LPRC - CrimeScience – The Weekly Review: Episode 20 with Dr. Read Hayes, Tony D’Onofrio, and Tom Meehan

Episode Date: August 20, 2020

253 deaths took place in retail locations – an increase of 45% from this second quarter. Why is the total revolving credit card debt down 10%? Dr. Read Hayes, Tom Meehan, and Tony D’Onofrio discuss this and more, including COVID-19 vaccine testing, LPRC initiatives, virtual SOC,  increased online sales, fraud risks, & chargebacks, puppy scams in the age of COVID-19, BOPIS,  technologies in retail, sustainability, recent crime data, and the fastest-growing retailers in this episode of LPRC CrimeScience: The Weekly Review. The post CrimeScience – The Weekly Review: Episode 20 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'd 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. Welcome everybody to another episode of Crime Science, the podcast, our weekly review or update. I'm joined today as always by Tony D'Onofrio, by Tom Meehan, and Kevin Tran, our producer. And we'll just kind of jump right into it, trying to update on everything that's

going on during this time period. We'll start, of course, with looking at COVID-19 and 2020, the year that not sure needed to be. Looking at immunity, there's now been a handful of studies that look at the immunity. In other words, some sustained immune response, effective response to the disease. And particularly in India with large samples looking at, now again, these are not randomized controlled experiments or trials, but rather are observational studies, but they are testing individuals that are known to have been, had COVID-19 and looking at them and understanding over time, is there a sustained response? Because that's a huge question. Can you be reinfected? And so right now they're finding a couple of things. One, it does look like there could be

a sustained response significant enough to provide the immunity that's needed to preclude reinfection. Now, we know like with the flu, you can be reinfected, we can be reinfected every year and maybe even multiple times a year, depending on the strain and things like that. But normally not in the same week or month and so on, typically, evidently. So in this case, the second thing there, so this looks positive that maybe there is, you know, you have it or at least a significant amount of disease, then you'll be immune for a while. Now, whether, again, that's weeks or months or longer is to be determined,

but it does look like in many cases it's quite a few weeks and months. But they're also finding that, of course, looking at the neutralizing antibody response and then, of course, the killer T cell response, but also seeing what they call B cell response. And then of course the killer T cell response, but also seeing what they're called B cell response. And so there does seem to be a complex and sustained response. So let's hope that's some really good news for everybody. For those of us that are infected or get infected, that maybe we will not be reinfected. And that means also not viremic, or in other words, shedding virus and infecting others. But early days, six months into this situation, and again, we're still learning about evidently the pandemic of 1918. So these things take a while now with today's science and

communication of what scientists are finding being instantaneous. We can see that we're learning in days what took decades. inexpensive test. And by quick, it means very accurate, but the turnaround could be a day to even hours, and in some case, even 15 to 30 minutes. A Yale test is now looks close or may even by this time received approval that is that very accurate, quick, and relatively inexpensive. It could be in the $10 range, but it would be the type of test that individuals could take and feel pretty assured that it's accurate, if not daily, at least several times a week. And so that's going to be a key to understanding where it's everybody's status over time. We know that elevated body temperature remains controversial that, again, they're still trying to understand the scientists, physicians,

what's going on with them. What are the real symptoms? Why are they all over the place? Why do people not present in some standard format? I understand that they've identified a somewhat normal symptomatic response, the way that it's expressing itself as fever, and then we've got headache, so forth. But I don't think it seems standard. But in this case, that we've got to keep moving and understanding more about that. Therapeutics, as we've mentioned before, still just an incredible amount going on in the therapeutics area. Right now, when we look at therapeutics, in other words, somebody has got the disease. Now we want to try and do everything we can to minimize it.

698 unique active compounds are in heavy-duty development. And overall, 188 are antivirals. 331 treatments are non-antiviral. They're designed to protect the body or protect against the response. They're finding in a couple of studies, it looks like that a key component here is protecting the blood vessels themselves. And so there are existing compounds or medications that do that. And so that seems to be a key part of what some people have sustained symptoms and damage for a while or for quite a while. Potentially they don't know, but a lot of that may be related to blood vessel damage.

So they're coming out with quite a few therapeutics in that area that are protective that have been shown to be protective with other illnesses. So that's good news, the sheer amount, the brilliance of what's going on, and then learning not only for singular or monotherapies, but as we talked about before, these polytherapies combining different things together, things that are steroidal or anti-inflammatory, as well as affecting the virus, the cells, and so on. Vaccines included in there, again, we're looking at 179 vaccines in current develop that are known and registered, developed that are known and registered with a lot of financial means behind them and looks good.

138 of those are preclinical vaccines. So they're going through, again, computer testing, then moving into cellular testing, then moving into mouse models or other animal models, and then into humans is what we call phase ones. Those are normally around small-scale safety trials, 25 of those at least registered. Phase two, expanded safety trials, there are 15 registered trials there. And again, the all-critical in moving toward the finish line of us understanding phase three trials. Now seven vaccines are in large-scale efficacy testing as of this week. So it's a race, but it's a rigorous and careful race to help deliver vaccines that will, again, simulate whatever different means, use different means to simulate the disease. But the point is to trigger the immune response, something that's sustained, again, looking at the neutralizing antibodies, B and T cells and so forth. So that if now the human,

we are exposed to the actual live virus, we onboard it through our eyes, nose or mouth, then we have a real good chance that either will not become infectious or be very minimized. The infection will be minimized. So exciting news there that there's so much going on in that area. Masks, I think many of you all are familiar with the Duke study where they were evaluating first. They did a meta-analysis where they looked at dozens and in some cases hundreds of mass studies have been conducted over the last few years. And, you know, again, we do this in criminology and you'll just, you evaluate studies that are very similar, but then you have to

normalize or make different metrics and inputs and outputs similar so that you can assess them as a group. So these meta-analyses are one way to do that. And so they're looking at that, plus they conducted sort of physics tests in the lab, looking again, using light and understanding how much of each type of cloth and the fold of the cloth, the layers of the cloth, or whatever the material is, provides the most protection for the wearer, the protection for those around the wearer, if the wearer is viremic or is infectious. So as we all thought, it looks like right now the N95 respirator fitted mask

provides the most protection for the wearer and those around the wearer, followed by the surgical mask. It has multiple layers. It has folds in it. Creases are all designed to reduce the amount of droplets and aerosols that can move through either way, one way or the other. But even with the cloth mass that most of us have out there, you're seeing a minimum of 30% reduction in likelihood of infecting another person or being infected. So

30% may be enough to obtain normal herd immunity in certain areas, potentially over time here. You know, again, there's all these caveats, but just more evidence that the mask wearing is good. We know that there's always counter evidence, but the mounting evidence, um, looking at mate analysis, not just hand picking or cherry picking, it's called right. A fallacy that's out there. One of them, um, that there's, it provides pretty significant coverage for most people. Um, but addition, even this test group still recommends frequent hand washing, not touching our eyes, nose, or mouth, or even our face and so on. And then that's still a great way to stop the spread. So looking at masking, you know,

I know here we've been looking at the mass studies and we're conducting two studies of our own. One, how criminals are using the mask, of course. Two, our two-parter on the second one, do masks intimidate people? How do we minimize or two-parter on the second one, do masks intimidate people? How do we minimize that intimidation? And then the second part, how do we help customers, employees feel safer, more secure, more confident because of the mask and how the mask is being worn by those in the store or in those they come in contact with? And you can imagine it can be a significant part of retailing if people don't want to come into your store because people are not wearing masks or

they're wearing, you know, a gaiter as they call them. We talked about that before. Or just a sliver or a scarf that it turns out is not providing very much, if any, protection. In fact, you saw there's evidence in the Duke study that the gator somehow amplifies the risk rather than minimizing the risk. So it's important that we're trying to do everything we can so that customers and their loved ones feel safe and secure. We've talked about that for a long time at the LPRC and conduct a lot of research around that. And this is one component of that. If you've got employees that have a flimsy covering over their mouth, they don't have a mask where that's flimsy or it's not covering their nose or it's just haphazardly put on, that is a signal to others consciously or even unconsciously. I'm not convinced these people know what they're doing

or care or something that's not good that could preclude that confidence that we all need for retailing. And every shopping event is critical to every retailer now more than ever. Looking at the science behind noncompliance, and of course, we've been having calls around and looking into why are people noncompliant, but also why do some noncompliant people become verbal or even physically violent. But some of the reasons we are understanding, of course, noncompliance, people are self-conscious, don't like being in a mask. It makes them feel uncomfortable psychologically or like they might be offending somebody. You know, it's not, hey, I'm wearing a mask. This doesn't seem right as a human that we want to see each other and communicate and be open and transparent.

That plays some role and explains some of the variance in compliance. Discomfort, of course, I'm one of those that wear a mask but have never found it even remotely comfortable. But that explains some of the variance again in non-compliance. Just a sheer discomfort. You know what? I can't stand it anymore. I can't stand it at all.

Not a good excuse, but another explanatory variable. Another one is just, we all know, resisting the mandate. I'll put my shoes on. I'll maybe even fasten my seatbelt, but I'm not putting the mask on. You can't make me. So we know there's that resistance out there. And not sure exactly why, but part of these things, these things feed together. We know like with any research that we do, the science, we're trying to understand the variables, test them,

but we code them, and then we can compare them statistically how singularly they might affect the outcome, but how they work in combinations, right? So their main and interactive effects, just like exercise and diet and hydration are individual explanatory variables, predictors of whatever some, let's say, some kind of cardiac event outcome. But interactions between those two, medications and so on, we know have interactions, their own effect, but they might have a different effect when they interact with another. So that's what's going on here. So you might be skeptical also and resisting the mandate. It does feel uncomfortable. You even feel a little self-conscious. You may believe or it does interfere with your breathing.

It's another explanatory variable. So you'll see these things, combinations. There's been some research because of HIV and some of the other viral infections we've had on masking before this over the last few years and provide some good evidence to some of the scientists. Look at this selfish to selfless scale. The more selfish you are versus selfless. Are you more internally or externally or oriented? You know, explain some of the noncompliance. You know, look, it's all about me.

I don't like this. It's not comfortable. I don't believe in, it's all about me. I don't like this. It's not comfortable. I don't believe in the government. I'm not, I don't buy this. This is a real problem. COVID is not for real or it's things like that, scandemic and so on. These things we're seeing out there to a selfless scale. Hey, I might not believe in things and all, but I do believe in helping or protecting, safeguarding, not intimidating others and so on. So just giving the idea of feel for us. We read the literature as it's called, the research out there that exists and the logic or theory behind what's going on and how they test that. It's been very interesting. Another key

principle here is safe versus safer. This know, this doesn't make me safe. I'm, this is a hundred percent protective procedure here. So I'm not going to do it versus, well, but you're safer. It can reduce it, you know, by 30% your risk of onboarding an infectious dose. Yeah, but I want a hundred percent it's nothing. So there's these sort of that kind of thinking sometimes that goes on in us. Well, if I'm not totally safe, then I'm not doing this. If I get in a head-on collision, I have a seatbelt on, I'm not safe. But you might be safer. So that's the kind of debate and us trying to understand the psychology. And again, all of these, all the reason behind this and any research that we do at

the LPRC is, okay, how can we use this, look at other people's research, conduct our own, but all to assist and support safeguarding vulnerable people and assets. So what are the indications, implications from some of the research as far as understanding how can we better communicate with our signage and other messaging, how we might say something or approach an individual, understanding, hey, we would like all of our customers and all of our employees to feel very safe and secure or safer here than they might if this is going on. So please all work with us, but how do we understand message approach and handle situations to maximize compliance and hopefully a safer environment for all and more conducive to good trade and commerce and a good workplace, but at the same time, not trigger certain things. Or if somebody is triggered, and we see it happening, and it

happens probably daily, but across 330 million humans, it's still a very rare event, but it just takes one event where somebody's injured or killed or frightened and intimidated to create the downside risks that we don't want. So a little bit about how we look at things and how we're trying to turn this into actionable things. So we're coming out with some recommendations or some suggestions anyway, based on what other research is showing out there. We can do some things online, some things now in these places and spaces like before, but that's some of what we're looking at now. How do we support the retailer to minimize, maximize compliance in a safer environment while minimizing the idea of conflict or if it arises

that that can be safely and quickly handled. Switching over now to LPRC and I'll let Tom, if you're inclined to address, by the way, the looting situation. We know that rioting and destruction and we're seeing a lot of personal attacks by some of the groups out there that either are or are masquerading as antifa revcom uh some of the blm activist side um as well as some of the more right wing or in or the other anarchist groups that are out there and how they're operating so if tom if you're inclined if you want to address some of that um on our call, we onboarded some of the information from the over 30 retailers that we all were able to debrief together. That report's been put out to the members. It's on the LPRC website in the LPRC Knowledge Center, joining 325 or so other reports. And Tony, I know we sent you a group of all the,

some responses from all the cluster calls, including that one. We've got the, I wanted to bring up the LPRC app. It's free app. We highly recommend it. We've got a lot of RSS feeds, you know, feeds that come on there. So it's like Twitter. It costs nothing. You just click it, opens, and now you've got your feed. You can thumb through that's coming in, again, from security magazines, from LP Magazine, from D&D, Downing and Downing Daily, from CDC, from DHS, from the National Hurricane Center, and so on. Multiple sources.

So now it's a one stop, just quick thumb through and you can get briefed fairly quickly. It's something that you can, everybody across your enterprise, your organization, including you, can use, myself included, to update ourselves very rapidly. And then you can go in and understand more about other things. And if you're a member, of course, you can go even to the next level. You can go and understand every working group, what they're working on, see their call notes. You can have curated pushes to you of, I'm interested in violent crime research. I'm interested in product protection research, supply chain protection, retail fraud, organized retail crime, whatever.

Those feeds, those pushes are in there for you you can you can actually pull up and look at webinars we've got a bunch of them that we've done listen to podcasts and on and on so I highly encourage everybody at your favorite app store download the LPRC free app and it's pretty cool looking too on top of that. We're doing a series of three member brief calls coming up. One coming up shortly will be on LPRC Innovate. We're going to walk the members through Innovate, all the cool capability, all the powerful capability that's been stood up here, including the virtual reality lab. We're starting to put little clips out there.

Some of you might have seen them on social media. It's really neat, but it really provides so much capability for our team to work with a retailer or others, a solution partner, and look at those environments. We can very quickly or relatively quickly craft that environment, including everything, the look and feel, the ambient noise or sounds, even alarm sounds, anything that's relevant, fairly quickly flashing lights, EPVMs, whatever. We can move fixtures around. We can do those things, the self-checkout units. But we can create the environment, put the person in there either from their screen or even better, of course, with the VR goggles, especially if they've got audio capability. And now we can

start to assess and get feedback from them and present different options. What if this looked like this or it looked like that, A or B or C, or, you know, we can do that and we can do things in combinations. I mentioned main and interactive effects. Well, what if you did this and this and so on? So it's going to allow us now to much more rapidly and fairly accurately measure options in addition to what we can do in the simulation lab. a little bit in some of the actual stores, particularly some of the retailers over 30 around their chains. They use stores in Gainesville to work with us. We call the store lab program. So look for that. We've got one on impact so that people are very familiar with impact. It's going to be an amazing two day event. We've been working long and hard since March of this year. And we've got a really good team. The band's back together again. It's done some amazing physical impact conferences.

And they're excited. We're excited. All the content. Look for the content. I think it's coming out. If not late this week, it'll be next week. So you're going to see what the sessions are all about. Strategy at the same thing.

Working hard, getting that ready to go. Working groups, we're getting more and more guest speakers into our seven working groups that are bringing more and more data in addition to our team. So a lot going on around the world, a lot going on at LPRC to try and support you all. So with no further ado, I'd like to head over to Tom Meehan. And Tom, if you can bring us up to date on some of the scams and some of the violence and some of the things we can do about it. Sure. Thank you. And I'll start kind of just to touch off with the LPRC and something that we've been working on. And I'm happy to say it seems like it's moving forward is really called a virtual SOC, but really utilizing the LPRC SOC and creating a place for the members of the LPRC to go.

We'll probably start with a weather event because we believe that a weather event will be the thing that we can control from a data consumption standpoint. But what the idea is and the hope is that in the future, we'd have a full functioning SOC. So if you want to learn more about that, please, you can either come to the Innovations Working Group, you can reach out to myself or anybody at the LPRC, because we're still in the planning stages. And we will have to take a phased approach. We know that we'll have to start with something. But imagine a place where you, and it may be very well be the LPRC app, it could be a different output, but you'd go during an event that's a national event or a global event. And if let's just use a weather event, you'd have information in real time that you could actually validate and see similar to what you'd see in any

other social engagement app to validate the information. And why we think that's important is when we talk about civil disturbances, there's so much information at once. We're trying to create a place not only where you can gather that information, but you can have some real-time validation. So certainly if that sounds interesting at all, even if you're not a member and you're a solution provider with either an open source intelligence gathering platform or social media mentions or monitoring platform, reach out. We're really looking to make this a robust application. I know that we're talking to companies like Planet with satellite imagery and then just a whole host of things. What I would say is we're not envisioning it to be like what's out today. It's going to be a consolidation of different things. Switching gears to some information that came out from the Federal Reserve Bank, and this is really interesting information because it doesn't really bode with past kind of global or economic events, is total revolving credit card debt is down by 10% according to the Federal

Reserve. And in the spring, it was down as much as 40%. So what you're seeing is that there's less credit card spend, less spend, and however, debit card spend is flat. And why am I talking about this on this? Because it's a very interesting phenomenon. Normally, what you'd see is an increase in credit card usage. There are some theories out there. It could be that a lot So today, the credit card spend is increasing a little bit, but it's still 10% down. One of the things that's really interesting is if you go back to March, that you have significant, significant increases in next day shipments, 300% up in March, 305% up in April compared to the year prior. So you're seeing huge increases online. Obviously, the volume isn't going to be the same as in stores, but you have increases of 91% in mid-March in sporting goods, 600% card not present transactions. So think about that,

600% increase month over month in a card not present transaction so think about that 600 percent increase uh month over month in a card uh not present transaction so what what the the natural thought process here is what does this open us up to for fraud and as i said many times this this is happening in real time so we don't know wines and spirits and crafts up by 900 so huge huge increases of online sales not not suggesting that these sales are going to replace in-store sales, just suggesting that when we think about risk and we think about goods, 90% in vitamins and wellness, and 60% in home office and electronics. All of the things that potentially in the past would have been categories in lower risk than your typical credit card fraud type items. This poses a challenge for retailers and merchants, whether they ran an online channel before or it's new to them, that model data isn't as readily available

and these huge spikes play against models. So all the risk modeling really is going to have to continue to be adjusted. And even with stores opening up, we still don't necessarily see all of the changes coming to play. The other thing that's important to note is that there was a significant increase in chargebacks. Now the chargeback data isn't all readily available because, as everybody knows, it depends where you read it from. But one of the things that we're seeing is online retailers are experiencing the same kind of chargeback result than criminal just using someone's credit

card. But there's about an 80% increase in friendly fraud. So an actual customer making a purchase and then claiming they didn't get it. It's a pretty significant number when you think about, you now have, again, I think Reid and I talk about this all the time, the person that was walking the line that took advantage of the opportunity, there's a lower perceived risk of being caught. So they went ahead and said, what will happen if I just pick the phone up and say, that's not my charge? So an 80% increase of that, which is a significant increase. There's also other categories of significant increases in fraud that we haven't seen in the past, where gaming and wireless fraud are one of the fastest growing areas.

Year over year growth, it was and it continues to be higher than it has been for account takeover in general continues to be a challenge and that's in any type of account not just credit card fraud but it you know it transitions credit card fraud and when you think you know in 2019 account takeover reached over nine billion dollars what is that going to look like for 2020 when you have all of these folks at home using more accounts, taking online to the next level? So that just leads me to all of the things that we continue to talk about is for the listeners on the call that are merchant and retailers, it is an important time to really take a look at your credit card risk models and then look at the future and how you are going to operate in your stores when you open in an environment that could be more contactless.

There's a lot of different information out there about cash. We all know that cash is not dangerous, that you're not going to catch COVID from using your cash. It's highly unlikely, but there are a lot of people out there that think that. So there's been some changes, but what you have to think about is when, as stores are opening and as customers come in, the new type of shopping behaviors and what that means for credit card fraud and risk for us.

And then switching gears, just because I talk about scams, online scams all the time. And I think it's kind of important to continuously remind everybody of this because it really, really kind of hits home with that scams are not limited to any type of particular purchase or event. So puppy scams are, you know, up the off the chart for reporting. So like, it's hard to give you an exact number of how high they're up because there wasn't a lot of reports, but there's studies that suggest today that more than 80% of the puppies online for sale are fraud and

scammers. And there are some red flags you can look for, but the reality here is that with the increase on people staying home, adoption was up in animals. So the scammers went out and they took a look at a different way. And I said 80%. I'm sorry, it was 300% reported up for that. And 80% of the puppies online are what they believe is to be fraud. So that's where the number came from. But when we think of fraud, we don't think of things like that. But the reality is anything that there's deposits or money being exchanged online is unfortunately at risk of being taken advantage of. And I look at this, again, as an opportunistic or a very clever thief taking advantage of the COVID-19.

opportunistic or a very clever thief taking advantage of the COVID-19. And just basically what we're seeing is that they're posting pictures. You're going in, you're looking at this dog, you love this dog. You're putting a small deposit down and then your money is gone. It's similar to what we saw in probably the mid 2000s with the real estate boom after, right before the crash, of people just taking deposits for apartments that weren't theirs and taking advantage of people really running through. And these deposits are substantial.

What the reports are showing is that they're between $500 and $1,000. So when you're thinking of a $6, or a $7,000 purebred dog, people are putting these deposits down. Sometimes they're doing it where I think anybody in the security field would question it. You know, the end users asking for a gift card versus a credit card for deposit, things like that are obviously red flags. The other big red flags, deposit. Things like that are obviously red flags. The other big red flags, which I was not aware of, but when people are offering COVID insurance for their pets, what they noticed is in the 80% of listings that they found, there were commonalities in the red flags around things like COVID insurance, which doesn't exist for puppies, future vaccinations for your dogs included for COVID.

So while these scammers are somewhat unsophisticated, they are much like what we see, their behavior staying consistent. I did a little digging online and didn't see a lot of chatter about this except from reported from news agencies and law enforcement, but it just serves as a reminder that no matter what we're doing to really stay vigilant and look at everything and take that extra special care before you go ahead and give anybody any money to make sure that it's okay. Over to you, Tony. Thank you very much, Tom. And I'm actually going to build on actually some of the online data that you talked about. So the numbers are in for July. So online sales increased 55% in July. But growth actually slowed.

It was an amazing up 76% in June. Right now, Adobe is projecting that 2020 online sales will surpass all of 2019 by October 5th, 2020. Think about that. This is before we get to Cyber Monday, before we get to all the holiday sales. We already have beat all of last year by October. So it's going to be an interesting year for online. Sales fulfilled by online pickup and store or Bocas was up 23% in July over June. Good news for apparel. Apparel sales online were up 3.6% in July.

One of the things that's interesting this week from the data is that e-commerce operations require three times or three acts the space of store operation as a result leasing activity for warehouses is up 50 percent at jll during the pandemic and ups and fedex at the same time are increasing prices for shipping putting surcharges in place and also limiting shipments so it's going to be an interesting holiday season. So the good news, retail sales online are up. The bad news, retail sales online are up because it's actually much more profitable for a retail to have a consumer walk into the store

because of all the costs that I've just described. One of the other interesting things this week is where is the money being spent by investors in terms of technology? So where are investors making bets on what the next retail technology is in 2020? And CB Insights had a new report this past week. Deals and funding and retail tax are declining because of the pandemic. So in the first half of the year, they were down 42% over the same last year. But there is more tech as into e-commerce tech.

That's up 6% in Q2, and $3.1 billion was bet in terms of new technologies in e-commerce. bet in terms of new technologies in e-commerce. Investments in new formats such as mobile-enabled vending machines and contactless checkouts is up 5%. Tech deals and supply chains decreased 15% in terms of number of deals, but there are more robots activity going on in discussions in terms of investing in robots. There was an increased demand for solutions for faster delivery, and those yields were up 53%, and online grocery tech was up 21%. In terms of the tech, that technology that is actually getting attention by retailers, it has this type of a profile. First of all, automation.

So anything that shifts employees' roles and reduces contact is getting attention. Optimization, finding efficiencies at the store and online. Omnichannel management, more connections between e-commerce and store operations. channel management, more connections between e-commerce and store operations, virtual management, adding interactivity and personalization to e-commerce, and then enabling broader reach, so expanding retailer touch points. In other words, having more channels to market. Interesting to the robot statement that I just made, actually, American Eagle announced last week that they're expanding the number of robots they're putting in their warehouses by 26 to do pick faster for e-commerce. Gap is doing the same. So more robotics coming to manufacturing inside of warehouses.

Speaking of apparel, there is a lot of clothes that wasn't sold during the spring but we were locked down so what's happening to all those clothes so one of the places that they're going is they're flooding charities good 360 which is a non-profit expects 660 million in donations this year double last year they're also going into into recycling. So LVMH, which owns Louis Vuitton, is doing a lot of this, recycling a lot of this. What is not being done this year is destroying the goods, which is not a sustainable approach, and actually got some bad press in 2018 when they disclosed that they destroyed $37 million worth of merchandise from the previous year. This week, we also saw a peak in terms of what

happened to crime in the first half of the year through some new reports that came out of D&D. So first, I'll talk about the organized retail crime report. The number of cases were down 26% through Q2 this year to 608, and that's the second lowest on record. Total amount was $54 million versus $101 million in 2019. By type of organized retail crime, theft and shoplifting was 62% in 2020, down from 70% in 2019. Robbery was 26% in 2020, up from 12% in 2019. And employee theft was 6%, down from 7% last year. was 6% down from 7% last year. The top categories of organized retail crime are electronics at 29%, clothing at 18%, and then drugs are 15%.

The hardest hit states are California, Florida, and New York. Also this week was the violence crime report, and this is the one that shocked me, actually. 253 deaths took place in retail locations, up 22% in the first half of the year, and up 45% in Q2, which is during the peak of the pandemic. So we're 125 individuals were killed. By category in terms of who was killed, 28% were suspects, 40% were customers, which is down 2%.

26% were associates, which is up 94%. That was a shocking number. And 6% were law enforcement and health protection, loss prevention, and that's up 133%. Where are the incidents taking place in terms of violence in stores or deaths in stores? So 55% are in the store or mall, 39% are in the parking lot, and 6% are off-premises. And again, think of the zones of influences of the LPRC and really scaling up protection. That's getting more important than ever. The top three formats in terms of violence is C-stores, 33%, restaurants, 15%, grocery, 7.5%.

grocery, 7.5%. And the top three cities, finally, are Houston, Philadelphia, and then tied for third place, Chicago and Cleveland. So violence inside stores was up, especially in Q2. And that's a disturbing trend that, again, we need to work with the LPRC to figure out how we get to a unified approach to STEM. And I'm going to close with a new report that came out from the National Retail Federation on who were the hottest retailers, and this is their 2020 list, but it's really ranking the 2019 hottest growth retailers.

And some of these were interesting. So number one is Lidl, which is a German retailer, which is a low-cost grocery retailer. They are expanding and growing in the United States. They grew 69% in 2019. Worldwide, just to give you an idea how big they are, they're a $126 billion retailer. billion retailer. Wayfair was number two. They grew 29%, and their worldwide sales are 8.4 billion. Number three is Built.com, which grew 26%. Number four were Don Quixote, which is out of Japan, and they grew 24%. They actually have worldwide 10 billion sales. They're small in the U.S., but worldwide they have 10 billion in sales. And number five, and this again was interesting because the other ones were smaller retailers. Amazon was the fifth fastest growth retailer in 2019 with 21% growth and worldwide their sales are 250 billion. So that's good. Some good news from retail. There are formats that are thriving. So we'll see how they did in 2020 through the pandemic and beyond. So with that, I'm going to turn it over back to Reed. to help us get a better purview.

We all need data at the different strata. You know, that macro, that meso, and that micro environmental level, it just helps us to have a common operating picture, right? And that's something that we've talked about with the SOC Lab that Tom mentioned a few minutes ago. And we're excited about the SOC Lab, by the way, the research that's going on there. And traditionally, we are a research organization, clearly, founded in 2000, working with over 60 major retail chains and then over 75 major technology companies or solution partners, as well as some major manufacturers like P&G and so forth. But the SOC lab is an example where we're trying to research and understand the best ways that a retailer, a retail enterprise, they can generate a common operating picture

for their executives. They understand a very dynamic situation to the best you can, particularly at distance, whether it's a storm, a flood, an earthquake, a riot looting situation, or God forbid, an active killer shooter scenario. And then provide as much information to themselves for decision making, to the executives and those that they work with at the top levels all the way through. And of course, to be able to pull together and push all the relevant data, imagery, lists, contacts, everything they need to the local on-scene commanders, the first responders. So that's kind of the research focus that we've had with the SOC lab. Additionally, as Tom's mentioned, several retailers have approached us

and asked if we could help maybe working in conjunction with some other organizations, a fusion center type, particularly because the SOC or EOC capability, the security operations center or emergency operations center capability of retailers in our group over 60 chains varies widely to really no capability to some type of VSOC, virtual capability on their mobile devices through a part-time room that can be stood up and activated in the case of an emergency, all the way to a full-time, fully capable security operations center or EOC. But how do we pull together relevant information, particularly in a specific area that's experiencing earthquake or a storm or a riot or something worse, so that you can pull from not only what you can get online and public venue or from your own team on the scene,

but also from others and share that information so that there's even a brighter, clearer, more actionable picture. So that's giving you some insight into what we're talking about there. I want to remind everybody, please, at your convenience, go to our LPRC website, lpresearch.org, lpresearch.org. And particularly right now, we've got the new LPRC Innovate page stood up. Kevin and Tom have done an amazing job. It's bright and colorful, but it's very informative. And it's got links that you could go in and look at and explore the capabilities that we've now got in our really five different labs. SOC lab, ideation lab, simulation lab, activation lab, engagement lab, and now the virtual reality lab. So please, at your convenience, take a look, understand the capability. We'd love you to reach

out, engage us, talk to us about innovation, R&D, or exploratory or confirmatory research you're interested in. We'd love to work with you, and we'd love to get you into the LPRC committee, over 150 corporations, and working together, collaborating, but always science, evidence-based, wherever possible. Check us out for Impact. It's free this year. Again, at lpresearch.org, you can register for that and get involved, get engaged. So from Gainesville, I want to again thank all of our team. Thank you all for listening and ask you please stay safe out there. Thank you so much. Bye. 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 Office of Prevention Research Council.