LPRC - CrimeScience – COVID-19 Series: Episode 2

Episode Date: April 15, 2020

In this week’s overview, Tom Meehan (CONTROLTEK) talks online vulnerabilities, Tony D’Onofrio (TD Insights) discusses the state of retail in the US, and Dr. Read Hayes (LPRC) covers the LPRC initiatives related to the COVID-19 pandemic. The post CrimeScience – COVID-19 Series: Episode 2 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. Use Bosch Camera's onboard intelligent video analytics to quickly locate important recorded incidents or events. Bosch's forensic search saves you time and money by searching through hours or days of video within minutes to find and collect video evidence. Learn more about intelligent video analytics from Bosch in zones one through four of LPRC's zones of influence by visiting

Bosch online at boschsecurity.com. All right. Well, welcome again, everybody, to another episode of LPRC's Crime Science podcast. We're doing these special COVID-19 episodes weekly with my cohorts, Tony D'Onofrio and Tom Meehan. And today we're going to talk briefly about a few key topics. We'll talk a little bit about what LPRC is doing, what we're learning, how we're supporting the retailers and the solution partners that are in the battle. We're going to talk a little bit to Tony D'Onofrio about what's going on around the world, what are dynamics around COVID-19 now, the pathway forward. And we're going to talk to Tom Meehan as well about what are risks, what are things that are evolving, what are things that we could be doing. So I'm going to get right

into it. As we've mentioned before, last week, we've had now six cluster calls with retailers. We've talked to over 50, almost 60 retail chains. On these cluster calls, let them talk with each other and our science team to try and learn and understand the events they're being faced with and the changes there, what's changing with their teams, their business, what they're doing about things tactically, how they're starting to plan for what next as they put together checklists.

We've identified some key takeaways. One is that what we'd like to do is track changes in what's going on, how it's happening, what you're doing about it, and look for events and practices that might be transient, that may fade away versus more persistent. And so we're hearing from some of the retailers that some of the things that they're doing now, they think they may continue doing them or maybe only alter those practices slightly.

Some of the ways that they're dealing with their customers, dealing with their merchandise, how they are dealing with their own teams. So look forward to more detail as we get into that. their own teams. So look forward to more detail as we get into that. Another thing we're doing right now at the LPRC is getting ready this week to have two big calls with all of our solution partners. Now bear in mind, we've got between 75 and 80 solution partner members of the LPRC that put together all types of technologies, including, you know, Control Tech, who Tom Ian's with. So what we're doing there is we're going to have two calls because it's such a big group and talk to them about some of the

same things we've been talking with, of course, the retailers about. We're going to share with them what the cluster calls reveal, give them some insights without citing specific retailers or, of course, executives on the calls. Let them ask a few questions, but take a lot of notes. What should they be working on or changing slightly now and going forward? And let them think about what might be transient versus persistent in dynamics and actions. So that's going to be a big, big part of this week. Myself and the research team, we're working on research grant applications, mostly around deep learning AI, a little bit

around robotics, but working with federal funding agencies, University of Florida has some funding mechanisms. And elsewhere, we've been pulling together a lot of our solution partners and non-members that are some of the bigger technology guys. We've had good calls last week and this week already around that. So look for some pretty exciting, interesting things hopefully to come out of all that. How you pull off research during the middle of a pandemic, of course, you can only imagine. And when we deal with human subjects or human participants in research and strive to get IRB or institutional review board clearance, that's where it gets even more colorful and challenging to do things right, maintains health and safety at the same time, collect good actionable data.

We're also working right now on 2020 impact. LPRC impact is now, depending on who you ask, it's at least 16th year. Right now, impact is full on, full go. The big question mark, even though the venues are reserved, by and large, the content, the 12 sessions, The by and large, the content, the 12 sessions for main stage and eight learning lab breakouts have been identified. Data are either in or being collected. What we're going to be doing, though, with probably at least eight to ten of the sessions open to the general public. The balance would be LPRC member only. At the other end of the spectrum, it would be totally in-house, but yet have a digital component, of course, for those that could not attend or participate.

for those that could not attend or participate, or somewhere in between, which is probably most likely, given it's the first week every year, impact in October. So look forward to that. Additionally, of course, the strategy at session for the retailers, number ones or twos in asset protection or loss prevention, that's full steam ahead. That's gone to a three or four module professionally facilitated dynamic engagement that allows those leaders at the most senior levels to interact with each other and with some pretty neat stuff, including tabletop. So those two events which coincide with each other are full steam ahead. Look forward to more information coming out on that. The labs are continually being worked on with only one person at a time from our team in there, as well as the online website at LPRC, which is lpresearch.org.

The solutions that all of the members have that they currently have or are repurposing or developing are listed on there, as well as on the LPRC special COVID-19 landing page, which is full of links and a lot of good resources. The Crime Science Podcast, including this one, have been ramped up from one every two weeks to two to four per week. to two to four per week. We've already got, I believe, four others that have been recorded and are being edited right now. We're going to record probably another three or four this week. So look for more activity there,

as well as two more webinars are being planned. So look forward to that. Now, with no further ado, I'm going to go over to Tony D'Onofrio. Tony, can you brief us up on what's going on around the world, particularly in retailing? Thank you very much, Reid. So as I did last week, I'm going to go to a data dump in terms

of what is going on with retail and in sectors and also in some of the markets like China that are coming out. What are we seeing in those type of countries? So let me start with new data that just came out from yesterday from global data in terms of the state of U.S. retail. So let me start with new data that just came out from yesterday from global data in terms of the state of U.S. retail. So as of right now, 61% of all stores are closed, and that's nearly 260,000 stores, and it represents about 55% of the total retail space. For the month of April, retail sales are projected to be down 31% in the U.S. And for May, right now, the projection from global data is to be down 20%. In March, April, and May, retail sales will be down $217 billion. So that's an amazing number versus last year.

One of the other fun trends that I like to track is the panic buying that's been going on. And it seems to be evolving every week. So week one, it was disinfectants. And this is from a friend of mine called Greg Music. Week one was disinfectants, wipes, gloves, and masks. Week two was toilet paper and paper products. Week three was puzzles and games. Week four was spiral hams, flour, and yeast. And last week, my favorite, hair coloring and clippers. So we're now down to panic buying hair color and clippers.

buying hair color and clippers. Moving on from Forbes, prior to COVID-19, and this is read data that you also share with me, prior to COVID-19, only 5% of groceries were bought online. That has changed now. 52% of consumers have tried buying online now with 20% for the first time. But what's amazing about that is that 48% still haven't tried it. So there's still an interesting dynamic where there's still a lot of people that have not tried it. From a chain store age, 60% of consumers feel that stores should reopen by the end of May. But what was interesting in this survey is that men are much more anxious for stores to open than women. 39% of men felt that stores should open weeks earlier, and they were joined by millennials and Gen Zs, the newer generation. They also wanted retail

to be back faster. In terms of the new normal and how fast we will get to the new normal, from retail leader, China believes it's nine weeks. U.S. believes it's 15 weeks. South Korea and Germany, 17 weeks. And UK and Italy, 22 weeks. What's astounding is more than one in five believe that it will take five months to two years to return to normal. And if that happened, that would be a disaster. 65% are postponing purchases of travel and 52% for those changes to continue. 68% believe that the pandemic has changed how they will buy products and services and what they believe was important to them in terms of those products.

CNBC also this week also provided the sectors that are most struggling and the ones that may default as a result. Retail sector was number one. It was actually department stores. a retail sector was number one. It was actually department stores. With a 42% chance that multiple companies will default in the next year, they were followed by hotel and cruise lines as number two and tire and rubber as number three. And apparel was number six. Speaking about apparel, McKinsey has some really good data this week in terms of what's going to happen to that industry. So the global fashion industry, they predict, will contract 27 to 30 percent in 2020 and could get back to growth again in the 2 to 4 percent range in 2021. Luxury will contract 35 to 39 percent in 2020 and go back to growth of 1% to 4% in 2021.

If the stores remain closed for two weeks, McKinsey estimates 80% of public fashion retailers will be in financial stress. stress. McKinsey also maintains a fashion index and 56% of fashion companies were not earning their cost of capital. And they expected a large number of those fashion companies will go bankrupt in the next 12 to 18 months. So that's a lot of bad news. Let me switch a little bit to the good news and that's looking at China. And in China, retail sales were down 20% in January and February. But after they started reopening, some new trends and actually good trends started emerging. And I'll go to Shanghai first, one of the largest cities. And in March, sales in retail were up 41.3% from the month earlier. Sales and retail were up 41.3% from the month earlier.

Almost all food markets, C-stores have reopened, and the rate of resumption of work is almost at 100%. Shanghai shopping malls and also catering industry showed strong recovery, and right now they're running at 56% for malls and 78% of normal levels for the catering services. And I'll have more on the China data. There's actually a new article that will come out this week on the technologies used during the crisis and also how retail is recovering. And that article will appear later this week. So with that, I'm going to turn over to Tom to talk about some of the risks. Thank you, Tony. Just wanted to kind of give an update, and I think a little bit repetitive, but reminding everybody about good cybersecurity hygiene and just to use those same principles that you use all of the time and really take a heightened level of awareness. This week, the United States and the UK issued some guidance.

So if you take Department of Homeland Security, the National Cybersecurity Center in the United Kingdom and the Cybersecurity Association of the United States, they went together and they really went back to the guidance and talked a lot about COVID-19 and actually put some written guidance out there for enterprise VPN. So if you're at home and you're using your work computer, you should use your work VPN. If you have that as an option, you should use it. I think some of the senses of being home and being self-isolated gives you a false sense of cybersecurity. So it's important

to take the same measures that you would when you're traveling, when you're at home, if they're available. That's one of the things that I would say is the main thing to help protect it. As hackers and criminals are out there, they're looking for vulnerabilities. They're actually spending a lot more time. And the targeted targeted attacks if you're a financial institution executive a retail executive and you have access to work computer at your house you could be targeted you could be actually someone that a hacker goes after and targets specifically to get into a network to get into your computer so it's a good reminder for there another thing which is also

something that I would say is probably not COVID related, but really comes out because of COVID-19 is just when you are working at home, whether you're working on a personal computer, your work computer, to just keep an eye out for some of the strange things that happen to computers when they're infected with malware. So when you're at home, the first recommendation is if you have the availability to work on a work computer separate from your personal computer, you should. If you have kids in the house and they're playing on your home computer

and then you're going on, logging on to your VPN and doing it, there's potential vulnerabilities there. So if you have the option to use your work computer, that's one thing to do. Second, and we talked about the VPN, using a VPN or a remote desktop if it's an opportunity. Freshening, you know, keeping freshened up on cybersecurity hygiene rules, password guidance changes all of the times. And it's now two factors, kind of the basic bare minimum.

It's more important than actually changing your password. So it's something to look at. basic bare minimum. It's more important than actually changing your password. So it's something to look at. And really, if your computer is acting strangely, if your computer starts to act slow, or you start to see, you know, just a difference in your computer, that's a potential sign that your computer has been compromised. Additionally, if you wake up in the morning, and you're looking at your computer, and you notice a new software that you didn't notice before, something on your computer. All too often, when people are using work computers that are managed by an admin outside, sometimes that software gets lost because of it. And then just your general hygiene, making sure that you're keeping updates with your admin and that you have

an endpoint management or a virus software available. So I think those are good tips to use anytime, whether you're at work or at home. But we continue to see hackers and scammers directly targeting businesses, both in retail and the financial sector, to try to get into those systems where there's a vulnerability. And then my last tip is just to remind everybody of phishing emails that are out there, people that are representing themselves as different people than they actually are to try to take advantage of you. There's been a whole plethora of COVID-19 resource-related emails that are coming out that aren't actually COVID-19 resources. So there's been quite a bit of maps and dashboards with updates on COVID-19 that our malware is embedded with.

So if you're looking for a source of information, I'd recommend you go to a reputable source, both Tony and Reid and myself, actually. We all have resources available. The LPRC has a resource center. Tony's weekly newsletter and website is a good resource for information, as well as Control Tech has a COVID-19 resource center. So there are a lot of trusted sites and CDC.gov, The Who, there are so many trusted sites. Don't click on that email from a stranger that has a pretty map on it. Really focus on sources that you're aware of. That way you're keeping your computer uninfected and you're not having another disruption in this already disruptive time. Reid, back over to you. Fantastic. Thank you to both of you. I wanted to also let everybody know we're keeping track.

I'm networked in with over 100 criminologists in most countries around the world that are environmental criminologists, those that study crime and the environment and how that creates opportunities for criminals, as well as for us to better protect people in places. So a lot of interesting trends. You're going to hear a podcast coming up here with Basha, a scientist at CapIndex, where we're going to talk about some data from LA and elsewhere. But those types of studies are also helpful at that macro level to get an idea of what's going on. A lot of the variables are lagged. It's just like with a human. If there's a fatality, there's something that probably occurred two or three or more weeks

before that that resulted in that. So there's a big lag there in those tragic events and that type of data. The same thing with hospitalizations and releases. The idea is to try and get farther and farther in front of epidemics, whether it be crime in our case and loss, as well as, of course, disease and other pathologies. So keep in mind, that's an area to go to. Looking forward to working more on connected community, the digital connectivity that we need to share intel and events, news with the new technology, including Zoom and so on. How do we have more regular connections with each other? How do we use some of the platforms that are out there that allow real-time digital sharing with AP and LP with each other, with law enforcement, so we're much more connected and we know what's coming our way? So everybody, please, from Gainesville, from the University of Florida, and from the LPRC, I wish everybody a safe

and happy rest of the week. And we will be in touch next week at the same time for my producer, Kevin Tran, and for our cohorts, my cohorts here, Tony D'Onofrio and Tom Ian. And they're not here physically. Thank you to everybody. Have a safe one. 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 Laws Prevention Research Council.