LPRC - CrimeScience – The Weekly Review – Episode 176

Episode Date: February 15, 2024

LPRC INTEGRATE is 2 weeks away, this week our hosts discuss the amazing things the LPRC is doing! On this episode, our hosts discuss the Kansas City shooting, the 2024 technologies that retailers are prioritizing, cyber week's returns were higher than before, and fun facts about Valentine's day. Listen in to stay updated on hot topics in the industry and more!

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 Podcast. Today, the latest episode in our weekly update series. I'm joined by co-hosts Tony D'Onofrio and Tom Meehan, and our producer Diego Rodriguez. And with no further ado, what I'm going to do is hand it over to my esteemed colleagues, Tony D'Onofrio and Tom Meehan. Tony, if you could take it away, I appreciate it. Thank you, Reed, for all those great updates. Let me start this week with the new 2024 store experience study just published by RAS News.

This is actually one of my favorite studies that comes out every year because it sets the technology trends that will be most important for the year. As RAS News reported, the coming year appears to be bright with possibilities for the retail industry. Survey respondents have an optimistic look going into 2024. Overall, store counts are up, information technology spend is up, and the NRF forecasted sales growth of 46% for the year, which lands right in the wheelhouse of the retailers who responded to the survey. Retail sales the previous year ended on a positive note, gaining 7.9% over 2021, according to the U.S. Census Bureau. Retail sales for 2023 are up 5.1 percent through the third quarter however none of those

numbers account for inflation you must remember which was over three percent by the end of the year retails are expecting an average of four percent growth for 2023 which was down from the previous year of 7.9 percent the 2024 forecast is for a more optimistic 4.9% growth. So if that holds, and with the current inflation forecast of 2.6% for 2024 for the U.S., that is indeed good news. Artificial intelligence is making its presence felt in a big way, and top priorities for retailers for 24 look much like those in the years gone by. Forecasted sales growth by Chandler in 24 is 5.1% for physical stores and 7.1% for e-commerce. By customer journey, in terms of total revenue, 72% takes place in physical stores, 12% is from buy online or delivery from warehouse, 5% from buy online pickup and store, 6% from

local store delivery and 3% is shipped from store that leaves 3% for other. In other words, critical stores still rule in the overall shopping journey. Information technology spend at the enterprise level is expected to rise 4.9% and for stores at 4.3%. The top five technology priorities for retailers in 24 are personalize the shopping experience, upgrade customer relationship management and loyalty systems, empower store associates, inventory visibility, and refresh point-of-sale infrastructure. The top five emerging technology priorities for 24 are voice and walkie-talkie in stores and parking lots, 5G at store level, RFID, second location for digital orders and stores, and microservices. The top five areas where retailers are implementing artificial intelligence are pricing and promotion,

order fulfillment, merchandising and allocation, sales and marketing, and business intelligence and analytics. Loss prevention didn't make the list in terms of focus for artificial intelligence, which is good news for this sector, which I know has a large following in this audience, and it came in at number seven. So loss prevention is gaining up there in terms of artificial intelligence focus. Switching topics, let me focus on some new data just published on Cyber Shopping Week, which are the five days between

Thanksgiving and Cyber Monday. As the chain storage reported for 2023, the rate of returns for Cyber Week purchases reached a surprisingly fast pace. Sales that week reached $38 billion up 7.8% from 22, driven primarily by record spending on Thanksgiving and Black Friday. But as sales increased, so did returns. Compared to the previous year data, the data indicates that returns were up 15% for the cyber week 2023, nearly doubling the pace of recorded sales growth. Three in four returns in 2023 were from the fashion and accessory products sectors of the industry. Additional research found that while 89% of retailers have changed their returns policies in the past 12 months to make them more expensive for customers or otherwise tightening the restrictions on returns, more than half, or 69%, experienced an increase with the management of returns as customers increasingly turn to more online shopping options. So, in other words, retail returns are still a big problem for the retail industry, needing more solutions, especially for apparel and accessories, which has been a problem for quite a while. and accessory which has been a problem for quite a while. Finally this week as it is Valentine's Day's week let me end the week with some fun facts about this

holiday as reported by countryliving.com as they stated and this again came directly from countryliving.com a Roman fertility festival was the precursor to Valentine's Day it may be difficult to believe given the innocuous the holidays these days, but the roots of Valentine's Day stem from a bloody pagan fertility festival dating back to the 6th century BC. Every year between February 13 and 15, Romans celebrated Lupercalia by sacrificing animals and slapping women with their hides, which was believed to make them more fertile. There is more than one St. Valentine's Day for which the holiday is named. That's another surprising fact. History tells us that Pope Gelasius I outlawed Lupercalius at the end of the 5th century and instituted St. Valentine's Day on February 14. But who was the holiday patron saint? More sources point to one of two men of the same name,

a 3rd century Roman priest who defied and was martyred by Claudius II goticus or another priest of the same time period but who hailed from a town about 60 miles away in what is modern-day Terni, Italy. He was also martyred by Claudius II. To further muddy the waters, some contend that the two Valentines were the same person, while the Catholic education resource points to an early martyrdom of three St. Valentines all sharing a feast day on February 14. You might also be interested to know that Valentine's Day was not romantic until the Middle Ages. And we have birds and chaucer to thank. In the Middle Ages, it was common wisdom that birds began mating in mid-February,

specifically on the 14th or St. Valentine's Day. According to folklore society in those days, we tended to refer the dates of the same designated by the church calendar. To this happenstance, Valentine's Day became associated with making like birds and being paired off. This notion is set to one of the themes of the earliest Valentine's Day poems associated for the day, which was written by Schofer and published in the year 1381. Cupid which is very popular on Saint Valentine was actually a Greek god that cute little chubby baby with the bow and arrow we associate with Saint Valentine, they started out in 700 BC as a Greek virile handsome god, Eros, able to make mortal fall in love or hit with the logical magical arrow. He was remade into Cupid by the Romans around the 4th century BC. But as Time.com reported, it wasn't until the turn of the 19th century

that Cupid became the face of Valentine's Day for his love-creating abilities. The Victorians began the tradition of giving roses for Valentine's Day. Red roses is a symbol of romance way back to ancient Rome. It was a favorite posy for Venus, the Roman goddess of love, and Cupid's mom. But it wasn't until the Victorian era that men really began giving the flower to women that were wooing. And finally, Valentine's Day is very expensive, at least if you go by the statistics released by the National Retail Federation, which found that Americans spend nearly $24 billion on the holiday in 2022. Much of that money goes towards jewelry, an estimated $6.2 billion. And that includes a lot of diamond rings,

by the way. And as many as 6 million couples get engaged on Valentine's Day. So the last one on spending all that money is great news for the retail industry. Hope you all had a great Valentine's Day. Happy post-Valentine's Day. And with all that fun-filled news, let me turn it over to Tom. Well, thank you, Tony, and thank you, Reed. And I apologize about the background noise. I am in transit today, so hopefully it isn't too bothersome. I wanted to

start with the unfortunate events at the Kansas City Chiefs parade where there was a shooter, an active shooter. There were three active assailants that we know of, at least one deceased, 18 people, eight shots, and between nine and 11 children. So pretty horrific event at what was supposed to be a celebration. We did update the fusion net in real time, although I would say that this was a typical unfortunate active shooter or active assailant event. There's still a lot of unknown, as always. I would caution all the listeners to be careful about what they're reading on social media. There was a ton of video released. I think most of the video has actually been confirmed. However, it's hard in these events to decipher what occurred. The police are still not giving a motive. At the time of my taping today, I'm taping more than 24 hours later than it occurred, and we're still learning

information. For the listeners here, if you are an LPRC member or a part of the law enforcement community, you can join the Loss Prevention Research Council's FusionNet, and the FusionNet is a place where active threat weather events as well as civil disturbance we monitor. We try to validate and share information in a controlled but open environment. So definitely something to look into if you haven't been a part of it in the past. And I think in the upcoming months, you're going to see a lot more emphasis on it with the elections, this being an election year. Switching gears a little bit to, there was news in the past 24 hours around a threat related to Russia.

There's a lot of misinformation about this as well. There was a cryptic message that was put out from the U.S. government about a potential threat, not imminent in any nature, but a threat of Russia having capability to detonate a nuclear weapon in space, potentially disrupt satellites. This is not really new information. This has come out actually two years ago. This came out once before. The difference here is that there is a Russian vessel that was launched into space that is considered top secret. We don't have a lot of information. I don't want to make any speculation around it, but I would tell you that with a lot of the information that's being spread, I would encourage all of the listeners to validate and use common sense and good judgment when you're

reading things. It's very hard to tell what these things mean. As we're all aware, we have a lot of political agendas. There's economic conditions and geopolitical things that are occurring today that don't normally occur. We have conflict in the Middle East. We have conflict between Russia, Ukraine, and potential conflict in Asia. So we are not in a position here at the LPRC to report further on it because the facts are still being gathered. But I thought it was such a large, polarizing news story over the last 24 hours that I thought it was pertinent to mention. We'll definitely keep the listeners up to speed on what's coming with it just in the event that anything changes. I had the opportunity to speak about artificial intelligence at retail this week. And what I would say is we continue to see the evolution of artificial

intelligence going beyond what was two years ago, the chat GBT 3.5 generative AI. So there's a ton of information and new things occurring. Google has rebranded Bard to Gemini, which is a much, much more robust generative model than what we saw in the past. And it is actually out there in the open. I encourage everyone to take a look at it. There's actually an Android native app, and you can get involved in Google's Gemini through the web today. I assume that we'll see an iOS app coming soon. One thing I would say is while there's similarities for ChatGPD, it's very different. What I encouraged all the folks at the speaking engagement to do is to get involved and to start using AI.

If you're not using AI in your day-to-day life, I think that you want to start, whatever that means for you, it may not, it is not a one size fits all. At the NRF Big Show, we saw a tremendous, tremendous amount of AI buzz. And you definitely need to go through the noise and understand what AI means to each individual piece of it. I often say don't confuse generative AI with some of the machine learning, some of the other things that are out there. There's a lot of different types of artificial intelligence. And when you think about artificial intelligence, it is an umbrella term. Underneath that, you have generative AI.

You have narrow or weak AI, you have machine learning, you have process automation. You have so many different terms under there where the umbrella of artificial intelligence is simply a machine or a computer replicating or attempting to replicate human intelligence or activities. That's at its core what artificial intelligence means. There is a stark difference between generative AI and what I would call narrow or weak AI in what a Siri or an Alexa would be. And then you get into a lot more different things with machine learning.

So I encourage everyone here to dig in and learn about this. I think that there's a lot of different things out there, misinformation, misunderstanding, good and bad info that's out. And what I would say when you think about AI is resist the urge to think of it one way and really dig in and understand what it means to you. I am back. Hopefully you guys can hear me. With AI, what it means to you. So generative AI is often referred to as chat GBT. I'd encourage everybody to understand that chat GBT is like Xerox to a copying machine or Polaroid was the instant film.

Open AI is the company, chat GBT is the brand name, but it's just generative AI. machine or Polaroid was the instant film. OpenAI is the company, ChatGPT is the brand name, but it's just generative AI. And there's a large language model as well as an image model and creation. So definitely, definitely explore it. I know that the LPRC will have a lot on it and it will be something to really keep in mind and keep an eye on. And with that, I'm going to keep it short today because I am traveling and there's a lot of background noise. But hopefully in two weeks, we'll see everybody at LPRC's Integrate or Innovate. And I said Integrate, it's Ignite or Innovate. Apologize there.

I'm looking forward to seeing everybody there. I will be there as well as some other folks from my team. And we're really looking forward to seeing everybody there. I will be there as well as some other folks from my team. And we're really looking forward to a fantastic event. As always, if there's anything that you want to hear on the podcast, reach out to any one of us. And if you're not already subscribed, subscribe to the podcast. It really means a lot to us. Over to you, Reed. All right.

Well, thanks so much, Tony, for all that information. And of course, Tom, there is a lot going on that we've got to pay attention to. We've got wars. We've got a lot of antisocial behavior. We've got a lot of problems that are taking place clearly in the retail environment as a result of that and more. result of that and more. So at LPRC, we're dedicated to moving on. We've got our new team members. They spend good quality time training with us, helping us plan 2024. So we will update on everything that we can as soon as we can. So stay safe and 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.