LPRC - CrimeScience – The Weekly Review: Episode 27 – Dr. Read Hayes, Tony D’Onofrio, and Tom Meehan

Episode Date: October 1, 2020

Over 40 COVID-19 vaccines in human trials.  20.5% of retailers surveyed will sit out of the markdown cycle. In this episode, our co-hosts delve into these topics and much more, including ransomware, 911 outages, eCommerce seasonal workforce, the correlation between incarceration & earnings, and customer perception of retail stores. The post CrimeScience – The Weekly Review: Episode 27 – 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. Take advantage of the advanced video capabilities offered by Bosch to help reduce your shrink risk. Integrate video recordings with point-of-sale data for visual verification of transactions and exception reporting. Use video analytics for immediate notification of important AP-related events and leverage analytics metadata for fast forensic searches for evidence and to improve merchandising and operations. Learn more about extending your video system beyond simple surveillance 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. This in our weekly series, updating the world during what we call 2020. Starting off a little bit on continuing to look at the trends of COVID-19, certainly because of the effects that it has on retailing and life at large. It's been an interesting look at schools reopening. And I just saw another study come out. We're in the state of Florida looking at positive infection detection rates, you know, testing positive rates actually have continued to decline since schools opened in Florida in August. The only time, the only spike that's being detected right now, my understanding, is with college kids. And I can tell you here at the University of Florida, there is pretty intensive testing going on.

And really, the testing is going on in two ways. Of course, they're doing screening testing, as well as if somebody looks like they believe they're symptomatic testing. And then they go to an isolation dorm. And there are a couple of those set up where they try to make them very comfortable and accommodate online learning. But also through, and we've heard this before, through wastewater testing. through wastewater testing. And so what they did, it's partly experimental for research purposes, but also for UF purposes for the college and particularly the faculty and staff that are going to be older and somewhat more vulnerable. But now they have an early sentinel warning. So in each of the dorms, the living areas, they have immediate testing on the wastewater. And so they see a spike coming out of

a particular dorm, they can now go in and do some more spot check testing in there and so on. And so they've really been able to curtail it. But you saw too that at least a third or more of the students signed a gator pledge and they got their fancy mask. But I'll be honest, again, I've updated each week as I drive around or walk around. The students seem very compliant. I think that the opening of college football weekend and them clustering in their dorms, apartments, houses, of course, bars and restaurants are now open in the state of Florida under the phase three opening, where they're still encouraging distancing.

They want everybody to wear a mask if at all possible, but there are no restrictions on bars and restaurants now as far as capacity and seating and things like that. So it'll be interesting to see coming out of this opening weekend for at least the Southeast Conference football. And here in Gainesville as just an experiment, what happens there. But everybody's stressing still, you know, hands, face and space. So let's keep washing hands and maintaining some covering. More and more studies are emerging, as we talked about each week here on how the initial mask can screen out particles, and then the other person's mask can screen out even more. And it kind of leads us a

little bit into some of the vaccines and looking at, and one of our researchers here in the Emerging Pathogens Institute, she's all over the national media, international media, talking about vaccines, and she's an absolute expert and has helped develop vaccines, a young faculty here. But just, you know, she's been very good about explaining what vaccines could be, you know, sterilizing vaccine, which is very rare. And that's, to my knowledge, not in the offing right now. But that prevents infection. In other words, somebody onboarding the virus. But as we've talked about over and over, the main endpoint of these studies seems to be trying to prevent the disease. So again, SARS-CoV-2 being the virus, COVID-19 is the disease you get from the virus, the human gets from it. So try to prevent somebody from

getting the disease. They may be infected with the virus or viral rna elements and so on in their nasal passages and so forth but not having disease severe disease would be the third endpoint um much more difficult meet uh you know the studies have to be powered as we say properly just like in what we do in criminology. In other words, we need a large enough sample size, a randomly selected sample size that we can detect different effects with less error. And so by randomization, by a larger sample size, we help cover ourselves a little bit because we can reduce some of the errors that we can make, false positives or type 1 errors or type two errors or false negatives. The fourth end point is infectiousness.

You know, so again, I know we've mentioned this. Hey, do we have some RNA? Do we have some virus in us? Do we get a disease from that? Does our body start to show symptoms? And that's how they can tell if one of us has the disease, because now we have a positive test showing the presence of the virus in addition to a cluster of symptoms that are now being classified as COVID-19 symptoms, which again, we know that's pretty far ranging and so on. And now how severe are those?

And so this kind of leads us to the next part, and that is the risk scoring. There are different models coming out that have been developed through machine learning, you know, artificial intelligence component, to learn what, as a person maybe is being admitted to the hospital or visiting a healthcare facility, what scores do they have as far as the symptoms they present with and the severity of those symptoms and the order that the symptoms present? And then how much do those symptoms persist and so on? Now they're getting better and better at predicting who has a disease, who has severe disease, in fact, even who is likely to pass away from disease if they're not treated in certain ways or even probably will pass away, particularly for very frail elderly that don't seem to have a lot of energy reserve and so forth.

So the infectiousness part as the fourth endpoint is we may not have the disease, we've all heard about this, asymptomatic, non-symptomatic spreaders, but that could be part of it too. So the vaccines right now, my understanding is they're all looking at endpoint two. We're trying to prevent the disease, but the severity of the disease seems to be an outcome, particularly from all the flu vaccines. So if they're 50, 40%, so on, effective, that's where 40 or 50% of people exposed at high risk that do not get the disease, even though they might have the infection or even could spread the infection. So we don't want to get too complicated.

189 vaccines at least that are known to be in trial right now, 27 in phase one, safety, phase two types, safe and effective. And then phase three, there are 11 in there. So we've got 27, 14, and 11. So at least 42 in human trials right now, 42 different vaccines for COVID-19 in trials with humans. Another almost 100 in trials in animal models to see how they fare. And then of course, hundreds more that are being looked at in computer modeling and so forth.

So a lot going on there. At least 200 antiviral therapies in trial, therapeutics. And then another 351 other COVID-19 treatments. We talked about some are repurposed, some are specially designed for COVID-19. So we're turning now over to some of the looting. We continue to see Portland and Seattle, particularly Portland. Portland just seems to every night have violence. Police officers injured in different parts of Portland,

particularly it looks like on the north side. Raleigh, we know that they had some flare-ups and were roping off areas. And it's creating some interesting dynamics that sociologists and others are studying, but in political scientists, where if you rope off an area for demonstrators, you're now affecting the businesses of the people that are in those areas. In fact, running some of those people out of business. So how does this all going to shake out will be interesting, but we're most interested in understanding it in the world of criminology and crime prevention. Then how do people start to lash back? And that's where we see shootings. We see people starting to arm up and go in and self

protect their property and so forth. So it's a very critical and interesting dynamic, the right to demonstrate. But if demonstrations turn out to be persistent, and certainly if they flare up or even become persistently dangerous, that starts to create a different dynamic for the people that live and work in that area. So that's part of what's going on in that area, but looking always at this erosion of consequences, it's something we're going to be talking about today on this strategy at during our two hour session day at 1 PM Eastern. We saw for instance, over the last 48 hours,

over 30 people shot in Chicago again. So we know that that sort of violence has been persistent in, in certain cluster areas and trying to understand those dynamics, but how they affect the people that live and work in that area and the businesses there. Going over now to strategy at that, this is our third year. It's designed again, as we've mentioned, for the number ones in the pyramid, the vice president or senior director level that's the head of asset protection and loss prevention. And the last two years, we had just over 30 of these VPs,

the ones that came into Gainesville to work together over the course of a couple of hours and embedded in the LPRC impact conference. Today, we have our, again, at 1 p.m. Eastern, we've got a strategy at 2020 virtual. And in this case, we've got over 60 of the ones and twos registered. So we're really excited about that. We've been doing rehearsals, dry runs. We'll do even more rehearsal this morning, but we're excited. We've got four cluster areas that we're looking at and working with the leaders, the most senior of the APLP leaders with, including erosion of consequences, something we really want to look at.

They want to look at collective efforts. They want to look at shrinkage, inventory shrinkage, maintaining control at a time when we're pulled off and distracted into other areas and avenues? How do we maintain that control and discipline that we need there? So impact coming up again the 6th and 7th of October. We normally have just over 400 executives come into Gainesville.

This year, we've got well over 1,000 registered for 2020 impact virtual continuing we just started initiating the projects with the industrial systems engineering senior class team with three teams from the user experience design computer engineering students that are senior class projects and then we've got nine interns from the Innovation Academy that are working with the LPRC. So we've got some really neat things that are going to involve a lot of study in the parking lots, in the opening parts of the store, the transition between zone four parking lot and zone three, the interior. We had a good planning call yesterday with one of the teams, the ISE. With the AI

servers that we've talked about on this podcast, we got the Sensormatic AI server in. We're readying that for action to work with one of the student teams and looking at some of the curbside dynamics as well as some in-store type dynamics in our engagement lab, which again is the simulated store environment lab, one of our five labs here at LPRC on campus. And then the other server should be here any minute. And that's the one that's from Dell Technologies. Their latest edge power server model. And NVIDIA, of course, supplying some brand new T4, Tesla T4 GPUs to develop AI data sets

and then test and build models, train them, and then finally to use them for inferencing exercises in the interior space, parking lot, and so forth. And so we're excited to have that support under AI solve. We call it LPRC innovate. So a whole lot going on in working groups, a whole lot going elsewhere. Please go to LPRC research.org, download the LPRC app at your favorite app store,

Apple iTunes and so on. It's free. It's like Twitter. You can scroll, you can keep up to date. If you're a member, you can also log in and go into the knowledge center, go through all the reports and videos and everything. There's, there are hundreds and hundreds and hundreds of items in that knowledge center. Um, so that's, uh, that's some of the highlights from the LPRC front. We're excited to work with each and every one of you. Uh,

let us know at operations at lpresearch.org. Anything that you're interested in knowing more about or suggestions. With that, let me go over to friend and colleague Tom Meehan, and then from there we'll go to Tony D'Onofrio. So, Tom, take it away, if you will. Thank you, Reed. Great stuff. So just kind of a quick update on some of

the things that we're working on with the LPRC and the Innovations Working Group. Our virtual SOC lab, I would say 1.0 is up and running. We're testing some software and really starting the collaborations effort and seeing how we can consume data. So please keep an eye out for more information. data. So please keep an eye out for more information. And if you want to be a part of that, just reach out directly to myself, Reid, Logan, really any of the members here at the LPRC to get you involved in it. So I think we're seeing a lot of information as Reid talks about the civil disturbance that's going on. And we're really taking a non-traditional method because as we all know, some of the information that we're receiving from traditional sources is somewhat sanitized. So I think it's been about a week now, and we're seeing some very interesting stuff.

A couple of things in the news. One, this is widely reported. Pretty much every major news agency picked up a ransomware that affected the Clark County School District in Las Vegas. And this is not the new news, but the interesting part here is that the school district has about 320,000 records affected. And this is an example of as schools are hybrid or virtual, they become greater targets. And with ransomware, there is a business decision that has to be made of whether it's paid or not.

The FBI often recommends not paying. But if you look at any of the studies, about 99% of the folks that pay get their data back and released. So this was an interesting one where over a period of time, the bad actors were actually in conversation with the schools and releasing tidbits of data. And the data that was released consisted of social security numbers, pensions, and personal information about pension data, about teachers, and then student information, date of birth, records, addresses, and so on and so forth. So it's just a reminder as we continue to

adjust to this virtual or hybrid world, we have to really make sure that we're taking an extra step to protect ourselves by, we're not clicking on links or downloading software from people we don't know. Additionally, last night, there was national news on what, it's still kind of up in the air. This is less than 12 hours ago, a 911 outage that did affect nationwide. It was sporadic nationwide. It was reported again by most of the news agencies and it's a little too early to tell what caused it. But one of the tidbits here and why when we continue to talk about social media is the majority of police departments nationwide use social media to notify the public that they were

having an outage and ways around it. So if you were on Twitter last night, you know, five o'clock Eastern time, between five and eight Eastern, you would see just a plethora of messages coming from municipalities saying the 911 system's out. Here's how you can effectively reach us. At the same time, there was a pretty significant Microsoft outage. At this point, it'd be too early to draw conclusion that they're related. It could, in fact, just be a coincidence, but Microsoft experienced a significant outage. And this is kind of one of those stark reminders of our reliance on technology and how important it is to have a secondary method. And I use the social media example because it's a good example of how when something like 9-1-1, which is so important and so significantly used,

goes out, what police departments and what municipalities are doing and then what the people can do as well, kind of serves as a reminder of you might want to take that local phone number for your police department and put it into your phone and fire department because while this isn't a regular event, it has occurred in a couple times in the past few months. And then additionally, that Microsoft outage, the impact that that had as mail servers all over the globe were going down, and it was very disruptive. So I'm sure we'll report more on that as we run through. And then kind of rounding out my topics today, and I talked a little bit about our SOC lab, which is our Special Operations Command Center, our virtual lab, and consuming that data. We were receiving a lot of information about Brianna Teller.

And one of the concerning things that continuously comes up, and this is a newer phenomenon in the magnitude, I would say, that we're seeing is the chatter on some of the back channels to actually be violent towards law enforcement. So very specific terminology and kind of what you can do, what you can't do, what's the best way to do it. And in a couple of these events, they were actually organized where I'm sure if you, this was pretty much all over social media, there's U-Haul trucks pulling up with riot gear being handed out to protesters. But more importantly, when you're looking online, people actually, who I would say are professional agitators, giving specifics of the best way to attack police without, you know, without making it seem like you are. So just a reminder to everybody to stay safe and to keep your ears open of what we're working

on here at the Lost Rangent Research Council. And with that, I'll turn it over to Tony. Thank you very much, Tom, and thank you very much, Reid, for those great updates. Let me start today with an update on temporary workers and the holiday season trends. So Target has announced they are hiring 130,000 seasonal workers. hiring 130,000 seasonal workers. Walmart is going to hire 20,000 plus more temporary workers in addition to the 500,000 they added this summer. The 2020 twist is that many of these temporary hires will be deployed to distribution centers and curbside pickup versus stores,

so versus inside stores. So that's a big change. And it's not just retailers. FedEx is going to hire 70,000 seasonal delivery workers, and they're up 27% on last year. UPS is adding 100,000 workers, all preparing for an online slot. Deloitte is estimating that retail holiday sales will be up 1.5% with online sales being up 25% to 35%. 50% of consumers are already stating that they plan to use curbside. 50% of consumers also said they already started to buy gift and retailers are responding in kind. In fact, 47% are already

pushing out promotions before Black Friday and Cyber Monday. Many have announced they'll be closed on Thanksgiving Day. Surprisingly, from the data this week, 20.5% of retailers said they are sitting out markdowns this cycle, this season. So they're not going to discount. So all this data is from Retail and Morning Brew. Also very, very interesting this week is new data from Statista telling us why crime does not pay. A report from the Brenner Center of Justice found that prison sentences and convictions are costing Americans hundreds of billions of dollars in lost earnings. Around 7.7 million people have served time behind bars at some point, and the research found that people previously incarcerated see their annual income lifetime earnings fall by 52 percent. Those who

committed felonies and misdemeanors without going to prison also face substantial financial losses with earnings falling 22 and 16 percent respectively. The total aggregate amount lost across all three categories adds up to an astounding $372 billion in lost earnings. So indeed, crime does not pay. And that was very interesting this week from Patista. Let me end with a deep dive into a new research in terms of what's going to happen to stores and online and who's going to survive out of COVID-19. And there was new research titled New Multi-Channel Retail and COVID-19 from Global Data. And let me just give you, first of all, the highlights or the quick digest in terms of their conclusions. The pandemic has disrupted how we shop. There have been shifts

in how we spend money and the number of retail transactions made online has increased. This has created a wave of negative headlines about the demise of physical retail. What the headlines fail to appreciate is that the pandemic is not dividing retail. It is bringing online and physical retail closer together with many retailers using both channels harmoniously. This reflects how the consumers have always used retail, not as separate channels, but as one market. The evidence suggests that the pandemic has acted as a catalyst for closer integrations of stores and online, and many retailers are investing in or plan to invest in multi-channel system processes and tools to drive overall sales. transactions are isolated, it's important to understand that penetration does not reach anywhere near a majority of retail sales during the pandemic. Indeed, peak online penetration during long time periods has since dropped in all countries. The reason the online channel

failed to dominate is because customers' needs are often best served by using multiple channels to make purchases. The best and strongest retail businesses now reflect this. They present a seamless channel agnostic shopping experience for the consumers. Now, having said there were some severe spikes, Best Buy had one of the highest. Best Buy, which had invested heavily in multi-channel operations, was rewarded with a 242% increase in digital transactions, although very notably in the research, 60% of those transactions were collected inside of physical stores. Target also had an increase of 195% online in the last quarter, an exceptional rate of growth, in addition to growing 11% for their in-store sales. And even Walmart had an amazing 97% increase in online sales. So those spikes are interesting, but what the research found is that retail is actually one of the most innovative industries. And one of the reasons it's innovative is it's very, very competitive. Global data looked at the concentration of the retailers in the top five retailers, how much of the market do they own? So the top five global retailers of the market own only 19% or roughly 19.9% or roughly 20%.

And this is US data. When you compare that, for example, to mobile, the top five are 95%. If you look at airlines, the top five are 72%. And if you look at banks, it's nearly 40%. So retail is very competitive because it's a very diverse industry and it's not highly concentrated. Longer term, some of the new things that we're doing are going to actually strengthen and accelerate.

So, for example, in the U.S., collect online and collect, basically buy online and collect inside of a store. 59% plan to continue that, collect orders from curbside. 68% want to continue to do that and return online orders back to a store. 49% continue to do that. And those trends are actually reflected in multiple countries. Compared to the pandemic, what are your views on physical stores as a driver of sales?

Stores continue to receive very high marks from consumers around the world. So in the United States, stores are really favored by almost 89%. In the UK, it's 37%. In France, it's 90%. In Germany, it's almost 86%. And then finally, in terms of what's going to happen to physical stores and why they're important, one of the most important reasons is people visit physical shops because they like to interact with human beings. they like to interact with a human being. In the U.S., U.K., and France, around 18 consumers agreed that they missed the social side in shopping. In Germany, that number was slightly lower,

with 7 out of 10 really agreeing with the same view that really they miss going to a physical store. So stores are not going to go away. They're going to be a very important part of the mix going forward, and online is going to be another channel working harmoniously to deliver the goods that consumers want. So, that's it for this week, and let me turn it over to Reed. and understanding retail dynamics. And we all have our senses come from what we see, we hear, we feel, we experience, but we know there's a lot going on outside of our skulls. And to understand that is huge, getting the macro view as well as the micro view.

So thanks for that, Tony. Thanks again, Tom, for all your insights too, and particularly in the digital realm. And I think it cues up one more thing, and that is that we're in heavy planning, and this is great to be in this prep with Strategy At and with 2020 Impact coming up, but we are planning our 2020 election planning session for LPRC members. Many of you have heard us talk about or recall and participated in the cluster calls. We're doing six calls per week, every two weeks. And we've had a couple since then to focus primarily initially on COVID for lessons learned, sharing adjustments,

readjustments, and things like that. And just amazing amount of sharing going on and learning. and things like that, and just amazing amount of sharing going on and learning. And then our team peels away and does research to support those calls. And then the same thing with the looting and rioting is that started to affect the safety and security of the stores and the people. Now with 2020 election coming up, so the four scenarios again, clear red win, disputed red win, clear blue win, disputed red, blue win, excuse me. And then what all are the likely, some likely scenarios? So working with some former and in some cases, current federal, state and local intel and law enforcement planners, trying to understand that.

Working with Dr. Patrick Tr Treanor from the University of Florida FICS, the Florida Institute for Cybersecurity. He's an endowed professor of cybersecurity, computer science, going through the digital threats. We're looking at the physical threats to potentials that are out there in scenarios. So we're going to have a large group get on and talk about different scenarios, different and what the implications might be in each case. What are some protective actions, some sharing between everybody, what they're doing to prepare just in case. I mean, this is, again, we've said this before, we don't want to be overly dramatic, but this is 2020. So I'm not

sure that's possible. So look forward to more information on that. We're continuing to have planning calls. We'll start into rehearsal. And then we're going to have that after the impact conference. And then we may have a follow-up one week before the election. So look forward to that. Tom did call out what we're doing with SOC Lab, you know, the lab that we've got set up to simulate a security operations center or EOC. you know, the lab that we've got set up to simulate a security operations center or EOC. But this FusionNet concept, we do have a pretty cool platform that we've been experimenting with on the alpha test level, our own team, now going to a little bit of beta testing with a handful of retailers now using this too. And the idea again is getting with SockLab or all is getting a

company security operations center, such as it is. It may be full 24-7. It may be all the way down to it's an iPhone or a smart device or somewhere in between to share within and some external coordination. We're talking about how do we help our 60 plus retailers right before, during, and post event with storms, with violent events and so on, communicate and spread some intel with each other and go into deep dives. We've got a lot of RSS feeds going in there and other feeds, bot feeds and so forth. So that's what Tom's talking about. And they're somewhat interrelated with the election planning, as well as the FusionNet concept. So again, another call out for 2020 Impact. It's free. You can get involved. We'd love it. Go to lpresearch.org and just enroll

in Impact. It's a two-day event. Really, really good content. We've got a lot of science results coming out with the retailers discussing what they did, what it meant with our research team. But we've got a lot of neat things going on. So I would highly encourage you to 6th and 7th of October, but get in there now and register. There is a cutoff because the platform, the virtual platforms, they generate a cutoff date for enrollment. So if you want to get in and get involved, we'd love it. That's how you do it. LPResearch.org.

Tony, Tom, again, thanks to each and every one of you out there. Please let us know your questions, your comments, your suggestions at LPResearch.org or at operations at LPResearch.org. Stay safe. Thank you so much. at lpresearch.org. Stay safe. Thank you so much. Thanks for listening to the Crime Science Podcast presented by the Loss Prevention Research Council

and sponsored by Bosch Security. 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.