LPRC - CrimeScience – The Weekly Review – Episode 132 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: January 5, 2023

NEW INTERVIEW with Lead Director at CVSHealth – Adam Oberdick! In this week’s episode, our co-hosts discuss the continued planning of LPRC Integrate, Twitter allowing previously censored individuals back in, the continued cyberattacks this holiday season, and a riveting interview with Adam Oberdick about the innovation initiatives at CVS! Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 132 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 our weekly update series, and I'm joined by colleagues Tony D'Onofrio and Tom Meehan, our producer Diego Rodriguez, Wilson Gabarino, and all of you. And we're very excited to work with you. Here we are. It's 2023. I hope everybody had a wonderful, safe holiday season and got some recharge, family and other opportunities, and especially relaxation as well, well as a refocus and

and maybe greater alignment so we want to welcome you to crime science here produced by the lprc and we got a lot of things going on in 2023 to build on 2022 and our team had our first team meeting of the year yesterday in our ideation lab in the hub at Innovate Square on University of Florida campus. And we went through a little bit about where, you know, in that the LPRC retailer membership, literally in the second quarter, excuse me, in the second half of the year exploded. We've added numerous retailers, double digit. We've also added numerous solution partner members in critical need areas.

Sensors, as you all know, we're going to talk a little bit about it, but are very, very critical to everything that we do. We just have, we have to know we're going to talk a little bit about it but are very very critical to everything that we do we just have we have to know we need to know earlier what individuals and crews are thinking and doing as they plan and move toward harming us and our people our places so we've got to have sensors of all types as as you all know, and that's where we've been adding key members. We need to, though, with the information, the visual, the aural, you know, in other words, the aural type evidence, as well as digital signals and signatures that are produced that we need to know about, they need to be processed, analyzed. They need to be recognized.

We need to generate alerts to the right people, disseminate the right information. So analysis tools would be another part, and the connections between the two would be the third part. So the technologies that we're working on are those that would sense individuals and their harmful planning and execution signals and signatures from those individuals, the connections from that to our different analytical tools that we might have, models that would recognize verbal, would recognize physical behavior, features of threatening individuals, of humans, of vehicles, and of our stuff you know the tools weapons crowbars magnets cutting out instruments garbage bags whatever it might be those are things that are

important to us the vehicles that we drive also the features both the color make or the color of the make the model damage, noises that they make, the digital emissions from their sensors, and some of the technologies in newer vehicles. So all of this are the solution partner members that we're adding to fill in gaps and create opportunities to build world-class integrations that you all, that our members need to make a big difference. So with that comes our team continuing to grow in capability and in size, and so that our researchers are more and more capable of understanding what needs to be researched, understanding context and how offenders think and how we influence that thinking, how they emit these signals and signatures, but then how to turn

that information into real-world projects that result in great outcomes for you all, for the practitioners and others, to create much safer, more secure places and people. So that's a big push for us in the number, the quality, the capability of our researchers, our research team members. And so we've really literally doubled our research team size in just over 12 months. And there may be a little more growth in 2023 to come. Our operations team also has doubled in size and in capability as well so that we can do things the right way. Always, always have great events, great webinars and in-person physical summits, you know, our Ignite slash Integrate coming up here, our kickoff meeting in New York City, and obviously the impact in the first week in October. So a lot going on around here at LPRC and a lot to talk

about. I thought what I'd do is today also touch a little bit on how we're looking at every scenario that we're putting together, every theft, every fraud, every violent scenario, or those that are mixed, that are hybrids of those, whether in person or online, whether it's a supply chain, office environments, parking lot environments, or of course, store environments. These are all important for us to work on. And so we put together these crime scripts and we've talked about this several times on this Crime Science Podcast, what crime scripting is and how we use it. It's basically what the offender goes through to be successful in their mind, to successfully

harm or victimize a place or a person. So that's the crime script. So we look at how an individual conceives of a particular crime, or it may be being exposed to others that talk about it, brag about it on media, social media, and so forth. We talk about that they might develop a motive. You know what, I'm going to do this thing because I want this, I want to hurt somebody or I want to threaten or otherwise victimize. So there's some motive development and there's an opportunity, again, to know about some of these crime concept exposures. for a potential active shooter or killer of some sort of a thief that works at that place or doesn't, but is visiting or planning on coming there, or a crew themselves are communicating with each other. These are opportunities to pick up on.

They might neutralize their guilt, you know, rationalize their act, this individual or this crew. Hey, they deserve it. They've heard other people, hey, I give and give. It's time for me to take. They owe me. You hear these what we call guilt neutralizations or rationalizations for people harming another person in some way, shape, or form. There's maybe some real specific event attempt ideation. They might think about it. They might practice. They might dry run. They might just do things that are part of what they're going to do in the future, whether they follow through or not. We've talked about before, most people desist or just the thoughts deteriorate and just go away. They don't think about it anymore or they think something better of themselves or realize that's really not worth it.

I don't want to get in trouble. That's wrong and so on. But many continue on and they might start now some actual planning opportunities again for potentially for the practitioner to learn, hey, this individual or this group, they're planning, they're acquiring tools, they're looking at routes, they're looking for vulnerable entry points, they're looking for places overall that might have the most potential victims. Again, whether it's an active shooter, whether it's a thief, a fraudster, or otherwise. So there's that kind of actual planning that might go on, getting buddies, getting equipment, getting tools, trying to acquire passwords. Again, we're always thinking of insider threat,

somebody that works there or used to work there or knows somebody within that organization, so there's that collusion that's happening or an outsider threat or again with collusion a hybrid um trying to understand that that planning purpose they might start searching for targets or better targets uh again a place a person or something inside of a place so what type of merchandise who's got the most of what i want who's got the most of what i want that's the most vulnerable to me it's not as well? Who's got the most of what I want? Who's got the most of what I want that's the most vulnerable to me? It's not as well protected. Who's got the most of what I want and is the most vulnerable and it's closest or most convenient or the place I can get off at a bus stop or a mass transit stop or get a friend to take me to or whatever we're looking at right now. So that's some of the planning and the search it takes on. They may adjust their targets or terminate one target and then later look for something better, more fruitful, more convenient, less risky for them, more vulnerable to their attack, to that event, that type of thing. There may be some pre-strike communications going on as they move and they talk with people to acquire the tools, to acquire information, to understand vulnerable targets better, or to maybe rule out but particularly online and different platforms and Reddits and RattleMe and just the different platforms that are out there.

You see it across multiple areas, Telegram, obviously texting. There is some communication on Facebook and Snapchat, Instagram. Facebook, and Snapchat, Instagram. You'll see, of course, listings in Craigslist and things that we know where they're posting information, recruiting things, looking for items, where people are, of course, trying to convert stolen goods to cash. That's how some of them are meeting up and so on. So that communications is all important, all critical, way before an event, during an event, and after an event, right? Left of bang, at bang, and right at bang. So we want to pay attention to that, have sensors out there online, and the abilities to collect that information and make sense of it, and most importantly, to prepare and protect our people and our places. They may have to convince or

give in to others to get what they want or need. There could be some of those negotiations, bargaining that they have to do. They're now going to have to move to the place. There's going to be some transit, some movement, whether it's on foot or on a bike, bicycle, motorcycle, mass transit, obviously a vehicle. There's going to be some movement of them. They're going to have to coordinate that. They're going to have to execute that. There may be some opportunity to pick up on that and so on.

So what places do we have along mass transit stops? What are the places that are most proximate, easiest to get to and from and so on in mass transit or other places to park or hide quick exit routes and so on these are some of the things that they're thinking about how do i get in but how do i get out and get away how do i get away uh what's the way to survive what's the way to get the most i want but what's the best way for me to get away and not get caught. Those are important to them. We look at, you know, also some of the approach that they're making. How are they coming toward us? Are they masked up or not? Do they approach from out of the dark or maybe with the sun or a light behind them so you can't recognize them on the camera? So there could be things they're doing to disguise,

to disorientate others, to blend in. Are they using disguises? Things like that. We understand that in the Tops active shooter situation in upstate New York, there may have been some disguise made pre-attack visits. These were pre-event indicators or pre-incident indicators, the type of thing that we're picking up on. So would people or cameras or other sensors pick up on things that, hmm, that's interesting or that stands out or that's not normal? Or that person keeps doing that, which is not normal, and so on. So we're always looking at those things. They're having to discount or to confront

and overcome countermeasures. You know, okay, I see that there's a camera or somebody that's alert or there's this or that. That's okay. They don't see me. They're not going to do what they, they're not going to execute the right way. I can overcome that. I can defeat that. So there are a lot of those things that happen. There's a lot of that type of activity that goes on, at least in their brain, whether they execute it on it or not. that. So there are a lot of those things that happen. There's a lot of that type of activity that goes on, at least in their brain, whether they execute it on it or not. Now they have to actually launch or initiate their attack. Do they now progress? Do they keep going in light of countermeasures or resistance or things that didn't turn out to be the way they wanted? So

these are all opportunities to pick up on this information and, again, to influence their behavior, influence their choices, their decisions that they make. There's the actual attack, whether it's taking something, defrauding, you know, social engineering, for example, something at the point of sale, concealment, something at the point of sale, concealment, a package attack, or some sort of intimidation or actual physical attack, of course. Is there escalation? Do they continue to escalate? Is there some resistance? Is there victim escalation, which is probably, to me, an unfortunate term, but the idea is that an offender escalates physically and otherwise because they perceive, or in fact it is, the fact that the victim is resisting this attack, resisting this crime event, this attempt to harm them or victimize

them or others. So there can be that counter-escalation even if the victim is actually not reaching to press a button or call for help or pull a weapon, but the offender might perceive that's the case. So those are things to look at, to understand, to guard against. Let's say they've now made their attempt, they've escalated or otherwise, now they've got to retreat, they've got to get out of there that's an opportunity to maybe do something in this case obviously make apprehensions determine which way they're going without putting ourselves in harm's way or our people looking at what exit escape route so a lot of retailers and others will as part of their audits and understanding about the risks that their places are exposed to,

given, you know, let's say comparatively to other places. But what's the vulnerability? How vulnerable are they? How well are protected? Are they not just how much risk are they exposed to? How many potential offenders and how often, how severe, but how well are they set up to maybe deter people, disrupt them, document them, or make it just harder, riskier, less rewarding for the criminal. So that vulnerability assessment, but part of that is escape routes. How would an offender go? Come to and hide, escape from on foot, on bicycle, mass transit vehicle, whatever it might be. So before things happen, understanding, having cameras in the right place, having schematics drawn up, having barriers placed in those areas so that vehicles can't maybe go in a

certain area or go as fast in an area, that they can't jump over a fence or run down an alley or get away quickly, making that more difficult. That may help prevent the incident in the first place or at least maybe enable quicker apprehension of the offenders and so on once it's happened right of bang or right of contact after the event, post-event. So looking at those types of things, they've got to get away. So looking at those types of things, they've got to get away. They may have next steps that they're going to go through to convert stolen goods to cash, all aiming points for sensors and action tools like we've talked about. There may be now them thinking about ideating a new strike, a new attempt. So what's victim one?

That's the place that got hit. What's victim two? What's the potential that got hit. What's victim two? What's the potential next victim? They're probably not done. They're either going to return there or to a place like that we call repeats and near repeats, near misses and so forth, and looking at the geospatial layout of crime. So these are some of the things just to think about, to talk about, to work on that our team's working on with the newer and greater enhanced team that we've got to serve the needs of our growing membership,

just about 200 corporations working together to reduce theft, fraud, and violence. So I want to, with no further ado, turn it over to Tony and then to Tom to talk a little bit about what they're up to, what they're hearing, and some useful ideas they've got for all of us to better protect and safeguard ourselves, our places, our people, our possessions. So, with no further ado, Tony, let's turn it over to you. Thank you, Reid, for those great updates. First of all, Happy New Year to everyone, and I'm looking forward to another great year for the Loss Prevention Research Council. This week, I want to focus on an article that I published, and it's titled the 2023 Top Five Strategies and Top Three Retail Technologies

for Retail Success. And it's really a cornerstone of a presentation that I've been updating and delivering around the world for years on the disruptive future of retail. The five strategies for success into 2023 and beyond are number one, harmonize retail channel. HubSpot recently published some consumer research that found Gen Zers start by doing a lot of research online, and these are Gen Zers, younger consumers, 18 to 24. They search most often on social media, followed by YouTube ads, music streaming services, and internet searches. However, the majority of consumers, and the number is high, 73% still prefer to shop in physical stores, and 55% of Gen Zers prefer to do the same.

So really, you must take care of harmonizing all channels to get to the success formula in 2023. The number two strategy, frictionless commerce. The number two strategy, frictionless commerce. The growth of frictionless stores is expected to have a compounded annual growth rate of 91% and may reach $400 billion by 2025. In my view, the train to frictionless commerce has left the station and the future of stores will be more automated. Key to this strategy is effective implementation that does not negatively impact customer service. The number three strategy is digitally empowered associates. The pandemic was not kind to employee staffing at store level with customer facing store level store-level associate shortages costing retailers an amazing $172 billion annually. Associates are the bridge between retailers and shoppers and play a pivotal role in ensuring

customer expectations are met. In my view, the arrival of the smartphone in the hands of consumers requires more aggressive focus on putting digital tools in the hands of associates. It is becoming a paramount requirement for the success of the retail brands. The number four strategy is enterprise inventory visibility. In 2022, the problem of inventory distortion, which is a combination of out-of-stocks and overstocks, has grown to over $1.9 trillion. I'll repeat that, $1.9 trillion worldwide, which is an increase of 13% since 2020. And that was the year, remember, we were all panic buying. and that was the area, remember, we were all panic buying. The first reason by far why consumers leave stores is empty shelves.

While grocery improved by 24% in the last two years, the IHL group saw a dramatic increase in empty shelves for clothing, especially soft goods and department stores, as retailers tightened inventory. Harmonized retailing only works effectively when a retailer has very high accurate inventory visibility. Digitally empowered associates can provide instant consumer assistance in getting the product they want to buy that is out of stocks.

With high inventory visibility, products can be sold across the enterprise at a greater profit even to the last unit. And the fifth strategy that's going to be important in 23 is real-time analytics and engagement. I cite some research data. Some of it is that 73% of business leaders said they are delivering a relevant and reliable customer service experience is critical to their company and overall business performance. Data-driven organizations are 23 times more likely to acquire customers, six times as

likely to retain customers, and 19 times as likely to be profitable as a result. The top needs for improving customer experience are personalization, are at a real-time pace, so in other words, personalizing experiences real-time, getting more customer data, and greater analysis of that customer data. Consumers, you got to remember, already have real-time information available with their smartphones when they enter your stores. They can and will increasingly respond real-time

to unfulfilling shopping journey with negative consequences to retailers that cannot respond quickly to their preferences. So based on those five strategies, what are the top three technologies that I see in 2023 as being most important? Number one, edge computing. Retailers with edge computing saw 7% higher sales growth in 2022 than those who didn't have it. And the numbers for profits are even stronger. 88% higher profit growth with edge computing was installed. Number two technology, Internet of Things at the store center. The Internet of Things or connected devices and more

sensors will dramatically continue to increase in retail, especially at the store center core, where all products will eventually carry sensors. And in the article, I go into detail on the increased adoption of RFID as an example of this. And the number three technology that I think is critical in 2023 is computer vision. In 2021, we crossed a billion CCTV cameras installed around the world. Many of those cameras now carry data eyes. Computer vision is already improving in applications, for example, such as self-checkout, where they can detect anomalies real time and react to them, that it can be very effective in allowing some of the other trends that I've talked about, such as frictionless commerce. And I would expect many more computer vision applications to be coming to a harmonized retail channel near you. Now, what does this mean in terms of a more smarter, more profitable

retail store of the future? The smart store of the future will include many more centers generating data mostly at the edge. The data will go through intelligent filters with the primary goal of defining immersive experiences and increase loyalty. At the core of retail was and always will be the consumer. The challenge for retailers today is that the consumer, because of the smartphone, are much more educated in shaping their own preferred shopping journey.

A truly successful retail model will focus on strategies that create brand ambassadors of both store associates and consumers. Technology in the hands of store associates needs to be elevated to deliver a magical digital commercial conversation with the consumers. The alternatives that the consumer using their smartphone can instantly buy from a competitor while they are standing in your own stores. So in closing, the five strategies are harmonized channels, frictionless commerce, digitally empowered associates, enterprise inventory visibility, and real-time analytics. And these are the critical strategies for 23. These are the critical strategies for 23, a great starting point to actually leveraging these strategies and making executing them are leveraging edge computing, the Internet

of Things, including RFID and computer vision, and they will deliver a smarter, more profitable store of the future. So that's my summary for this week for the new year. I'm looking forward to a prosperous new year for all of us and a healthy new year. Happy new year to all of you and see many of you at the NRF. And with that, let me turn it over to Tom. Well, thank you, Tony, and thank you, Reid, and happy new year, everybody. This is the first, should be the first episode after the New Year.

We're taping on January 3rd, so Happy New Year to everybody. Just a couple different things in the news, and I know I spoke about this in the last episode. We continue to see articles throughout major news publications. articles throughout major news publications. Actually, the Wall Street Journal reported that the one article that they had put out, shoplifting fuels a $94 billion problem in America's stores, had tremendous response. That was from January 23rd. So I think we'll continue to see the influx of this information being shared will help obviously everybody on this call spread the word and um get get out and about update on supply chain so also from the wall street journal just uh similar in the same week uh supply chain is up ended by covet or back to

normal so improve shipping rates delivery capacity um and inventory and retail. We're seeing a positive sign for supply chain. In some cases, you're seeing in certain markets, in certain industries, supply chain fully corrected and others you're not. And then the question is where rates have not fallen back to pre-pandemic levels? Will they ever? And I think that's a big, big question for everybody here. We know it's with inflation and going on, I think there's more to come with that. But it is definitely good news that items can get from point A to point B. I would caution us all to keep close eyes on what is occurring overseas, both in China with COVID and the resurgence of COVID, as well as what's occurring in Central and Eastern Europe from a standpoint of if you have the war in Ukraine,

then it's COVID in China, what if any impact will that have? On the chip market, we see a pretty dramatic increase in availability for chips. Consumer electronics are available. There are still some components, primarily something called a Raspberry Pi, which is actually a computer that is in most automobiles, as well as a lot of edge devices. It's still relatively difficult to get a hold of, but nowhere near what it was before. So I see that the signs are improving uh some of that

has to do with inflation and the spending changing but i think uh we're relatively back to pre-pandemic levels which for supply chain which is phenomenal uh switching gears a little bit tick-tock band it continues to come up this debate actually moves from the mainstream to a very small forum in comparison to the federal government so in south dakota there is a rapid city south dakota council it's actually meeting today during this taping on whether they should ban the device tiktok from their devices. The federal government has already done that, stating the risk related to China and the data it collects. But this is a really interesting turn. Normally it wouldn't be so interesting, but the simple fact here is that when you have local government getting involved,

it shows kind of the diversity of concern here. There is some political elements here where you have two folks that are essentially going to run for mayor at odds of whether TikTok should be banned or not, where there was some talk about that having impact on the decision being made. I think it's certainly too soon to say that that's definitely the case, but something certainly we should be aware of and mindful of when we're thinking through this. I do think that you will continue to hear this potential band coming up. The algorithm is very advanced. It collects a ton of information, much like any other social media network. They have similar terms and conditions. The difference

here is that the Chinese government overreaches what concerns folks a lot. And I would say that the algorithm is, in my opinion, one of the most advanced out there. And that's based on not only my opinion, but information gathered. It is from a video platform only second to YouTube. So when you think of that, it has a huge, huge user base. And some of the concerns around the Chinese government are not just at that collection point, but that they can point certain people to certain videos and potentially change the way someone views or thinks about something. So more to come on that. I think we'll continue to hear that.

In ransomware news, the hospital for sick children was affected by ransomware. The attackers actually did a formal apology. The attack occurred on December 18th. The hospital suffered a ransomware attack that impacted the internal systems and corporate systems. internal systems and corporate systems. And actually, on December 29th, they announced that 50% of their systems had been restored. The LockBit gang is the gang responsible for this. And they actually went ahead and two days after the attack,

responded with an apology. And there's a screenshot of this available on the Internet. And it basically said that they formally apologized for the attack on six kids and gave it to Cryptor for free to the bad actors. So this is an interesting one, right? You have bad actors who are out for financial gain. There's a chance here, and I'm speculating that this was a widespread kind of net attack and lock-bit ransomware went after and attacked this hospital inadvertently. Basically, you cast a wide net.

Someone clicks on something, something downloads something. But they did go ahead and give the free decryptor. That still did take down the hospital for some time, but this kind of shows that in some cases you do have bad actors who are out for financial gain that still do want to do the right thing at the end for certain things. So we always talk about this

jokingly when we're talking about criminal gangs and enterprises that there is a code of ethics that they follow and within reason a lot of times it does have to do with children. And this is a good times it does have to do with children, and this is a good example of the code of ethics for children. There was a lot of chatter about how they would never intentionally attack a hospital

for financial gain that involved children. So interestingly enough, this did get a lot of press over the weekend. With ransomware in general, we're going to hear a lot now that the New Year is of what the overall impact was. There was a report that was released that said over 200 government education and health care organizations in 2022 were affected. My guess is that's grossly misunderstood because of the fact that you don't get all of that data in the same place. They made a point to say in this report that there's no clear picture on ransomware attacks. This is based on the data that was available. The U.S. struck 105 countries. So when you look at this, it's saying the U.S. is predominantly the largest attacked.

It affected nearly almost every country, 44 universities, 45 school districts, 24 health care providers. Again, this is a great report when it says that it affected 105 counties. The report is kind of very interesting, but cites many times that this data is relatively limited in the sense that they only have a small pool. So as we continue to talk about ransomware, it continues to be a challenge that will arguably be with us for a long time. And then over the weekend, there was – and it's still occurring in some cases – there was an outage, or I shouldn't say an outage, a challenge with air traffic control systems in Florida. There was a ton of news around Southwest flights and challenges they've faced after the storm with legacy systems. This is related to specific to Florida air traffic. So there was thousands of flights canceled over the weekend. We continue to see that as a challenge. One of the things that I often talk about is in which specific to cyber risk is the risk of

outdated systems. And Southwest admittedly says they have a lot of outdated systems. This is a big challenge throughout the aerospace industry. And I shouldn't say aerospace. I should say commercial airlines. Generally, you have a lot of legacy systems out there. And while they don't normally cause challenges, sometimes they can. And in general, when we talk about legacy systems, it continues to be a challenge for cybersecurity overall. I think there is a bit of a misconception that this has to do with cost of replacement, and a lot of times it's not.

A lot of times it's pure resource and time. the resources needed and the time and effort that goes into replacing a legacy system are exponentially higher than I think a lot of times people think about. So when you're trying to replace an older legacy-based system, this at times can take months, if not years, to replace, and then you have to have the right developers and the right resources available. So it's not always about cost. As a matter of fact, I would argue that it's more times about resources than cost when it comes to legacy upgrades.

And with that, I will turn it back over to Tony and Reed. All right. Well, thanks so much, Tony, for all that great information. And Tom, you as well. I want to thank Diego for his hard work, for Wilson as well. I want to thank you all. Stay safe. stay in touch, always at lpresearch.org, operations at lpresearch.org. So stay safe, 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. 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.