LPRC - CrimeScience – COVID-19 Series: Episode 3 featuring Gus Downing (Downing & Downing)

Episode Date: April 23, 2020

On this LPRC CrimeScience COVID-19 Series episode, we are joined by featured guest Gus Downing of Downing & Downing. Tune in to hear our discussion on current crime data, how COVID-19 is changing retail in the short & long term, risks & vulnerabilities, LPRC initiatives, and much more. The post CrimeScience – COVID-19 Series: Episode 3 featuring Gus Downing (Downing & Downing) 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. Welcome, everybody, to another episode of Crime Science. The podcast today

will be our third special COVID-19 episode where we do a quick round-the-horn briefing for everybody. What I'd like to do is, first of all, let everybody know we've got a special guest today, Gus Downing of D&D Daily Fame. And so what we're doing today with Gus is going to ask him a little bit of some questions, get his insights. A lot of what we've been doing lately is, of course, trying to understand the changes that this pandemic is creating out there, what the retailers are doing to understand and adjust. And then just as critically, as we come out of this, as we build pathways, what does that look like? So with no further ado, I'll touch briefly on a few things that LPRC is doing right now.

First off, we'll talk about crime science, right? The podcast and just released by Kevin Tran, our producer and team was delivery dynamics. So many retailers are forced or excited about moving to more delivery and those interactions with their customers in different ways in the omni or multi-channel as we look at the new normal. So we've got Domino's Van Carney, who is an absolute delivery security expert for obvious reasons. A fantastic and dynamic interview with Van. We've got other ones that are getting ready to drop. We've got crisis preparedness and executive protection

during a crisis with Brosnan's Eric White, who's got a ton of training and experience at Walmart, the Home Depot, and elsewhere in this type of crisis preparation and handling a lot of DHS training. So more on handling crises that we might have, particularly from a major upscale department store perspective. So we've got Bloomingdale's Vice President of Asset Protection, Peter Chee, another great interview, so insightful, very smart executive in Peter Chee. Pandemic countermeasures and crime changes.

Cap Index's Basha Piotroska, a VP there. She is putting together a series of crime reports and looking at how crime is changing in different metro areas right now as a result of the pandemic and how we leverage and use routine activity theory, that perspective or approach to understand how people, their behavior and routine activities, victims, if you will, or places that are victims, how those targets change their behavior and how the offenders adapt and adjust, but their behaviors are changing too. So a really neat interview with some of the reporting.

She's issued two right now, retail and then a restaurant and more to come. reporting. She's issued two right now, retail and then a restaurant and more to come. We've got another one getting ready to drop on investigative interview before, during, and after the pandemic with WZ's Dave Thompson. A really neat, I mean, we do a lot of deep dives into interviewing and interrogation, history, the different types and methods, some of the controversies and ways to get better and better. And of course, because of the pandemic, looking at how do we do things even more from a distributed or a remote way, like some chains have been doing for a while with WZ leading the way on some of the tactics in doing that. Merchandise counterfeiting and brand protection coming up

with Michigan State University's Dr. Jay Kennedy. We're looking again at a lot about the dynamics of counterfeiting and what all is counterfeited, particularly now. We see PPE, even pharmaceuticals at an accelerated rate coming in the United States that are counterfeit and dangerous in a lot of ways. So we're going to talk about that and brand protection with Dr. Kennedy. We've got another one on global crime changes. I think I mentioned before I'm involved with a group of over 100 criminologists. We have online chats and people are contributing reports, but right now the entire group around the world is monitoring and looking at crime

changes and trying to understand all the things that are happening out there. So we're going to be talking in depth in a two-part series with Texas State University's Dr. Marcus Felsen, a living legend on environmental criminology, LP Magazine's history and pandemic support with Jack Trulicia from LPM. A really neat look at how that is rolling out. We're going to also explore the LPRC retailer cluster calls, what we're learning with LPRC's own Diego Rodriguez. So look for more of those cluster calls coming up. We're going to have round two going forward in about just over a week. And in this case, we're really looking at going forward.

How do we go forward from here? What are people doing, planning, thinking? How are they doing that? We're talking, as you all know, over 60 major retail chains in the United States, Europe, and also down in Australia. There'll be another Crime Science episode, by the way, with some representatives of six major retail chains in the UK as they move and would like to establish LPRC Europe. Look for 2020 Impact and Strategy Act. You'll see coming out very shortly, the agendas are all prepared. The sessions are being developed.

Whether 2020 impact is all virtual or just partly so, and it will be at least partly digital, all 12 sessions, as I mentioned before, will be digital. A lot of research going on with LPRC. Kenna and team are working away and on multiple projects and doing what we can do without having to go into the stores right now. And then I've got now, I'm working on four different grant applications with colleagues across the University of Florida, primarily from different departments within the College of Engineering. Some really cool artificial intelligence, deep learning things that we're working on, things that I'm not an expert on, but the behavioral part is my role there. So with no further ado, what I'd like to do is go over to my friend and colleague, Tony D'Onofrio. Tony, can you give us a global look? What's going on? Where are we going?

Tony, take it away. Thank you very much, Reid. So as usual, every week I want to give you a little bit of what the stats are with retail and what's happening to the retail industry right now. This week I'm going to focus primarily on the U.S. and a little bit of some other parts of the world, but mainly U.S.

So a new forecast came out last week in terms of what's going to happen to retail in the U.S., and this was from the IHL group. And what it shows is that food is going to have a tremendously strong year. It's going to be up 13% from the initial projection of being up 3%. And this is actually an increase from the prior forecast that I shared with you on the first podcast. It's going to go up 12%. Supercenters are going to go up 14%. And mass merchandise are going to go up 12%. So those are the four sectors that are doing extremely well. And actually, their forecasts keep going up from the previous estimations. The hardest hits are department stores.

Their forecast keeps going down. So initially they were forecasted to be down 10% from the year. They're now going to be down 25%, especially soft goods, so mainly apparel. They were going to be down 1%. They're now going to be down 23%. And bars and restaurants, they were going to be up 2.5%, and they're going to be down 23%. And bars and restaurants, they were going to be up 2.5%, and they're going to be down 22%. So in general, those are the three hard sectors that are getting hit the worst. Speaking to department stores, CNBC reported this week that

about $12.3 billion have been wiped out of the market caps of JCPenney, Macy's, Nordstrom, and Kohl's. Their operating income is going to drop by 40%, and Neiman Marcus is – the rumors are that they're going to file this week for bankruptcy. So the department stores in general continue their struggles, and that's reflected actually what's happening in the malls. So Daily Beat in New York reported that mall landlords were non-essential tenants, have collected only 15 to 25 percent of their rent, where centers that have essential formats in them, like food and drug stores, have collected 50 to 60 percent of their rent. So malls and department stores continue to struggle and they will struggle coming out of this for this year. So it'll be interesting to see what happens to the sector. Our favorite team is the panic buying and what we're buying. So there was a report this week from Forbes on the top five things that we're buying online worldwide.

And the shocker to me was number one was bread makers. Maybe it wasn't a shocker, but the percentage was. The buying online of bread makers is up 652%. So we're making a lot of bread. Number two was toilet paper up 150%. And then computer monitors, hair coloring. And then I don't know how it got in the top five. This is worldwide.

Ping pong is number five. So that's what we're buying online right now. Those are the top five. Speaking to the new normal and what this thing is going to look like, Fast Company said that 88% of Americans have a better appreciation for the role technology played in helping with COVID-19. 89% see the pandemic as a good time to reflect on what's important, and 88% are actually working to improve a look at their lives. Also interesting to me this week is a new update in terms of where technology

spend is going to go because of COVID-19. And this is more general technology, not loss prevention technology, but it will impact loss prevention technology. So pre-COVID-19, the forecast was for IT spending to go up 6%. It's now going to be down 9% from the original forecast and 3.5% from the actual. The technologies that are going to get attention post-COVID-19 are going to be analytics and business intelligence, customer journeys, things like buy online, pick up in store, customer relationship management and loyalty, touchless payment, frictionless checkout, self-checkout, inventory visibility, and lots more cloud.

And then out of that, there's going to be some new categories that will emerge, and there's going to be a lot focused on putting technology on home delivery, curbside checkout, and contactless payment. on home delivery, curbside checkout, and contactless payment. On that list of new stuff is also live video and computer visions, but they were much smaller percentages. And let me add in a couple of pieces of interesting and good news. So Amazon is going to report earnings April 30th, and depending on how you look at Amazon. But this is what the analysts are expecting. They're expecting Amazon to report $73 billion in revenue, up 22%.

And that would work out to about $10,000 a second day and night that Amazon is cranking out. So that $10,000 a second. So that gives you an idea of what online is doing right now. And that's from the Guardian. And then I'm going to end back in China because they've come out already of the crisis and their reopening stores. And I'll give you an example, again, of the power of retail and the power of branding. And I'm going to go to Hermes, a luxury brand that when they reopened their Hermes Gwangju flagship stores on the first day in a 5,500 square foot small store, they did $2.7 million. That's an unbelievable amount of sales on the first day for a luxury brand, which tells you if you have a strong brand, you actually will thrive

no matter where you're at in retail. And that's going to be important in the new normal going forward. So that's a little bit in terms of what's happening in retail worldwide. I'm going to turn it over now to Tom. Thanks, Tony. Thanks, Reid. So I want to talk just about some of the risk. And really, this is a consumer and a commercial paid risk is there are a plethora of scams that are coming back to life, really centered around COVID-19. First one I want to talk to is related to text message scams. So there is both in the United States and the United Kingdom, there have been around 50,000 reports of text message scams, and they're all kind of all over the place, but

they all relate around a COVID-19 warning or message, which is geared at trying to get personal information and or payment. One of the real prevalent ones in the United States is the text message that reads something around the lines that you've come in contact with someone who's tested positive. And if you've shown symptoms or not, you should click this link for more information. And when you click that link, there's kind of two routes that go. One route is to get you to pay for a really inexpensive rapid test. So get your credit card out, put it in there, and we're going to overnight you this rapid test. Really what the object here is to get your credit card information and go ahead and steal your credit card.

The other event actually asks you to fill out some personal information, including some insurance information, to get you a free test. There's been roughly 25,000 reported incidences in the United States, the Federal Trade Commission, and around 18,000 in the United Kingdom with almost the exact same messaging that's out there. So kind of a good rule of thumb is if you get a text message from what you believe is a reliable source, it's take the time to go ahead and fact check it and get in touch with it. Go to the Federal Trade Commission's website, go to the CDC, go to the WHO's website. It is not a typical means of communication, but in these unprecedented times, it isn't unusual to get text messages that are legitimate on shelter in place, on different

guidance that's given. So I can understand why this is happening and why people are falling victim to it. Another scam very similar is people receiving voicemail messages on their cell phone, literally about the same exact messaging, but really about a test kit. You've come in contact. We've found you through tracing. Please press to or call us back type of messaging. If you answer the phone, it's an automated prompt to press a button. And again, the goal here is to get personal information and or credit card number. If you think of the law of averages, if you call a million people, you're going to get a percentage to fall for that. And then there are two other prevalent scams, both in the United States and the United Kingdom, related to other phone calls that are really around a new format of rapid testing.

So they're not actually implying that you got sick. These messages are softer, but people seem to fall later. They're almost a sales message where they imply that it's a free test kit and you just need to cover their shipping and handling. Again, the goal here is to get your information. Yesterday, I actually got off the phone with someone unrelated and they talked to me about a student loan callback scam. Actually, they taped it so they actually had the audio. And this was a very, very well done scam because the message really played on if you had a student loan and was kind of open and talked about the government packages that were available and to call and give your information. It was a true identity theft scam. They weren't asking for payment. They were really looking to help you.

They represented themselves as the federal government. All of these scams, again, are playing on the COVID-19 fears. And as you're listening to this podcast, I think you probably will go to what I thought of, well, of course, this is a scam. But the reality is in the environment today with a heightened sense of fear, these scams are really easy to play on. And just imagine you just got back from the grocery store for shopping. That first time you went out in 10 days and then you get a text message saying that you potentially were in contact with someone where you just were. It really can play on the emotions of folks. So the message is going to continue to stay the same as stay vigilant.

If you get a message, if you get a phone call that doesn't make sense, a quick search usually will yield you the result you're looking for. It pays dividends to take the extra step to validate it. On the flip side here, with all these scams going on, I received four text messages yesterday, two from nyc.gov and two from local municipalities that were giving a legitimate information so again that fact check if you're on a list and you expect to get new york city.gov text messages it makes sense that you would they're not asking you for anything so i'm not at all implying that you should ignore messages i'm just saying that someone's asking for payment or asking for personal information it's worth a second look so um i'm really excited to turn it over to Gus Downing.

Gus, I really appreciate you coming on. And I know that you wanted to talk a little bit about some of the events and trends that are going around around crime and some of the things you're hearing. So thanks for joining us, Gus. Thanks for having me, gentlemen. I appreciate it. And what I would like to talk about is, you know, doing the daily H-Day, I mean, our team kind of looks at the news, and we're reporting on what we feel is important, what, you know, the executives should see, should be aware of, and there's some really interesting trends that are going on right now.

So, and some key milestones, if we take the time to recognize them, there's a couple of things going on that are really game changers for the industry and for loss prevention and cybersecurity. But let's talk about what's going on in the crime scene, and that is globally crime has dropped significantly in virtually every category. But we are seeing a significant increase in burglaries, commercial burglaries worldwide. In the United States, they're averaging anywhere from 20 to 100 percent, depending on the locale. I mean, NYPD reported 75 percent since March 1st. And that's really the dates that we're looking at here. I mean, Boulder, Colorado had 189% increase in commercial burglaries. But for the most part, a lot of them are coming in between 20, 35, and even 40. I mean, that's really, there's a big spread there. So it's just an interesting point that should be noted. And

the bottom line is that as a result of all the 250,000 stores that are closed, the real key thing that's growing is the security guard industry. I mean, COVID is having a huge impact on the guard industry, huge impact, with Allied Universal staffing 30,000 jobs, they announced just two weeks ago, Securitas adding 1,000 positions in California. I mean, physical security has taken a front seat throughout this pandemic, and rightfully so. You know, you've got luxury stores in Chicago and New York City boarded up, much to the chagrin of the association presidents, by the way, and they fought that chagrin of the association presidents, by the way, and they fought that significantly.

And now you've got, you know, inside stores, like a Lowe's store up in Wisconsin was shut down Sunday because of crowd control and social distancing. And they had a heck of a time with it. And when they rolled out their plan to, you know, what are they going to do about it, how to address it, part of the resolution was adding a guard at the door along with another associate. So that's two people at the door, a guard and an associate, which is a significant, you know, cost expense. And also utilizing tech to track customer flows and customer counts,

which is another significant little piece here, is that people counting is becoming part of the solutions that retailers are going to be, in some cases, forced to do. And that's going to be a hot item over the next six months, especially with the fear of any kind of second wave. But really, one of the biggest milestones that's happened, and it just happened yesterday, by the way, 300 academics published a paper praising Google and Apple coming together on contact tracing apps, which is huge. coming together on contact tracing apps, which is huge, because the privacy folks and the tech folks have, you know, steered away from that until this time. So this is the first time in history where we're seeing academics support tracing, you know, of the population, which is really going to benefit a lot of other technology down the road

as we look to use it and instill it. Now, what happens when we come back and when we start coming back, as so many are working on right now? I mean, one of the biggest questions that, you know, most of the experts putting out there is, are the retailers going to test for COVID-19? You know, should they test for COVID? And that's going to be a big hurdle, you know, very shortly that they're going to have to address. And they have to make some very, you know, have to take a position on, you know, because the issue that they're going to be, you know, having to deal with is social distancing and crowd control. Because I don't see that being totally relaxed with the threat of a second wave coming. So, you know, from that standpoint, this is going to have to be a very flexible, moving resolution and plan of what the retailers have to do going forward.

Because it's all about crowd control and social distancing, obviously, as everyone knows. So, you know, from an LP perspective, coming back is going to be a real interesting position. I mean, do you make apprehensions right now? You know, there's a school of thought out there that, you know, is saying, no, you don't. You move to the preventative mode, drop your badge. You know, Target did it back in the 80s or 90s. Reed would remember that for a period of time. But from the stopping perspective, you've got a lot of folks in the stores and, you know, you don't, I don't know if you really want to make that type of a position in your store right now or that type of apprehension. You know, recently also,

interestingly enough, the federal government, the DOJ, made spitting on associates with a threat of COVID-19 is a terrorist act. And they can be charged with it now. Now that's pretty big legal act. And I don't know that necessarily the states are going to enforce it. I don't know if the retailers are going to enforce it, but certainly we're going to run into that from a standpoint of when we stop folks, you know, when we do have shoplifters, we have to stop or with the, you know, organized gangs, They're going to be using that as a defense mechanism quickly and all across the board. So what do you do in that case? And just the knowledge of knowing that there is a terrorism threat charge coming potentially,

I mean, that's going to be something that everyone is going to have to communicate. potentially. I mean, that's going to be something that everyone is going to have to communicate. It's brand new, and it's going to take some time to get out there, but it's a great proactive defense technique to use out there for all of the retailers, bottom line, because that carries some stiff penalties and takes it right out of the misdemeanor, you know, decriminalization world and puts it right into the terrorist world, bottom line. So on another note there, the lawsuits are piling up. I'm sure all of you have seen them from every aspect, from cybersecurity to sick leave, to some of the furloughs issues, and they're just piling up with all the attorneys.

From a cybersecurity standpoint, interestingly enough, if you back to some of the stuff Tony was talking about, I mean, Google is blocking 100 million fizing emails a day. They're also blocking 18 million COVID-19 malware and phising emails daily. Daily. I mean, the COVID-19 cybersecurity problem is so sizable that the Department of Justice just appointed one attorney in every district across the country to head a task force in each district that's going after nothing but that and price gouging.

There have been very, very few price gouging citations or violations that they're prosecuting. Very few. And most of those are at the smaller retailers, very small retailers, a lot of them are in poppers, so to speak. But price gouging has been reported quite a bit extensively. But the government doesn't look as though they're taking the posture of wanting to prosecute them and carry it through. So I think they're issuing warnings and such first, as they are with social distancing and crowd control. They're issuing citations.

I think it was New York that just passed a $1,000 fine for it. So they appear to be right on the verge of starting to institute that or at least enforce it. And that's going to be an issue going forward. I mean, when we really relax all of these restrictions, you know, how far does it go? I mean, do they maintain the social distancing restrictions? And each state is going to be a little different. And that's going to have a major impact on LP and how we operate as an industry and how we operate as specific teams and stores.

You know, I also want to mention, you know, I hope to see, and I think we'll see, the resurgence of the health and safety executive in the field. Over the last 10 years, the industry has totally eliminated that group. I mean, there are very few safety people in retail. And you talk safety now, for loss prevention, from an LB perspective, you basically are talking about managing your workman's compensation program. You're not really talking about in the field, you know, boots on the ground,

really training the folks in developing a culture of safety. But I think what we've just gone through, and with, you know, the implications of a virus and threat of a second wave and lasting for 18 months, I think it's something that the retailers really need to address and look at and say, okay, can we really monitor our employee populations and get in front of this so that we can be proactive and keep them healthy. And those that do, you know, have a fever or show signs, you know, are we really going to send them home? Is there going to be a better sick leave and paid sick leave for employees in retail? And that's another big issue that the retailers are going to have to deal with over the next 18 months. So there's a lot going on out there with all of these factors,

from crime to shoplifting to organized retail crime, which I think, by the way, will be very slow in the beginning. And a lot of it will be determined by the crowd size, the dynamics of the crowd in the store, the time of day, how busy it is. You know, because everybody's sensitive right now. Everybody's going to be very, very sensitive to their surroundings and who's coughing, who's sneezing and such. And that's going to put a lot of eyes looking at a lot of people. to their surroundings and who's coughing, who's sneezing and such. And that's going to put a lot of eyes looking at a lot of people. And that's going to be a deterrent, which is a great thing.

The issue is, though, once they overcome that and the ORC folks really, in fact, go do it, you know, I have a feeling we're going to see increased aggressiveness. We've already seen that the last couple of years, and everybody's been mentioning it in every study that we've all read, that the shoplifters have been more aggressive. Well, in this particular state of our environment, I think that's going to increase. I think we're going to see a direct correlation and an increase in aggressiveness and in violence, plain and simple, in order to get out and get away. So, you know, it's an exciting time. It's a great time for reinvention. And with that, I'll hand it back to Reed. Thanks so much for that briefing. Very comprehensive. A lot of insight.

Now you see why we reached out to Gus, asked him to get engaged and involved. Thank you, Tom, for the suggestion and the action on that. A lot of great thinking. And I just want to comment briefly on one of the things that you said during your briefing, Gus, of the things that you said during your briefing, Gus, and that is around over 200 research scientists across the United States pinning a carefully crafted letter. And one of the colleagues I work with here a lot, Dr. Patrick Treanor, who is a cybersecurity, he's a computer scientist here at UF and very distinguished, very young, but very, very distinguished.

And he made it very clear, too, this is designed to be very decentralized. They're looking at counties and state, not an overarching. They want it to be very transparent how it works and how it's metadata and so on. And then that it's time, it's got a shelf life, that whether it's six months or a year and six months to get clear of this thing that we're going to use this. But they all firmly believe, as you said, that we have got to understand who is infected or exposed to somebody and where they are and who they're next to. And using the technology, including good testing of different types. And that's what's going to get us out of here until we have better and better therapeutics and an actual vaccine. And applying technology to do it all.

That's right. That's right. So there you go. I appreciate that briefing very much. I thank you to Tom for your briefing. While things haven't changed, what has changed, it seems, is the increase, the sophistication, and the number, the quantity of some of these fraud schemes. And some of them, as you said, are becoming just very believable, and their timing is what makes them also especially dangerous. Because people do have to go out and get some food or do something. And then these things, they don't have to hit 100 percent. They don't even have to hit 10 percent accurately that somebody just came back from going out where they may have possibly been exposed, for example. So, Antonia, again, another great briefing.

We hope everybody pays closer and closer attention. Stay safe. Wash both hands, practice good safety measures. On behalf of Kevin Tran, our producer, I want to thank everybody for listening to another special COVID-19 episode of Crime Science Podcast. Thank you very much. Thanks for listening to the Crime Science Podcast presented by the Loss Prevention Research Council and sponsored by Bosch Security. 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 Loss Prevention Research Council.