LPRC - CrimeScience – The Weekly Review – Episode 139 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: March 9, 2023

This week, our hosts cover retail trends in 2023 and tech trends. Hear about top retailers in 2023, retail fatality numbers and demographic changes, unidentified flying objects on headlines again, and civil unrest. Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 139 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. And I'm joined today as per normal by co-hosts Tony D'Onofrio and Tom Meehan, by our producer Diego Rodriguez, associate producer Wilson Gabarino. And we're going to talk a little bit today with each other and you all and explore the world of asset protection and loss prevention within the context of primarily retail environments and, of course, the world as it changes every moment. So we'll start a little bit about LPRC news. And we're still celebrating and debriefing and taking away and creating next steps from the inaugural LPRC Integrate event. And we continue to work on refining what we've got.

event. And we continue to work on refining what we've got. We're going to be able to use a whole lot of the footage and the takeaways for another event, TB determined. Also, of course, we'll be having our debrief event, 90-minute webinar, where we'll go through and discuss with each other and others what we found and what we went through and where we want to go next. And all important, what are the implications of all that we found and learned and so on for a better, more effective, more impactful practice to safeguard vulnerable people, places, assets, and so forth. And that was the intent, learn how to do it, learn a lot, learn how to get better together. That's just going to be a more powerful model. Every one of our members take away individual learnings and action steps, and that's very

critical. Groups of retailers doing it together in addition to that or to strengthen that is what we're all about at the LPRC as we continue to add retail corporation members, solution partner members, association members. And we'll kind of segue to the summit that we're going to have tomorrow as I speak. This is Tuesday, March 7th, 2023. And this evening at the Bluegill restaurant, we'll be hosting, or ICSC, I should say, the International Council of Shopping Centers will be hosting, will be facilitating. But we'll start with that dinner and reception labs and our colleagues at the University of Florida. We'll also have our labs open for tours starting at 4 p.m. Eastern today. We've already got some people that are RSVP that they'd like to come by and spend a little time with the team and in the labs and so on.

To get that on the ground view, as Chad McIntosh is fond of saying, you got to come here. You got to be here. You're not going to believe all the capability and all the things that are happening here to support the LPAP and law enforcement practitioners and everybody that works in retail, that shops in retail, that delivers to retail environments and so on, fulfillment centers, distribution centers, office buildings alike. So this is the place. Tomorrow, we'll have the ICSC Organized and Violent Retail Crime Summit. So far, we've got over 50 VIPs coming in to participate in the summit tonight and for tomorrow. The big focal point is to discuss an overarching strategy. What could a strategy look like to coordinate better? that are taking point on different discussion points throughout the event,

all with a mind toward getting us to better and better places and doing it together. Beyond the LPRC, the LPRC plays a critical role, hopefully, out there in helping to build protective strategies, the organizational design, excuse me, the operational design, that it takes us from a strategy to how we're going to actually implement what we're doing and the various tactics that we use, the people, the programs, the systems that are integrated together to convince people not to harm another person or a place. And so that's what we're doing. And some of the critical issues, the way we're framing this up, we're looking at theft, fraud, violence, and other disruptive threats like rioting, burning, looting, work stoppages from people blocking during demonstrations so that others can't

work or get what they need to survive from stores and so on. But we're looking at these theft, fraud, violence, and disruptive threats across physical and digital domains, right? So this is a multi-domain anti-crime strategy that we're going to be looking at, a unified one at that. So this is all proposed, and we just want to discuss what's a way that we might align across retail trade associations, including the Food Marketing Institute, FMI, that's the supermarket and food retailer primary association or one of the big two. So many retail corporations and companies in the United States, also manufacturers and so on, but also lobbies for at the federal level and then coordinates what used to be the American Retail Federation, which was a coalition of the state level, different lobbying organizations and retail associations and so on across each of the 50 states. Big player in obviously this space that needs to be at the table, we'll have RELA, the Retail Industry Leaders Association, another critical voice as far as lobbying, shaping strategy across supply chains and legal matters and operations,

merchandising, and of course, in the asset protection space. In so many different ways, Lisa Labruno and the team at Rila are working hard day and night for us. We're excited to add their voice to NRFs, to FMIs, to the International Council of Shopping Centers, representing so many different centers from strip, standalone, open and enclosed malls and so on, all these retail environments. So, and as an aside, we're going to have some major retail corporations represented by their vice presidents of asset protection and loss prevention. We'll also have some directors or vice presidents of security from some of the major malls,

strip centers or retail centers, as well as ICSC executives. We'll have the National Association of Chained Drug Stores here participating with us as well. We'll have the American Society of Industrial Security, ACES, or ASIS, that will be here as well participating. We will also have CLEAR, the Coalition of Law Enforcement and Retailers, represented by a couple of distinguished gentlemen in this case. We'll have top leaders that are in the organized retail crime and violent crime spaces from Department of Homeland Security, DHS, from the HSI, Homeland Security Investigations, nationally, as well as from the Federal Bureau of Investigation, the FBI. And here we'll also have some local investigators that are mission-critical.

Detective Sergeant Nick Ferrara from the Gainesville Police Department, for example, and one of his key detectives that they cover the Gainesville area, and they're off the charts amazing. But they also support retailers in other areas because they can sometimes help support investigations, not as a routine matter, but occasionally because of their expertise. So we're going to have a whole mix along with some of our research scientists here getting together on the University of Florida campus and discussing the critical issues, the threat, the organized and or high-impact foreign domestic insiders and outsiders. And forever we've talked about high-rate, high-impact offenders. Some operate in an organized manner. Some don't. Some are part of an organized group.

Some aren't. And we know that organized is in the eye of the beholder sometimes because so many of these groups, whether they're the stealers, the boosters, sometimes because so many of these groups, whether they're the stealers, the boosters, whether they're some of the fraudsters or those hybrids of those, the fencing networks, a different strata. So often these organized groups are very disorganized, but particularly and mostly they're very opportunistic. They take advantage of gaps and target opportunities, weaknesses, and so forth. So we want to look at also those that are high impact, high rate offenders. And we're looking at foreign and domestic because we heard about physical and digital domains. We want to look at domestic insiders and outsiders,

those that work or are contracted or full-time for a retail organization or a contract organization that has access online or physically in person to a distribution center, an office, or some corporate environment, regional, and of course in the stores, as well as outsiders. So again, we could talk about thieves, boosters in particular, but any type of thief that's creating a lot of havoc, in particular, but any type of thief that's creating a lot of havoc, talking about dishonest associates and collaborators, that collusion, or some of the errors and omissions that are made that allow some of the victimization that happens, not just intentional acts or collusion, that type of thing. So that's going to be part of the threat. The harm we're looking at, of course, is the personal harm that comes from crime events. People are psychologically, they're physically damaged sometimes permanently from that exposure, from that victimization, from having a gun held to their head to being in their day in and day out or at least week in and week out as people remove merchandise and other assets from their place of

business without permission with seemingly no consequences to the offender. These things wear on people psychologically as well as we know of the physical harm that comes. So we're looking at the personal, the place damage that happens to a local place, sometimes never reopening after an active killer or shooter assailant type event or just ongoing persistent crime. The enterprise itself, the organization, the commercial, the reputational damage to them, to the organization, and of course, the community harm that comes from crime events and criminal offenders. And that is, again, as places are closed or curtail their hours, takes away employment opportunities, it reduces the tax base and, of course, reduces access for those that are less able to travel to farther places as their places close down

or don't have what don't carry the merchandise that they want or need because it's so highly stolen. We'll be talking about operational imperatives. You know, we need to know how offenders are targeting us, what their process is and ways that we might address that, affect their behavior, document their behavior, their decisions, how to understand where our assets are particularly attractive or desirable to different offenders and crews, and then what the protective gaps and weaknesses are. We want to talk about how to better sense and share digital, aural, and visual threat cues so we can get earlier and better detection and prevention deterrence of individuals and crews and things like that, faster recovery,

prevention of ongoing crimes, and so on. So we'll talk about how to create multiple integrated situational crime prevention efforts. And then what are joint and private and public action opportunities? What are strategic and tactical research needs? Yeah, surprise coming from a research organization. But how to better shape what we do and how we do it. Better state and federal legislative priorities. How do we focus, bring all the associations, more retailers and other interested parties to bear to get the legislative cover that we need

to get better and to restore some of the downside risks, the consequences for bad actors, right? And then intelligence and lessons learned sharing. How do we fuse together the private or commercial platforms that are becoming available and powerful or from the retail associations and others, LSU and others working on? So we're critically want to talk about how do we fuse a lot of this information, these ideas, what we're learning so that more can benefit from them. And then finally, some of the practitioner and law enforcement and prosecutor training that might be needed so that they're more aware, more capable of dealing with these people in addition to the retailers being less vulnerable and more effective

at dealing with these people. And having the legislative backup that we need to do all the above as well as the research findings that help us focus and not waste our time on things that just don't help and sometimes even hurt. So that's a little bit about the upcoming ICSC, the Organized and Violent Retail Crime Summit happening in Gainesville, Florida, on the University of Florida campus this week. Findings to come. So what I'd like to do with no further ado is let me turn it over to Tony D'Onofrio. Tony, take it away. Thank you, Reid, for all those great updates. Let me start this week with one of my favorite annual research reports. This one is from Deloitte, which analyzes the top 200 global retailers. It's called the Global Powers of Retailing, and this summary is from the

2023 edition, which was just published in February. First, Dr. Ira Kalish, who's the chief economist at Deloitte, provides predictions in the report, and this is what he said he expects for 2023. Number one, inflation will recede. Supply chains will stabilize. Labor markets will remain tight. Central banks should stop tightening. U.S. may avoid a recession. Europe may experience a recession. China may rebound only modestly.

Japan should stabilize. And India should grow strongly. So interesting prediction. Some of these I agree with, some of them I'm skeptical, but I do think these are very good predictions for the year. The top 10 retailers in the 2022 report are, number one, Walmart, which remains the world's number one global retailer, Amazon, Costco, the Schwartz Group from Germany, which operates the little stores, Home Depot, Kroger, JD.com, which is a Chinese online powerhouse, and it actually moved up two spots in the top 10. Walgreens and Boots are number eight and they dropped one in the top 10. Aldi, also from Germany, it dropped one

in the top 10 and the number 10 largest global retailer in 2023 was Target. global retailer in 2023 was Target. The top 10 retailers represent a whopping 34% of total revenue for all of the 250 global retailers. This year, an addition of the top 250 also provides insights on technology in the future stores and some of the comments that were made as the post-pandemic world emerges, the integration of technology in the retail industry has become increasingly important in attracting customers back into physical stores and creating immersive shopping experiences.

The use of advanced technologies such as virtual and augmented reality, artificial intelligence, and data analytics help enable retailers to personalize recommendation, streamline checkout processes, and engage customers in unique ways. In this new era of retail, the innovative application of technology will be crucial in fostering customer loyalty and driving business success. So really good insight. I would encourage you to read that as a really good analysis in terms of what's going on with the future store. The global powers of retailing in 2023 also shows that they're growing. So they actually grew 8.5% year on year, which was up from 5.5% in the previous year. And interesting, in the 2023 edition, apparel and accessories achieved a higher sales growth at 31%, and the average margin for all the top 250 was, interesting, 4.3%. Apparel was the fastest growing, as I said, at 31%,

percent. Apparel was the fastest growing, as I said, at 31 percent, and the margins actually were decent at 9.8 percent. The largest sector in the top 250, in other words, the one that comprises the most retailers, is the fast-moving consumer goods sector, and it includes supermarkets and hypermarkets, and that sector represents 64% of total retail sales of the top 250 retailers. Interesting that the profit margin for the fast-moving consumer good is only 2.6%. In the latest report, 15 retailers joined or re-entered the top 250. 10 of the new entrants are either from the U.S. or the U.K., and six are apparel and accessory retailer. It's a great read. It goes into a lot of detail in terms of how retail is evolving, so look it up. You can actually find the link on my personal website.

Moving on to another topic and switching topics, let me do a follow-up on Amazon. to another topic and switching topics, let me do a follow-up on Amazon. And as I said a few weeks ago, Amazon announced that they're holding the expansion of their Amazon Fresh and Amazon Go stores. And the company just announced that it is closing now eight Amazon Go in a cost-cutting move. As reported by CNBC, the company will shut down two ghost stores in New York, two in Seattle, and four in San Francisco. All the stores were closed by April 1. Amazon CEO Andy Jassy has been taking steps to really cut expenses in the grocery unit and elsewhere as it deals with slowing sales. In January, the company did say they were laying off 18,000 people, and some of the cuts were felt in the Amazon grocery business. The first Amazon Go store,

by the way, opened in 2018 to a lot of hoopla, including myself, and I had visited that store in Seattle multiple times. Amazon puts lots of cameras and sensors in those stores, so it'll be interesting to see what happens to that technology. But as I said in a previous post in a video that I did actually on this topic, the economics need to work for this kind of topic to continue. Finally, this week, I want to focus on the latest 2022 summary of retail violence that was just published by D&D Daily. And again, it's sad news. For 2022, violence incidents were up 17% and alarmingly, fatalities were also up 17%. were also up 17%. Retail fatalities have gone up 86% since 2016, and they registered an increase every single year. In 2022, a total of 694 people were killed in retail, 16% were suspects, 55% were customers, which were up 18% on the previous year, 24% were store associates which was up 12%,

and 5% were law enforcement, loss prevention, security professionals which was up an astounding 73% on the previous year. Parking lots which is an important place we put focus here at the LPRC, had 53% of the fatalities, followed by in-stores at 43%. 89% of the fatalities were males and 11% were females. Convenience stores had the highest percentage of fatalities, followed by restaurants. And there was 32% for convenience stores and 19% for restaurants. And third was distant gas stations at 8%. The top three USA states for retail fatalities were Texas, California, and Georgia. The top three cities were Houston, Memphis, and Chicago. This is an alarming report to me.

I look at it every year. Retail violence is a challenge. I know we're doing a lot of discussions here. There's even a discussion group around it. We all need to keep working together to improve in this going forward. And with that, let me turn it over to Tom. Well, thank you, Tony, and thank you, Reid. Wanted to just kind of give a couple quick updates and talk about some new things that are going on. But one of the first updates is really around these Chinese surveillance balloons or these unidentified flying objects that we talked about in the last few podcasts. And I'm sure that you've read about or seen on the Internet. read about or seen on the internet. And much like anything else that we're dealing with today, the news cycle or the media cycle has shifted a little bit and we haven't heard as much about it. But through both unofficial and official channels, we are seeing still reportings of unidentified flying objects. There was actually an object two weeks ago that really got very little media attention over in the Pacific Ocean in between Hawaii and the United States.

There was no official reporting of what was done with that, but certainly something that the government is continuing to monitor. I think we talked about the change in the radar and how the radar works so that we can identify smaller objects. And I think it's important to note that there's clearly something that's still going on. People are still looking at it. This is not a thing that is going to go away. So I think we'll continue to kind of monitor the situation as needed, and we will come back to the group when we have an update. Switching gears a little bit, a first responder training facility that was, protesters went to and were shooting fireworks and setting fires around. So this was a newer phenomenon. There's a lot of video of this on the internet and this creates kind of a challenge because there was a lot of

civil unrest in that area and it was very very focused and intense on doing damage there was public statements made that you know this type of behavior would not be tolerated arrests would be made but we did not activate the fusion net for that. We will continue to monitor it. But I thought it was relevant to say because this was a more targeted protest. With a violent piece to it here, firing fireworks at individuals, lighting things up fire, this was not a peaceful protest turned the other way. This was something where someone went to an area to cause harm. So

it's definitely something to watch. Also last week around civil unrest, there was a very large settlement issued against the NYPD for several hundred individuals. The settlement was six million dollars and it dates back to the George Floyd protests where the NYPD was using a technique called kettling where they're bringing people together with batons and pushing them, in some cases, chemical agents. And the NYPD and the city of New York settled. I think the average payout for an individual was $21,500. And there was a lot of backlash from politicians and former, actually former Commissioner Ray Kelly of the New York City Police really had a lot of choice words related to it. But this is that kind of balanced approach of when there is civil unrest, what occurs and the unfortunate difficulty of being a law enforcement official these days of how do you manage it when you're concerned with the outcome afterwards.

So still something that we will continue to monitor. A couple kind of interesting things from the newswire. There was a chemical or hazmat alert in New York City over the weekend where someone was found dead in a car. And when the first responders came to the car, they became ill when they opened it. There were chemical compounds in the car. At this stage, we're not 100% sure what the chemicals are. There's been speculation about related to drugs. But based on some of the earlier reports, this was a mixture of different types of chemicals. So I think it's important to note that these things happen all

the time, but there's been a heightened awareness around hazmat. So more to come on that. I don't know that we'll hear a lot about it. It was a singular issue that closed down a couple of streets, but it came up on the wire for hazmat. There was another unfortunate train derailment, unfortunate train derailment, and it was also in Ohio. Fortunately, this time there was not a chemical release into the air. Excuse me. I think it's also important to note that, and I'm not diminishing the effect of some of these derailments, but that train derailments are a fairly regular occurrence. And again, when we talk about the news cycle, a lot of this has more to do with what the news cycle has going on than anything else.

anything else. I think one thing that came up last week also is that there was a plane out of a Pennsylvania airport that during luggage treating, there was explosives found in the checked baggage. The passenger actually who lived in Pennsylvania is from Lanford, Pennsylvania, a 40-year-old male, left the airport. So he checked these bags and left the airport, and the bag had a mix of different things in it, a detonator, a type of accelerant, a type of powder similar to what you'd put in a firework, so not gunpowder, but very similar, a power drill and some other items. The FBI did arrest this man promptly. And at this stage,

while it happened last week, there's still a lot of information unfolding. He did acknowledge that he knew, in fact, that there was explosive materials in the bag um i think it's it's very important to note that this was not a bomb this was not a bomb something put together although it was something that could have exploded so it does not look at this point that he had intentions to down a plane um so it's a very interesting one with developing stories. This was going from Lee Valley International Airport, which is in Pennsylvania, to a Florida airport. It was stopped in the screening process. It's just a reminder of, you know, how important it is to stay vigilant and how important it is to stay aware of your surroundings

with everything that's going on today. And then last, but certainly not least, last week I was in Europe at Euroshop, which is the largest retail trade fair, and there was a couple of common themes that I thought would be really relevant to talk to in the group, and I know that there are things we're working on at the LPRC. One of them was self-checkout there was hall more than two halls full of self-checkouts and different applications the other thing that was glaringly obvious is the use of artificial intelligence um to help identify deviant behavior that came up quite a bit and then one thing that

i i thought was extremely interesting is that and this this is definitely a European trade show, but it's a global trade show, is that there was a much, much more heightened awareness around gates and locking mechanisms, so physical security. But what I would say is more traditional in methodology, so automated gates that lock, corral-type gates. I saw a tremendous amount of that. corral type gates. I saw a tremendous amount of that. I know that they're more heavily adopted in Europe but I thought it was very interesting to see. While in Europe I did some traveling and feel that I'd be remiss if I didn't mention that the the sediment around the world was with the geopolitical climate. What is everybody hearing? I can't tell you how many people asked me. I was in Germany,

Croatia, and Bosnia, and everybody asked me, is this really what's happening? All of these countries are kind of in similar boats where is this actually what's happening or is this just what the media says? There was a lot of talk about the conflict in Ukraine. There was a lot of talk about Russia in general, NATO, and what the feeling and sentiment is in the United States. So while we're here watching the news and wondering what's going on, I think it's important to note that our friends and peers overseas are in very similar boats where the media cycle has a lot to do with what goes on. very similar boats where the media cycle has a lot to do with what goes on. I actually was in a meeting in Croatia and someone asked about the train derailments and said, you know, I'm often concerned when I'm watching the media that I'm getting one side of the story and not what really is happening or how bad it really is. So what I think that should serve us all as a reminder of is that, you know, don't take anything at face value. Always look at it

with a little bit finer tooth and comb and use judgment and common sense with doing things before you actually take action. One last thing to note, which kind of goes along with that, is there's a video circulating of Morgan Freeman that is not Morgan Freeman. It's a deepfake, which is where artificial intelligence is used to emulate a human. And this is a very good kind of depiction of what Morgan Freeman looks and sounds like, only it's someone else talking and the computer making it look and sound like Morgan Freeman. There was a report that was just recently released, and while this is a small number in comparison to other frauds, there was $11 million worth of scams reported in the first three months of the year where you had biometric-driven fraud where people were using actually someone else's voice to perpetrate them to commit fraud.

So as artificial intelligence becomes more advanced and increasingly available, the bad guys will continue to use it. So for everybody listening to this podcast, whether you're in academia, or you're a retail loss prevention or security professional, or law enforcement, as we continue to get more tools, so do the bad actors. So with that, I'll turn it back over to Reid. Everyone stay safe. All right. Well, thanks so much, Tom.

Thanks so much, Tony, for the amazing information. I want to thank, of course, Diego. I want to thank Wilson. I want to mostly thank you all as well for tuning in. Please send us your ideas, critiques, opportunities to interview good people to operations at lpresearch.org. Check out the website at lpresearch.org. Come and see us in Gainesville. 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.