LPRC - CrimeScience – COVID-19 Series: Episode 8 with Dr. Read Hayes, Tony D’onofrio, and Tom Meehan

Episode Date: May 28, 2020

What does the data say about the retail sector during the ongoing pandemic? On this LPRC CrimeScience COVID-19 Series episode, our new weekly podcast covering the novel coronavirus with Dr. Read Hayes, Tony D’onofrio, and Tom Meehan, we discuss this and more, including LPRC initiatives, wealth transfer, curbside pickup, store reopenings, data breaches, malware, and contact tracing. The post CrimeScience – COVID-19 Series: Episode 8 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. 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. Welcome, everybody, to another crime science episode in the COVID-19 series. I'm joined by Tony D'Onofrio and Tom Meehan and our producer Kevin Tran. So what we're going to do is a quick round the horn as per usual and talk about what LPRC and other research is going on to support retailers and their solution partners in their reopening and march forward. And then we'll talk about what's going on around the globe and then what to look for as far as protecting yourself and your business, your family during these especially trying times.

But what we're going to be doing right now is I'll take a quick run through what's going on with the 2020 LPRC Impact Conference, always the first week in October every year and has been for, I believe, 17 years now. And so we've got, of course, 12 sessions have been mentioned before. We're leaving the main guest presentation open right now because everything is so dynamic. And the beauty is that that will probably, as will all or most of the conference, be digital or virtual, if you will. And so we have the luxury of time since that person will not have to saddle up and travel into Gainesville and so on and have to have a much longer lead time.

But we're going to be having a particular panel right now on retail before, during, and after the pandemic strike. We've got, it looks like, three speakers. I'm not going to call them out right now, but they're going to be retailers that have been dealing with it from three different perspectives. A company who all their stores remained open and those that their stores remain closed. And then another that had kind of a mixture of both, even though all the above are charging full steam ahead now at this point. But to get the perspectives and deep dives, really deep dives into what that looks like and what the implications are for their strategies going forward, their relationships within their corporations, how their AP, LP teams are, what their org charts and responsibilities, their skill sets and knowledge, the data sets and other decision-making tools that they need to have available going forward through what we've learned and are learning every single day here. on how retail offenders are using social media, never more than now, to communicate and share some of the things that we're doing in that area of research that we were not only able to continue,

but even ramp up during this period. Another session will be around together through research. And what we'd like to do is go through and highlight some of the research that was accomplished in 2020. Why, how, what it means. And then with an eye toward 2021, we'd like to really tap into and talk with our membership about, all right, based on where we are now, but where we think everything's heading. What's that going to look like? We're going to have learning lab breakouts on the impact of face mask research that we're conducting right now. And we're looking at how the masking is, of course, enabling offenders to do things and do in places and times that they weren't before and ways that that we're working to counter that so both through research and through experience in the field and then

tying those two together into learning loops the fear of crime what's going on with that and we identified of course like everybody else three ago, that we needed to add to our secure experience or safe and secure R&D cluster a lot around the infections as we were trying to continue to attract and reattract the green shopper, the person we want there. And so we're looking at all the no low touch and so forth and what these different things mean and masking and other behaviors that people are picking up on. I've mentioned before some of the artificial intelligence, computer vision, R&D that we're involved with, some of the UF engineering faculty and computer science faculty and some of the large companies and medium-sized companies are out there that everybody will know and love that are AI people. And we're going to leverage the relationship that NVIDIA has created an unprecedented relationship by providing several of these, the largest, most powerful artificial intelligence computing A2 systems to tack on the hypergator, the supercomputer here, as well as providing a smaller, very powerful box to the LPRC.

So we'll work on that a little bit. Some more around active deterrence technologies are still going to be very critical now and going forward. In the zone 1, 2, three space, in other words, in the interior, the proximate or near a shelf or display area, and of course, the item or product itself, or that peg, for example. Some things that we've been working on, some things around detecting deviance through video analytics. Again, leveraging some of the AI on the edge in this case, before we're talking about off-prem or off-premises computing or box edge.

Now we're talking about camera edge type of computing. We'll be looking at continuity plans and linking in the partners in the business, looking at all the things and what were some of the weak and not so weak points and lessons learned there. And so we'll be taking a look at that. We've been already, as everybody knows, I've discussed before, we were looking at UVB and A lighting for precluding obviously on-site injection, unlawful or illicit injections that were happening in the restrooms, creating havoc and, in some cases, leaving people, deceased people on the premises. And then looking at extending that to sort of antibacterial. Now, of course, we're looking at antiviral and UVC and near UVC and so forth.

So some of the research going on around that. We're also doing a little more of a deep dive into offender decision making and what it looks like as they ideate alone or together and as they start to plan and then as they initiate and what that looks like searching or consolidating, arming up, collaborating, and things like that. So that's just a little bit of a taste of what will be happening. I mentioned before on the LPRC Innovate side how the advisory panel strongly urged us to roll quickly on a rapid research research or R3 initiative. So where we are right now with the curbside pickup component of that, that's part of smart transaction, which is buy, pickup, return, and so on, both in-store, at the curbside, and so on. How do we better orchestrate that for not only infection safety, but person versus vehicle conflict and de-conflict?

but person versus vehicle conflict and de-conflict. So that is underway. We're getting ready to expand that from the one giant store that we've got with some Bosch edge computing going on to elsewhere. Now that we've learned a little bit about how to do that and how to get some low-tech solutions to look at the design and layout of that area itself and then see what the response is.

What do we see in movements of vehicle changes, changes of workers, changes of the changes in behavior of customers? The low no touch is also critical, whether it's curbside or inside. And so what does that look like? And so in this case, conferring with some of the companies that work on credit card transaction, the actual SCO or self-checkout machines, and so forth. And we had a couple of calls around that last week as we continue deep planning to move rapidly. The inside return policies, and this comes back a little bit to the UVC lights and things that we'll be talking about

at impact the first week in October. So what does that look like as far as returning, particularly apparel? Apparel has been in fitting rooms and if people are trying things on and off and it's passing, of course, passing and touching their mouths and noses and things like

that. So how do we do these things the right way in some of the other pathogen spread reduction initiatives? So a little bit about that. We'll have a cluster of three for the retailers. Those set of calls coming up in about a week and a half where we're now talking about emerging and getting better. So look for those calls and then the reporting coming out of that, as well as a continued uptick in the amount of crime science podcast episodes that we put out there. And then a webinar that's under development here at the LPRC. So remember to lpresearch.org. We've got a COVID-19 landing page that we keep fresh and up-to-date daily. And we're always trying to put as much material, useful and credible material out as we can. So I want to thank everybody for listening and go over to Tony D'Onofrio.

Tony, let's talk about what's going on. Thank you very much, Reid. So as usual, there's a lot of data going on around the world. So I'll start with the updated forecast as of May 20th in terms of the different sectors. So grocery still expected to be up 11.5% this year. Drug 10.7%, super centers 12.5. What's interesting this week is that they actually lowered the forecast for mass merchandisers. They were initially projected to be up 12%. Now the projection is for them to be up 6.6%. The tough sectors are still department stores are going to be down 29%. Specialty soft goods are going to be down 21%. Restaurants are going to be down 25%. And convenience stores are going to be down 7. And convenience stores are going to be down 7.5%. Of interest to me this week from the IHL group was actually when they talked about

what happened during the lockdown in terms of wealth transfer. And this was new data. So during the lockdown, basically, we transferred from general merchandise and hospitality, $125 billion in North America, to food and drug and mess merchandiser. And worldwide, it was $285 billion. So that's how much wealth was transferred between those sectors. thing is because a lot of states designated who was essential and who was not, there was also a heavy transfer of wealth from small companies to large companies. So the estimated transfer of wealth for North America from small companies to large companies was $250 billion. That's a very large sum.

billion. That's a very large sum. CNBC this week also had some interesting data in terms of how much malls depend on retailers that are now struggling. So 14 of the 20 largest mall tenants are either apparel or department stores. And of the 117 million square feet of retail square footage in the U.S., four companies that have filed for bankruptcy occupy 75.2 million or 64.5%. So those four retailers really, it gives you an idea of what's happening in the malls and what it will take for malls to come back. it will take for malls to come back. Also this past week, Alibaba in China released their earnings for Q1 2020, and they were, again, very healthy. Their revenue grew 35%. They now have active worldwide,

a customer base of 960 million people. Of interest to me, which I've been tracking this a lot, and actually there's several articles and another podcast that have come out, they actually use a lot a concept called live streaming, and live streaming, think about a QVC network, but on steroids, with a lot of entertainment, with a lot of live, we're actually calling out your follower with celebrities and micro-influencers pushing out retail. And that concept really thrived during the pandemic for that quarter that Alibaba just reported. They own Taobao. It was up 88%.

Also interesting to me that the expansion that Alibaba is doing in their fresh supermarkets or supermarkets chain, they did extremely well. And 60% of the revenue that those supermarkets filled was actually from online orders. So it gives you an idea, again, in terms of how important stores are in terms of fulfillment centers. And you'll see that again here in another second in some other areas. Interesting also this week was an update on facial recognition and what is happening with facial recognition around the world in terms of number of countries that have adopted and so on. So right now, facial recognition is in use in 98 countries around the world. It's been approved but not implemented in 12. It's being considered

in another 13. There's no evidence of use in 66, and three countries have banned it, and this is all from visual capitalists. A 2016 study said that about half of USA adults were capturing some kind of facial recognition network when they did the analysis. Homeland Security plans to use the technology on all travel by 2023. And then there was a Pew Research study that said that 59% of Americans are in favor of implementing the tech, considering it's acceptable for law enforcement. So that gives you an idea in terms of the growth. And actually, that's one of the things that I'll be publishing actually today is an update on facial recognition. Target also came out with their earnings.

Again, they were very strong because they were one of the essential retailers. Digital online sales were up 33%. And again, they leveraged heavily their stores for fulfillment. So again, it gives you the importance of stores and physical stores in terms of the mix in terms of online versus offline. For Target, stores fulfilled 80% of the digital sales in April. Also interesting to me that there were more than 5 million that use curbside retail. And we just talked about it. Curbside, to me, is one of those areas that's going to explode going forward. And 40% of those 5 million used it for the first time. So again, it gives you an

idea of these new services that are going to emerge in the new normal are going to grow. And curbside retail is going to be one of the most important. And Walmart actually reinforced that. I already talked about Walmart sales being up also for the quarter, but they grew the number, Walmart grew the number of new customers trying their pickup and delivery service at the curve by 4X since mid-March. So again, very, very important, these new services. Sticking with Walmart, the Wall Street Journal talked about this week in terms of how, again, the CEO of the Americas, John Furness, talked about how the stores were very, very critical

in terms of fulfilling goods. And the fastest-gr growing group that Walmart saw an online pickup for shoppers is customers over 50, which again gives you an idea that we're crossing generations. We're no longer, it's no longer the younger folks. Actually, all generations are looking at these new services, which tells you again that some of these new habits will stick going forward. Also, some new data on Fresh Insight in terms of how consumers are changing. 48% of consumers need a 30% discount or more to make a retail purchase.

And what's interesting is that 30% or more is now being reflected also in luxury, where luxury really was isolated. more is now being reflected also in luxury, where luxury really was isolated. And luxury is a sector that needs retail sales to come back. And all this data is from First Insight. Bain is projecting that personal luxury goods market could be contract 20 to 35% this year. And I'm going to close on a couple of good news. One is that the number of closed stores is way down. In fact, the latest data published is of May 24th by Global Data. Closed stores are down to $104,000 or 25% of total retail stores. There's about 90,000 stores plus that are open with severe restriction, but retail is coming back. Last week, also, I did a webinar with the Loss Prevention Foundation that talked about a

lot of these trends and where we go next. And you'll see a lot more of that in the future. And I'll be updating that at the Retail Crime Summit, Global Retail Crime Summit, at the Retail Crime Summit, Global Retail Crime Summit, that the LPRC is also participating in. So that's a little bit in terms of what's happening around the world. Let me hand it over to Tom. Thanks, Tony. Thanks, Reeve. So I'm going to just briefly go through some of the risk related to cyber and information and technology.

And the first one is we continue to see an increase of data breaches reported related to COVID-19. As more folks are working from home, the data is being exposed in ways that wasn't before. I just remind everybody to be vigilant and pay extra special attention to those emails and text messages you're getting. The Ohio State Unemployment Department of Labor Services did release that they did have a data breach. The breach was large in data nature, but the exposure was limited in that they caught it very quickly. They actually reported that only a handful of people actually saw the data. This was an error as opposed to a hack where data was left unexposed. an error as opposed to a hack where data was left unexposed. So this is a very prevalent thing that's occurring now throughout the United States and really throughout the globe where there is

just a plethora of information available. So as you're continuing to use online shopping, just communicating with your friends online, just pay special attention to anything that seems outside the norm. Microsoft has released some information about a phishing slash malware specific related to Excel. There's an Excel email with an Excel document saying that it's coming from Johns Hopkins Center University related to engineering. And there's some email notifications with some information about COVID-19. This is

malware. This was widely pushed out in the last five to seven days. And it was reported heavily. Right now, it's still out in the wild. So again, the reminder of if you get an email, if you get a text message, don't recognize that sender. Take the extra 30 seconds to figure out what it is before you click on something. This is going to continue to be a challenge. We talked about text messages and phone calls related to contract tracing. And here's the challenge that will occur now is there is a host of hackers and scammers out there sending emails and text messages about contact tracing looking like it's from a municipality or a state government. Most of them are not real. New York State over the weekend actually released some public information that they will be using text message

and phone related to contact tracing. So here becomes the challenge with all of these things that occurred during a scam like this. The bad guys have taken, you know, the advantage of the situation and really went out and put a whole bunch of misinformation to try to steal information. Now you have states using the same methodology to actually gather information. So New York State was one that really went out publicly, said the phone number it was coming from, said the information they're coming from. So this is just a part of the times. And what I would say is that you need to take that extra special step to make sure that the information that you're getting is accurate. And don't give information out, give information out.

Get information in. If you do get a phone call from someone and it does feel authentic or real, remember, don't give them information. Gather that information and do your research. So with everything that's going on and states are opening up right now, actually California gave permission to open most reserves, we're going to have to change the way we think about this and just take a little bit more time to validate whether this information is real. And I use

New York State as an example, because if you are called by a contract tracer and it is valid, you do really want to take that call. So you're going to have to really spend some time, Google, take a look at what's valid, what's not. And a good rule of thumb is don't give out personal information when you do get that call. Someone's calling you to contact you. You don't need to give them a whole bunch of personal information. You can take that information, you can jot it down, and you can do your research later. That's a good rule of thumb. Anytime you get a call or a text message requesting for information is gather that information. Don't give any information back. You know, all these contractors aren't going to be asking for a whole bunch of personal information. They're really going to be calling you and setting up a process to run through.

Online shopping continues to be on the rise. And with that, continues to be fake or scam websites that are being put up to gather personal information. So it feels like every week there's hundreds of thousands of websites being built around shopping. This is not a new type of activity. It's just heightened by the online activity. So when you're doing your online shopping, there's kind of some general rules of thumb. If the deal is too good to be true, it's too good to be true. It's not real.

There was a whole host of electronic deals over the weekend at prices that were obscenely low, 90% off of MSRP. These are flyby websites. They come up, they take your funds, and they disappear. They're generally housed overseas, so there is no recourse for you. And in some cases, depending on how the payments are made, you don't have that same protection that you would from a regular credit card transaction or standard online sale. If it doesn't make sense, it probably isn't real.

That's kind of the rule to follow. You're not going to buy a $1,000 item for $10 or $100. That's not normal. And I think you just need to take extra special time. One of the things, a quick, easy thing to do is to do some research, quick Google and see how long the website has been in business. If the website's a day or two old, there's a pretty good chance that you have a problem when you're running there. 57% of folks surveyed have said that they have a heightened level of awareness with online shopping.

So all of the education awareness is getting out there. There are multiple studies, more than 50%, and all of them say that they're aware of it. But on the same token, they're also aware of the fact that they're limited in how they shop. That leads me to my next points and kind of my final point. Porch piracy is up up as we probably all suspected as we continue to buy things online people are taking advantage by just going in and grabbing those packages off the porch there's been a whole bunch of information i know reed and the lprc has done a few things on i know that we had a podcast in the past about it but with the the increase of online shipments, the port's piracy is up. The other thing that

was reported over the weekend throughout the United States was an increase in cars being broken into. This is an interesting one because it was pretty widely reported throughout the country of people opening doors and taking advantage of this. This is kind of the reverse. You're at home all the time. So in the middle of the night, someone drives through, you tend to leave your door open. You tend to get lax on some of those habits. It's just a reminder to close and lock your doors. I know that that's kind of a given, but I think now more than ever, when people are not using their cars, they're not as cognizant to that. So it's just a huge increase they're running through. And that is all I have this week. Over to you, Reid. Thank you very much, Tom. Always good advice. Well done. It is interesting about the car vehicle.

We just aren't using them as much right now. And there probably is that tendency. Well, let me go grab something out of it or another family member, maybe grab something out of the car and forgets to lock it. Or thinks the other person did. everybody continue to remain safe, wash both hands. And please let us know any and everything that you would like to hear from the LPRC, whether it be for an event, a webinar, a session, a crime science podcast episode. So from Gainesville and Fort on behalf of Tony D'Onofrio, Tom, Ian and Kevin Tran, stay safe. This is crime science. Thanks for listening to the crime science podcast presented by the loss Ian and Kevin Tran. Stay 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.