LPRC - CrimeScience – The Weekly Review – Episode 114 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: August 4, 2022

LPRC Supply Chain Protection Summit This Week! LPRC IMPACT Agenda Preview! In this week’s episode, our co-hosts discuss the mutation of COVID Variants, Apps that are being cloned to steal information, Monkeypox is growing and its effects are discussed, the metaverse and the way its being used are explored, and a look into inflations effects on spending. Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 114 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. All right, welcome, everybody, to another episode of Crime Science, the podcast from the LPRC. Today's our latest in the weekly update series, and I'm joined, as always, by our partners, Tony D'Onofrio, Tom Meehan, and our producer, Diego Rodriguez. Even though Diego is on the road today in Philadelphia with one of our other team members, Orion, and they are working with the Supply Chain Protection Working Group at their annual summit hosted this year by TJX at one of their distribution centers.

There'll be two days today and tomorrow of a lot of brainstorming, putting out research evidence that we and others have collected around supply chain protection. And so we're expecting a great turnout, a great crowd of top decision makers in the asset protection for supply chain space that will be up in there. Some solution partners as well brainstorming. We'll have federal, state and local law enforcement who are supporting with ORC and with, of course, supply chain investigations, especially over the road or more systematic problems that they're dealing with. So we're excited to put that summit on. I mentioned before, by the way, that our Violent Crime Working Group Summit will actually be co-located with MPAC this year, October 3rd and 4th. So we've got a series or a track of violent crime content, and I'll go through the content. You'll hear it here first on Crime Science Podcast here in a couple minutes. Let's go through some of this COVID-19 situation.

It's really interesting some of the testing that's going on and how some of these new variants as they continue to aggressively, rapidly evolve and mutate what the way they present and infect and hide and escape and all these types of things that they're doing. But one thing some literature is looking at it was on testing, particularly at home testing, antigen testing, they call it versus a PCR testing, which is supposed to be a little more rigorous, take a little bit more time, and generally need to have it done at a lab or a lot of documented infection cases with COVID-19 disease that just didn't show positive on those at-home tests. Part of it is they recommend maybe multiple tests over two, three, four, five days. The other, of course, is to try and get a PCR test, but it just may take longer to present. And we see some of our luminaries here, if you will, that are testing positive repeatedly and some of the bounce back and rebound that some

are seeing, particularly with the antivirals that are being tried with COVID-19. We're also seeing now vaccines continue. I mentioned before about 120 new, new compared to what we've got now, incremental vaccine candidates in trial. And I know we've talked about this repeatedly. The exciting thing about all this development and testing and learning new manufacturing, new production techniques, new ways to ship and distribute around the world have been learned, tragically, throughout this SARS-CoV-2 virus global pandemic that we've been going through together. But there have been a lot of powerful lessons learned. Again, some of these vaccines are being converted and used or altered to work on different types of cancer and other testing research that's going on. So a lot of good comes out of a lot of bad in every situation. So this is no different. Right now in the United States, we've had just now over 262, there are 3 million Americans that have been vaccinated. Just over 5 billion have been vaccinated globally.

So a lot of shots and a lot of arms across the globe. And we've just not seen a whole lot of, there's certainly been some isolated kickbacks that either are attributed or are possibly attributed to vaccines. But in this case, not too much. The monkeypox virus continues to spread. It seems it's in now dozens of countries around the world, but the infection rate or the number of people both seem to be relatively low. And I guess understanding here, it looks like in the readings, largely confined to a certain group, and so not widespread across groups of people, even though it's appearing in multiple countries. And in the United States now, in multiple states, of course, Florida, where we are, we typically lead in everything that's a little strange or dangerous, and this is no different.

So switching over now, I mentioned the Supply Chain Protection Working Group Summit. We're excited how that's going, all the planning. Procter & Gamble, because of a huge project we're working on with them and for them, our team was able to go in even better prepared than ever on cutting-edge supply chain research, looking at the future of the places and process of fulfilling what's needed in stores and other selling places, going back and looking at what are customers going to demand, what do they want or need, where are they going to try and get it, how are they going to get it, what's the competition going to look like, what's emerging technologies look like, what's the working population going to look like as far as putting people in and operating

distribution that works and so forth? It's guesstimates, but of course, a lot that's happening is evolving before our eyes at light speed. And so this team has been working on systematic interviews with people from RILA, the Retail Industry Leaders Association, from the National Retail Federation, from National Association of Chain Drug Stores, Food Marketing Institute, others in the supply chain day in and day out, manufacturers as well, working with regulators, understanding and lobbying and so forth, trying to understand all this, in addition to interviewing senior distribution of executives, asset protection or operational executives. Even here at the University of Florida, we've got some world-class supply chain research centers, one in the Warrington College of Business, the other in the Wertheim College of Engineering. They have research centers that are separate and look at slightly to completely

different issues, but both of those center directors, those faculty have been contributing their knowledge and insights as well. So, all in all, we've been able to collect quite a bit of information. It takes a lot of time to synthesize that, but what will end up, it's helped us all learn how to think more and more about the granular all the way up to the overall logic and theory and strategy of distribution throughout time and place with all different types of products and supply chains that reach out to different parts of the world that are constantly evolving under threat, being shut down, blocked by ships that are sideways in a canal, and every other thing that can be conceived.

And so it's going to provide for a lot of information, a lot of good dialogue, and I think help propel the LPRC, Supply Chain Protection Working Group, to the next level. We're also working with the ISCPO. That is the group that works on supply chain security. We're in a memorandum of understanding agreement and working closely with them. And so that's broadened us from the retailer members that we've got, so many retail corporations and their supply chain people, but into looking at the third-party carriers and common carriers and others to get different aspects over the road, trucking and things like that. So stay tuned for that phase two next year.

You'll see us doing some really neat innovation and field experimental design and interview research with some of what we tease out of this projectPRC Supply Chain Protection Working Group Summit coming up on one of our future podcast episodes. Also coming up, we keep talking about NETS Impact. So today I'm going to talk a little bit about what's coming out, some of the content. We've not really done this before because we have so much good content to go through. done this before because we have so much good content to go through. It's been very difficult or at least trying for us to figure out exactly what's the most mature in the data that we've got. Do we have one of our team that can best work on this and explain this and go through this along with at least one retailer, sometimes more, and lining them up and so on but right now we've got a face-off exam in the role of ai in improving decision making and reducing you know the cognitive load so uh it's really going to be good it's going to be practical what is ai a little

more practically and updates there and then how are people using ai now and going forward to improve decision making whether we're talking about in decision making, whether we're talking about in a store, whether we're talking about the distribution center, we're talking about in a parking lot, we're talking about overall, and so on. So, and Dr. Lowe, Corey Lowe, our research team leader, has been doing some really innovative research in comparing how well humans, all types of humans, but particularly expert asset protection, executive humans of differing races and levels of experience and so forth, a pretty diverse sampling. Now we're approaching 200 participants at this point perform

in identifying faces, male and female, appearing of different skin tones and tints, racial or ethnic backgrounds, and so on, to see how well some of the AI models or algorithms, if you will, perform versus the human. And it's interesting how, at this point, still continually we're seeing that the algorithms are still outperforming in identifying across racial groups, even by individuals in those racial groups and so on. But it does look like what you would expect to. And again, more to come. We're going to get to where we got 400 or more participants at some point. It's just taking time as we try to do this research very well and do it the right way,

how well everything holds up. But stay tuned on that. But the idea that there's bias, that there is a value exchange and things like that we've talked about before. And it turns out there is, according to our research and others, always bias, always bias. But is there less bias when a decision is assisted or in some way informed in addition to the bias that the human already brings to the equation? So, in other words, it looks like AI-informed decision-making can dramatically reduce the bias in a decision because the non-supported decisions also include or always include some bias. And bias doesn't necessarily mean a negative.

It means what we're looking for, what we think, what we're experiencing, what we're used to, what we're comfortable with. You know, these types of things play into bias. It's a very complex construct and so on. and talk about these things, leveraging research that we and others are doing, instead of leaving very critical and important technology and practitioner decisions to the media or to popular narratives that aren't necessarily well-informed by anything other than maybe emotion. And so bringing research in the equation can help us all in that way. Another one, we've got ORC team development collaborations. Our team has been working a lot with ORC working group leaders and members, also with CLEAR and other organizations, of course, on doing research, gathering information.

James, as well as Corey, have been mapping ORC in what it looks like across the U.S., now comparing statutes and other things. So you're going to see a lot of neat things going on at impact around ORC. We are going to be doing featuring some research we've done in reducing loss or shrink and increasing sales from with theft prone products. sales with theft-prone products, but leveraging the value exchange, the VX, where people can opt in and give up some privacy information to get more convenience and allow stores that maybe couldn't even carry very, very high loss items in certain stores because of just incredible theft rates. This might allow that and allow the customer to make that value exchange. I can wait. I have to go to a store that has it or this one has it, but it's locked up. I've got to go find an employee or this place has this product secured. But if I exchange a little bit of

privacy in the moment, like I do on online sales, and we've talked about going through RFID toll booths and things like that on a turnpike, then I can get my product now. You're going to see intelligence-led loss prevention, a lot of best practices and opportunities from research we've been doing there. The 21st century odyssey, we're going to talk about key challenges and threats. I just was going through that in the supply chain. Automating the future, determining building blocks through artificial intelligence. We've got some great partners here with 92 solution partner members of the LPRC and growing. We're going to be leveraging a lot of these partners that we've got,

members, to get out some of this information to help shape the discussions, help us to fund and execute the research that's needed by the overall group. So you're going to see things going on there. SOC and sensors, we're going to be talking more about the efficiency gains by using visual, aural, and digital sensors, but just critically, how do we, or just as critically, how do we integrate these sensors together at each of the aiming points through zone 5, 4, 3, 2, 1? How do we integrate them across those aiming points? You're going to see us looking a lot at parking lot interventions, again, as we all work together to up our game to make places and people much safer, more secure, more stable, to allow good economies, good practice. It's the ethical, moral thing to do as well. So we're going to be

looking at fear and safety, evaluating parking lot interventions, understanding retail hotspots. We're going to be looking at the role of mapping and problem solving, understanding, evaluating. If we do something here, what does it do there? What does it do to places that weren't treated or didn't have the intervention? So the role of crime mapping is going to be a big part of this. We're going to be looking at some of the different body-worn camera issues, talk a little bit about that. This will be more of a setup for RELA next year because of the body-worn camera initiative with four of our LPRC members offering body-worn cameras and some retailers that are going to be participating with us in the labs and in their stores on working through body-worn

camera use to better safeguard, to better document, better train and execute and audit. You're going to see things from the front lines. We're always talking about the voice of the victims here at the LPRC. How do we better understand and articulate and explain the harm that's created when people are victimized by crime, that places are victimized by criminals? So by systematically interviewing people that work in stores, getting their perspective on what it's like, how it's affected them and their coworkers, their customers, when acts of aggression or even acts of ongoing theft that are not abated or addressed go on. What's that do to morale? What's that do to even operating?

And we see many of our members have shut down dozens of their stores in certain markets now because of crime and fear of crime victimization. So we'll be talking a little bit about that more on some of the incident reporting as part of intelligence led loss prevention. Another thing that will be interesting, we're going to be talking about how do you work with technicians? How do you actually evaluate technologies that you're looking at? How do you put them in, bolt them in, integrate them, do things efficiently? How do you work with IT and others to make it happen to get the protection that you want and need for your people and your assets? So, we're going to also look at the aggressive street behaviors from homeless and harm and look at that. And then active assailant opportunities. We've talked about this for earlier detection. We've got two projects now that we've just completed. There'll be more upcoming, but where we've been looking at a typology of types of shooters, we mentioned this before, or attackers. They may not always use a handgun or firearm or long gun in this case. So there'll be a lot of good discussions around that. Um, and

there's a couple more to come up, but that'll be good for us for right now. Um, but looking forward to 2022 LPRC impact, uh, some unique twists too, by the way, uh, LPRC was literally founded, uh, decided to be founded in 20, 2000, I'm sorry, in the year 2000. And then we had a founding meeting with 10 major retailers that wanted to happen. Just inside of 2021 was our initial, you know, I guess our official launch of LPRC in 2001, but really was started in 2000. 2001, but really was started in 2000. So some of those founders will be with us. Three have passed away. Others are not able to make it, but we're going to have, it looks like, between five and six of the leaders of those retailers will be at 2022 LPRC Impact. And it looks like our first impact was in 2003, hosted by Walt Disney World Company.

And we had about 110, 120 participants. So, you know, some neat historical facts about LPRC. But we're excited to host the founders and bring some energy and connection between those visionaries and where we are today. So, with no further ado, let me turn it over to Tony. Tony, go ahead. Thank you very much, Reid, and that sounds like a really great action-packed agenda at Impact, and I'm looking forward to participating. Let me start this week with one of the topics you briefly mentioned, because it's going to be interesting to see how the metaverse plays with retail theft as we go forward. So I'm going to start with an update from ChainStorage on what consumers are expecting from the metaverse. According to

Connecting to the Metaverse, a new survey of 1,500 consumers, 69% are looking for a quick getaway by exploring metaverse-like environments to engage with friends, family, and colleagues, and enjoy more leisurely activities. Nearly half of respondents view a fully built, unified metaverse as a fertile landscape for growing relationships and deepening connections. While the majority of respondents have visited a metaverse-like platform recently, men are more likely than women to visit these destinations. Not surprisingly, millennials and Gen Zers are heading to the metaverse much more often than baby boomers. Once they arrive in the metaverse,

women are more likely to use these platforms as a virtual showroom, browsing products, digitally returning to the physical world to make purchases. Nearly half of respondents who utilize the metaverse are buying virtual items or finding inspiration for purchasing a physical product. However, slightly more than half of the respondents expect customer service to be better in the metaverse. the respondents expect customer service to be better in the metaverse. Only one in three respondents believe that these immersive environments will provide less frustration and anxiety than calling and talking to a contact center agent. In addition, 27% of respondents both

envision the metaverse as making it easier to access product and brand information. Instead, it will make it much more effective and interact to the seek assistance from an omni-channel agent metaverse avatar rather than engage in chatbots. For surveyed baby boomers, virtual travel plans through the metaverse environment center primarily around socializing with friends, Close to one-third of respondents are drawn to the possibility of finding new and more thrilling experiences. More than one-third of respondents predict that the metaverse will be mainstream in the next five years. So what does that all mean? For me, it's another channel, another way for retail to evolve and become more immersive. It also might lead to some interesting possibilities on tap. So that's an area we got to keep following.

Let me switch now to another topic that's top of mind on everybody, which is what the heck is going on with inflation and how are consumers reacting? And this is an update from payments.com on how consumers are reacting to inflationary pressure. More than half of consumers say their financial situation is worse in 2022 than it was in 2021. Nearly a third believe it will deteriorate even more in the next 12 months. Nearly 8 in 10 of those living paycheck by paycheck with issues paying bills say they're seeing their financial situation worse than over the last year and half expected to erode further.

44% of those earning more than $100K said that they are worse off today than a year ago. A third of those high earners believe their financial situation will also deteriorate in the year to come. Nearly two-thirds of Americans report maxing out on their household budgets, including a fifth of the high earners. Millennials are the most negatively impacted. Nearly everyone, 80 to 90 percent of all consumers, report taking at least one step to adjust their spending levels. 70% of retail shoppers said they're cutting back on purchases they don't consider essentials, including 87% of consumers, those earning, again, over $100,000. Few consumers say they'll compromise quality to save money.

Instead, they will consider whether the purchase is necessary at that time. 71% of consumers said they are eating at home more often. That includes two-thirds, again, of those consumers making more than $100,000 and those not living paycheck by paycheck. These are two groups who presumably have discretionary money to spend, but they aren't spending it in restaurants now the way they once did. More than half of retail shoppers look at competitors, to their favorite merchants to find cheaper prices on items they want to buy, including one in five higher wage earners. Forty-five percent of consumers sell their shop,

other grocery stores for better prices, and things they want to buy, including nearly 20% of those, again, with that high income. Consumers also think they've been living with higher prices for a while, and interesting in the survey, they came up with a number. So the consumers in this survey believe that we will be in this situation for the next, are you ready, 653 days from the day they took the survey. That's a very long time. And let me close again with some additional data on inflation and where we're at. And this is important because it will impact retail, especially if we enter a recession. And this is from Statista.

impact retail, especially if we enter a recession. And this is from Statista. Here are the top five categories that consumers are concerned about that they will not be able to afford in the face of rising prices. Number one, gas and fuel with 63 percent, very concerned to somewhat concerned. Groceries at number two at 59 percent, school supplies at 50 percent, clothing at 49 percent, and restaurant visits and takeouts at 46 percent. Next week, I will publish my second part on retail crime trends, and I will speak to exactly how inflation impacts retail crime. So that will be a nice follow-up to all this inflation data. So we'll be interested to see what happens to consumers as we go, including with crime.

So look for that update on retail crime in the next couple of weeks. And with that, let me turn it over to Tom. Well, thank you, Tony. Thank you, Reid. And time for some quick cyber updates of what's going on in the world of risks. First, the Ukraine has taken down a million bots that were used for disinformation. So when we talked about in the past year, several times there was disinformation used, used. Probably the most predominant was the stories of the election being meddled in by the Russian government. And what really this is, is a very similar tale here where the Ukrainian cyber police have shut down massive amounts of bot farms that are used to spread

disinformation on social media networks. When you think of a million different bots, really these bots share fake news stories, take videos and change kind of the dynamic by putting different stories on it. But really designed to help drive disinformation and fake news to change the narrative of what is really occurring. So some examples were used as, you know, there is an event that occurs, potentially a bombing, and then there is a million different bots spreading information about this attack, blaming the Ukrainian government when it was really the Russian. And that's just one example. And the bot farms use a myriad of tools and actually take advantage of algorithms and Google and Facebook by continuously spreading and sharing

the information. So when you think of a million bots, what does that mean? That's a million different automated services going around and changing things but they also took down or reported over 100,000 fake accounts throughout various social media and I think when you think about this a million is a huge number of bots but then when you start to look at 100,000 fake accounts on social media, then additionally 1,500 Telegram channels that had bots, another 1,500 Instagram and TikTok accounts spreading propaganda and misinformation. It leads us to what we always talk about here is while social media is a tool to use in your everyday activities, open source intelligence, active intelligence gathering, whatever you call your program today, to make sure that there's some level as best as humanly possible to validate that information using multiple sources and not

just going with what you first see here at the All-Pure Sea and the FusionNet. That was one of the reasons we really recreated the FusionNet is not only to help have a method to share information, but hey, is there a way that we can effectively help validate that shared information? And this is one of those ways by using the FusionNet. And this is a good example of why that's so important. Just more news out of that region. We continue to see just a massive amount of cybersecurity attacks from that region to the U.S. and to other countries. I don't think that we'll see this slow down. We do see a larger influx there. And then we also see an increase in North Korean and Chinese attacks.

This is from intelligence servers. I do see a larger number of reported events. It's hard to tell if that is because reporting has become easier or if there is a larger amount of events. We certainly can quantify that there's a larger amount of events than out of the Russian space today. I think it's important to note that that doesn't necessarily mean they're government-backed. So I think it's important to say that because I think a lot of times there's confusion on certain countries like North Korea are almost always government backed. You have other regions where the government might be aware, but they're not necessarily government backed. And there is really a difference.

There is a couple reports of apps that are out there. One app that just that was in the news recently was Atomic Wallet that was cloned. That was in the news recently. It was Atomic Wallet that was cloned. So there was a legitimate app called Atomic Wallet. For those of you that have never heard of Atomic Wallet, it's one of the many wallets out there to use to store cryptocurrency. And basically what was happening is there was an app clonage. So an app that looked, felt, and sounded like it was Atomic Wallet that was created to help try to steal information and pass malware. So when we think about downloading apps, how do you stay safe? When you're downloading

a cryptocurrency wallet, it is vital to make sure that you're using the official download portal or the official area. Never, ever use social media links media links never ever use links that someone texts you or in a whatsapp message also it's important to not use ad base links because it's very easy for and in this case this is one of the ways we think it happened is you have a illegitimate company clone an app and they go ahead and put ads out and someone clicks on it and it ends up driving them to a cloned app, which actually was, they actually had a Mars, it's called a Mars Stealer that was part of it. So it was stealing information, believe it or not, from things like Discord and other channels. So this is a very interesting kind of challenge as we continue to move forward. The other thing that's important

here is that you may see that these actors have very, very intelligent activities and they may even download a real app, but then at the same time, while you're giving them permission, download the malware. So when we talk about it, trusted sources are the key here, going to a website, making sure that it's valid in their website, making sure that you're not clicking on links, even from trusted sources, always validate, hey, where did you get this link from? And don't just click on the ad, go back to the website. As I often say, that extra 30 or 40 seconds could save you a tremendous amount of time later. There are tons of tools built into your browsers to help stop some of these,

but unfortunately some of them, as we get more sophisticated, really are still a challenge. A Spanish research agency is still recovering from a ransomware attack. We talk about ransomware attacks all the time. The National Cryptology Center did a little bit of a report on this and just how long it takes to sometimes recover and what the impacts were. We continue to remind people about clicking on links, but I think it's also important to say that there is an evolution occurring where you're what I hate to use the word traditional, but your old school type of attacks are getting smarter, faster, better. And we'll continue to educate everybody here and talk about what that means, because what it really means is that as we evolve in the way we protect ourselves, the bad actors evolve in the way they attack us.

So I think it's very, very, very important to take all of the basic precautions in place. Use good passwords. Use two-factor authentication. Patch, patch, patch. Update regularly. I can't stress enough on that. Even a seemingly innocent ad or a realistically looking ad with a legitimate service can create a bottleneck or a gap for you in your security plan. So important to stay appeased of that. we're continuing to open up to taking that extra 30 or 40 seconds that you would take to validate it.

It's crucial advice that I don't think will ever change. And then I think just switching gears just a little bit, and this will be the last thing I talk about today. Just switching gears just a little bit, and this will be the last thing I talk about today. I think it's imperative that as we're thinking of supply chain crises and inflation and all these other things, that there's a stark reminder to just take that extra three to four minutes, listen to podcasts like this before you just read a headline and make an assumption. And there is a tremendous amount of news out there about supply chain and about what's occurring globally in the geopolitical state. And I think one of the things that I think is just so, so important is to take the time to validate information, even from a trusted news source. And I know we've said this so many times before on the podcast,

but you may, if you're reading financial news recently, saw a story about Russia and China creating a reserve currency. This is a true story. But when you really, if you understand what that is, there's a group of countries called the BRICS. So you have Brazil, Russia, India, and China working together to, and actually South Africa as well, 14 years ago to look at was there a need for another large reserve currency. That's resurfaced, but I've gotten a tremendous amount of chatter on the intelligence channels of what really it means and what the news is saying. And I think we're going to see by the time you listen to this podcast that you'll see that Sweden and potentially Finland were approved to enter NATO. That's something that's been going on for a while. So really digging in because the geopolitical impact on supply chain sometimes appears to be different

than what it really is. So it's just trust, but verify that information and listen and read for yourself so that you can make sure that you're not getting caught up in the misinformation track. And with that, I will turn it back over to Tony and Reed. All right. Well, thanks so much again, Tom, for all that good information. Tony as well. And Tom, I know you're on the road traveling like Diego is. And thank you, Diego, for producing this during your travels and after this episode. But mostly, thank you to all of you all. Again, look us up, LPRC. Look at lpresearch.org or operations at lpresearch.org. Let us know what you're thinking, what we need to do or change or add or delete. It's all about you all. And we look forward to your insights, input, and everybody stay safe out there.

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. 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.