LPRC - CrimeScience – The Weekly Review – Episode 124 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: October 28, 2022

Save the Date – 2023 LPRC IMPACT is Oct 2nd to the 4th! 2023 LPRC Event Calendar is available now! In this week’s episode, our co-hosts discuss the World Population Trends and their effect on retail sales, the future of identifcations and device authentifications, the decline of customer loyalty and its effects, the best apps to predict severe weather, Google Chrome is no longer supporting certain Windows versions, and Europe is requiring devices to allow universal charging cables! Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 124 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. Welcome, everybody, to another episode of Crime Science, the podcast. This is the latest in our weekly update series. Today, I'm joined by, as always, our co-host, Tony D'Onofrio and Tom Meehan and our producer, Diego Rodriguez. And we're just going to kind of take a quick trip around the world and discuss a little bit about what's going on. First of all, just a very, very brief touchdown on the COVID-19 SARS-CoV-2 virus world, and that's the world we live in to a certain extent.

But a little bit of reading and understanding around this Omicron variant, right, that we know that there are now multiple variants and then sub-variants, sub-sub-variants of these different strains around the world. But the idea is that the research showing that Omicron continues to evidently come out on top. theft, fraud, and violence, and other issues that we're dealing with, and how individuals continue to adapt and adjust, in this case, offenders, and overcome whatever barriers we put out there, procedural controls, obviously technological controls, ways that we're trying to deter them, convince them not to initiate a crime against us, or to progress that crime by disruption, but always trying to better document everything about them and their harmful events or crimes that they're committing as they victimize us.

So this is a little bit instructive in how those adaptations and adjustments to overcome what we put out there and what combinations of solutions or solution sets that we deploy. But this one is interesting in that there's this sort of evolutionary convergence, they call it. But the idea is that, you know, they're going to come out on top if a particular strain or variant or in its offspring, if they're the best at avoiding, at evading or neutralizing the host, us, the potential victim's immunity, whether that immunity is through vaccination or natural infection or a combination of both, how they do that.

This particular variant, the Omicron and all of its sub-variants and relations now in offspring and so on, just seem to be the best at avoiding and neutralizing our immune system components. Remember, we talked about the innate and the adaptive immune systems as well as it can be understood by scientists around the world. So, you know, it's instructive, again, I think from us as criminologists, for all of us that are practitioners to think about, all right, what next? How? And you see a lot of that kind of penetration or red cell or red team testing. And it could just be thought exercise. It could be through the systematic offender interviews that we and others might do to say, all right, if you're presented with this obstacle or that obstacle or this versus that obstacle or these combinations of obstacles and so on that we put out there through their

journey to crime, their journey to harm or to victimize, that journey, how do we disrupt that? How do we deter them at some point or displace them to another type, less damaging crime or a less damaging version of the crime they're trying to do or a different place, a different victim set, a different tactic they might use or a different time? Okay, not now, but later. So how does all this work? And that's really our role here at the LPRC and at the University of Florida, at the Safer Places Lab Crime Prevention Research Team, is to think those through, test those, and then come up with ways to help you all, the practitioners out there, you all that develop anti-crime solutions, to think about these things

to better integrate and get better effect, more cost effectiveness, fewer negative side effects, right, that people don't, that the green, the green actor or agent, the green shopper isn't likely to be deterred as well because it seems frightening or whatever it might be to them what we're doing, but rather fits in and is highly effective against the red actor, the red shopper. So just a quick tie-in on COVID. Again, the update, it looks like at least 420 executives defied Hurricane Ian, came into Gainesville, Florida for LPRC Impact 2022. Amazing, the most we've ever had register and certainly the most we've ever had participation wise is just absolutely amazing experience for our team. We've done multiple debriefs now to make adjustments. We had well over a hundred of our participants. Thank you. Respond to, okay,

what can we do to get better at, and then whatever it might be, logistics, the food, the fun, and of course the facts, you know, the content and how we orchestrate things. You know, one thing that was interesting was some of the comments and really it only came a couple of times, but it stood out to us and that, hey, there's too much content. I don't have time to go and check my phone and go hang out. We're going from session to session, you know, and you ask them, well, what do you think about this session? Well, high quality, high quality. So, you know, is it too much content or too much good content? Because which leads us to the other thing that we're always trying to look at. And people say,

well, there was too many good sessions. You know, I wanted to go to a mall. I could only go to six or eight of the learning labs. I couldn't go to all of them. How do we do that? I think the number one response, by the way, seems to be bring to bring three, bring four of your team members into Gainesville and go and then compare notes. Some of these are going to end up being webinars, by the way. Our sessions, we try not to video or audio record them because of the sensitive nature of some of the information. all the engagement that happens, not wanting to attribute particular comment or thought or idea to an individual or an organization, right? We got to get a lot done here. All the theft, fraud, and violence that everybody's dealing with is just incredible. And so we need to be able to be very open and partner with each other, engage and collaborate. And it's tough to do that if we don't have that kind of confidentiality. So we want everybody to know that.

So what we're going to be doing is some of the content will come out in research and action briefs, one or two pagers that will give you that summary that go to work. Some of this might come out on short or combined webinars. We're just the speakers talking, so we're not concerned about putting out some comments that were helpful and instructive, but that the individual making them wouldn't have maybe done so if they thought they were being recorded. So stay tuned for that. We've already got the dates, first week in October, first week in October, always impact. We're excited about it. We've also put out in today's, today being in October, first week in October, always impact. We're excited about it.

We've also put out in today's, today being in this case Wednesday, October 26, 2022, our latest Connect e-newsletter. And in there you'll see, as it came out last night, actually on Tuesday evening, the updated agenda of all of our events for 2023 here at the LPRC. We do put on six events for our members, and we're always excited about that to share that, but you'll see those dates out there. If you're not getting the LPRC Connect e-newsletter, it's free. It's for everybody. It's by email because you're not either signed up and it's just hitting a link and putting your name, title, and your email in there, or you're concerned that it might be screened out by spam, please reach out and let us know there at lpresearch.org. In this case, operations at lpresearch.org is probably the best way to do that. Looking ahead a little bit, the Ignite conference, again, coming up on that in that February time frame.

What we're looking at right now is that 14th, 15th February time frame in Gainesville. is that 14th, 15th February timeframe in Gainesville. Normally, we've got about 40 or 50 executives in town from our board of advisors. That's going to expand now with a slightly larger BOA, as well as our LPRC's Innovate Advisory Panel that continues to grow. Now, at 30 retailers, we may expand that by up to six, just because of demand by some of our retailer members, in a way wanting to participate monthly on the Innovate advisory panel, as well as the key sponsors of Innovate program that on the solution set side, the solution partner side, that number

is growing. We've got a new commitment this week, and we're expecting two or three more for the balance of early 23. We're going to try and limit that, but that funding, those resources we're getting there are amazing because they're helping myself and Corey, Dr. Lowe, grow the research team, both on the assistant or associate specialist side, but also with research scientists, both behavioral and now upcoming, stay tuned, a data scientist that can write heavy duty coded Python and help us do some of the very sophisticated things that we need to get done. Technically, technologically, as well as what we're doing behaviorally to to make those things happen. I've mentioned before the second part of that conference, Ignite, in that mid-February timeframe, we're going to also have Integrate.

And that's going to be a day dedicated to looking at all the integrations of technology across the five zones of influence. You're going to see these online scrapers as offenders talk about, as they recruit, as they obtain, enable themselves, move, and so on. We see the Army move, shoot, and communicate. How do we pick that chatter, that information up online? What all platforms can we scrape from? So that's going to be demonstrated that we're going to have a couple of characters. Some of our team then mobilize in a vehicle, move through our four-square block, University of Florida Safer Places Lab, SPL here. You're going to see all kind of action.

They're going to come in, go upstairs, as I mentioned before. action tool we've got deployed from their home online through zone five to four our parking lot area through three which is the transition into our building entire interior space zone two the approximate area around whatever the asset might be which is zone one and that that property so we'll have steel three or four items um maybe a weapon displayed or two um and some other uh aggressive behavior while they're in the store. We're going to test and stretch our SOC lab, our command center. And then you'll see us battle track. Where are they? What are they doing? Where are they showing up? How are we deterring? How are we notifying? Disseminating the information across our four square blocks and the simulated locations that are there.

How are we recording and connecting? How are we generating all the forensic evidence we need? Aural, which is, of course, sounds and voices and anything else of interest in that area. Digital signatures, signals that are coming out of vehicles and people's smart devices and so on. And of course, all the visual through the LIDAR and radar and infrared and standard cameras and so on, all the imagery we can get that could help document the crime, the extent of the damage, the harm that's created by these people and do it in a relatively seamless, integrated way. That's the whole point. So we're

really excited about it. We're doing a lot of detailed planning. We're collecting a lot of imagery. We're working with a new member, Drone Up, one of the top drone organizations in the world. They're already working with retailers on some of their delivery, R&D, and so forth. But they are absolute experts to combine and help us with our University of Florida drone expert, John Rouse, former Gainesville Police Department helicopter pilot and absolute drone expert. And then with our research team, put together high-res day and night imagery as well as using mapping 3D software and things with our partners, Esri and others, to help highlight and understand the whole Safer Places Lab ecosystem, what sensor and protective tools are arrayed across the ecosystem,

what role they play in deterring and disrupting and documenting would-be criminal offenders and those crime events and patterns that we see a lot of mapping going on. So we're excited to put all this together, to trial it a couple times, and then demonstrate and integrate or collaborate at LPRC's Ignite and Integrate conference in mid-February and then beyond. So stay tuned for all of that. What I'm going to do is on next episode, I'll go through some of the research we're up to. In the meantime, let me go ahead and go over to Tony. Tony D'Onofrio, let us know what's going on. Thank you, Reid, for those great updates. This week, I'm going to focus on two topics. One

is speak to about consumer loyalty and where consumer loyalty is going with all the challenges around us, getting over a pandemic, recession, inflation, and so on, all the economic challenges. And then I'm going to talk about the world's global population and where we're at on the journey of the size of the global population, which I think is important because that's a lot more consumers that come into stores in the future. So let me start with new research from the IHL group titled How Retailers Can Win Customer Loyalty in an Omnichannel World. Continued supply chain disruptions, rampant inflation, and an increase in selling and

fulfillment channels have magnified the complexity of what it takes for a retailer to deliver an outstanding customer service to their consumer. Their survey, this is the IHL survey that they do, revealed that how smart retailers can not only survive, but thrive amid uncertainty to win consumer loyalty in an omni-channel world. Poor inventory position is one of the biggest challenges in retail and is presenting a significant challenge and opportunity for the physical store. Inventory distortion, which is the annual cost of overstocks and out of stocks has risen to an amazing $1.9 trillion in losses for retailers across the globe. To put that in perspective, IHL points out that if inventory destruction was equated to GDP, it would be the ninth largest country in the world,

roughly equivalent to one that's very familiar and important to me, the total economic output of Italy. Improving inventory position can help retailers secure consumer loyalty and capture impulse spending, which is a higher margin and very important to retailers. The IHL's 2022 consumer study confirmed that in a world with increasing online orders, the primary reasons consumers shop in stores are, number one, they need those items now, and that's 75% of the people, or they want to touch and feel or try items on before purchasing, and that's another 57% of the people. In the last two years, these same consumers suggest that it has become much tougher

as they are losing trust in their local retailers to have the item in stock that they want to buy when they want to buy it. When consumers can't find what they came to buy in the store, it erodes their trust in that retailer, and that erosion of trust is increasingly driving them to other online retailers and marketplaces, especially Amazon. Across all segments, more than 25% of customers report decreased trust in retailers based on inventory levels. When asking consumers to trust Amazon has increased or decreased over the last two years, 32%, over 32% reported an increase in trust in Amazon and 26% reported their trust and

only 26% reported that their trust in Amazon has declined. According to the IHL survey of U.S. consumers, 80% of U.S. households now has a prime membership. The memberships are as low as 70% for households with income under $50,000, but over 94% of households with annual income of over $100,000, and they now utilize Amazon Prime. So the biggest spenders are using Amazon more. And again, this trust factor is important. What is fascinating about Prime members, however, is that if you can get them in the stores, they make considerably higher percentages of total sales on impulse items.

So the bigger spenders, you get them in the stores, they buy more impulse items, which means you, the retailer, gets higher margin. when a Prime member will go to a physical store, they experience out-of-stocks up to 55% or more of their shopping trips than non-Prime members. As a result, they're choosing to shop less and less at their local physical store. So physical inventory, knowing where the products are and having the products there for consumer becoming more important than ever. And how do Prime members act when the store is out of stock? They take out their phones and purchase online from our competitors at 73% of the time than non-prime members.

They're also 40% less likely to ask an associate to check other stores or online sites. So they're not patient. And I mentioned this in previous podcasts. Custom report they will give up on your store after two and a half to three times out-of-stock experience. So that's the famous three strikes and you're out. So when three strikes is all it takes for Prime members

to turn to your competitor, it's clear that stockouts put customer loyalty at risk. The study reveals when people leave stores without buying what they intended to purchase 14.5% of the time, it was not due to empty shell, but because of long checkout lines, which is another problem inside stores. To put it into perspective, that means that in North America, retailers are losing $27 billion in sales simply because the lines are too long and consumers walk out the door. Adding items like self-checkout or Scan & Go technology can convert those shoppers who are already in your stores and want to buy. Another area where consumers find greatest disappointment is the area of pricing disconnects. Retailers are losing close to 90 billion in sales worldwide at the store simply because the pricing on the shelves

didn't match the price in the promotion or online. As we look at the entire inventory distortion issue, it is hard to cut through the news to understand if performance is actually improving on an individual retailer basis when systems are deployed properly. The most significant challenge for inventory distortion are the availability of workers and the disruption outside of the immediate control of the retailer. But one trillion of the 1.9 trillion inventory distortion issue is the result of inflexibility in inventory systems and over-reliance on production in a small handful of countries. At a pandemic, poor shutdowns, the governor determined who was

the essential retailer and who was not, and an unexpected war between two countries controlling key raw materials. And the job of getting inventory correct is now extremely correct. So that's very, very important data. Out-of-stock is really a recipe for disaster for retail. You must have the product, and especially for the higher income consumers walking into store, they have options, and they will take those options online very quickly. Switching next to what's happening to global population,

let me go to Visual Capitalist, which reminded me that in November, we're gonna reach 8 billion people living around the world. So in just 48 years, the world population has doubled in size, jumping from 4 to 8 billion. Of course, humans do not equally spread across the planet and countries take all kinds of shapes and sizes. With 4.7 billion people in 2022, Asia is by far the world's most populous region. The continent is dominated by two massive countries in China and India. In 2023, a big shift will occur with India surpassing China to become the world's most populous country.

North America's population is 602 million people in 2022. The continent is dominated by the United States, which makes up more than half of the total population. And interestingly, American population is growing modestly. The exact date that we will hit 8 billion I have seen in multiple publications is November 15. When do we think we'll hit 9 billion people in the world? Currently projections are that we will reach this major milestones in the 2030s,

which is not too far away. In fact, Earth's population is expected to continue growing until it hits a peak at some point in the 2080s, probably just over 10 billion people. And then interestingly enough, it will start to decline in the 2090s, probably just over 10 billion people. And then, interestingly enough, it will start to decline in the 2090s. So lots more shoppers coming, especially all the way up to the 2080s, and lots of opportunities for

retailers to get consumers to store, especially in the nominee channel world that makes it easier and easier. And with that, let me turn it over to Tom. Well, thank you, Reed, and thank you, Tony. A lot of different updates today. I'll start off with kind of the continued piece on ransomware and cybersecurity and risk, and we'll go into kind of the normal updates here. There have been some kind of recent articles from different government agencies throughout the world. This is not really being driven by the

United States. I think it's important to state that before I go into it. But outside of the US, specifically in Central and Eastern Europe, ransomware is being used as a precursor to physical war. This is something that is, you know, something we've talked about before on here, but ransomware has grown by about 466% since 2019 and is increasingly being used to attack utility and infrastructure throughout the globe. There's a really good report for Q3 on ransomware and it talks about kind of the cyber warfare angle of it and this has come up before and how these attacks continue to be prolific and damaging and just this week there was you know some talk about an attack on the largest electric company in India and how there was a breach as well as an attack on Iran's atomic energy.

And the atomic energy attack is not the first time that's happened, but there's a tremendous amount of information that's available on the web. There's actually translated documents where there's communication between foreign parties and emails. attacks and the type of attacks these are. These are no longer just financial attacks. If you think of the kind of backing here and how significant they are when you're talking about in India, a country with just a mass population ransomware attack on their Tata Power. And that ransomware attack led to a data leak and then you have an attack on the Islamic nuclear regulatory piece. This goes to that article. That article actually in that report didn't actually talk about those attacks.

Those are just kind of examples of things that are actually happening in real time. We continue to see attempts and attacks on U.S. and North American infrastructure. I think we talked about, we released very early on the Colonial Pipeline attack here, the JBS meat attack, and there has continued to be kind of infrastructure attacks. So we'll continue to monitor it. I think we'll continue to talk about it, but it talks kind of how modern day Cold War versus what we have faced before and how a lot of nation state actors are taking the approach of cyber first, as well as with a lot of these attacks, their cyber criminal gangs and what the impact they have. So I know that at the LPRC, we're not focused on cyber, but this is just one of those things

that I think is important when you're thinking of your open source intelligence gathering or geopolitical impact. If these things are happening, what impact could it have on your organization? For instance, additional supply chain disruption, potentially disruption in countries where manufacturing is occurring, and then just overall concern globally. So I think that was pertinent to talk about. I wanted to talk a little bit, and I'm not going to get too far into detail, about some of the news around the United States cracking down on Chinese chip technology.

Roughly, depending on what report you read, 60 to 70% of components are manufactured in China. And the remainder, when you talk about chip specific, the remainder is a split between a whole bunch of different countries. But Taiwan actually has a huge chip Taiwan semiconductor. They're actually the two largest semiconductor companies in the world are in Taiwan. And so this China and US chip thing dates back to Huawei and ZTE talking about the theft of an intellectual property. This is not necessarily new.

What's new is that the government is taking a more formal approach to actually banning certain chips outright. And I think when we say that, I know some of the listeners here are familiar with NDAA when it relates to cameras and what can be put on a network. This is a much broader kind of approach here. This is a much broader kind of approach here. This hit the news several years ago with Huawei when the telecom, the 5G towers were restricted in the United States. And then the United Kingdom, who had already signed a deal with Huawei, was stopped because the U.S. relationships with them. So a lot of long, deep-rooted things here that go into this, but what I suspect we'll see just based on some of the bills and things that are coming out is a

greater degree of chip manufacturers being regulated outside of the United States, meaning that they will not be allowed to sell their product to certain customers in the United States, which in turn generally has a domino effect as the Huawei did, where other countries that cooperate with us or that we share intelligence with, we have the same kind of mandate. So this is definitely a space to watch because it could and probably will have long-standing effects on not only consumer electronic prices, but some of the things that the listeners to the podcast buy, especially in the security space with all the IoT devices

and all the things that occur. We, you know, looking back in the last two years, we know that with COVID there was this blockchain disruption and we really, it was flushed out very in the open of just how dependent we were for chip manufacturing in Asia and China specifically. But this is just kind of the next iteration of this. And I'm not going to get too far into the politics of what the impact on Taiwan is. But there's definitely in the past two weeks been conversations about the Chinese government saying Taiwan is a sovereign nation and that they're going back after that that's theirs and that

will also have some long-standing impacts on chip not only price but availability so it's definitely a space to watch for everybody who's on this podcast because it affects each and every one of personally and professionally and in the security space it absolutely affects the the use case of technology PayPal is rolling out pass keys for users in the United States what does that mean that means that some users will be able to access their accounts without typing in credentials this is a new option for PayPal users and basically what happens is it's using the iPhone, iPad or Mac passkey so your device becomes part of the

authentication process. This is something that's been in the works for several years and there are already other folks that are doing it but basically it's a two-factor authentication sometimes but what it really is, and if you've ever went to use Apple Pay and it looked at your face, it's saying that device matches that person, so we're safe to do this. This is something that we are going to see a huge trend in in the next probably six to 12 months as the industry is trying to eliminate the password. as the industry is trying to eliminate the password. This type of methodology has generally a biometric method as well as an actual physical device method.

There is also, you know, Google also released an initial passkey support for Android and Chrome earlier this month and that they're looking to, you know, work on a stable API for Android apps before the end of this year. So this is not just an iPhone, iOS, or Mac thing. This will definitely be on Android as well and is in some fashion already.

But this is really the next gen of password, and we're going to see this. Much like anything else, we need to be cautious of how the bad actors will take advantage of this. But in theory, this is a much more secure method because you need that physical device as well as the biometric. So you take away the ability for someone to even try to get into a device,

or into a, I'm sorry, not a device, into an account without that device present so in the future you would have no failsafe except for this and obviously when you have this type of authentication methods it means that there are the pros and cons but the the pro is that you are eliminating passwords and this is the future And I think we'll see more about that coming up. Google announced this week that Chrome web browser will drop support for Windows 7, Windows 8.1 in February of 2023. There are still folks out there using Windows 7 and 8. This is really, really

important. And when we talk about updating and patching, this is a little different because now you're talking about upgrading, you're changing versioning, and there's still a lot of machines with Windows 7 and Windows 8 out there. But why this is so important is because there will be certain features and certain security patches that may not be available for Google. There hasn't the Google Chrome in the future if you're using those versions. If you're using Windows 7 or you're using Windows 8, there's nothing wrong. The end of support is coming for the Windows 8, but I think the key here is to look at your versioning, not just your patching and updating.

We talk all the time about patch, update, patch, update. This is version complete, and this is a little different than an update. Sometimes this would be an upgrade, depending on where you are. It depends on what would occur. So I think something to watch. And then something in the news that I just think is interesting that you may have heard about, but the European Union last, actually, was it yesterday?

I think yesterday is in its final approval to require companies to switch to USB-C devices. And this really comes from a lot of times around proprietary charging cables. So this was a big news for Apple where the EU is saying it's not, you know, they don't want a telephone or a handset or a smart phone maker to be able to limit you and force you to buy a single type of charger. This universal piece does make it easier. It's something that I welcome. The only challenge you'll have is all the peripherals and all the things that you bought for an iPhone. So if you switch to

a newer iPhone and you have an iPhone, that lightning connector won't work. I'm sure there'll be adapters out there to deal with it. But if you remember way back when Apple switched from lightning connector, there was a little bit of fluff and fuss in how much time it would take to get rid of peripherals. Someone like myself that does podcasting, I have microphones and things that are specifically designed for lightning ports. So for me, I look at this as, you know, just changing the purpose out. However, my iPad, which is also an iOS device, has a USB-C. Universal charging really makes things easier. I love USB-C because I can charge my laptop, my iPad, my headphones, all these other things. The only thing I can't really

charge is my iOS device. So the verdict is out. I think this is, whether it will go through, it does look like this is going to get passed. And that would be that iPhones by the end of 2024 would need to have this feature. It isn't clear if they're saying sold or manufactured, so there's still some open items here. But if that happens, it's a likelihood based on the size of the EU that we would see that globally. And that's a benefit to all of us. Not so much risk news. I just thought it was good tech news. And with that, I think that's all I have today. I hope everybody stays safe. It's starting to get cold. Up here in the Northeast, the leaves are changing and we're starting to see that cold weather. Travel's in

full swing. I know we just ended a few weeks ago at the LPRC, but everybody stay safe and stay tuned. Over to you, Reid. All right. Well, thanks so much, Tom, for that amazing information. Thank you also, Tony, for all the great insights you're providing from around the U.S. and the world. It's sometimes tough. We used to always get on at the same place and time and certainly the same time. increasingly difficult, particularly with Tony all around the world making some neat things happen and Tom with his extensive travel. And now I'm starting to travel more as well. So thank you for all of your input. I want to thank Diego, our producer again as well, and thank you all for tuning in. We want your suggestions and ideas. So everybody stay safe out there. We want your suggestions and ideas. So everybody stay safe out there. 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. 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.