LPRC - CrimeScience – The Weekly Review – Episode 38 with Dr. Read Hayes, Tony D’Onofrio, and Tom Meehan

Episode Date: December 24, 2020

25-30 million Christmas trees are sold each year in the U.S. Retail sales increased by 9% last month. 35% of consumers shopped more this November versus last November. On this week’s episode, our co-hosts discuss these facts and much more, including the recent Russian state-sponsored hack, Interpol’s “Orange Notice”, COVID-19 vaccines logistics and IT challenges, NRF’s ORC report, BOPIS & curbside-pickup consumer ratings, and The Economist’s top trends for 2021. The post CrimeScience – The Weekly Review – Episode 38 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. 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 Podcast. This is the latest in our weekly update series. I'm joined by Tony D'Onofrio and Tom Ian,

our producer, Kevin Tran. And we're going to just spend a few minutes updating on what we're seeing and hearing in the world. And so, of course, during the pandemic, talking a little bit about COVID-19 and the effects, but what's going on to liberate people from their isolation, quarantine. And so we know that there are more and more new test kits coming out. There are now a retail version, a home test kit that's been approved and at a reasonable price point, I understand, that will be going out. Some have already received it. I myself am going again today to get the COVID through the University of Florida, but the testing protocol is sort of the numbers have surged a little bit in the United States and other countries around the world.

And so some of the hospitalizations are up. serious disease have been treated differently now that there's been so much learning and sharing and research done on how to handle somebody that's got the disease, a patient, or particularly those with very severe symptoms to extremely severe symptoms, and just redoing particularly with ventilators, and that there were a lot of people that probably got sicker or even lost their lives because, as per normal, physicians and scientists are racing to understand how to best save lives. And so you're seeing much higher and higher survival rates, even for those with the most serious illness, that also have the comorbidities that are helping those underlying conditions, if you will. So there are now 319 therapies, either in some sort of preclinical or clinical assessment. And we know, of course, on the vaccination front that globally the right thing to do, as well as the smart thing to do, is to help ensure that from 70% to 90% of the world's population, human population, are vaccinated

so that we're not dealing with this and all the variants. And we're seeing that the virus, as would be expected, is adjusting and adapting a little bit to the conditions it experiences as it tries to maximize the infection chain, its movement, survival, and its growth in humans. As our antibodies and T-cells rise to the occasion, the virus learns those that aren't killed and they are transmitted and they adjust and adapt to what they're experiencing. And our bodies, immune systems, the adaptive as well as the innate systems adapt. Again, it's what we deal with in crime prevention. It's measure, countermeasure, counter-countermeasure.

So we're seeing that happening. measure, counter countermeasure. So we're seeing that happening. COVAX is the global group that's combined many countries, if not most, to figure out ways to identify what they're trying to do and how they're trying to do it globally. COVAX's goal right now is to acquire 2 billion doses and have contracts and agreements with most of the major vaccine manufacturers and the governments themselves. UNICEF has stood up a dashboard designed to very carefully focus delivery, where, how, which one, which vaccine, and so on. Make sure that everything's acquired and distributed, but have a very visual mechanism for everybody to coordinate as seamlessly and efficiently as possible. We know right now there are 85 vaccines in preclinical clinical assessment, either via heavy duty computer simulation, as well as animal models, 43 more vaccines, additional vaccines in phase one, safety and dose ranging trials,

20 vaccine candidates in phase two, more of a safety and efficacy effectiveness trials. And then finally, now we're up to 18 in phase three. We know that the Pfizer, BioNTech and the ModS. have both received emergency authorization. Millions have been already had been manufactured. Millions of doses, hundreds of millions of doses. Those are, of course, being moved out. We know the Pfizer vaccine requires roughly negative 70 below zero, 70 below zero temperature. Once it's taken out, it rapidly degrades. So

we see that that's an issue and where and how to distribute. But again, the government's had, along with all the commercial partners and others, have had several months to try and put together as efficient and realistic transportation plan as possible. And so we know that millions have already been vaccinated around the world, but particularly the United States and the UK. Of healthcare workers moving more and trying to understand that, we know that at Stanford University, and I'm sure others, developed algorithms and methods to best and most efficiently and most safely administer the vaccine to their workers to make sure that they were safe as they were treating COVID patients

and that they were also not spreading, further spreading the virus, the SARS-CoV-2 virus to others. But there was a bit of a hiccup, I understand, in that the algorithm was looking at age and it has weight factors and models are as good as they are. And that just means, so you saw some homebound, very senior physicians or scientists, for instance, getting vaccinated that really are not exposed to patients and don't expose themselves to patients, certainly not on a regular basis, whereas very young and normally very healthy medical students that have graduated and are now residents or interns or others like fellows that have completed their internship and residency were not vaccinated.

Presumably, the algorithm didn't identify them, not while they were having max exposure and exposing themselves to others. They weren't as at risk, but yet they were the ones that were most likely to contract the disease. So they had to redo how they're doing it. So we're all learning together how to do COVID-19 in 2020, that's for sure. The Moderna version of the vaccine, their vaccine, also an mRNA type, does not have to be refrigerated or frozen at the same level. So that might prove much easier to handle, allow for much wider distribution. They're also finding that in many of the vials that very efficient medical staff are able to get more doses than are normally in the vial,

out of the vial. So that's sort of a bonus in some parts of the country. The J&J vaccination or their vaccine version continues to be in phase three trial. Some are expecting that potentially next month in January of 2021, it will possibly also receive emergency use authorization. They too have hundreds of millions of doses ready and start to go out in the United States elsewhere. So with Pfizer, Moderna, potentially J&J, with the Oxford AstraZeneca, which is also completing its phase three trials and trying to get out and get in the version, the European version, the UK version of emergency use authorization. We're getting much closer

at LPRC. Many of you know that we had our cluster calls. We had multiple calls during the beginnings of the pandemic so that 60 plus retail chains and our team could get together and cross plan and share and lessons learned, adaptations, wins and failures, and so forth. The same thing, we had two cluster call groupings with around the looting and rioting. Then stood up, of course, what you all have heard about, FusionNet. We had an election preparation call as well, cluster call. And then now we've had the first, and we'll get ready to have our second, probably the second week of January, our COVID vaccine distribution call. So with our supermarket, drugstore chain, and mass merchants, in other words, the retailers that will be involved in sort of mass vaccinations in the

way that they do with flu vaccines, even though the CVS and Walgreens are currently preparing for it, in some cases already initiated vaccinations in elder care homes, starting with the staff and then going to the actual residents. So a lot to be roughly the same security level in transporting the vaccines, especially during, while it's rare as far as being in the marketplace, the same as are handled for narcotic substances and so on, in other words, the opioids. So more to come on that. Our working groups continue to work away on the different issues. Will not be any more calls this year for the working groups, but the organized retail crime had a fantastic ending. A couple of studies that they put out,

some planning for how they want to go forward. The innovation working group, the same. They outline their strategy and what all they would like to cover. Those are two I'm most in touch with, the data analytics working group, the product protection working group, the retail fraud working group, supply chain protection, violent crime working groups. All those went through their end-of-year planning, wrap-ups, guest speakers, looking at the different issues that they deal with. A lot of exciting work there at Operation Next Level, which is driven by the Board of Advisors at the LPRC

to broaden and deepen membership with even more retail companies participating here, hopefully, is the aspiration, as well as more tech and other solution partner members, has gone through heavy planning last week here in Gainesville, actually. And so look forward to a lot of Operation Next Level new marketing materials and video clips. And you'll be Lighthouse consultants, three industry luminaries, Chad McIntosh, the longtime VP at Bloomingdale's, but a lifelong LP professional. Alongside of Jeff Powers, Russ Tate, Brian Hayes are all working on identifying and contacting leading retailers and others, solution partners, for example, north of the border, Stephen O'Keefe up in Canada, Tony D'Onofrio, and some other luminaries

working in the UK and Europe to spread the good word and to continue to grow the LPRC research and results community. A lot of excitement, the idea that we would have some more resources continue to expand our capability in the United States, in Canada, South and Central America, of course, the UK and Europe, to do even more good work at all levels. Offender interviewing,

randomized controlled experiments or trials, data modeling, but a lot of innovation too, using AI, IoT, and others. So we're excited about and looking forward to it. The Safer Places Lab concept continues to grow and be more sophisticated. More to come on the detail. We're going to do a visual crime science podcast in January. I know that Tom Meehan and Tony D'Onofrio and Kevin, our producer, have wanted to do that. So it'll allow us to showcase a little bit our different labs and where they stand and where they're going.

So we're excited to show that off. So with no further ado, I'd like to go over to Tom Meehan, and Tom's going to fill us in on the latest and greatest. Tom, if you would. Great, thank you, Reid. Just wanted to cover three things, and one, I'll start with something that I spoke about briefly last week, which is this hack that is thought to be from the Russian government and a state-sponsored hack on U.S. infrastructure. And there's a lot of news and a lot of information surrounded around this. And just to kind of recap where we were when we spoke about it last week and last week when we spoke about it, it was very, very new news, is the belief is somewhere in early March, it could be earlier,

but the belief is sometime in early March that there was a hack that was successfully made through a software program, through a malware. And this software program, as we talked about last time, is actually in an intrusion detection or network security software. So it is in the cybersecurity space. It's very well known and reputable and used throughout many commercial institutions and government facilities. Right now, the U.S. government is still really speaking about Treasury and Department of Commerce. If we remember about five years ago, there was a pretty substantial hack around top secret clearance and clearance records. So this is unfortunately not a new thing, but this is arguably one of the largest intrusions in history.

You'll hear that the news sometimes will portray it as the biggest in five years. There's really a lot of unknowns here. One of the big questions here is what's the risk for us? And then how does the U.S. respond? Russia has continued to say what they have in the past is that they do not participate in cyber activities and they want to strengthen the relationship here. But there are a lot of blurred lines on what is constituted as an act of war.

This is an attack on some level of infrastructure. So a lot more to come here. One of the things that what I always say is it just reminds all of us is, you know, to use as many good habits and practices as we can. And to understand that this is very similar to what we deal with here at the LPRC is you can have the best software and the best policies and procedures in place. The bad guys, the nefarious actors are working day and night to defeat them. So it's important to talk about things openly, share what's working and work together to try

to run through this. There's a lot of great information if you're into the cybersecurity world here about the technical aspects so far. But the reality here is there's a lot of unknowns. And unfortunately, because of the political state of the country, the information is not necessarily being balanced by the U.S. government. It is predominantly driven by media. And depending on what you read depends on what the picture. The one thing that's consistent here is that there's a firm belief that the Russian military intelligence and an outside group that is sponsored by them had involvement. There has been some conversation about the potential for China masking as Russia,

but that's highly unlikely with these levels of sophisticated attacks and the amount of work that the U.S. government has done to look at this. It really doesn't. It's very unlikely that we wouldn't actually know where it is. And what recently came out this week is that hundreds of large corporations were also affected by this and that the FBI was notifying them. I think at this point, if you use this software, you probably have a good understanding of that there was a potential there. But it's very, very important just to stay up to speed on it. And we'll continue to update on it. There's not a lot more from last week. Switching gears a little bit, and we talked a lot about vaccinations,

but I just want to talk very quickly about two bulletins that went out. One, I don't often talk about Interpol, but Interpol issued a global alert to law enforcement. Interpol is comprised of 194 countries, but they did a global alert. They call it an orange notice to outline the potential criminal activity in relationship to COVID-19 vaccinations. And we did talk about this before, but what they were talking with Interpol's notice really outlined is the examples of crimes where individuals are either advertising, selling, or creating fake vaccines, as well as putting up websites to spread misinformation. And this is predominantly about selling of non-vaccine, you know, non-real vaccines, and then the distribution of counterfeit vaccines.

And switching gears to the U.S., the Department of Homeland Security and ICE also issued a warning, and this is kind of a two-phased approach. Right now, what the United States is doing is they actually have a two-plan. They have Operation Stolen Promise version one and two. They're in the version two phase. And the version two is really about making sure that they're attacking aggressively any known counterfeiting, unauthentic websites, fraud schemes. And they have dedicated resources to this. We talked about this early in COVID and throughout that of all of the scams that occurred,

even the puppy scams and how folks are taking action to take advantage of the situation. The alarming rate here is that obviously this is a vaccine and there's a huge demand for it. Obviously, this is a vaccine and there's a huge demand for it. And this allows to open a door again for that potential for a real scam. And Reid also mentioned self-testing. This is one of the things that, you know, making sure that you do the research, that if you do see a self-test, that it is the approved self-test and that you're not just spending money on something that's not there. Not to mention with both of these, the safety concerns, the potential counterfeit here. Right

now, it's really, you know, I think the Interpol puts, you know, vaccinations are a prime target for organized crime, and it really opens up the door for a much more organized group to take advantage of it. And then lastly, I'll just top it off with another piece related to the vaccines and something that I don't think we have talked about, really. We talked about supply chain challenges. We talked about some of the other things, but rolling out this vaccine globally is a huge information and technology challenge. A Harvard business review did a really good article on this. I wrote an article on some of the challenges that will get published shortly. And it really is about the logistical nightmare of trying to distribute millions of anything in a short period of time

is challenging enough. When you think of 10 to 50 million doses, adding in the temperature requirements creates a whole nother challenge. And then when you think about the IT standard process here is there's not really in the US and I would say globally, there's not really a standardized method of how personal health data is engaged or exchanged. So if you've recently gone to a doctor, you'll start to see that there are a lot of hospitals that are associating themselves with each other and have information sharing available better than they've ever had, but it's still restricted due to HIPAA. They at least can tell someone was treated for something they can at least run through. With the vaccines, and this is one of the things,

the standardization of data is really important because as we continue to run through and a third and fourth vaccine comes out, there's a real risk that people could get different vaccines throughout the dosage. So that's one of the IT challenges that are coming up, as well as aligning state and really regulatory ammunition registration. There is no way to do that today. So there's a thought of how do we do that? How do we do that and protect people's privacy? How do we do it and actually be able to manage it and make it standardized so that if you did go into a doctor, someone could go into a screen and actually look up and say, oh, you got the Pfizer vaccine, you know, those type of things. Additionally, this kind of, this digitized passport, if you will, or a portable equivalent to be able to actually protect your privacy, but to show that the

vaccine was done. As we start to go back to normal, expect, especially with foreign travel, the need to validate that you were immunized. And so how do we do that? How do we do that electronically? How do we protect that? How do you, you know, how is it protected if you go to JFK and they have a computer to check it? Are they putting your information into a system to say, yes, this person was checked? All of those things at face value sound very easy. When you think about doing them on a global scale and protecting it, it really becomes challenging, as well as making people feel safe from a privacy standpoint. And just to really let people understand why you're doing it is a challenge, especially when you talk about cross-border standardization. And then the next piece of it is the privacy and portability and cybersecurity trade-offs, taking all those things into consideration and saying, how do you take all of those and really weigh out what the right way to do it, avoid the potential risks that occur.

And then as we started the conversation earlier, knowing that you have nation state actors that if this database exists, that there's value in getting into that data. Now, there are a whole bunch of different technical ways to protect data like this. Blockchain is suitable and really by design, this is a perfect blockchain experiment where there's no centralized repository and using extremely high level encryption. Encryption that to date hasn't really been challenged and probably won't be for another five to seven years. But then getting every country aligned with that is challenging enough. If you think about the US, just think about how challenging it is to get state to state. So a lot of risk and challenges ahead of us around the vaccination. So yes, I think we're in a great

place and we're moving forward, but I also think that there's a significant amount of risk and challenge. And when we think about risk and challenges, just add the potential, just catastrophic IT issue. We all have been somewhere at the airport or using transportation when the computer is down and there's nothing you can do about it except for wait for it to come back up. That is the other challenge here that comes into play is whatever is put into place, how do you have a life cycle upkeep challenge? What's an appropriate amount of downtime when you're thinking about a vaccination type tracking system? So I think we'll see a lot more to come with this in the coming days.

I also think we'll see a plethora of scams coming in the next six to eight weeks. And keep in mind with those scams that you can have very organized groups that are selling to pharmaceutical distribution networks. So there's definitely going to be more and we'll stay abreast of it and make sure that we keep everybody clued into what's going on. Over to you, Tony. Thank you very much, Tom.

Great information. Same with you, Reid. It's great to get these updates in terms of where we're at on the journey with the pandemic and also the risks and also the great work at LPRC. This week, I'm going to start with the just published Organized Retail Crime Report from NRF.

Just came out. Organized retail crime costs retailers $719,548 per $1 billion in sales in 2020. That's up from $703,320 in 2019. This is the fifth year in a row where the ORC figure has topped $700,000 and is up significantly from $493,940 in 2015. The issue of ORC is continuing to grow. Among ORC victims. Three in four report an increase in the past year. Retailers believe the increase in ORCs related to incidents may be the result of changing laws and penalties for shoplifting. Many states have increased the threshold for what constitutes a felony, which had the unintended consequence of allowing criminals to steal more without being afraid of stronger penalties related to felony charges.

Nearly two-thirds of retailers report that they have seen an increase in the average ORC case value this year. In the average ORC case value this year, the industry is still supportive of a federal ORC law. Over 6 in 10 believe federal ORC law is needed to effectively combat the issue. 61% say their company is prioritizing ORC more than five years ago. prioritizing ORC more than five years ago. 52% say the company is allocating additional technology resources to address the risk. 36% say their company is increasing its annual loss prevention budget because of the increased risks. The top five cities impacted in 2020 by ORC were Los Angeles, Chicago, Miami, New York, and San Francisco. And the top five stolen categories in ORC were designer clothes, laundry detergent, razors, designer handbags, and deodorant. So the ORC crime continues. The ORC crime continues.

Let me switch to some new research also just published from Bain & Company on how shoppers are spending this holiday season and where we're at so far. With less spending on discretionary categories such as travel and restaurants, retail sales grew 9% in November. It's beginning to look like a lot like a record holiday season. 35% and more holiday shopping this November versus last November. 51% shop Black Friday deals before the actual dates was coming earlier, as we talked about in earlier podcasts. In-store foot traffic declined, but store sales are still growing.

Consumers shopped an average of three stores in November and made trips once a week. Both were down from 2019, yet they're spending 3% more in stores than last year, resulting in $264 billion in in-store sales last month. 27% in grocery are using buy online, pick up in stores or a BOPIS. 16% in non-grocery are using BOPIS. 40% reporting making additional purchase because they're using BOPIS. And 21% report making additional purchases when using curbside. This study also allowed consumers to give a grade to BOPIS. So for buy online, pick up in store,

they got four out of five stars, retailers. And for curbside satisfaction, they got even better, 4.3 out of 5 stars. So consumers like these services. And the reason they like these services are these are the top three short wait times. The order is ready upon arrival. Number two, affordable, lower cost and delivery. And number three, it's reliable, accurate. They get accurate and complete order.

So how do you continue this into 2021? So Bain recommends meet the customers where they want, make BOPIS and curbside offerings more satisfying to customers, continue to prioritize safety, keep delivery promises, and improve mobile and desktop browser experiences. So that's a little bit on how we're doing through the holidays with the latest research. The economists also published their top trends to watch in the new year. So let's move into the new year. These are the top 10 things that the economist is seeing as trends in the new year. Number one is fight over vaccines. Number two is a mixed economic recovery. Number three is patching up the new world disorder. Number four, more U.S.-China tension. Five, companies in the front line on topics such as climate change and social justice. Number six, after the tax

acceleration, some clarity in terms of what happens with all these fights with Amazon and Facebook that are going on. We're going to get some clarity next year. Our last footloose tourism world is number seven. Number eight, an opportunity for climate change. Number nine, the year of deja vu or a second take on 2020. And number 10, a wake-up call to other risks. So those are the top 10 trends at The Economist season 2021. And let me close with, since we are in the holiday season, how some of the traditions that we're going through actually emerged. So these are from mental flaws, the origins of some of our favorite Christmas traditions. So hanging stockings are linked to an old tradition of leaving shoes with hay on December 5th, the eve of St. Nicholas' feast day.

5th, the eve of St. Nicholas' feast day. Caroling dates back to Victorian England, emerging visits to neighbors to wish them happy holidays and linking it to Christmas carols. Christians, when it comes to Christmas trees, Christians decorated evergreen trees with apples to represent the Garden of Eden, calling them paradise trees around the time of Adam and Eve name day, which is December 24th. Gradually that became the tradition of the Christmas tree. Today 25 to 35 million Christmas trees are sold in the United States a year. Why do we associate red and green with Christmas? Green is tied to the evergreens. Red is tied to the holly berries. The ugly Christmas sweater is a gift from Canada.

It started in Vancouver in 2001 when somebody came up with one and it went viral to the rest of the world then. Cookies and milk for Santa dates back to the Norse mythology. According to the legend, Odin had an eight-legged horse named Slipnir. Kids used to leave treats for Slipnir, hoping that Odin would favor them with gifts in return. Eggnog actually dates back all the way to the colonists who brought it to the U.S. from England. Nog was short for noggin, which was slang for a wooden cup. Mistletoe has been associated with fertility and vitality since ancient times when Celtic druids saw it so because it blossomed even during the most frigid winters.

And finally, the first Christmas card was sent via mail in 1843 in England. The cardboard greeting showed a happy group of people participating in a toast and said simply, a Merry Christmas and a Happy New Year to you. So that card was extremely popular today. We will call it. It went viral. It sold like hotcakes and Americans sent two billion cards as a result every year. That is changing now.

A lot of those are becoming e-cards. So on behalf of myself and the rest of the team, I want to wish everyone a Merry Christmas and a Happy New Year to you. And with that, I'll turn it over to Reed. All right. Thank you so much, Tony and Tom and Kevin, our producer, for all your great insights this year, this most bizarre year, 2020,

hopefully the most bizarre year. And I too want to echo, you know, Merry Christmas, Happy New Year, Happy Holidays to everyone. Safeness, please. Good health to all. And please, again, any questions, comments, suggestions, we invite them at operations at lpresearch.org. And again, the website lpresearch.org

for all the latest research and news around crime control. And again, stay safe, tune in. We'll keep rolling here. But this will be our last podcast for, of course, 2020 on Crime Science on the weekly episodes. Kevin's got some more in store that we recorded on other topics. So stay safe and thank you, everybody. 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.