LPRC - CrimeScience – The Weekly Review: Episode 14 with Dr. Read Hayes, Tony D’Onofrio, and Tom Meehan

Episode Date: July 9, 2020

In order to accurately represent the wide-reaching content of this podcast, we have changed the COVID-19 Series name to The Weekly Review. Read Hayes, Tom Meehan, and Tony D’Onofrio discuss LPRC initiatives, global consumer trends, new shopping channels, pandemic hoarding, the new rules of retail, healthcare cyberattacks,  online banking risks, hackers utilizing data, shoplifters weaponizing COVID-19, and much more. The post CrimeScience – The Weekly Review: Episode 14 with Dr. Read Hayes, Tony D’Onofrio, and Tom Meehan appeared first on Loss Prevention Research Council.

Hi everyone, welcome to Crime Science. In this podcast, we aim to explore the science of crime and the practical application of the science for loss prevention and asset protection practitioners, as well as other professionals. We would like to thank Bosch for making this episode possible. Use Bosch Camera's onboard intelligent video analytics to quickly locate important recorded incidents or events. Bosch's forensic search saves you time and money by searching through hours or days of

video within minutes to find and collect video evidence. Learn more about intelligent video analytics from Bosch in zones one through four of LPRC's zones of influence by visiting Bosch online at BoschSecurity.com. All right, welcome everybody to another episode of Crime Science, the podcast from LPRC, broadcasting from Gainesville, Florida. broadcasting from Gainesville, Florida. Today, what we want to do is do our usual weekly roundup and talk about what we're seeing and what we're doing to support the retail community and specifically via the LPRC community. So we know that reopening continues. There's been some retrenchment due to the anticipated increase in infections.

I know there's a lot of close monitoring to understand what percentage of those infections that are being detected are going to end up in serious disease. Are they going to end up in hospitalization, possibly? Are they going to even go further, say to ICU or tragically even further? And we all know that there are a lot of lags. It can take a few days to a couple of weeks, at least as our understanding from the science to actually become infected to at some point potentially display symptoms, I guess during the pre-symptptomatic phase or when you are asymptomatic but are still shedding virus is still a puzzle and a concern for many out there. I think more of us, as the virus spreads, are starting to hear anecdotally from friends or relatives a little bit about the disease in addition to the news reporting and websites and things that we're

able to go to for the CDC or the NIH. So very interesting. I think the main thing here is always, always, always, as we want to reopen and re-employ, people need to go and earn a living and support themselves and their families is safety and confidence. I think safety and confidence are interlinked, critically linked. And so everything we knew from really day one, when most of us became aware and cognizant of this COVID-19 coming from SARS-CoV-2 was how do we do that? How do we prevent? And then secondarily, how is the disease treated?

But preventing, I think it's the same thing we've always known as blocking the spread. And we know how it's spread, comes out of us, and it normally goes into the air and goes to somebody else. Or it could go on our hands or on a surface. So we understand blocking, we understand distancing, we understand cleaning. So if we're just working on blocking, distancing, and cleaning, it seems that that has a major effect. Before we tried the distancing through everybody kind of going into isolation, quarantine, holing up, if you will, seemed to have a great effect on creating that distance. We now know that by blocking via masks that we're trying to reduce the intimidation of those that might be vulnerable

or scared and are not going to go into a place of business or around a place of business, or even some cases go outside. So we know reducing intimidation by blocking via mask is important for our cells, but even more critically for our fellow humankind. So distancing, the same thing. And then of course, continuing good cleaning of our hands and our clothing, but also surfaces particularly horizontal, but also vertical surfaces. So treating, we understand

right now, there are 55 US NIH or otherwise funded COVID-19 studies currently underway at different phases, including multiple vaccines. But a lot of these are therapies for those that are treated who are not vaccinated later down the road, but have got the disease. Globally, we understand there are close to 1,800 COVID-19 studies that are funded and underway with more both U.S. and globally coming online weekly. coming online weekly. So there's a lot of our top scientists, physicians, entrepreneurs, technologists around the world working day and night on better and better ways to prevent and treat COVID-19. And that also prepares us for the future with other pathogens that are inevitably going to come out. So at the LPRC, we continue to update our COVID-19 landing page. We want to make sure that everybody understands, has the resources that they need to reestablish safety,

reestablish confidence by establishing better and more safety around their entire enterprise, but particularly where there's that interface. So we're excited to continue to support the LPRC community that way. We also continue on deterrence and disruption research for offenders. You all know that's really our mainstay, what we've done for 20 years now, and that is trying to work on establishing a perception of control in a location that this is not a vulnerable place to commit a crime, whether it's victimizing another individual or a place. So we've got multiple studies underway on increasing perceived control at different perception points before you enter the parking lot, in the parking lot, approaching the entryway,

as we approach and are inside the interior, as we come up to specific places like high-risk, high-loss merchandise to self-checkout and other locations. So that offender control research continues. We're working on two different mass studies, getting ready to initiate a third. We continue on the artificial intelligence front by looking at a couple of robotics concepts

that are pretty exciting, in addition to what we've talked about, about hazard net and leveraging existing security infrastructures there to spot and report hazardous behaviors. So we're excited about all the above. LPRC, again, we talked about that the 2020 LPRC impact is full go for the first week in October. The virtual platform, Kevin Tran, our producer is working away on that.

We're excited to participate in the global retail security summit coming up here shortly, which will also be a great way for us to learn at LPRC about how to put together and conduct a virtual summit or meeting. We've got a couple 300 people already enrolled in LPRC Impact for 2020. And that's way beyond where we normally are at this time. We're going to have a podcast episode coming up with Kenna Carlson, our LPRC research team leader. She's going to talk a little bit about what we're trying to do this year with content, what we'll be talking about, what the sessions will look like, who will be involved in the sessions, what research is going to come to the forefront, how we're going to interpret and

discuss how to implement that for effect. So very excited about LPRC impact. For members, of course, the Knowledge Center continues to grow with new reports. We just got one in today from the UK on victimizing shop employees, so violence in shops or stores. There's a lot of research going on around the world, and we try and tap in to every bit of that. So what I'd like to do now is go over to my colleague and friend, Tony D'Onofrio. Tony, can you bring us up to speed on what's going on in the U.S. and around the world? Thank you very much, Reid. Today, I'm going to spend a little more time on consumer trends because really the consumer is going to bring us out of this crisis in terms of their shopping patterns. I've been following up on a lot of data in terms of what that data, what they're telling us in terms of their specific direction for the retail industry. So this is actually, the first one is actually from Mastercard.

They released a brand new report on consumer research. So they said that e-commerce sales in 2019 were 11% of total retail sales. That spiked in April, May in 2020 to 22% of total retail sales. in April, May in 2020, to 22% of total retail sales. The shocker was actually the UK, where in the UK, in the same April, May 2020 timeframe, online sales represented 33% of total retail sales. And UK was already a leading market for the world in terms of shifting to online, and looks like they're accelerating that trend during COVID-19. 53 billion more was spent in the US online

during April, May. 9 billion of that was for home improvement. So we're all fixing a lot of houses right now. More money was spent online in April, May than the last 12 Cyber Mondays combined. And just to see that that trend is actually global, for April, May, for just April 2020, Canada had e-commerce sales going up 112%

while total retail sales were down four. UK had e-commerce overall going up 64% and total retail was down eight. US had e-commerce overall going up 64%, and total retail was down 8%. U.S. had e-commerce sales up 63%, total retail down 15%. And Brazil had e-commerce up 41%, and total retail sales down 19%. Also of interest from MasterCard is what, are missing right now from COVID-19. So eating out was number one, 28%. Traveling was number two, 19%. Tide was out of home, leisure activities, 19%. Shopping was only 13%. Social events, 12%. And going to work, 11%. And what do consumers think will stay after COVID is over?

So number one is hygiene focus, 77%. Contactless payment, 69%. Connecting virtually, 64%. Struggling economy, 64%. And more creative activities at home, 61%. And working remotely more, 60%. So those are some of the consumer trends from MasterCard. I've also been tracking a lot how consumers are changing where they shop.

And I think one of the potential that COVID-19 will create is new channels. And one of those new channels is going to be where consumer product manufacturers are actually going to be channels directly for retail. And that's being reflected by all of them actually having increased in online sales. So General Mills online sales grew 250% with the segment now representing 9% of their total sales. Unilever online sales grew 36%, and now they're at 7% of their total sales. PepsiCo launched two sites for you to buy your snacks and your soda directly from PepsiCo.

Nestle and Heinz are also doing the same. So are we headed down a path where a new retail channel is emerging and the consumer product manufacturers are going to be that channel? So that will be one interesting to watch. An additional survey that was interesting this week is the hoarding that we've been doing of some of the goods like toilet paper. And we actually stop it now. Their stores are reopened.

And a new PWC survey actually says that we're actually not. All responses loaded up continue to load up more than normal. This includes 47% of this slightly when 39% related more than normal and 14% related substantially more than sorbo. In the latest survey, 64% of the respondents plan to continue this higher loading platform, which is good news, especially for grocery stores. And really, they really don't see stopping the hoarding until we get to COVID-19 fully resolved. The other sign that was interesting that they're watching out for is other stores fully restocked. If they see a lot of empty shelves, it's a trigger to go buy more or the hoarded goods that they think they might run out of.

goods that they think they might run out of. One in five will stop hoarding and 14% will until they see basically when the mandates to cease shopping or stay at home stops. That's when they'll stop hoarding. So interesting data in terms of how the consumers continue to actually buy goods that a lot of stores actually have a lot more of. Also, a new just this past week is a new YouGov survey in terms of how comfortable are consumers in terms of their shopping experiences. So 71% would not feel very comfortable shopping in a physical store the next three months. 80% would feel somewhat to very uncomfortable eating out in a restaurant. 79% will feel somewhat to very uncomfortable staying in a hotel. And 63% would not feel very comfortable returning to the workplace. And 53% and seeing visible display of safety lists and completion of those safety lists would increase their trust in actually walking into that business.

And I'm going to end on some positive, really Harvard, a new Harvard Business Review article in terms of how the pandemic is rewriting the rules of retail. And a key message that they drove home is that retailers need to stop expecting business to return to just normal. A new baseline has emerged. To start, retailers have to adapt their brick-and-mortar stores operation to comply with health and safety regulations. Retailers also need to offer a seamless e-commerce experience. And as a result of COVID-19, all retailers need to make their in-store experiences even more extraordinary than for those that visit in person. So investing in unique digital capabilities such as real-time inventory management, predictive analytics, AI power search, personalization, and co-creation function all can create completely new and different shopping experiences.

This isn't the time for retail to simply ride out the storm. And I bring this up, especially in light of the work that LPRC is doing, especially with the Innovate Center in terms of testing ideas and figuring out what is actually going to work in terms of stores going forward. This is the ideal time to more deeply engage with LPRC and those types of activities to prepare what will be not just for the same normal, for a really a brand new normal that all these consumer trends are telling us. And with that, I'm going to turn it over to Tom. Thanks, Tony. Thanks, Reid. with that, I'm going to turn it over to Tom. Thanks, Tony. Thanks, Reid. I'm going to just cover a couple recent cyber incidents that occurred. And while they don't directly relate to retail, I think you're going to see some correlation and connection. There's been a huge

increase in cyber attacks directly related to hospitals and the healthcare system. And there's a whole bunch of publications out there. Bloomberg just actually released a pretty lengthy article on the fact that hackers are taking a targeted approach to hospitals because hospitals have an influx in patients. And they're actually taking a very sophisticated approach and following the news to hospitals that have full capacity and states that are seeing a little bit of a spike and actually attacking those hospitals, knowing that their resources are strained to both gather personal information and also be disruptive. Additionally, the Health and Human Services had a state

actor attack. They haven't released, probably won't release what state it was, the nation state it was, but they have officially announced that they were attacked. They won't say what that attack yielded. But again, all related to COVID-19, really both hackers that are state sponsored and just financially driven are attacking hospitals because of the change in the infrastructure. attacking hospitals because of the change in the infrastructure. Additionally, the same type of reporting hits on the financial sector. So America is grappling with this change in the financial sector where people are switching to digital payments at a rapid pace, withdrawing tons of money. So there is this huge influx and attack on the financial sector that's being reported. is this huge influx and attack on the financial sector that's being reported. And very similarly,

we're going after banks that are focused on a digital transformation very quickly. Believe it or not, in the United States, there are still a lot of mid-sized, tier-sized banks that their online presence is in the earlier stages of this. Additionally, the U.S. Treasury Department actually talked about this about a few weeks ago prior to the stimulus checks coming out and now have come back and a top secret official testified in the Senate Judiciary Committee. You can read about it, but you can't find out who testified that they have pretty reasonable data to support that about $30 billion worth of stimulus funds were likely stolen by criminals by going out and them running through using that information that they're stealing from other places to get this information. Why is this important to everybody that's listening to

this podcast is because there are early indications of retailers having similar challenges. The hackers are taking advantage of COVID-19 and looking at hospitals, financial institutions that are going through transitional phases and attacking where there's vulnerabilities, trying to catch people off guard. And this is not a prediction. There's actually data support

that similar things are occurring in retail. Retailers that had a very strong physical presence that went to an online presence very quickly. Retailers that predominantly were public about how they didn't remotely have remote workers are now subject to a greater degree of attack. So while this comes to be a constant reminder of this, it's important to say that this is up-to-date information. And as the pandemic in some cases is evolving into the next stage of it, and we're starting to slowly open it in some states and some states rapidly open it and others go back, hackers are actually really taking a lot of time

to look at data, much like we do, to figure out where they're going to make their next attack. And then the nation-state sponsored attacks are concerning because, as we talked about in the last podcast, Australia had its biggest nation-state attack. We now see the health and human services. Retail is not exempt from nation-state attacks. A lot of nation-state attacks are not just about disruption, but about financial gain and about intellectual property. So definitely a lot of activity on the cyber risk standpoint and the electronic risk standpoint. Another early report that I think we'll be reporting on this podcast probably before the masses is there's been a pretty significant attempt of attacking camera infrastructure

throughout the United States. So I think there'll be more to report on that. It's very early. We're seeing chatter on the dark web about going after infrastructure specific to camera and retail. And this may be around the protests. It's a little early to see, but there's a lot of talk on the dark web about camera infrastructure and retail. Switching gears to shoplifting and masks, there's been a significant uptick in reported shoplifting instances since stores have opened. New York, New Jersey, Pennsylvania, Florida, there's a whole list of states that are listing an increase. Some of this data is anecdotal because there's not a lot of data here. But what it really runs down is there's a couple news, ABC News in Los Angeles released it, ABC, another ABC in Philadelphia released it, and in New York, the Post and ABC talked

about the increase in shoplifting and the challenge that both law enforcement and retailers were having with the masks being worn, people actually, when they're caught shoplifting, saying they have COVID-19. warned people actually, when they're caught choplifting, saying they have COVID-19. Now you get into these, when you think about hands-off stops, think about a stop when someone tells you they have COVID-19. How do you respond to that? And then additionally, law enforcement response in some of these markets slowed, or when they are responding, being challenged with some of the civil disturbance at the same time.

So I think very early in the podcast, we talked about the potential for this occurring and what occurs when people are wearing masks. But now we're actually starting to see data coming out. And the reason I say it's anecdotal now is because these are news reports without a lot of factual data behind them. But the fact of the matter is that there's quite a bit of news reports about it. And there's quite a bit internationally as well. In the UK, there's very similar articles. If you read them, you would actually, reading the article, you would see that it's exactly the same as the ABC article in Philadelphia, just in the UK, where in flux, in shoplifting, people wearing masks, there's chatter about the police not being able

to respond. And then when they do respond, having mandates on arrests and having to deal with all those things. So it's just a stark reminder of the importance of really revisiting the policies. I know that the LPRC has done a lot with best practices around this, but I hate to use the word new normal. I think it's an overused term. But at this point, we have to start to really look at how we're going to deter and stop shoplifting in a world where people will be wearing masks all the time. And then adding that layer of potentially someone that could really be sick. How do we maintain a presence of asset protection and loss prevention? How do we handle shoplifters? How do we process sick? How do we maintain a presence of asset protection and loss prevention?

How do we handle shoplifters? How do we process them? How do we recover our merchandise? And how do we partner with law enforcement right now where law enforcement is in a very difficult situation too between civil disturbance and the pandemic issues and all of the other things that are going on? So I'll continue to look at this. I did find two pretty elaborate forms on the dark web about masks and the right way to wear them to, to get around facial recognition and things that should be said when people are shoplifting, as well as an updated list on the dark web of what retailers are,

have changed their shoplifting apprehension policies, which I think is interesting because there's a lot of chatter on the dark web about shoplifting, which realistically is not the norm. There isn't as much. I've seen a huge increase about organized retail crime and ways to get around it. So that is not a great sign for us because I can tell you that seven months ago, I would tell you that shoplifting was minimally talked about on the dark web. Now you have forums where people are saying,

now is the time to go out and steal. And again, this is an international conversation. It is not just a US-based conversation. So certainly something to keep our eyes on. And that's all I have for today. Over to you, Reid. All right. Thank you, Tom. Thank you, Tony. And, you know, a word on some of the items that you both talked about, but it really is a challenging and interesting. I read an article yesterday in

The Hill written by a colleague at George Mason University, Dr. David Weisberg, who really is one of the world leaders on criminology, but particularly with randomized controlled trial or experimental design. But looking at place and crime, which is a huge driver, as we all know. But his contention in the article, and it was a nice short article, I'd recommend anybody that is interested, about law enforcement and the dilemma that we all see and that those of us that are researchers or practitioners in the private or public sector are dealing with right now, and that crime has dropped dramatically. We all know this over the last 30 years and has continued to do so until now. But that by and large, law enforcement could stand like medicine and any other discipline to continue to improve better models, better data,

but really more and more rigorous evaluations to help them understand what works better, A, B, or C. And then that's what we do at LPRC, as everybody knows, with retail crime control, is try and put together logical models, repurpose things, or just try and enhance or even evaluate existing to understand what really does, what mechanisms work best to enhance safety and confidence, also enhance protective uh, shape safety and confidence, uh, also enhance protective efficacy that in other words, convince a victimizers not to come to our place or victimize when they are at our place. Um, so it is contingent is that, uh,

by and large law enforcement has actually gotten better and better and better at crime suppression or crime, uh, reduction, harm reduction and dramatically. So suppression or crime reduction, harm reduction, and dramatically so. And there's been a lot of very rigorous randomized control experiments around hotspot policing, instead of just driving randomly around or standing on the street corner or waiting in a police station for a call, that we identify, use data to understand where are we having problems in space and time. And these things do cluster like everything in life and place and time. Then digging deeper, why?

Why this place? Why this time? Why these victims? Why these particular criminal offenders are victimizing these people in these specific places at these specific times in these ways. So that data-driven approach and the evaluation of using that has shown that people could go to their mailbox, go to the local store more and increase rates and be and feel safer and more confident in doing so. The downside is what we're seeing now, and that means we're going to, in this case,

law enforcement is going to saturate those hotspots and do things that the evidence is showing are more effective. Just like we do in healthcare and you see right now, they're going to look for hot spots of infections, what occurred there, who was involved, why did this happen, how do we identify people, how do we quarantine those that are infected or been exposed to infected people. You're going to focus on those problems when we go to our doctor. They're looking for issues, not looking overall, and then they're going to focus on and try and do a differential diagnosis and dig down. And that's what law enforcement has gotten better and better and better. They're not perfect. They're not even close atilling, you're actively approaching people that look like they might have firearms or about to commit a crime. All those approaches, those contacts, those engagements create stress and they create situations. where they've just disbanded their street crime units that were very, very effective at removing firearms from people at places and times where there was a lot of victimization. Those units have been disbanded and did that removal to reduce tension increase now the exposure of good people, which is overwhelmingly everybody, to more crime victimization? And so that's, I think, a little bit about what you're talking about, Tom, as the law enforcement agencies are trying to rapidly adjust.

So Dr. Weisberg is saying, look, I think there are two different constructs or concepts here. One is crime control and suppression using evidence-based process to go into certain places and be very effective at reducing victimization of the vulnerable. But the separate concept is how do we also positively engage and roll back some of the tension and help people understand things that have been suggested or ride-alongs by community leaders and influencers going through shoot, don't shoot programs and helping them understand. A lot of us have seen those on TV, for example, where media or specific activists are invited and engaged in some of the training and understand the split-second decision-making that occurs when you're confronting people. And we know the United

States last year, 11 million arrests were made. 11 million arrests were made in the United States last year. We tragically had people killed during those arrests, but that was a thousand people. And you do the math, you know, it's not a situation that we want, but it's a situation where good crime control results in that. Now we know there are bad actors, there are poorly trained, there are those that don't care, those that are stressed out and are making bad decisions and so forth. We've got to deal with all those things too. So not getting on the pedestal, but just us as scientists, we're trying to take a step back, remain at that, and not be activists, but be analysts. And try and use evidence and take some of the emotion out of it

for ourselves as well. We're all concerned. We all have friends in these communities or we're right next to those communities and things like that. So I wanted to thank both of you today for illuminating and helping us all better understand some of the fraud risk, understand Tony globally and locally, what's going on with sales and re-engagement, and what are opportunities for all of us to help people feel and be safer and more confident. So from Gainesville, I want to thank everybody, Kevin Tran, our producer, Tony D'Onofrio, Tom Meehan from Crime Science. Everybody be safe. Thanks for listening to the Crime Science Podcast presented by the Loss Prevention Research Council Everybody be safe.