LPRC - CrimeScience – The Weekly Review – Episode 112 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: July 21, 2022

LPRC Supply Chain Summit Agenda is Out! Safety Issues Cause Starbucks Store Closures! In this week’s episode, our co-hosts discuss a quick look at 2022 IMPACT Conference, how inflation affected June... USA retail sales, Microsoft Outlook global outage and its effects, the 10 highest global countries at risk of default, a new person on the FBI’s top 10, and a look at LPRC Research initiatives. Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 112 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio appeared first on Loss Prevention Research Council.

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Starting point is 00:00:00 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. Welcome, everybody, to another episode of Crime Science, the podcast from the LPRC. Today, our latest in our weekly update series, I'm joined by colleagues Tony D'Onofrio and Tom Meehan and our producer Diego Rodriguez. We're going to talk a little bit about what's going on around the world in retail and beyond. Not much of an update, believe it or not, on the COVID-19 SARS-CoV-2
Starting point is 00:00:38 virus situation other than some of these new sub-variants continue to expand, seem to be highly infective, evidently not nearly as severe disease coming out. And again, as we've talked about, seem to be able to get around, evade, overcome natural and vaccinated type immunity that we might have generated. And so we'll see. But we're hearing anecdotally as well as seeing the numbers, high infection rates and hearing about it again. But it doesn't seem to be dampening people's spirits. You do see people that are masking, but most not so much right now. And so, again, vaccine and treatment development continue at as fast a pace as they can possibly do it. And with dozens and dozens and hundreds, in fact, of treatments and vaccines on the way, you know, that things look better and better is just going to take a while.
Starting point is 00:01:44 is just going to take a while, particularly since so many people have been infected. It's more difficult to conduct these rigorous, large-scale, randomized controlled trials. Finding naive people is very difficult. So, you know, they've got to turn to different sample sizes, go into different population areas, and so forth. So, those things slowing down the phase two and certainly the phase three randomized controlled trials, the double blind study. So, turning over to a little bit of LPRC, the team's finished up, has the 2022 version of LPRC impact content wrapped up. We are expecting right now a record enrollment for the conference, 3rd to the 5th of October here in Gainesville on campus at the beautiful Wrights Union student unit that we've got here. Many of you have been to this conference
Starting point is 00:02:32 before. You know what it's like. It's all about content, about engagement, about being in a very unique atmosphere, collegial atmosphere, having an amazing amount of engagement opportunities. atmosphere, having an amazing amount of engagement opportunities. The learning labs, the breakout areas right there, co-located with the main area, which is co-located with where we have our experience center for solutions. And so all the solution partners, all the retailers get to spend a lot of time over just about two days in concentrated engagement with each other and with a lot of research learnings. I'll go through the learning labs next week. We've got 16 of those right now planned with amazing content around theft, around violence,
Starting point is 00:03:17 around fraud, a lot of neat deep dives, some broad looks, a lot of things around crime mapping. So a lot of things around crime mapping. So a lot of excitement with the content. The sponsorships are rolling in at a record pace as well. That allows us to just do a super job with putting on an amazing event with world-class social events on that Monday evening of the 3rd at all our lab complex inside and out. Look for a pretty special event there. complex inside and out. Look for a pretty special event there. Engagement opportunity tours of labs and visiting there. And then again on that Tuesday evening, the 4th, where we'll be at UF Swamp, the stadium where we take over the entire Champions Club level. You'll see the sponsors
Starting point is 00:04:00 and LPRC logos flashing on the scoreboards, the huge mess of digital scoreboards. But it's a great time. Live band, open bars, a lot of fantastic food, but just a great way to engage with all the right people in the industry, in research. the engineers, the scientists, a ton of practitioners, over 200 of the top APLP practitioners and beyond. So looking forward to that. Go to lpresearch.org to learn more about that. On the research front, we've been doing and working a lot more on the LPRC SOC lab, Security Operations Center lab, which is a mock-up but highly functional, cutting edge EOC or SOC or command center. So those technologies and the sensors across the four square block outside Safer Places lab with now five mobile platforms provided by LVT or LiveView Technologies loaded with the sensors.
Starting point is 00:05:07 So that's all been 3D mapped, working with Esri's ArcPro, ArcGIS, and their drone mapping 3D technology. So a lot going on there, more and more technologies flowing into the LPRC engagement lab. Now just over 200 technologies in there. engagement lab now just over 200 technologies in there new fixtures of just being installed to display more merchandise and provide more space for more Protective technologies, but this is the only place in the world like it I mean, there's just nothing even close from a lot of a lot of standpoints But the only place where you can come and look at 200 technologies from over 65 only place where you can come and look at 200 technologies from over 65 security and loss and other types of technology companies deployed and being integrated. So it's a great place to assess.
Starting point is 00:05:53 We are adding team members. We're getting ready to add two more research scientists here to the team, which will take us to a record number where there'll now be seven of us researchers. For a long time, it was me. And then we slowly added people. And so we're going to be growing to the largest size ever. You'll see at least three PhD level and three master's level. So you've got a lot of graduate training here, a lot of high order research capability from experimental design research to big data research to a lot of statistical analyses, general linear models, or REMA, all types of regression analysis,
Starting point is 00:06:34 logistic, and OLS, and beyond. So a lot of capability there. The mapping capability by this team is pretty unprecedented, particularly when we team with Cap Index, a team from Rutgers that have a spinoff company, Simsi, and of course with Esri and their ArcPro, ArcGIS. So a lot of capability there. So stay tuned on that. The homeless and harm research continues as we look at and build a typology of the types of harm and ways that we can interact with the community and better safeguard our own places. So our people and our shoppers, our employees feel and are safer and more secure our places. The research continues on the voice of the victim, where we're getting ready to reach out and interview hundreds eventually,
Starting point is 00:07:28 to reach out and interview hundreds eventually, starting with dozens of current retail store workers, getting an idea of the exposure to aggression and other crimes in their places to get the voice of the victim better understood, build, again, another typology of harm, and get the word out, and then work on better ways to safeguard people from not just physical harm but psychological harm and some of the avoidance behavior now where good people don't want to shop or work in many, many, many retail places now around the United States. The research continues on armed robbery and better understanding and preventing that type of a dangerous crime. Commercial burglary research, some more coming up on the active assailant front. We've been robbery and better understanding and preventing that type of a dangerous crime. Commercial burglary research, some more coming up. On the active assailant front, we've been doing several
Starting point is 00:08:10 projects, but again, we're writing up now the results of our wave one, working with 11 retailers, their threat assessment experts, getting an idea of four types of shooters we've mentioned before, or active assailants, and then the signals that they give off, the aural, the visual, and the digital. So, a lot of good work in that area. On the fraud front, James Martin and the leaders of the retail fraud working group have put together a typology of types of online and in-store fraud, and then started to break down in detail what it looks like and countermeasure opportunities there. So, the theft front, a lot of product protection research going on with Dr. Corey Lowe and others in that product protection working group, organized retail
Starting point is 00:09:00 crime, the same. They're conducting multiple research tracks right now. The Innovation Working Group and the LPRC Innovate program, their advisory panel, are going to start working closely together to coordinate that activity. And so we're, again, expanding from 15 to what will now be 30 leading retailers having their innovation people meet eight times, six times by Teams calls, and two times once at Ignite and once at Impact. So, a wonderful opportunity to build cutting-edge innovation with players like Lenovo and NVIDIA, Intel, and many, many others from Endime to Milestone to we could go on and on, ProSecure, Synthromatic, Checkpoint, and many, many more. So I'm going to go ahead and turn it over to Tony. And Tony, if you could take it away.
Starting point is 00:09:52 Thank you, Reid, for all those great updates. Let me start this week with some news from Starbucks as reported in CNBC. Starbucks said it will close 16 U.S. stores, mostly on the West Coast, by the end of July because of safety concerns, according to the company. Most of the stores set to close are in Los Angeles and Seattle metro areas. The coffee chain will also close two stores in Portland, Oregon, one store in Philadelphia, and another in Washington, D.C., also for safety. one store in Philadelphia and another in Washington, D.C., also for safety. Concern about store safety was sent through to a letter to employees published on Monday from two senior vice presidents of Starbucks U.S. operations at the coffee chain. The letter cites societal safety concerns, including increased violence and drug use in the area of the stores.
Starting point is 00:10:46 And according to the CNBC article, crime data from Seattle and Los Angeles seems to back up those concerns. In Seattle, property crimes, which include car theft, larceny, and burglary and violent robberies, are up nearly 20% for the first five months of 2022 from an earlier period, according to the Seattle Police Department. In Los Angeles, these types of crimes are citywide, are up citywide up 50, 14% for the first six months of 2022 compared to the same period last year, according to the Los Angeles Police Department.
Starting point is 00:11:27 This is indeed, to me, disturbing news from Starbucks, and it's another reason that we should engage with the LPRC as we work together to combat these crime trends. Let me switch now and talk about, with the economic risk of recession increasing, I thought this week would be a good time to visit an infographic from Visual Capitalist, which summarizes the top 10 countries with the highest risk of defaulting in 2022. In order of higher risk, the top 10 are El Salvador, Ghana, Tunisia, Pakistan, Egypt, Kenya, Argentina, Ukraine, Bahrain, and Namibia. And the reason I bring this up, if you listen to the news, it can lead to some substantial issues. Look at what's happening in Sri Lanka. Recent events in Sri Lanka highlight this increased risk. You saw all the violence actually storming the government buildings and taking them over.
Starting point is 00:12:40 In May 2022, the South African nation of Sri Lanka defaulted on its debt for the first time. The country's government was given a 30-day grace period to cover 78 million in unpaid interest, but ultimately failed to pay. So this could lead to substantial economic disruption around the world. So I want to bring that up and everyone should be aware of it. And then again, switching to another topic this week, from retail dive, some insights on how inflation is impacting shopping holidays such as amazon prime day which just completed with its first uh 2022 event prime day over amazon on thursday said that globally prime members and these are the only ones allowed to shop for the deals, bought more than 300 million items, surpassing other years.
Starting point is 00:13:28 The B2B retailer declined to comment of exactly how much revenue that is. Still, at a time of peak inflation, consumers kept much of their prime-time shopping to essentials and smaller purchases, according to Numerator, which found that only 5% of the items sold for $100, while 58% sold for under $20. As in previous years, Prime Day lifted other U.S. retailers as well,
Starting point is 00:14:01 according to Adobe Digital Economy Index. US retailers as well according to Adobe Digital Economy Index. US online spending nearly reached 12 billion, which was split 6 billion on Tuesday and nearly 6 billion on Wednesday, which was an 8.5 percent increase over last year. Stores played a key role with conversion for retailers offering curbside pickup or BOPIS, which is buy online, pick up and store, which was up 20% compared to an average day in June. Adobe said it as well. So again, gives you an idea on the shift that's going on. It was interesting speculation that Amazon continues whether they think they'll schedule a second Prime Day later this year, which has never been done before, but the company declined to comment on it.
Starting point is 00:14:54 So a key message here, consumers are pulling back because of inflation with their online spending and plan to spend less in the next six months, according to research from a test. So just a heads up for the retailers that listen to the podcast that consumers are adjusting to what's happening with inflation. And finally, some data in terms of how same inflation is impacting store and how it reflected in the results in the June retail sales for the United States. Sales in June rose 7.7% year-on-year among the segments tracked by Retail Dive, according to the monthly numbers released by the U.S. Department of Commerce. The growth is not adjusted for the record inflation also reported this week, however, and sales in segments declined, such as household budgets went towards filling up gas tanks and other essential items.
Starting point is 00:16:14 As one analyst said, this feels like an inflation story to me. noting that the government this week again announced a very high inflation of 9.1%, adjusted for inflation retail sales actually would have fallen in June. E-commerce sales were a standout, climbing 2.7% over the month and 20.6% year over year, which another analyst again said reflect our consumer strategy to save on gas. Electronic sales took the biggest tumble, down nearly 10% from last year, an indication that consumers are avoiding bigger ticket purchases, according to Rossman. Apparel sales fell 2.5%, departmental sales fell nearly 5%, sporting goods sales fell 0.3%, and general merchandise sales fell 0.6%.
Starting point is 00:17:19 At apparel retailer in volume terms, sales were strongly negative, said one another analyst. Uncertainty for retail continues for the time being as the inflation story continues to unfold. So I urge everyone here listening to this, that this is the podcast where you can get the detailed information in terms of what's happening with the global economy, where the risks are, what's happening with COVID, how cyber risk is going. So keep on listening and send ideas on how we can improve this podcast. Now over to you, Tom. Thank you. Thank you, Reed. Thank you, Tony. I'm just going to cover a couple trends and things that are coming up in cybersecurity and risk.
Starting point is 00:18:09 Yesterday, Microsoft Outlook or Exchange, the online version, had a pretty significant outage. So if you're using Microsoft for email, you probably noticed that there was an outage and it was a global outage. So it affected folks all over the world. Microsoft I think took a couple hours to address this and did a very good job of taking care of that relatively quickly as well as communicating with their customers. This is just kind of one of those reminders that as we continue to become more and more connected and reliant upon certain services that there is a potential for disruption that even the largest carriers in the world struggle with from time to time. the podcast. So just again, having extra lines of communication are important. And one thing I would say is that I realized there was a team's outage a few weeks or months back. And I was talking to
Starting point is 00:19:13 some folks that had after COVID gone 100% virtual and literally had to look for people's phone numbers because they just hadn't called them in so long. They were relying on the services. So it's important to have backups, have phone numbers. It sounds silly to say that out loud, but we do. We are in a world where if you are on a platform like Teams, like Slack, or any of the other social kind of business platforms, and there's a disruption that it potentially poses a risk to your business continuity. Well, the FBI has added a woman to the top 10 who is a crypto or Bitcoin. It's really a crypto, not Bitcoin, scammer. She designed something called OneCoin and is believed to get $4 billion. That's actually what the FBI says they can prove.
Starting point is 00:20:05 So it's believed to be more swindled people. Interestingly enough, they have not been able to find her at this point, but she's on the FBI's top 10 list as well as Interpol is looking. So I think we'll continue to see that. And this is one of those things about Bitcoin or cryptocurrency. I apologize if you're saying Bitcoin. A cryptocurrency that becomes interesting is that there's this need to be an early adopter or this want to be in. So you have some of these potential nefarious actors be able to take advantage of that.
Starting point is 00:20:37 And here's a real example of a very smart lady, PhD, very well respected, goes and creates a coin and collects money. And it's essentially the old Ponzi scheme theory, right? I get your money, I pay someone, and I keep collecting, I keep collecting. And this was the one coin piece of it. This is the risk with crypto, that when new cryptos come, people want to jump on that bandwagon. They want to be a part of it early. They're looking for that quick win. And this opens it up to risk. Next, there's been a fairly large
Starting point is 00:21:12 cyber crime ransomware prosecution out of a Canadian citizen who was actually prosecuted in the Southern District of Florida court, federal charges and pled guilty. And this is interesting because when we think of ransomware, we think about all of the nation state actors or you think Russian hackers or Romanians. This was actually someone that was working with a group overseas and actually was using a service to get ransomware.
Starting point is 00:21:42 And when he was apprehended, they were able to seize 20 million dollars and they know of about 40 million dollars that was collected and again that ransomware is horrific and large and it isn't just specific to overseas activity so great arrest believe that you'll see this individual working with the FBI to help create more arrests in the future. A little short today, but with that, I will turn it back over to Reid. All right. Thanks so much for that, Tom and Tony. A lot of good insights, a lot of good stuff.
Starting point is 00:22:19 Thank you, Diego Rodriguez, our producer. But mostly, of course, thank you to you all that are listening. We seriously really want to hear from you. Any insights, what should we do, do better, do more, do less, do differently, that's helpful. It's operations at lpresearch.org. Come set a visit. Come into our labs here in Gainesville. Get enrolled and come in for Impact Conference. Get involved in our supply chain
Starting point is 00:22:46 protection working group summit that's coming up in two weeks in Philadelphia, hosted by TJX. And you'll see all the right people, a lot of the right people, let's put it that way, in that area, so much more. So everybody stay safe and stay in touch. Thanks for listening to the Crime Science Podcast presented by the Loss Prevention Research Council. If you enjoyed today's episode, you can find more crime science episodes and valuable information at lpresearch.org.
Starting point is 00:23:15 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.

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