LPRC - CrimeScience – The Weekly Review – Episode 104 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: May 27, 2022

Facial Recognition Stops a Kidnapping! LPRC Speaks in Front of Convenience Store CEOs! In this week’s episode, our co-hosts discuss the influence and future of AI, the stock market tumble, the growth of Walmart’s drone delivery program, Zara’s charging of online returns in the UK, and the opening of Amazon’s first physical apparel store. Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 104 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio appeared first on Loss Prevention Research Council.

Hi, everyone, and welcome to Crime Science. In this podcast, we explore the science of crime and the practical application of this science for loss prevention and asset protection practitioners, as well as other professionals. We would like to thank Bosch for making this episode possible. Take advantage of the advanced video capabilities offered by Bosch to help reduce your shrink risk. Integrate video recordings with point-of-s sale data for visual verification of transactions and exception reporting. Use video analytics for immediate notification of important AP related events and leverage analytics metadata for fast forensic searches for evidence and to

improve merchandising and operations. Learn more about extending your video system beyond simple surveillance in zones one through four of LPRC's zones of influence by visiting Bosch online at boschsecurity.com. Welcome everybody to another episode of Crime Science the podcast from the LPRC. This is the latest in our weekly update series and as always joined by our partners here Tony D'Onofrio, Tom Meehan, our producer Diego Diego Rodriguez. And today we're just going to kind of take a quick trip around the world and discuss things that we're pulling out that seem not just interesting, but hopefully useful. You know, I'm trying to slowly but surely curtail some of the the SARS-CoV-2 slash COVID-19 pandemic news, but still a little bit of relevance here. COVID-19 pandemic news, but still a little bit of relevance here. And always interesting to look at places like, in this case, San Francisco, California, that's dealing with a myriad of issues. But one now is that they are double the U.S. average in reported COVID-19 case rates,

that it continues to spike, continues to grow. Massive infections, evidently, in the San Francisco area. And so a lot of articles reporting around that and what's going on, the dynamics, where it's heavily vaccinated, heavily masking and distancing and isolation crowd, but they are starting to come out and about. And there are people that never were compliant with whatever the latest guidance might be, but that why would now all of a sudden a spiking? And so it's just interesting, are they a naive population from some other standpoint? So we'll stand by and see what is this. Is this some kind of case study, but that the fact that the number one infection location it looks like statistically is San

Francisco Bay Area. The next is, again, some overviews about how do we get ahead of this and try and, in this case, also curtail this type of pandemic in the future, which we're all for that. But looking at different better surveillance techniques and trying to do some deep dives. And even the CDC, I guess, has been doing some self-reflection going back from way before there was a reported cases or suspicions and all the way up till now, trying to understand what went right, what went wrong, what needs to still be understood, which is probably most of it. But understanding that probably better surveillance across the globe, better surveillance in certain areas.

We know that it was learned that maybe doing some sewage monitoring and things like that. But they're trying to look at representative surveys because most people are not getting tested. And testing is a critical part. And we talked about before, if any of us are doing home testing and we see that we are positive or we're not positive according to the test, then we're probably not going to report or do anything about it specifically to the government, the CDC and the FDA and the state and county health authorities and so on are probably not going to know one way or the other unless we go to a physician and then they're bound to report it. So just interesting how to get better

testing, but maybe through representative surveys like we're all aware of in our area of criminology and loss prevention, asset protection. We're all you know, we all fill out surveys to try and understand. We all strive to ensure that the population of interest that we're interested in, in other words, the population, is represented in those that complete our survey. So, if we get a survey that's not representative, then it's not really worth the time. It could give us some indicators, but directionally, but that's where it is not representative, then it's not really worth the time. It could give us some indicators, but directionally, but that's where it is. So better surveys, more complete surveys, broader surveys. So you'll see that probably in the future, along with what they talked about,

sewage monitoring, antiviral uptake. Our physicians, what are they prescribing that might be, not just for COVID or whatever, but are there patterns or something with infectious diseases? That's what they're interested. We're all interested in. We know that acute and sometimes persistent illnesses are certainly critical, can be deadly and debilitating, but it's the infectious diseases we're talking about here today. But looking at prescription patterns along with representative surveys, and then what testing data are available, and then finally sewage and other monitoring, so that we maybe will have earlier warning and be able to get ahead of these things and not go into panic lockdowns and other things like that. Masking is probably going

to continue sporadically or in specific areas, certainly with individuals that are immunocompromised or more vulnerable to get serious disease or worse, or if they are infected, are more likely to infect somebody who is highly compromised and it would be dangerous. So, you know, I think all of us never wanted to wear masks, don't like wearing masks, but there are times when some of us are out there going to wear masks and should wear masks. But if we're going to mask, it sounds like a KN95 or N95 even better, and maybe even with some other mask helping that. So stay tuned on all that. The next part being, I guess, again, we've mentioned this multiple times,

Stay tuned on all that. The next part being, I guess, again, we've mentioned this multiple times, better multiviral testing for RSV, for influenza, as well as coronaviruses and other viruses to understand what is the course, we'd go on, and we won't go through it this week, all the vaccine development to come up with something that's much more effective, more persistent than what we've got right now, which are proving highly effective to serious disease, but not very persistent necessarily. Time will tell, and certainly not highly effective against infection prevention. So, we'll next turn to, let's go over to LPRC and take a look at, you know, again, last week was a wild one for me anyway from a travel standpoint, but getting the opportunity to go to Chicago and work closely with the CEO Summit from NACS, the National Association of Convenience Stores. You know, a lot of top flight, highly capable, very intelligent leaders of some of these very highly successful convenience store chains, getting to talk with them, listen to them and talk with them about a little bit about robbery and other issues they've got, but mostly the focus was on the harm that comes from panhandling, from aggressive street behavior, the intimidation that can occur from certain behaviors that are not normal shopping behaviors. And this is nothing

new. We've known as scientists for years and years that when one or more people are not doing acting in a certain place or space as that space is designed for, if it's a shopping environment, you're either not working or shopping or delivering there, that can put others off. Obviously, we're hardwired to be concerned for self-protection and preservation. And so it's intimidating, particularly it looks like in surveys for females. So encampments that impede individuals and impede entry are intimidating. And so an individual is going to make a U-turn, not go in there or not come back. Individuals are collapsed or passed out in the doorways or entry-exit ways, not only creating a fire hazard, but precluding people coming in and out and even wanting to go in. And then we looked

at imagery of people collapsed on the floor, defecating on the aisles, on the floor, passed out in restrooms, overdose and passing away in the restrooms and a lot of infections that have occurred, a lot of unsanitary conditions, I mean, horrific conditions around some of these places. So, you know, what's the bigger issue? What are options and ways to work on this? How can retailers support the community, that neighborhood, but also take care of their customers and employees so that they want and will shop and work there. A lot of good feedback. I think there's a possibility of more of these convenience store chains joining the LPRC community, getting involved in some of the research is what I heard, as well as with NACS overall. So stay tuned. Another good adventure over to Charlotte, North Carolina to the LP

Foundation Town Hall event. There were a lot of loss prevention practitioners, asset protection, a lot of solution partners, a lot of good dialogue, re-engaging after being holed up for so long, a little bit like what we saw at RELO where people were just excited to be out and about. And we had the opportunity to learn from some very learned people, Oscar from Target Corporation, Rick Peck from TJX, and several others in the room, a lot of personal engaging. I was able, with Terry Sullivan, to go through some excellent research, a lot of personal engaging. I was able with Terry Sullivan to go through some excellent research, some of the a lot of excellent research conducted by Dr. Corey Lowe on the LPRC team and engage around looking at organized retail crime. What are we learning about it? What are helpful things that we can know and do. The theme that we're sort of developing here that I talked a little bit about there in Charlotte was, you know, first and foremost, we've got to get better at protecting our own merchandise, our own goods in our supply chain and in our stores before we, you know,

as a first step. That's the first, that's what feeds the problem is boosters stealing or committing fraud, others committing fraud in there. Sometimes this even becomes violent. And so how do we get better at in-store production? To that end, you know, Corey is also doing a lot of research, we all know, on product protection. The Product Protection Summit is this June. We'll also be talking about the National Retail Security Survey. Some of the revamps we're doing and enhancements in year one will continue to enhance and improve. Year two, also work on the Organized Retail Crime

Study, all for the national and with the National Retail Federation. And so we're going to be learning through the Product Protection Summit and then through some of these surveys more and more and getting deeper and deeper into what seems to be working and what doesn't or what are opportunities to learn more. The next part we're looking at in ORC is after improving and enhancing our own in-store protection. And this really ties to me directly into the next one. And that is building the partnerships, better and stronger partnerships with each other, which retailers are notoriously good at, particularly on the ORC front, ORC investigators working together or working with law enforcement, but even getting better with

educational programs. LP Foundation has been working on one. The Broward County Sheriff's Office in South Florida has been administering that program to all frontline supervisors, to all patrol during their in-service training, to all field training officers, FTOs, in their case, FTDs, deputy sheriffs, field training deputies. And so trying to roll out and help them understand the real harm created by organized retail crime, how to discriminate a probable boosting situation versus what we hate to say, but an ordinary or non-ORC shoplifting event. And then the second level is working with prosecutors, again, helping them understand the real harm created individually, the people there from these crimes that work and shop there to that place that's being victimized and wiped out, how they lose customers because the good customers come in and they've been wiped out of what they came for by boosters, by organized retail

crime events, helping all of us understand that, and then starting to do some pre-planning. Okay, how might we do this? How might we do that? What makes a good case in this jurisdiction? And we know that each and every of almost 19,000 law enforcement agencies have different policies and sometimes within different districts or zones or beats, they might have that or precincts. So how do we get more coordination, more pre-planning? And again, the same thing with the prosecutors, the state attorneys or the district attorneys, the prosecutors, the state attorneys or the district attorneys, as they're called in different areas? And how do we help them get better up to speed, get more depth at spotting and more effective at reporting and prosecuting? And how can we support all that with better and better

evidence? Which goes to the next one, and that is working away on getting more sources of positive identification of offenders on site at that time, more facial recognition and feature matching across the individuals, different features, biological, biometric features, including face and ears and arms and hands and gait, feet, also things like clothing or other items of use, their vehicle, make, model, color, other stickers or toolboxes or whatever might be there damaged to them. Also things like their digital signatures from their smart devices or the Bluetooth signatures from their wearables, things like that, so that we're getting more and more evidence in tying the exact offender to that exact place and time and crime event. individual to other offenders and those offenders to crimes and all of the above to those specific places and times and crime events to help support better continuing criminal enterprise prosecutions,

things like RICO, Racketeering Influenced Corrupt Organization, types of criminal and civil proceedings that can take place so that we're not bound to dollar amounts that are being taken, but rather the crime and the systematic crime and the harms that these offenders are creating for their victims. And so those were some of the things we talked about. And finally, the ribbon on the top is helping create standardized narratives that include all the elements of the crime. Normally, there's three to six elements of any crime that have to be demonstrated, supported with evidence. Those need to be clearly, concisely articulated in a report, and the individuals involved clearly and concisely identified as committing each and every one of those elements, proving or supporting the idea that this was intentional as

well as the act. So, you know, those are the things we talked about getting better and better that and all of them support each other. If we're better taking care of our own merchandise, the prosecutors and the popular narrative out there and even law enforcement officers are less likely to point the finger or be reluctant because we're so readily victimized and don't seem to be doing anything about it. They're having to clean up. So that helps reduce our losses. It helps us make a stronger, better case for strong partnerships. We are crime victims here. We're not here and creating the problem. We are being victimized. But there are things we're doing about that by creating stronger narratives, collecting better identification information of the offenders

and other linkages, helping support all that, pull these things together with that strong narrative, a nice tight case, we're all helping ourselves. We're getting more respect and credibility and we think things can be more positive. The LP Foundation, CLEAR and others are making a strong call for there to be sort of a national guiding retail task force that helps to organize and orchestrate and deliver on some of these things. on the training component, others, LPRC on research and third-party credible rigorous information to feed into this, and others that can get involved. So stay tuned on all that, but we're excited to be engaged and involved with what's happening there. Another call out again, remember, we do have the Product Protection Summit in June. We've got the Supply Chain Protection Summit and the Violent Crime Summit, I believe, will be in July-August timeframe, possibly or even maybe probably in Philadelphia. The LPRC Innovation Working Group's S3 SOC and Censor Summit to be announced the date in Gainesville in August of this year. And then, of course, the big granddaddy of all

for LPRC community members, and that's the LPRC Impact, October 3rd through 5th. Go to lpresearch.org to find out more. With that, let me turn it over to Tom Meehan. Tom, if you can take it away. Yeah, thank you, Reed. And I think, you know, just talking about the, I unfortunately missed the town hall because I was at RFID Journal, couldn't be in two places. And I actually taped last week live from the RFID Journal, and the crowd was big. I mean, it was a big bust, very excited to be together. There were some international folks that couldn't travel based on some COVID challenges, but the attendance was large. And one of the key things, and again, a little bit repetitive, but I think it warrants it,

was there was talk about retail asset protection or RFID journal. And I've gone many years, and it really, while sometimes came up, was not a topic that you would hear very regularly. And Joe Cole from Macy's did one of the keynote presentations and talked about organized retail time and talked about, you know, or see and how you could use it from investigations and the digitization that retailers are going through and how RFID can help in many different facets. And I thought it was really great to see Joe talk. Obviously, I've known Joe for 20 years, so it's always good to see people that you know up there talking. But the day before, during another keynote session, they actually talked about organized

retail crime. So you have folks that would not normally talk about organized retail, non-asset protection folks talking about organized retail crime, talking about the extended benefit of introducing technology and taking advantage of sensors to do beyond what was originally thought of. And so very exciting to see that and hear that. And I know we at the LPRC have been talking about kind of the value and the ROI in more than one facet. But as we continue to talk about the hyper digitization in retail, one of the value and the ROI in more than one facet. But as we continue to talk about

the hyper digitization in retail, one of the projects that we're working on through the innovation group is just integration and how you get all of your equipment to work together. But it's more than that. It's also how you can take full advantage of all of those digital sensors and all that information for the greater good of the retail establishment, not just for the profit and asset protection piece. So I thought it was really good to see that. We'll probably continue to talk about that because I think we'll see writing around that coming up. So I wanted to just touch on some kind of risk in cybersecurity and things that are out there in the news. One, the UK Information Commission office fined Clearview AI $9.4 million for violating

its data privacy protection laws and ordered the facial recognition company to delete all of the UK residents' data. And prior to that, in recent months, there have been many privacy watchdog groups in Australia, France, and Italy who have also ordered Clearview AI to delete data on its residents. And this is kind of one of those things that I know actually during IMPACT and a couple last couple events, there was talk about facial recognition and taking my opinion out of this. There isn't basically a standardized approach of how it's regulated throughout the United States, where in the UK or the EU,

there are much, much more definitive privacy guidelines and rules. So when you read these stories, it's important to note that there is regulatory bodies behind it. It's not just a government attacking a company. There's GDP, and there are other things that kind of doesn't, what can be done. They kind of define what can be done and what can't be done. And in certain EU countries, there are even more restrictive rules around video specifically. So while I don't think this is necessarily going to follow suit in the United States, I do think that Clearview AI has been in the news. It's also important to note that everybody, including most of the publications that wrote about this, so Protocol wrote about this, Naked Security, this was all over the, you know, in that cyber and IT space. in that cyber and IT space, there was actually in writing, they thought that the fines would be much more significant and the penalties would be much more specific. In the United States,

back in 2020, you saw some class action shoots fought against Clearview AI from the state of Illinois. And basically, it really was focused on the biometric privacy data laws. And so today, I'm not 100% sure that I'm accurate, but I know Illinois, California, and I believe it's Maryland have some sort of biometric data privacy laws. I think that it's important to note that most of those laws, with the exception of California, are specific to private companies and not public law enforcement agencies. So we'll continue to follow this. I think Clearview AI is an amazing platform. Obviously, I think the folks that are listening to this are biased. In some case, I think if you're using facial recognition to prevent harm or to solve crime, it makes perfect sense. But I also completely understand the European Union and how their laws work and the way they were written.

So I'll continue to follow it. It's something that I've been following for a long time. And I think retailers and I'll make a general statement and have tried facial recognition in some form or fashion. Not everybody. and we're still working through what that means. We know that it helps solve crimes. We know that we can cite real information to show horrific crimes that are actually helped bring to the forefront for, you know, with face recognition. And to that note, I want to just comment that, you know, when we talk about the legal side of it, recently, you may have seen a headline. And as the listeners know, probably I volunteer for a human trafficking company to try to help solve human trafficking through the data and intelligence side of it.

And there was a 15 year old that was kidnapped in Texas at a basketball game. a 15-year-old that was kidnapped in Texas at a basketball game. And it was through facial recognition that she was found and actually reunited with her family 10 days later. So when we talk about the privacy concerns, I hear stories and think of stories like that and say that there has to be a scale of privacy versus protecting people. in that case i'm confident um that uh it would not have been solved the way it was it was a uh not a public entity it was a private entity that helps find missing children that actually found the facial recognition through sex ads so a horrific example but an example of how important facial recognition is and that's a live very timely real example of in that circumstance if it didn't exist there's a likelihood that the this person would never

have been found so um continue to monitor it and i'll continue to say there has to be a balance of course like everything else but it's important to not just totally take this uh as this is a a bad technology or i believe at one of the LPRC events, there was a public official who said creepy. And I often challenge as soon as someone starts that way, because technology in general can be misused or used appropriately. And I think in some cases, facial recognition gets a bad rap because of what it can do, not what it does. So just moving along through the next stage of Netflix is going to start working on a live streaming platform. This is going to be used for live voting and unscripted content and competitor

shows. Why am I talking about this here? Because we continuously talk about social media and the Internet and what the impact it has on our day to day lives. And this is just another example of how technology is evolving the way we consume data. It's a little early to say what what that means for all of us. You know, I'm always very, very curious when I read a statement of this as what is the public interaction going to look like something certainly to look after. I know that when we think of live streaming or when I think of live streaming, I think of the TikTok and the YouTube and the twitches of the world where we know we've seen criminal acts being live streamed some very tough acts so while i don't think that will happen here i'm very curious to see what it means uh for the the live streaming industry and how it changes uh what what occurs uh in the twitter kind of sphere we've been talking about elon musk and his uh acquisition efforts with twitter um as probably most expected with Elon, there's been a change and more information that's come out with Twitter again, where Elon is asking for reduction in price because of the amount of fake accounts. So it's estimated that, you know, four to five percent of accounts are not necessarily real.

They're either bot driven or duplicate. This number is very hard to kind of put your finger on it. It comes up often in any type of social media of what is a real account. And then, you know, there's this kind of quasi argument of, well, maybe a person created the account with an alter ego or a, is that actually a, not a real account? Is, is it a real account? Is, if it's not used, I have multiple Twitter accounts, one for business, one for personal, and then to monitor news. So I often say, you know, me as an individual, I think I have six different accounts that I've set up very specifically to do different things. Are those five of those deemed fake? Because they're not fake, they're just used differently. So why am I talking about this on the LPRC Crime Science Podcast?

Because we have the FusionNet and we have a lot of folks that are part of the LPRC community that use social media to monitor for events. And I personally think for events, both good and bad, I personally think this is a great way to monitor. Twitter happens to be one of the ones that I use often in an active shooting environment, in a civil unrest environment, because people use it, news media uses it as well. So it begs to kind of often talk, what we often talk about is how do you validate if you have 5%? Now we might say 5% fake is not a big number, but what does that mean for the way that we monitor live events? I'm not sure it has any impact because using my own example,

I have multiple accounts that I do use. I don't deem any of them fake. I don't even think they have aliases as much as I name them things around what I'm using them for. And that has more to do with a method of the way I collect data. I think that when you think fake account, it usually is a bot or a software driven account. But we'll continue to monitor it. I do actually think it'll affect what we do from a whole bunch of different ways. I think it'll affect the way we gather intelligence, the way we share information. And I know today that in speaking to the member base of the LPRC and listeners of the podcast that a lot of folks use Twitter to monitor for event-driven. We talk about this a lot too, in patching u.s government actually

put out a memo around patching around vmware and basically uh vmware is a is a company that probably is most commonly known for virtual machine software where you can run multiple instances of an operating system on one machine. So basically it creates virtual partitions with operating systems. They also have a cloud computing division. They're a lot more than that. And they did have two vulnerabilities that were identified. It's important to note that these vulnerabilities required access to the network. So they weren't vulnerabilities where you could get into a network. If you were already on the network, it created a hole, if you will. And the U.S. government took a hard stance and basically said that, you know, if you don't patch these, you cannot use these services. of depicting exactly what they wanted.

And basically it was find it and find the whole patch, the whole and then let them know. And I'm not giving you the exact information, but why it's interesting is because they publicly put out, hey, if you don't do this, we're going to remove, remove or block these services from activating or being used. I think we're going to see a trend of this, both in the government and the private sector, where companies are going to

take a much harder stance on vulnerabilities. I think it has to happen because in today's age, you have multiple vulnerabilities that pop up often. And in some cases, they are a little bit challenging to fix or to get patches for. This is a very clear message that you have the U.S. government, I think you'll see financial institutions, retailers, and eventually private folks, again, having the ability to say, we're not going to use this service anymore, which in turn, a lot of times means we're not going to pay for this service anymore. So I suspect we'll see changes of terms of services and things of that nature coming in the future as this continues to evolve and we know it will and I don't think it will ever go away as we become more digitized we'll continue

to see these type of vulnerabilities at a pace that's probably much much greater than what we're used to seeing today. I wanted to just kind of talk about a story about an individual that was selling passwords online. So this was a 28-year-old who was originally from the Ukraine and Florida district court in 2021 and charged with trafficking of unauthorized access data and trafficking of compromised passwords. So this is a good example of where everybody works together. And I think what you will see here is you will continue to see some of these cases where these hackers are being picked up while they're on vacation. Sometimes they're really on vacation. Sometimes I think it's done through back channels of intelligence. So they may be in a non-extra D country or a country that doesn't cooperate with U.S. law enforcement. And lo and behold, when they're traveling, they're picked up.

law enforcement. And lo and behold, when they're traveling, they're picked up. A lot of times we know who these individuals are, and we're just really waiting to get them and pick them up. I think it's a really, while this case is not substantial in dollar amount and what it is, although it was a significant amount of passwords, I think it's really important to note that the Department of Justice is doing exactly what it says it's doing since the fall of 2021, which we reported here. They would, in fact, be treating these hacking instances at a much higher degree from a crime. And so, therefore, going after some of the cases that before would be somewhat of the victimless crime piece. So I think it's a really good win for all of us. And it's important to note that we're going to continue to see these things. Last but certainly not least, we're seeing a tremendous amount of information around

retail and inflation, Walmart earnings, Target's earnings. And I think it's, you know, this is the Wall Street Journal had a whole series of articles, the New York Post, the New York Times, pretty much every major, The Washington Post, pretty much every major news agency in the US and actually globally reported on, you know, how investors dump shares of Walmart and Target on the change earnings reports. I think there's a couple of things here that are really, really important to note. One is that retail sales were actually up in the month of April. And this is kind of the curve of inflation of retailers trying to manage price increases the curve of inflation of retailers trying to manage price increases and as well as short-staffed and some of the higher product supply chain and employee costs that while we all can predict,

it's extremely, extremely volatile. And so while I'm not going to get into the details of the article, there was one thing that I thought was very, very important to talk about, is that consumer spending is still at an all-time high. It is shifting more towards grocery and food and things of that nature, but it's also important to note that when you had some of these reports, there were some real clear winners in it where there were still companies that had gains. Also, the Fed, the Federal Reserve Bank, the Fed did a report on consumers in the late fall having more money than ever. So we talk about the pandemic and all of these things that are occurring on the negative sides, but some of that cash that was infused through the stimulus checks and through some of the pay increases and the hiring frenzy that's occurring today, I think we still have 11 million open jobs. So you think about the inflation and some of the changes

that are occurring today, still have a high percentage of open jobs. And I'm not predicting whether there'll be a recession or not. But the Fed continuously says that people have more cash in hand than they've had before. They're just spending it differently. This is the evolution. And then on my other side, outside of retail, I do a lot in the financial sector. And it's important to note that today's inflation is nothing like inflation in the past. If you go back to the late 60s, early 70s, late 70s, early 80s, we did not have hyper digitization. We did not have the global economy that we have now. We did not have hyper digitization. We did not have the global economy that we have now. We did not have the level of pandemic, although we did have a small pandemic at that time.

And we also did not have the war in the Ukraine. So when you add all of those things together, it exasperates and we're not actually sure their financial analysts out there are calling for doom and gloom, but there is also a whole other subset of people saying that this could be an adjustment based on the hyper digitization so we'll continue to follow that and this is something that I'm heavily involved in again on the financial sector side but much like what read Tony and I have talked about since

the beginning of this podcast there aren't necessarily history books to relate to. And using the pandemic as an example, you can't really compare the coronavirus to what happened with the Spanish or Indian flu because we were in a totally different geopolitical climate. We were in a totally different geopolitical climate. We were in a totally different travel climate. You know, air travel has changed. Digitization has changed. And it's very, very similar with the hyperinflation that we're starting to see of that. When you look at the history books, while you might have one or two of the events that are occurring, we've never had the level of events and the way information changes and even just how quickly the market changes that we do today.

So when we read some of these stories, I encourage you when you're reading the news about stocks to read further in and hear about some of the successes that are occurring at the same time, because as we all know, it's very easy to read the negative, but understanding why the earnings of some of these companies were affected. And I'll use, and I'll end with this. It's the Amazon, you know, having the first quarter since 2015 down, it's a roughly $7 billion loss. it's important to note that almost all of that loss was associated with an investment that Amazon made an electric vehicle company. Almost dollar per dollar that loss matched. But when you read the article at face value, your assumption is a whole bunch of other things. But when you really dig deep, you start to realize that, okay, so if that investment didn't happen,

they wouldn't have that loss. Now, it doesn't change the fact that the loss occurred, but the general assumption might be it's because of inflation, because of cost change, because of supply chain, not because there was a hedged investment that didn't turn out the way planned. And with that, I will turn it back over to Reid. Thank you, Tom. Great updates from both you and Reid. This week, I'm traveling to Reid. Thank you, Tom. Great updates from both you and Reid. This week, I'm traveling through Europe. So let me start with some updates from here. First, interesting news from Zara, which is part of the Inditex chain of nearly 7,000 primarily apparel stores and based in Spain.

This update is from Forbes. based in Spain. This update is from Forbes. Zara in the UK started charging a fee of £1.95 or equivalent to $2.39 to return merchandise bought online via mail. The fast fashion retailer reportedly instituted the charge for environmental reasons. Zara deducts the refund charge from the refund. Customers buying items online can still return them for free in stores. Mailed returns in the U.S. are still free for up to 30 days post-purchase. Consumer expectations around free returns have maybe somewhat lower these days due to their environmental sympathies. And a recent study from Cyclone found that two-thirds of U.S. consumers are willing to pay extra

when returning a parcel to subsidize greener carrier options. Also this week in an online discussion, some of the experts from the retail wire brain trust said return fees are likely to become more common among retailers, although the rationalizations may differ. margin on killers for online selling. A recent Pitney Bowles survey of US online retailers found returns cost retailers on average of 21% of their order value and the National Retail Federation found that nearly 21% of goods bought online will return in 2021 up from just over 18% in 2020. The article did point out that Zara risks disappointing customers who gain confidence in making an online purchase when they see free shipping

and returns basically changing. A Power Reviews 2021 study found that consumers indicating free shipping was 96% and free returns 76% were deemed as important considerations when shopping online. Switching topics, some also very interesting news from Europe is that Lidl, which is part of the Swartz Group, reached 100 billion euros in sales. This news is from the Retail Detail EU website, and it's interesting that we're already a top 10 global retailers in revenue and points to the continued growth of the low-cost grocery model. Congratulations to Lidl on this important milestone. The retail sales said in their latest earnings that sales increased nearly 5% to 100.8 billion euros

on the previous year. The increase in turnover is partly due in the fact that they continue to open new stores and they opened 100 in the recent financial year. Incidentally, 100.8 euros is roughly 108 billion US dollars. I follow the sector closely because there are two low-cost grocery retailers in the global top ten the other is all the very successful so this is a sector to watch because they've disrupted multiple countries in terms of coming in and being aggressive with their low cost model switching topics and going back to

the u.s. interesting this week Amazon and this news is from Reuters, has opened its first physical apparel retail store. The store is called Amazon Style. It's located in Los Angeles and it will use machine learning technology to help customers find clothes and personalize recommendations. Customers shopping on the Amazon app will also have the option to try out their sell options at the physical store and be notified when a fitting room is available. So again, this link of physical to digital, Amazon is exploiting very heavily, and that will continue, I think, for Amazon as a differentiator going forward. But also very, very interesting that they continue to open physical stores, which again, kills the mantra that physical stores are dying and everything is going online, especially as we just talked about the profitability and the cost of returns a few minutes ago. Let me go back to the U.S. to end this week and talk about Walmart. This is again from the Retail Detail EU website.

And again, very interesting news from Walmart. Walmart is said to be the first major retailer to use drones for deliveries. The supermarket chain says that by the year end, and this is an outstanding number four million american households will be able to receive parcels by air the households are spread across six different states in parts of arizona arkansas florida texas utah and virginia and customers could receive more than a million parcels a year by drone. And this is as reported in the Guardian.

Initially, these orders will be small with a maximum weight of 10 pounds. They're only tested if drones mainly deliver household items. But Walmart sees a lot more possibility. But Walmart sees a lot more possibility. The potential range covers up to 100,000 different products in numerous categories from snacks to batteries. So there's a lot of upside in terms of where this goes next. The drones are automatically controlled by operators from partner DroneUp and will land in customers' driveways or front yards. Walmart said it would charge a

delivery fee of $3.99 for delivery. It will be the first large-scale delivery drone program in the U.S., but it'll be interesting to watch. I actually spent some time with drone up at the Big Show, and it actually made it as one of my 11 trends that I spotted in terms of 2022 and beyond. So it will be interesting to watch where this technology goes next. And then again, just to close, remember that LPRC is the place to test many of these new technology ideas

for both those green and red shoppers. So join us. And with that, good evening from Europe, and let me turn it over to Reid. All right. Thanks so much, Tom. Thanks so much, Tony, for all the insights and amazing information. That's what we need. We want to be informed here. And I want to do a quick follow-up, up to on looking at the different AI technologies and in particular computer vision and then the facial recognition or feature matching components. And I mentioned in mine for ORC and Tom spent some quality time talking about some of the lawsuits and some of the concerns out there, but also talked about the high side, you know, what's going on and why it's so important. And all of us want to guard each other's privacy, even though we, you know, you look at the

research literature and understand, even through our own personal experience, that privacy is different for each and every one of us, our perception that it's by and large transient. It can change in a moment. It can change through our lifespan. But also it's highly transactional. And so, you know, if we purchase something online, we very readily give up a lot of personal information every single transaction. It's either already stored with the retailer or others that we're dealing with or we're voluntarily providing it each and every transaction. But there are many cases we've talked about too as well with the RFID transponders on our vehicles to conveniently and more rapidly go through toll areas on to travel and to not burn as much fuel to get to places on time or quicker. And it really goes on.

We could all think of dozens and dozens of ways that we make that VX or value exchange where we exchange some bit of privacy for convenience, for entertainment, and in this case, for safety and security of us and our loved ones or others. And I know that in working with some of these law enforcement detectives, and we all are working pretty closely with them, as well as the civilian investigators and others out there trying to safeguard people and places, that some of these technologies are literally saving lives. We heard Tom talk about recovering a poor thing that was abducted. That's not unfortunately unusual, but that's how this type of recognition technology is helping surgeons find, locate,

and treat much earlier tumors and other events or situations or pathologies that are helping us save and recover those that have been kidnapped. But also I'm hearing case after case after case where some, uh, an individual or crew that are committing robberies, uh, or are now being linked to those places. Like we talked about earlier in this, in this particular episode. So there are a lot of good things that are happening. Uh, serial rapists are now being arrested and taken out of circulation so they can't harm, they can't victimize another single woman. Not one more woman out there. We know of murderers and others that are being taken out off the streets because of leveraging some of these new powerful technologies that are available. So whether it's our fingerprints, it's our signature, if it's our license plate, if it's something about our biological features that put us in that place in time that match us up, or in this case, even can find an elderly person that's lost or is wandering or somebody that's in need of a vet medication that has disappeared or in

this case a child. When we talked about, you heard Tom talk about some of what's going on with the transportation of people against their will. And so locating these people is proving powerful. So we're not here to advocate for any particular technology or manufacturer or even any practice right now. But we do think the most ethical thing we can do is strive within reason to safeguard vulnerable people. So I'll get down off my high horse here and want to thank each and every one of you, as well as Tony, Tom, our producer, Diego Rodriguez, and say, stay safe and stay in touch with us. Thanks for listening to the Crime Science Podcast presented by the Loss Prevention

Research Council and sponsored by Bosch Security. If you enjoyed today's episode, you can find more crime science episodes and valuable information at lpresearch.org. The content provided in the Crime Science Podcast is for informational purposes only and is not a substitute for legal, financial, or other advice. Views expressed by guests of the Crime Science Podcast are those of the authors and do not reflect the opinions or positions of the Loss Prevention Research Council.