LPRC - CrimeScience – The Weekly Review – Episode 57 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: May 13, 2021

US Invested over $1 Billion in Vaccine Development and Pipeline Shutdown by Cyber Ransom Ware Attack! In this week’s episode, our co-hosts discuss these topics and more, including the testing of mixing vaccines, the Largest Retail Investments in 2020 by Top Retailers, the Retailer Investment Type that “Winning Retailers” use, and the possibility of protests within the US because of Gaza Strip Violence. Listen in to stay updated on hot topics in the industry and more! The post CrimeScience – The Weekly Review – Episode 57 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio 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 this science for loss prevention and asset protection practitioners, as well as other professionals. We would like to thank Bosch for making this episode possible. Be a leader in loss prevention by implementing integrated solutions that enhance safety, reduce shrink, and help to improve merchandising, operations, and customer service. operations, and customer service. Bosch Integrated Security and Communications Solutions spans zones one through four in the LPRC's zones of influence, while enriching the customer experience and delivering valuable data to help increase retail profitability. Learn more by visiting Bosch online at boschsecurity.com. Welcome everybody to another episode of Crime Science, the podcast that's the latest in our weekly series. I'm joined by colleagues Tony D'Onofrio and Tom Meehan, producer Diego Rodriguez, and sometimes Mirta as well. So we'll

talk just a little bit about some of the hot spots we've taught as far as COVID-19 goes from the SARS COVID-2 virus. And it's still a global pandemic in some areas, very tragic, such as India, that we've heard about. In the meantime, it's such a massive and heavily populated country, evidently, that for the last two weeks, supplies and technology, even oxygen generators and tanks and everything, respirators on top of vaccines pouring in and therapy, therapeutic drugs. There's a lot of logistical nightmares to handle in moving the relief around the country and getting in there, getting organized, doing things right. Just an absolute tragedy and I guess a lesson learned for all of us as far as preparation or as far as prematurely celebrating anything. You know, the end of a war or shrinkage going down or in this case that the virus has moved on. And so I think that's probably the big takeaway, at least for me.

And I know our team, as we conduct research for so many retail chains around the U.S. and the world is how do we know and do we really want to declare a win? And I was talking to some colleagues actually yesterday about how difficult it is to declare things and how relevant this all is. And probably it's not the best move. And even a criminologist I heard the other day say, well, we're going to fix this. And I think sometimes you might hear an orthopedic surgeon or you might hear an engineer or a repair person say, I'm going to fix this. But the idea of fixing things is pretty complex and difficult. So that's why we want to work together collaboratively.

We want to use good science, good research, but always be a little cautious. Doesn't mean we don't want to have a lot of optimism and a lot of enthusiasm and energy in what we do and plan and execute. Moving on to the next part, I guess we're seeing, even in the United States, some spikes in different types, and they're all very informative. I think it's like looking at crime, theft, fraud, or violence, where it pops up, how long, what form does it take, what might be dampening it down or might be fueling it to increase. And we've talked about, for example, these mass or active shooting situations. The United States so far, here we are about mid-May, and there have been on average about 10 per week, three or more people, non-gang-related shootings.

So, you know, these things are, and they move around, they take different forms, just as this virus is. I know in the state of Florida, hospitalization rates for young people are up, in fact, lead the nation, whereas other, with elderly and others, those that were vaccinated, they don't. Florida has been in excellent shape for so long by vaccinating those, the most vulnerable very rapidly as part of the governor's strategy. So it gives an idea of where we should treat and how we should treat crime as well as pathologies. The next is there's a lot of research going on around mixing vaccines. I know for so long the guidance was if you start out with Pfizer or Moderna, for example, or then later the J&J, then that should be your first and second dose. Don't mix. In the UK, they had to start mixing in other places, but studying it.

to start mixing in other places, but studying it. In the United States, all along, there's been studies going on about mixing vaccines from different manufacturers and different modes or mechanisms that have different modes and mechanisms of action to further boost. And there seems to be a growing consensus among some scientists that some of these pretty robust studies are showing that there may be an even more robust immune response by mixing vaccines. So stay tuned on that. And we heard last time that the U.S. Army Institute has been doing a lot of research around this for a while. Moderna is showing that their booster seems to be good against variants, and they're starting to think more about having a third booster shot to do that. Meanwhile, the initial Pfizer vaccines are now more studies that have come in showing that actually the Pfizer, as it currently stands after two doses, is pretty robust, pretty

against different viral variants. So that's good news for those. We're seeing now that another interesting part of the spread is children are now account for about 22% of new cases, which is fairly dramatically up evidently. But again, bear in mind, the vaccines are designed to reduce serious illness almost to zero and hospitalizations almost to zero, as well as fatalities, not to always prevent you from getting any of us from getting COVID-19 disease, but rather it keeps it from progressing because the body's ready and damps it down so much. So it's my understanding through the reading that the children, while accounting for a growing number of percent, there are a couple of things going on. One, that's not necessarily serious disease, but they are now viral vectors that could be moving the disease around, but that so many adults and particularly, again, those most vulnerable have been vaccinated. That's probably partially why the percent of new cases are going down for adults, clearly at the same time that they might be going out for non-vaccinated children. We're seeing too some experimental things going on with businesses and who they require to get vaccinated or how they work on that carrot and stick, you know, $10 or $75, whatever $50 bonuses to get vaccine or paying you for time

off to get vaccinated, or you can't come into the workplace or work with others, or the unvaccinated can go without masks during meetings and, excuse me, vaccinated without masks, the unvaccinated with mask on. So stay tuned on how that works. And even there was a fully vaccinated flight that flew the other day and nobody had to wear masks. So as an experiment there. So you're going to see more and more of this type of thing going on in the United States and around the world. There are now 77 vaccines in preclinical non-human trials yet. They're not 49 in phase one human trials, 49 different vaccines being tested. in phase one human trials, 49 different vaccines being tested, 37 more vaccines being tested in phase two human trials, and 27 more in phase three. And again, we still have our six emergency use authorization vaccines. We've got 10 fully approved elsewhere in the world. In the world, we've got Pfizer has just filed for normal authorization going beyond the emergency use authorization that was granted last year.

So it looks like in the United States, over 270 million Americans have now gotten at least one dose. Over 120 million Americans now fully vaccinated. Amazing, amazing progress for such a massive country. And again, by getting, starting to get people vaccinated in November of 2020, which is amazing since the virus was really only identified in early March and February of the same year. Around the world, closing in on 1.5 billion humans vaccinated, 325 million around the world plus fully vaccinated. So it's just an incredible, incredible feat of science and execution to get so many humans that are so dispersed vaccinated so rapidly with such powerful

and well-tested drugs. And I think the addressing like Pfizer and Moderna alone went through, and the others as well, multiple phase three trials. I think some people don't realize, again, that the Operation Warp Speed was designed to get a lot of highly skilled companies or clusters of companies and government agencies and university researchers to start to roll by pre-purchasing what they produce, whether it worked or not, but most critically by building or funding factories and production or reconverting them, repurposing them to produce the vaccine at massive levels.

And so that, again, the science wasn't hurried. What was hurried was the manufacturing and distribution of the vaccines, but as well as getting a head start. And I heard a podcast this week about the mRNA vaccines that we know as Moderna and Pfizer. That's what theirs is based on. That's the science and delivery mechanism. science and delivery mechanism. That goes back over 15 years in use and 30 years in research. So this is not voodoo or anything like that. This is really rigorous, extensive science conducted across multiple laboratories around the world for decades, but sped up dramatically by the ability that we have now with supercomputing. High-speed computing is just amazing what can be simulated and they can look at all the different ways to, and the different failure modes, they can fail fast in that way in silico. So amazing, amazing kind of thing. 239 antivirals in human clinical trials now, and then another 365 other treatments being tested, again,

around the world for those that do get sick from this. And the lessons learned across all of this, of course, is already being leveraged for other viruses, for bacterial infections, and then even things we've heard like cancer or autoimmune diseases. So out of such tragedies coming some real, some real positive impact. We're seeing two different missed patches and pills as we've talked about before. So other delivery modes and mechanisms, and again, testing and kits and things like that, that are now universal, people can have them at their homes so rapidly and so, so accurate. so rapidly and so accurate. Switching gears here real quickly over to LPRC, heavy duty planning on 2021 LPRC impact. Normally 400 plus executives coming together at the University of Florida for two and a half days of amazing interaction around science-based learning

with really cool learning lab breakout sessions with main stage sessions with really neat social interactions at the swamp and elsewhere. And then, of course, this year with now with five physical laboratories that are all set up and up, they're operating for LPAP only. This is crime prevention. This now looks like a fully or at least partially physical impact conference this year. We're all like everybody else waiting to see what form. Are we going to have 50 or are we going to have 500 executives here? But we're really excited and there's a lot of detailed planning on the content logistics of LPRC Impact that October 4th through 6th. Just go to the LPRC website, lpresearch.org for more information there. As I mentioned before, in two weeks, we've got a

solution partner planning day for all the 70 LPRC members that are so critical to the LPRC research and results community. But we're going to have that webinar just for the SP executives doing deep dives into LPRC and how they can engage even more broadly and deeply there, as well as we've got multiple webinars I mentioned before on artificial intelligence, on mass shooting or active shooter situations, on product protection. And then again, the product protection summit, the violent crime summit, and the supply chain protection summit, all in planning now. So go to the lpresearch.org where you can see the full calendar of events at a glance. So a lot of neat things happening in the working groups, research. On campus yesterday, we were

walking around in our area that we have for the Safer Places Laboratory outside and where we're setting up live view trailers, where we're putting banners on light poles, where we're setting up portable power units and all kinds of things to simulate curbside, but also for intimidation and other safety and crime in the parking lot or zone four, as we call it. So just an amazing amount of things going on at LPRC. With that, let me turn the page here. Let me head over to Tony D'Onofrio. Let's talk about the U.S. and the world and what's happening. Tony, if you will.

Thank you very much, Reed. And again, a great update on what's going on with vaccines around the world and also the great work that's going going continues at LPRC. So let me start actually with actually supporting what you talked about in terms of the vaccine. So these are the top five countries that invested the most in research to actually get the vaccines to the market. And the world was led by the United States, which invested $2.23 billion in vaccine development, followed by Germany at $1.51 billion. The UK came in third at $500 million. The rest of the European Union invested $327 million. And Canada, $283 million. So you can see the United States by far had the

biggest investment, and really Germany and the United States is what drove the development, if you look at the investments in terms of the vaccines. Speaking about the world, one of the other areas that I look for in terms of when is the world going to reopen? One of the ways that it's going to reopen is through passports. So what are the world's most powerful passports? And this is based on the number of countries that you can enter without a visa. So the number one country in the world that has the least visas in terms of travel is Japan with 191 countries that you can travel to. Singapore is second, 190. South Korea is third. Germany is fourth. Spain, Finland, and Italy

are fifth. And U.S. is sixth. So with the U.S., you can travel to 187 countries visa. U.S., you can travel to 187 countries visa. So let me now switch to winning retailers and what characteristics separates winning retailers from competitors. For this research, a winning retailer was defined as any retailer that saw total sales of 10% or more in 2020. Of the winners, interesting, 57% were long-term privately owned companies. The other 43% were large public companies. None of the winners in the studies were owned by private equity companies. Part of this was due to the segment differences, but the researchers felt strongly that long-term private companies were able to pivot aggressively due to culture and public companies succeeded because they had their store portfolio and access to unlimited funds to take advantage of the pandemic surge opportunities. take advantage of the pandemic surge opportunities. On average, winner store walk-in business grew 18% and on top of that, digital orders, making it clear that while digital orders made all the headlines, it was the stores that were the stars in 2020. Only 7% of total sales in winners came from online orders that were completed

via warehouse or fulfillment centers. A full 93% of all business had a store component. Again, reinforces the importance of the store. Looking at 2021, winners are reporting a 7% increase in total IT spend across the enterprise. That spend includes support for store pickup at 7.7%, traditional store IT spend at 4.5%, and 4.2% spend to support local delivery. Winners are continuing to double down on IT and technology spend at a level of 4x the growth of other retailers. Winning retailers are also taking advantage to accelerate touchless shopping, and that can range from self-checkout, kiosks, electronic shelf labels, click and collect, touchless delivery, customers using their own devices for checkout, and even contactless payment.

The number one priority of 2021 for retailers as a result is actually deploying touchless solutions, which was rated 178% higher. There were four specific technologies that winning retailers have already deployed at a much higher rate. First, it's the use of voice recognition for order picking and inventory. And winning retailers did this at 214%. Next is the investment in self-checkout, which was at 124 percent higher than average so i am winning retail we're not just installing self-checkout but actually doubling and in some cases actually opening entire stores with just self-checkout and walmart is an example of that for the other two i would encourage to actually read the study it's from from the IHL group.

It's a great study in terms of what makes a winning retailer. And let me end with a new blog that I just published this past week, and it's called Back to the Post-Pandemic Bright Future of Physical Retail Stores. And again, it talks about the importance of physical stores and why they'll be a very, very important component of the mix of what retailers will use for success going forward. Brick and mortar sales generated over $18.5 trillion in the United States in 2020. And as I said in the blog, I anticipate that the store is actually the epicenter of what

retail goes next, with online being the supporting agent. In a recent survey of retail technologies from RIS News, I found that 31% of overall U.S. sales now come from digital sales compared to 23% last year. As I discussed in one of the other articles, worldwide e-commerce did spike by 27.6% in 2020, but it's already declining and would only grow 14% in 2021. By 2024, 78 percent of total retail sales are still going to be in physical stores. COVID-19 really has become a brutal accelerator of digital transformation trends that already were underway, and the physical store itself will be a critical component in terms of where we go next, as I said earlier.

But we'll be different. We're not only going to be shopping inside physical stores, but the store itself will expand to the parking lot as a shopping area. Experts predict that 70% of retailers will offer curbside pickup by 2023, while 80% of retailers can provide in-store pickup and return opportunity by customer by the same year. The biggest challenge that retailers will face going forward is what's called inventory distortion, which worldwide is a $1.8 trillion problem. Enter RFID and computer vision as solutions to this. I would encourage you to read the blog. It gives you a lot more data, including some of the key technologies that retailers are adopting inside store

to make them more efficient, plus all the key data analytics platforms that are emerging. So summarizing this week, the investment in COVID-19 in the USA are paying off as we start to come out of the crisis and ahead of regions such as Europe. We will start traveling again, as I was reminded, by the world's most powerful passports. And technology is a key differentiator of winning retailers. And remember, you can leverage LPRC

to add value to those technology investments. And finally, the store will remain the epicenter of the retail model for a very long time. And with that, let me turn it over to Tom. Well, thank you, Tony. Thank you, Reid. And hopefully the background noise is okay. I'm traveling. But I have just really two things. And one is the Colonial Pipeline ransomware attack.

So I'm sure if you're following any of the new local or really global news outlets, you've probably seen a little bit about this. The Colonial Pipeline fuels about 50% of the East Coast of the United States. So it's about 48%, but close to 50% of gasoline and diesel fuel is provided by this pipeline. And about four days ago, it was shut down by a ransomware attack. And so this is probably the most prolific state-sponsored attack in history in the sense that it has actual real implications. So this is a Russian-based hacking outfit. Not necessarily Russian government, but there's belief that it's state-sponsored. It's very small and new, but the way they infiltrated this ransomware attack

is by using a ransomware as a service provider. So if we're all familiar with software as a service, this isn't a new, new trend, but in the last five years or so, hacking as a service and ransomware services out there, there's a company called Darktrace, not to be confused with good dark trace which is a cyber security intrusion detection but company but on the dark web you can actually go on

and you can pay for ransomware as a service and you really can pick your budget you can pick known ransomware little known ransomware or you can pay these uh companies to develop ransomware for you. And kind of a tidbit as I was looking at their website, and they had a developer position for a ransomware developer, and the starting salary was about $750,000 a year. So these are definitely commercialized money-making outfits, and they can charge anywhere from a few thousand to hundreds of thousands of dollars a month to get people in. But what occurred is the colonial pipeline has, you know, succumbed to a ransomware attack and basically has shut the pipeline down.

The White House and the U.S. government is at the stage where they're still assessing what the risk is. As of this morning, there wasn't a direct impact on gas prices throughout the East Coast. But what you can see really as of yesterday is the European and Middle Eastern kind of suppliers of oil, their evaluation skyrocketed with the anticipation that we would not have enough gasoline to supply the East Coast of the United States. So as I started to say, this is a fairly significant attack. Four days, the pipeline has been shut. So literally, it's a matter of hours before we start to actually see a financial impact. The Colonial Pipeline is owned by Coca-Cola, Shell, and KKR. So to date, while I'm

not a financial expert, there hasn't been any real impact on their stocks, but you can expect that if this continues, that there'll be an impact there. And really virtually anybody on the East Coast would see an impact. And then it's fairly, if that occurs, it's fairly common that you'd see an impact throughout the country. So why is this so important? Well, one, it really highlights the trend, and this is an ongoing trend, I think it was exacerbated by COVID, as we talked about many times, of the nefarious acts and hacking going from more of a chaotic approach to a business approach. And it also highlights the kind of vulnerabilities that we have in our utility. And unfortunately, some of our utility systems are 30, 40, 50, 60 years old and are in that

sole upgrade phase. I think in an earlier podcast, I talked about how some of the airline industries were still in the mainframe or green screen environment, written in kobolds. For those of you that are programming folks, if you went to school in the late 80s or even early 80s, that would be the language that you would have learned. And that's a similar challenge throughout utilities, throughout the world, certainly in the United States, while they're actively, and they have been for the last three years, upgrading and bringing those forward, it kind of just speaks to the vulnerability that we have. Certainly, we'll talk about this next week, because I think this has some far-reaching impacts. And I do believe that, again, we talked about the solar winds attack in the past and this is an actual direct attack

to the infrastructure so there are far-reaching implications of how the united states and other nations respond to show that this type of behavior isn't tolerated um it it is still fairly new so more to come on that and then switching gears just quickly and i think it's important to notice um to come on that and then switching gears just quickly and i think it's important to notice um uh there there have been some chatter stay stay tuned to the fusion fusion net um for those of you that don't know the fusion net is the place where we communicate about civil disturbance weather events other emergency events but there are some things occurring outside the united states uh jerusalem and the gaza strip there has been some chatter of protests uh in the Gaza Strip. There has been some chatter of protests in the United States related to that. There hasn't been any real talks about violence, but we'll see what occurs. It's still, it's a

living and breathing process. To date, the protests have been very small and subject around embassies and religious institutions. So I would definitely stay tuned to that. And lastly, I recently published an article about the chip shortage. And I think it's important to mention on this call here, the podcast, I think we talked really about it. And Tony is highlighting all of the technology and all of the places retail are going. And if you just take a quick look at what a computer video card is, or any really consumer electronic product, you probably see that it's a little bit more difficult to get a hold of, and the price has increased. This is occurring also in the retail landscape because there is a

global chip shortage. It is a very real challenge. And it really was impacted not only by covet but covet started this the kind of process of where chip manufacturers um changed their forecasting and then had to close because of covet and then basically more folks bought consumer electronics which drove the demand up and it became a supply and demand nightmare and it affects every sector so if you're in retail and you're buying just about any electronic component you may you may notice that it you know it's harder to get lead times on things are eight to 20 weeks and then this domino effect which occurs which creates a strain in logistics industry this is a consumer and a business challenge um recently ford it was a couple weeks ago ford actually published that they would

reduce their earnings for next year because they didn't believe they could produce 50 of the cars that they needed to because of the lack of these chips and it's a high silicon chip so you know taiwan semiconductor has one of the largest semiconductor issues in the world. It was about six months ago it said this was going to be a challenge. And the natural progression would be, why don't we open more factories? But fabrication factories take six to nine months to get up and running. If everything is perfect and nothing is perfect. So stay tuned to that because I do believe that the chip shortage will continue to create challenges both in the public and the private sector. Over to you, Reid. All right. Well, thank you so much, Tom.

It really, there are a lot of breaches that we're still reading about. It's not, some of these are not getting as much coverage. There's either other news covering it up or there's too complex to report or something, but we're seeing other breaches in all different fashions. So I appreciate, Tom, always the update and all of us to be cautious about what's going on. And we know in the retail community, each and every store has multiple entry points that somebody can take advantage of.

So some retailers might have thousands or even tens of thousands of potential leak points beyond going into their main corporate office compute. So thanks so much for that. Thanks again, Tony, for all your insights and thinking about how the economy is evolving, adjusting, adapting, and in fact, seems to be growing in so many ways and how travel is affected and so forth. So it gives us some idea about how things in the world work or don't work or how they're changing to set our strategies in place. And to you all out there, I appreciate you listening. Please keep tuning in. Send us your questions, comments, suggestions to operations at lpresearch.org. From all of us here in Gainesville and on behalf of Tony D'Onofrio

and Tom Meehan, everybody stay safe out there. Thank you. Thanks for listening to the Crime Science Podcast presented by the Laws 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.