LPRC - CrimeScience – The Weekly Review – Episode 135 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio, with Special Guest David Johnston

Episode Date: February 2, 2023

2023 LPRC IGNITE & INTEGRATE planning is going strong for this first of its kind event! In this week’s episode, our co-hosts discuss the role of social media in intelligence gathering, a quick look at the LPRC events coming up, an international coordination to stop a ransomware group, and a riveting interview with David Johnston, VP of Asset Protection and Retail Operations at the National Retail Federation! Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 135 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio, with Special Guest David Johnston 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 Tom Meehan, by Tony D'Onofrio, by our producer Diego Rodriguez, associate producer Wilson Gabarino, and our very special guest, David Johnston from the National Retail Federation, the NRF. And Tony and David are going to sit down and chat a little bit as well and get an idea from loss prevention asset protection as well as overarching retailer support, where that organization is going to be helping to lead us in the industry. I'll just start out with talking a little bit again about our events. We've got LPRC's Ignite or Winter Planning meeting coming up

February 22nd, a reception on the evening of the 21st. We're excited about having our board of advisors into Gainesville again to help us all think about, discuss, brainstorm, and plan for 23 and beyond what research and development needs to be done to support more effective, efficient, profitable, but certainly safer places. So we'll also, though, of course, have a reception, though, on the 20th of February in the labs and in the greater UF Innovate Hub facility inside and out. We'll do a terrain walk through the labs and kind of trace the exercise we're going to carry off as part of the inaugural integrate event that will actually occur 8.30 to around 3.30 to 4 time frame on Tuesday, February 21st. And that'll be over at the University of Florida's beautiful

rights union building, the student union. So we're very pleased. I think we're now at about 48 cutting edge technologies that have been integrated or just about there. We started filming some of the sequences that the tabletop exercise will leverage for the retailers. I think we had 26 retail chains, over 40 retail executives now registered to participate. The goal is 30 chains potentially, but we could accept up to 90 participants. But the idea is to actually keep this inaugural event a little bit smaller. This is a learning event. This is what's going to generate a lot of tabletop war game type exercises for us all across theft, fraud, and violence or hybrid type scenarios. So,

we did the filming in left of bang, if you will, as our red actors create havoc before and during an armed and strong armed robbery event in our lab, engagement lab, which simulates a store. And also prepared for today. Today we'll be doing shooting. I'll be heading there in a minute. Right of bang for event one. And then it'll be, well, we don't want to disclose too much more than that. We've got some law enforcement support as well, making some cameo appearances, it looks like, at least their vehicles. So what we're doing, though, essentially is just building all the elements of a very realistic, hopefully, crime event involving two organized retail crime characters that end up getting a little aggressive and even potentially

violent, and then trying to understand how we earlier and better define what's going on, maybe try and prevent all the daily surprises that continue to happen every time that a retail environment is struck. So more to come on that exciting event. We do also have some other events coming up. We've got our Violent Crime Working Group Summit. Our Violent Crime Working Group Summit, that's going to be coming up here on the April 18th and 19th. It will be in Houston, Texas. We think we've got the venue. The reason we're not sure, we do have a venue secured and donated, but the concern is the size may grow of the group.

On April 4th and 5th, we've got our annual Supply Chain Protection Summit. That will be hosted by Procter & Gamble P&G at their headquarters in Cincinnati, Ohio. Very excited about the prospect, as is our retailers and solution partners and P&G. May 23rd, May 24th will be our annual product protection or theft reduction summit. That will be virtual as per normal to allow us to carry off some exercises and to get very broad engagement across the retailers that are assigned to reduce theft in the stores, whether it's organized or disorganized or opportunistic, if you will. So stay tuned on that. Another quick reminder that impact, our big one, always the first week in October, second through the fourth here in Gainesville should be bigger and better than ever. We're already working on the research, already working on the sessions. There's going to be a lot of interaction now with these

scenarios and tabletops. There'll be nothing like it. So we're excited about all that and more. What I'll do is let me head on over now to Tom Meehan. And Tom, if you could kind of fill us in around what's going on around the world. Yeah, thank you, Reid. And thank you, David, for joining. And I just wanted to talk a little bit about some of the civil unrest and some of the things that have occurred in the past 10 days. And we're gonna focus on the United States. I think it's important to note that there's been globally quite a bit of civil unrest all for I would say different things.

There's some governmental things in Europe and you were seeing a lot in Central and Eastern Europe. But really, the most recent, the Nichols case, which was the unfortunate issue out of Memphis, and I think the civil unrest, which I would say was largely peaceful, there were still pockets of violence and destruction. I know that the Lost Prevention Research Council launched the fusion net for anybody listening. What our fusion net is, is a place where retailers, law enforcement, academic folks can come together and share active intelligence information

through a channel that is safe and secure to help get information in real time and really to help validate some of the things. We know that social media tools and active intelligence tools are great. The challenge is that sometimes you have a largely peaceful event with a very small pocket and the media might focus on one portion of it. So when I was monitoring and working with a couple of the members here, there were very, very small, what I would say, acts of, you know, rioting in New York City, but they were limited. But it was largely missed on the chatter, the open chatter.

And then when you went down, a lot of police vehicle destruction and graffiti and things like that, and that that surfaced later on, but was while it was happening, really getting that information out. We'll continue to monitor the situation. I think that the activity, both on the open web and in some of the forums, is that there will be several protests in major metropolitan cities. One thing I will say that is good to see is a lot of these channels are in the past have been channels where they called for disruption. And then what I'm starting to see is a lot of the chatter is the latter of, you know,

we need to protest and not destroy things. And I think that that message was overwhelmingly, you know, the consensus of what I saw throughout most of the channels. And I would say that this was in, there was chatter or events in almost every major metropolitan city throughout the United States. So I think it's important to note. I also will say that on the global wire, which is not always the case, there was quite a bit of media in Israel about this because of some of the violent events that happened. So both myself and the LPRC monitors global channels to see what's going on. And this is one of the first times where I saw parallels in the communication

and the stream of people talking about it in other countries and relating it to their challenges while they were very different. So again, we'll continue to monitor and we'll continue to update as we see necessary. Kind of switching gears, there's been a ton of talk about artificial intelligence and machine learning. I think chat GPT coming mainstream and being available to the public has really brought it to light. I thought a very interesting announcement that I do actually think will affect us here in retail is last week, Mercedes-Benz confirmed that they will have the first approved level three autonomous vehicle in the United States. And what that means is basically the vehicle can drive independent with, you don't actually have to even hold the steering wheel at under 40 miles an hour.

And this is a huge breakthrough in automation, artificial intelligence, and machine learning, because I think if you would talk to someone, you would think that that is already occurring. And that really talks to the advancement in machine learning and artificial intelligence. And I know at the NRF Big Show, we saw a huge, huge influx of real artificial intelligence and machine learning helping retailers. And although chat GBT and autonomous vehicles may not at first relate, what it shows is that the technology is advancing and becoming scalable for all of us. So I continue to believe that this year you will see a much greater emphasis on not just

artificial intelligence, because I think we've had it for a long time, but actual machine learning and how it's applied. So I thought that was a relevant thing to talk about. Switching gears a little bit to TikTok, because TikTok is constantly in the news and talking about privacy concerns. TikTok's CEO has voluntarily agreed to testify before the U.S. House and Energy Commission on March 23rd to talk about how it handles content, what it's doing from a privacy perspective, and child safety. Why is this so important? I think for all of us, when we started with the FusionNet, we as security professionals and loss prevention practitioners rely on social media and the internet to gather information.

So it's really important to follow these challenges because as we all know, sometimes social media is a haven for misinformation and could essentially bring us down a path that's challenging. Switching gears a little quickly to kind of touch on kind of the cybersecurity space, Hive ransomware servers were shut down by the FBI. And for just the listener base, Hive was a major ransomware challenge. And for just the listener base, Hive was a major ransomware challenge. The numbers are astronomical of how many people were attacked by this ransomware. And we can continue to see the Department of Justice working with foreign agencies to really shut down these ransomware attacks.

It's really the only way that we're going to see an improvement in the sense of that this is not going away. And it's really challenging because we don't know exactly what the loss case is, but we believe that Hive was responsible for somewhere between $150 and $300 million in ransomware. So if it's 150 or 300, it's very hard sometimes to gauge this. But close to an average of as low as $45,000 a victim, when you think when I say as low, the average ransomware event is usually in the several millions. So this was a group that affected 1,500 victims over 80 countries. So it's a victory for all of us because it shows that we're not allowing these crimes that largely in the past were unenforceable and sometimes even challenging to get the victim who the victim is. We're seeing the progression with the Department of Justice. And I think we broke the news very early last year

about, you know, the way that the Department of Justice and the FBI were handling some of these cybersecurity instances and really leveling up the way they're investigating. And we're actually seeing that happening in very complex cases that have cross-border and a whole bunch of different implementation challenges when you're thinking about investigating in remote parts of the world. And then in this particular case, it was a very, very prolific group that globally was very well known. So it really sends the message to the other groups that we will not stop. We will continue to go after it. And I think we continue to see this challenge and we're plagued with the ransomware. I think at last check, every eight seconds, there's a ransomware attack globally. And from a commercial aspect, retail hovers, believe it or not, in the top three all of

the time for ransomware attacks. So I think right now it is third. believe it or not, in the top three all of the time for ransomware attacks. So I think right now it is third. Last year, it was second. And it hovers around that piece because of the availability to do that, to get funds from a retailer if you can't be out of business. The other thing that we're seeing, and I continue to stress, is that the ransomware becomes something else. It's really a cyber incident. Ransomware is the start. And then you see data breaches and all of these other things, even blackmail at times or IP theft, and they're all kind of lumping together. So it will continue to be a challenge for us. And we'll continue to monitor it here. And with that, I will turn it over to Tony.

Thank you very much, Reid. Thank you very much, Tom, for those nice updates. Let me really take the time to introduce really a great guest and a great friend, David Johnston. Welcome, David. Thanks, Tony, Reid, Tom. Glad to be here today. Yeah, so you and I have known each other for a long time. And again, congratulations on your new role as Vice President of Vessel Protection and Retail Operations at the National Retail Federation.

Can you tell our listeners a little bit about your background, your different roles, and what got you where you're at today? Sure. It's probably not unlike most, but different than some where, you know, I'm happy to say that this year is my 35th year in the law prevention, private security career. And for me, what's interesting is pretty much about half of my career was spent as a practitioner and half was a solution provider before joining the NRF this past November. On the practitioner side, I started out like many as a store detective with the intention of getting into law enforcement. For me, it was federal and then state and local. federal and then state and local. And while going to school and kind of learning my way through retail and retail security at the time, I kind of got the opportunity to advance my career and decided to stay on the private sector side where I was able to move into working with the department

store to specialty retail to eventually becoming a global security executive with Duncan Brands and then later Inspire Brands overseeing the loss prevention and fraud and global security for seven brands, 32,000 restaurants in about 65 countries. And then sandwiched in between my two times as practitioners, I did about 14 years as a solution provider where we met and spent some time together. At that side, I was with LP Innovations doing consulting and outsource loss prevention, as well as a stint with DataVantage and Micros leading their exception-based technology, XBR, into a global perspective. So having the ability to see both sides and work both sides of the carpet, as I say,

I think really gave me the tangible and intangible skills to take on the role with the National Retail Federation, which is really supporting the advocacy of the entire retail industry, not only the retail company membership, but also those, the important members of the solution providers and folks like yourself. That's excellent. And I really enjoyed those times together, especially in Spain. You actually brought back some great memories of the time that we had together. What do you see as the initial loss prevention priorities for the NRF from your point of view in the role that you're starting? Well, you know, the priorities for the NRF, you know, are really to push the, specifically the post-pandemic advocacy footprint. We want to get back to retail before the pandemic and help strengthen and grow our economy. And currently right now in the loss

prevention arena, we're seeing a lot of unique challenges, organized retail crime, retail theft in general, violence. So our priorities are really to start to, you know, advance the positive narrative on behalf of our retailers in those areas of concern. You know, we want to get back to a position that, you know, the economy is growing on the back of the retail community. And to do that, we have to tackle the issues that create theft loss and, you know, And to do that, we have to tackle the issues that create theft, loss, and concern for our employees and our customers. Yeah, that's good feedback. You know, reflecting back, it was great to see that loss prevention made it actually in the top 10 predictions for 2023 from the National Retail Federation. or retail federation. But the prediction that I saw was that this could be the year that we see

legislation at state and federal level to attack crime. Can you comment on that? I can, you know, and I do think we're progressing toward that. You know, just yesterday, you know, Senators Grassley and Cortez Mastro introduced or reintroduced their Combating Organized Crime Act of 2023. Unfortunately, it didn't get a chance to go before the Congress in 22, so they reintroduced it yesterday. And the focus there is to create a center to combat organized retail crime led by Homeland Security investigations. organized retail crime led by Homeland Security investigations. It's to help DHS and DOJ review training programs for law enforcement and agencies on ORC, as well as to make some

changes to Title 18 of the U.S. Code to help with prosecution. And I think that's a definite step in the right direction. We saw the Informed Consumers Act passed late last year, which is going to take a look at online marketplaces and hopefully remove some of the ability of thieves to sell stolen goods and counterfeit goods online. And then we've seen a number of states individually take up new legislation and pass new legislation. We had a great session at this past big show with the Deputy Attorney General from Illinois. They just enacted a law that in January to go after the ringleaders and those above the boosters to really disrupt and, you know, take out the heads of the snake. So I think we're starting to see a progression both at the national level and the

state level on tackling not only organized retail theft and retail theft in general, but crime in general. And that's very good news, I think, for everyone, the industry and consumers and also for the retailers. Moving on, we just completed really what I thought was a very, very successful NRF Big Show. From your perspective, what do you think were the big takeaways from this year's edition, 2023 edition? Well, I think the first big takeaway is retail is definitely back. We had over 35,000 attendees. We had 1,000 exhibitors, 350 speakers. It was great to see the number of folks, the level of

participation in the retail community. You know, so the takeaway is that, you know, we're ready to move forward and retail is moving forward. You know, I think we see the pandemic is behind us and now is the time for us to really start to get back into providing the consumers with a great shopping experience as well as providing them with product and help to grow and strengthen the economy. I did get to pick up a tidbit from the NRF that I found very interesting, and I'm not sure that our listeners may be aware of this, is that the economic impact to New York City alone, because of the big show, is estimated at about $40 million. So I'm sure the New York City economy and the people there, the businesses, big and small, hotels and services, appreciate you know, retail being back. Yeah, and I agree with you.

It was really an excellent show and good to be back in New York. I also, as you know, had the pleasure of spending time with you at the NRF loss prevention and council dinner and hosting it. And the teams at that dinner seem to be collaboration and innovation. What takeaways did you take just from the meetings that I know you had at NRF with the council and for you at that dinner? I mean, what are some of the key takeaways from your meeting with the council?

Yeah, first, I want to thank you for co-hosting the event. We appreciate the time that we have to spend with our solution provider sponsors and most certainly the support you give to the council, the NRF and the industry as in whole. You had mentioned it, collaboration and innovation, right? We're looking and Tom had mentioned in his remarks about the technologies that are out there with AI and, you know, a lot of advanced analytics.

I think we're going to be looking at, you know, trying to get ourselves involved in a lot more innovative technologies to help curb the issues as it pertains specifically to theft and loss. You know, collaboration is another big point. And not only collaboration, I think I have to add one more piece in there is data collection. Retailers are doing a much better job at collecting data. Unfortunately, we've got to get down to the granular levels on a lot of areas that include things like violence and the shoplifting. But collecting the data, being able to aggregate that information and to properly analyze it and come out with actionable results on the other end is something that we're looking at from a council perspective and from an NRF perspective. we're looking at from a council perspective and from an NRF perspective. Because without that information, you know, we can't really understand what's going on. And then the last piece I think is, I would add to there is involvement. You know, with the introduction of these acts in the Senate and the expected introduction of the similar acts in the House, you know,

we do believe that there are going to be some congressional hearings. We think that there will be some conversations. So, you know, getting the retailer's individual voice to the legislation, to the state and local governments is going to be very important for us in the next 12 months in order to get these important pieces of law passed. That's very, very good input. One of the other trends that I've noticed is that both the Loss Prevention Research Council and the Loss Prevention Foundation have been in high growth mode in the last year, really highlighting the need and the request for research and education. What are your thoughts in terms of how these industry groups can engage and help the mission

of the National Retail Federation? Yeah, I see both the LPRC and the LPF as strong partners with the National Retail Federation. And I hope that Reid, I know Reid and I, in the few months that I've already been in this position, Reid, myself, and even Terry Sullivan and I have had numerous conversations, have talked about a lot of strategic opportunities that we can do with our respective membership.

There's a lot of, you know, we have a lot of crossover in membership. So I think it makes it easier for us to, to be able to, um, help the narratives and, um, allow people to engage and innovate and also collaborate with those that may not be members today and, and try to bring, you know, actionable, tangible deliverables, uhables to the industry. And I think that with the LPRC, I'm excited to be involved in their upcoming events, members of the council. And for those who can attend, that's where I come in and can be that gathering point to be able to bring it back to council members. And then the LP Foundation, advancement and certification and

growth of our industry is of great importance. You know, one of the strategic goals for the NRF is, you know, job creation across the entire retail industry. And that includes the loss prevention and the asset protection sectors. You know, none of us really grew up wanting to be loss prevention or asset protection professionals, but we've all learned and through the years, you can see that there are substantial career paths and capabilities of people to really grow in the industry. And we have to get them involved at the early levels and the early stages. And LP Foundation is a great way to do that. Yeah, I totally agree with you. The industry groups are becoming even more important

as we evolve and go build to exactly what you said earlier, this collaboration and involvement. You know, one other topic that's been top of mind and you mentioned it briefly, but I would like to comment more. Just actually this past week, the United States Secret Service issued a study that I actually published this morning on all my social media channels that analyzed the mass shootings from 2016 to 2020.

And the most common places for the violence they highlighted were restaurants and retail. Any initial thoughts from a retail industry point of view on this topic? Yeah, that was very disturbing to read that report. As you had mentioned, you know, from a location type businesses, I think, you know, were the highest by probably 20, 25 plus to the next location of like open space. And when you break down the businesses, over 50% of the business types were restaurants or bars or retail. And if you add the manufacturing, the distribution, I think it adds another 10 to it. So, you know, almost, almost 75% of the business types take place in environments where our membership, um, you know, derives, I think where we have to look

at, there's a lot of things that, that need to be done in society when it comes to, you know, derives. I think where we have to look at, there's a lot of things that need to be done in society when it comes to, you know, violence and crime and particularly mass acts of mass violence. And I won't get into that. But what I will do is a lot of our members, I think where we need to start to have the conversations is how do we get to our employees and our associates early on in the pathway to violence? You know, what can we do to, you know, look at not only left of bang, but far left of bang, you know, areas of grievance and ideation and even before research and planning. And, you know, we've had several conversations amongst our group. Some of the retailers are starting to get to that point where, you know, this June at NRF Protect, we're going to have a speaker that talks specifically about

that portion of the pathway. Because what we need to do is to do, you know, we have to look at how can we get some daily checks on our employees to be able to make sure that they're not moving through that pathway to violence and help prevent the workplace violence. Unfortunately, there are acts that will take place, you know, in public spaces like retail and restaurant that we have no control over. If we don't have any control over the individual, then it's difficult for us to prevent it. And I know a lot of retailers are doing what they can. This gets back to another part of collaboration that, you know, Reid had mentioned earlier that, you know, getting to some of the associations and working with the shopping centers and the

property managers and collaborating between how can anybody that sits on that particular footprint, whether it be security service, property management, or retailer, how can we all work together in order to make a safe and secure environment and to be able to properly respond and, more importantly, build resiliency to get back when incidents do occur. That's really good input. Let me close with one final question, and it's actually also a comment. What I'm hearing from multiple loss prevention executives is that post-COVID-19, the function

of loss prevention is actually undergoing substantial changes. the function of loss prevention is actually undergoing substantial changes. And I would say it's even being elevated to the C-suite in terms of importance in multiple companies. And the examples that I cite, it's coming up actually in earnings call as a topic that's being discussed. And what do we do about it? What's your thoughts about this? Yeah, you know, I see the same thing. I think there's a great opportunity for our loss prevention executives and in our profession as a whole to really work on elevating the position of the LP executive and the function overall. You know, as you mentioned, for many of us, including myself, when I was the practitioner,

when the pandemic began, a lot of us were tapped on the shoulder to become, you know, kind of that environmental health group or the tip of the spear for the pandemic response, or at least, you know, we had a seat at the table when we were looking and developing what we need to do to keep our people and our customers safe and healthy. Progressing past that time in 2020, you know, with the theft and violence and the increase in those two areas, again, we're making headlines. You know, as you had mentioned, had mentioned, shrink or losses and even events are now part of the daily news. More and more CEOs and executives are coming out speaking about it.

I think the opportunity it gives us as a profession, Tony, is we have to continue to look at the threats and the risks from a more holistic approach. And I'd like to see, and this is my personal plan, is to see the loss prevention asset protection role progress more into the enterprise security risk management role. Now, that's a little different than just enterprise risk management that may look at a lot of different risks and threats to the organization, brand, reputational, financial, operational. But I do think that we can look at a lot of things and see where from all the risks and threats that are out there in the world today, whatever impacts security, we should be the ones early on at that table having conversations about what the potential impact is. And again, going back to some of the things that Tom had mentioned, how does TikTok impact the security threat of your organization? How do the global issues, the war in Ukraine, impact, you know, supply chains?

What happens with China as they go into, you know, potentially thinking more and more about an attack on Taiwan? These are some of the things I think we have to look at from a global perspective. Even if we don't have locations globally, we should always look globally to act and consider our threats locally. Well, thank you very much, David. It's been an enlightening discussion. I've totally enjoyed this. I look forward to continuing to participate and get involved more with the National Retail Federation and look forward to all the great things that you will do. Thank you very much. Tony, thank you. I appreciate the time today and everything you do to help support our industry. So with that, let us close this week. And I'm looking, this is actually episode number 135.

So we've actually had a long run and we appreciate the audience and join us in terms of listening to this podcast and also check out all the great events, both around this podcast and also on the Loss Prevention Research Council website. Thank you very much. Thanks for listening to the Crime Science Podcast

presented by the Loss Prevention Research Council. If you enjoyed today's episode, you 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.