratings for government handling of the COVID-19. So the top five best in the world that handle COVID-19, the best are Vietnam, Malaysia, Taiwan, Australia, and Denmark.

The top five worst are Spain, France, USA, Mexico, and UK. And if you look at the highest deaths per million and you rank the countries in the world, so these are the highest debt numbers per million. UK is the worst, followed by Spain, France, US, and Mexico. So there's still a lot of pain going on in the world with COVID-19. I'm going to switch to a totally different use side of data, and this is the growth of 5G. So while we're dealing with COVID-19, 5G is in the process of being released worldwide. And it's actually a good reminder that in 40 years, we've gone through five generations of wireless technology. The 5G market is projected to be $668 billion by 2026 at a CAGR of 122%. Now, what does 5G actually give us?

So 5G is actually 20 times faster than the current 4G that a lot of us have on our phone. And just to give you an example of what that means, to download an average movie today on 4G would take you six minutes. On 5G, it will be 20 seconds. And then finally, 5G allows you to support a lot more devices. So it allows for IoT, the Internet of Things, to grow even more. 5G supports 10X than the more devices per square kilometer than the current 4G. So 5G has a lot of potential to increase the digitization

of the retail industry. And that's a technology that I keep watching very, very closely. And I'm going to end with a little expanded review of China and how they're coming out again of the COVID-19 crisis. Because, again, they went in first and they came out first. And this is focused on retail.

So this is actually McKinsey looking at an early read on discretionary spending in Asia post-COVID-19. on discretionary spending in Asia post COVID-19. So during the lockdown in China or in Asia, in the three countries that they surveyed, which are China, India, and Indonesia, discretionary spending dropped 90% at the peak of the lockdown. What's coming out now is that consumers are not rushing the stores.

There's an overall, what McKinsey calls, cautious optimism. About two-thirds in India and in Indonesia are expected to recover their income or savings lost during the lockdown by the end of the year. So that's the good news. They actually feel that by the end of the year, they'll be in much more better shape. But they found some trends in terms of how the evolution is coming. So number one, ticket size matters. So consumers are not rushing out and buying things like cars. In fact, 61% of Indonesia and 50% of Chinese are delaying buying cars, and 59% of Chinese and 39% of Indonesia are delaying buying jewelry. A lot more focus on value.

So number two, a lot more focus on value. There is increased price sensitivity in the market. Consumers expect to be spending less this year, but there are signs that there is pent-up demand for apparel, which is really important because that's the sector that's been devastated the most. Number three is a preference for trusted brands. So if you are a known brand in the market, you are actually getting more business as they come out of the crisis. So market leading brands retain significantly higher conversion rates of 60 to 70%. There is some uneasiness and guilt that consumers are dealing with in terms of not really sure that they should be buying this because maybe it's not the right thing to do this time. And finally, the fifth trend that they're seeing is digital shopping has accelerated,

but physical stores are also coming back, especially for apparel, mobile phones, and appliances in China. And McKinsey recommends that don't just reopen the stores. Rethink how the stores actually are going to play in the ecosystem going forward. Earn and maintain the consumer trust. Radiate value. Follow the consumer across channels. And more importantly, communicate purpose. And by purpose, they mean that really be socially engaged and communicate honestly about what you went through on the impact

on the service levels and the overall economy. In other words, be extremely honest with the consumers. And I thought those were really good lessons as the U.S. and the rest of the world gets going as we reopen. So with that, I'm going to turn over to Tom. Thanks, Tony. Thanks, Reid. Just wanted to kind of touch base on a couple of cybersecurity and risk initiatives or issues that are occurring.

It's hard to believe that today worldwide cases of COVID-19 have exceeded 10 million. And when you think of that number, it wasn't too long ago that we started here. Good news is about 50% have recovered. But a lot of what I'm going to talk about today is global and tying back to the United States, but I'll quickly go up. One thing to note is that 70% of organizations have increased their cybersecurity spend since COVID-19, and that has to do mostly out of necessity. COVID-19 and has to do mostly out of necessity. Cybersecurity experts have serious concerns around IT infrastructure and data. As we continue to work in the remote workplace, we continue to see an increase in attacks. And an increase that is really monumental and not seen before.

In the last about 14 days, there's been a 400% increase in reported phishing attacks. So there's, you know, when you take that number into consideration, you obviously have to take that with a grain of salt that it's reported. So there's no real understanding of what occurred post and, you know, post, what will occur post COVID and will occur pre because of those numbers that run through. But one thing that's really important to note is that these attacks are not non-discriminatory on financial value. So one of the things that cybersecurity experts, actually Deloitte, KPMG, and all of them, actually the big four consulting firms have said is that this isn't a tax that are geared towards financial institutions. These are attacks that are

broad and wide. And if you have even a few dollars in the bank, there's someone that's essentially attacking it. When you think about the uptake, it is huge in the pharmaceutical brands and the brands that are around COVID-19. So you have kind of a two-pronged approach from cybersecurity, both nation states and just bad guys in general. There's a huge attack on the pharmaceutical industry, the medical industry, and the supply chain industry. And what obviously is occurring there is the cyber criminals are taking advantage of the stressed infrastructure and the lack of resources

or the limited resources related to COVID-19. Kind of an interesting fact that is, there is this talk in the higher end of cybersecurity, the CISO, some of the organizations and groups specific to chief information security officers are talking about a global cyber event and what that would mean. into me and some cybersecurity experts are taking that same approach and they're using numbers like you know if five percent of the computer infrastructure globally went down what would the impact be you know 70 million new devices would be needed immediately um manufacture would manufacturers be able to up to keep track of the uptick how would we actually respond so the although covet 19 is a horrible thing,

it actually is opening up different ways of thinking even in the technical world. I think the one other thing that's constantly coming up now is a whole bunch of schemes and scams around social security and unemployment with the need for people to gather unemployment and trying to do taxes uh this time obviously thanks to the tax deadline there is a whole host i'm looking at a number now um they have over four million reported unemployment fraud claims where people are going on to websites, and this is from the FTC, thinking that it's an unemployment website and running and trying to get information. Obviously, that number exceeds what, in some cases, looking at the data here, what would be reported as unemployment in a week, but it's just people going back and trying to figure it out. A lot

of states are behind on it. Before I wrap up, I think we all talked about masks. And one of the things that we're starting to see on the cybersecurity side is just channels and talking. This is really in the dark web about people taking advantage of retailers and which masks are the best to conceal. So it's just a reminder that we're all gonna be wearing masks or we all should be wearing masks. And it's just a reminder that we're all going to be wearing masks,

or we all should be wearing masks. And it's just a reminder that, again, the bad guys are looking to take advantage of that. So everybody stay safe. Over to you, Reed. All right. Many thanks, Tony and Tom, for all your insights and heads up on what's going on. And we're here to learn. heads up on what's going on. And, you know, we're here to learn. We're here to discuss with everybody. We're not here to lecture. And I think that as scientists and professionals, we're trying to really be more evidence-based, less emotion-based. We're trying to advocate a little more analysis over activism that's not informed activism. And so it's a fine line, but that's really what I know in this case at the LPRC, myself and our team, we're dedicated to hopefully always every day in every way, being objective and as unbiased as humans can be, but to try and use good frameworks we call logic models or theory. And then conduct rigorous research. In other words, use logic and observation.

And then report, again, in an unemotional, unbiased way. Here's what seems to be happening according to this evidence. Here's evidence from others and so on. And these are some possible courses of action. These are some options. So we always appreciate input, insight from you all, the listeners, from anybody that's got some questions, some comments, some suggestions, we're here for you at lpresearch.org. So from Gainesville and on behalf of my colleagues, Tom Meehan, Tony D'Onofrio, our producer, Kevin Trin, I want to wish everybody a safe, productive 2020. We're here for you at the LPRC. Thank you, everybody.

Thanks for listening to the Crime Science Podcast presented by the Laws 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 Office of Prevention Research Council.