LPRC - LIVE FROM NRF PROTECT: CrimeScience – The Weekly Review – Episode 108 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio

Episode Date: June 24, 2022

CrimeScience Team Live from NRF Protect! Supply Chain Protection Summit in Philly August 2nd and 3rd! In this week’s episode, our co-hosts discuss the NRF Protect Conference in Cleveland, LPRC Team and Tech grow, Inflation and Stagflation conversation and its effects, Staffing Issues are Visible, and the protests and looting are discussed. Listen in to stay updated on hot topics in the industry and more! The post LIVE FROM NRF PROTECT: CrimeScience – The Weekly Review – Episode 108 with Dr. Read Hayes, Tom Meehan & Tony D’Onofrio appeared first on Loss Prevention Research Council.

Hi, everyone, and welcome to Crime Science. In this podcast, we explore the science of crime and the practical application of this science for loss prevention and asset protection practitioners, as well as other professionals. 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-s 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 is the latest in our weekly update series. I'm joined by colleagues Tony D'Onofrio and Tom Meehan and our producer Diego Rodriguez. What we're going to do is we're here, we're live from the National Retail Federation, the NRF's Protect Show, the annual loss prevention asset protection event. It's back. It's live after two years of online adventures. And so here we are. We were just trying to go through. It looked like in the exhibit hall area.

It's a mob scene. It looks like the solution partners, the providers, the vendors are here in force. I've seen a handful of retailers, so time will tell. Most of the retailers roll in throughout the day and evening and some even early in the morning. So today it's Tuesday, the 20th of June, 2022. So we'll just talk a little bit about different things. I'm not going to really necessarily go into the pandemic. The infections are still there and continue to infect. And I did notice that almost nobody, in fact, I can't even recall somebody that actually was masked up at this event so far or acting any differently than in, say, a 2019 event. So time will tell.

As far as the LPRC, we've got, of course, our huge aiming point, the Impact Conference scheduled for the 3rd through the 5th of October. It will be on campus at the beautiful University of Florida's Wrights Student Union, essentially taking over the third floor of the building. And so we're excited about it. We've already got some fantastic enrollment and registration for the event. And it is early. Here we are in mid-June, and we're looking at the beginning of October.

So we're pretty excited about what's going to happen. The content is taking shape. We've got most of the learning labs ready to go and some of the main content as well. The social events in the UF Swamp, the football stadium, the Champions Club level for that Tuesday evening. We've also got a great event at the LPRC Innovate Lab Complex there in the UF Innovate Hub. So we're looking forward to it. We've got a Supply Chain Protection Summit coming up in Philadelphia at the TJX, the Marshalls Distribution Center in the Philly area.

We're still looking at the right date and place for the Violent Crime Working Group Summit. Just have been some conflicts. And again, we're trying to deconflict and not interfere with anybody else's conferences. But we've got plenty of content on active assailant. We're getting ready again, I mentioned before, do our research, some more research that we've done on the topic. This coming Monday, June the 27th, we've got now nine retail chains. Their threat assessment people are committed to get on there, and we're going to go through the five zones of influence with four types of shooters or events that occurred on a specific place and time.

And so we're looking forward to collecting that data, collaborating, and getting more and better information out to all of our 70 retail corporate members. A new member, by the way, Racetrack just joined. So we've got, I don't know, 12 or 14 more that are heavily kicking the tires. So we see the organization continue to head, march toward the 100 retailer member. We're just over 90 solution partner members

and people like Procter & Gamble as well. So the organization continues to grow. We're going to be bringing on two more LPRC research scientists to go with the already stellar crew that we've got on board now. We're going to be adding two operations team members as well. So a lot of excitement, more technologies going in the lab. I think we're just over 190 just in the engagement lab alone. So a lot happening at the LPRC around the world. Let me turn next. I'm going to go over to Tony D'Onofrio. Tony, if you can let us know what's going on. Thank you very much, Reid. And I actually want to have a conversation a little bit in terms of that. So first of all, I would like to say welcome to Cleveland. And I've heard

this story that Cleveland rocks. So there's some kind of hall of fame here that I think we're all headed to tonight. So welcome to Cleveland. I am impressed by the amount of booths that are actually there with the solution providers in terms of who's there. So welcome to Cleveland. This is actually my adopted hometown. When I immigrated from Italy as a child, this is where we came. So Cleveland, Ohio. So it's actually interesting coming back for Soco. So I'm going to say first, welcome to Cleveland. Second, I want to just have a quick discussion in terms of what's happening in the world. We're hearing a lot about inflation and the impact of inflation, what that's doing. In fact, I saw a stat just this

morning that 80% of economists named stagflation as having greater risk in the long term. And again, stagflation is a combination of high inflation and high unemployment. How do you guys think that's going to impact really what's happening here and loss prevention in general? So let me ask Tom here. Yeah, so 50% of my life is spent outside of retail in the financial sector. So this is a topic that keeps coming up. And I actually just was on a conference call with some central banks folks and some other folks about kind of the history books that we're trying to relate it to aren't necessarily the best way to look at it because of all the different things that are going on in the world today. And so anecdotally, no facts, this is just opinion. How do I think it's going to affect us? I think, you know, what logically we'd say is

there was and is this hyper focus on crime and violent crime that we're seeing throughout the United States. I definitely see a change in tide for law enforcement support and some political backing. But as we know, when the economy has a downturn, people do resort to, you know, different circumstances. And it does become an excuse for especially petty crimes, not necessarily organized retail crimes. So I think we need to keep an eye on that. I also think it's important to, as we always talk about, make sure that when you're reading the news that you're really reading into it. I mean, some of the Wall Street Journal articles have these vicious headlines,

but then when you really read about it, you start to understand, like using the example of the Target, the Wall Street Journal had a really, this article about they changed their earnings. And they really neglected a lot of that had to do with supply chain as well as it wasn't just bad buying. It was some of this stuff was inevitably going to be slowed down. But I do think it's also important to say that we're human beings and it affects the morale of people and creates tension. So, you know, retailers, you know, from what I'm talking to is that we just got out of a pandemic, right?

Like, so things seem like they were on the upturn. And then we have this hyperinflation that I know that, you know, from the manufacturing side, I know from both Tony and I are in that world that you can't even predict freight costs today. Like they, it's actually, you know, you, they are sometimes 10 times what they were before.

And you coming out of COVID, you thought you understood it. And now you're seeing things that just don't actually make logical sense. And when you add kind of what's going on in the Ukraine and having to, to take things differently, I do think that it's going to be tough for retail. And then the last piece I'll address is we have still almost 11 million open jobs. And I still to this day, and I actually was talking to a friend in Germany

and sent him a picture, find stores in my, you know, big stores in my area that are closing early because they can't staff, which to me is wild. Well, you can actually see a lot of that in Cleveland. If you walk downtown, a lot of the offices are closed because people are not coming to the office. And I do think that crime will continue to be an issue, and I do think the surrounding economic factors impact. So I think engaging with the LPRC to understand that and then to get to the fusion net and all those other type of tools, staying engaged is becoming more critical than ever. I

don't know if you want to comment. No, I think that right, good times and bad, we've got to get better at controlling everything, including our losses and to stay competitive. You know, you do only want to order just enough, but you need to sell it. But I think you're right. It seems like we're going from one experiment to another versus pandemic, you know, and then all the rioting and looting, unprecedented almost, other than say, maybe in the 60s or something that from what I can hear or recall. And so now here we're entering this maybe a stagflation situation with incredible inflation. And so we're just going to have to get better and better.

So at LPRC, I think, and this was already a theme, integration, right? How do we better integrate to affect theft, fraud, and violence? And how do we tighten that down and maybe eliminate some of the things that we're doing, tighten up the way we're doing it? we tighten that down and maybe eliminate some of the things that we're doing, tighten up the way we're doing it. Maybe some investment in, especially if it's capitalized, in some of these technologies makes sense where it's integrated with other technologies and it's dialed in. And so that's what we want to do together in the LPRC community. Yeah, so let me add some other thoughts in terms of innovation and technology in terms of what's going on in the world. So some other interesting technology news that happened actually in the past week,

Lowe's is taking a different approach to the metaverse. They're actually releasing 500 3D products via their Lowe's Open Builder to Web 3.0 creators. So they're getting into the metaverse. And then I saw some really interesting stats from Retail Dive where they talked about two-thirds of consumers are less likely to return a product if they use augmented reality during the buying process. And three-quarters said they are more likely to buy clothes after using AR in terms of actually the experience of buying those clothes. So I do think technology is changing, and I think we're going to see some of that this week. And you see that, for example, Amazon is launching this week their first drone deliveries in California.

It's actually in Lockford, California. They're going to start delivering drones to about 3,500 consumers. And again, another industry in steps, and these are from the Retail Innovation Hub. Twenty countries now have checkout-free stores, and the count is actually now up to 250 stores. And every time I go through Kennedy Airport right now, right there on the way to the gate is a totally self-checkout store using your credit card. You go in, pick up what you want, and walk out, and they charge your credit card.

So the world is changing. And the final industry stat this week, Amazon is opening a second department store. So they're actually going to department store route. So lots of changes going on. And I think, again, it's another reason to stay engaged with LPRC because all this innovation, you look at what's going on with the innovation lab, for example, with all the augmented reality and virtual reality activity, those are going to become critical to retail. So really engaging early and understanding how to leverage it going forward becomes more important. So, Tom, what are some of the other trends you're seeing?

Yeah, I think so that recently, this past really 10 days, there's been a lot of news about cloud, major cloud disruption. So CloudFlare had a huge outage. Microsoft had a huge outage that affected Teams and Outlook. And it's interesting because, again, when I say this all the time, when you're reading the news, you have to be careful because huge is relative, right? And while these were large in scale by users, it isn't a sign that you should be running away from cloud. It's just understanding that, hey, this does happen. It's much less likely to have a major service go down. But a lot of the chatter on it was kind of what I think Reid, you and I and Tony talked probably about 10 years ago about why you wouldn't want to use the cloud because you don't control it. When the reality

is, you know, when you had an outage, when a server went down in a building or for a retailer might be out for 10 hours and all of the research is trying to fix it where when microsoft has an outage there might be 10 000 people trying to fix it you know so there's there's that double-sided coin but the reason i bring it up is because for loss prevention folks and we we talk all the time, this is like a fusion net thing. You can't just solely rely on one form of communication. And I think one of the risks in business on, this is a general statement, is there are a lot of folks that have taken their whole entire communication strategy to one platform. Well, that's a challenge. If your phone system, your social system, your email is all one platform and that goes down for four hours and it becomes a real issue. And I think that is one of the things that when we're talking about the integration piece of it's not about one thing.

It's about how you get all the things to work together. you, but it puts you in a position where when you have that built that way, you can look at some redundancies and go, okay, here's risk that I didn't even identify before because I didn't have these things together. So seeing a lot more of that. The other big interesting thing when we talk about inflation is so cryptocurrency has been in the news heavy because of how much it's fluctuating. And the reality is, I think we talked about this years to do, that we, you know, to think that cryptocurrency wasn't eventually going to follow the stock market is kind of silly.

Like, of course it would. And stable coin, which was supposed to have different algorithms based on a different blockchain, also crashed. Well, that kind of, to me, is fairly logical, right? When all the financial pieces are going down, that's what you're seeing. But interestingly enough, there are several retailers in the same week saying that they're going to start accepting bitcoin uh for online purchases so it is still

a part and you talk about evolution and changing where it's still there it's not going away and and we're obviously starting to see that retailers um I don't even think it's reluctantly. It's just understanding how to adopt it so that it's safe for them and for the customer. It is very similar to cash. That's what people and I say with the risk is that if you lose the $100 bill that someone gave you, you lost it. With cryptocurrency, you really aren't necessarily taking much fraud risk. It's the consumer that usually will. It's more the method of how you're taking it.

And I see that trend moving also, and this is the second time this has happened, because crypto is the way it is. I think a few months ago, we talked about it on the podcast. There was a very formal announcement that Kroger was going to accept it, and it was all BS to inflate.

So they're able to actually change the price of it by doing things like this. So now you have all these announcements and immediately I said, well, man, you don't, you have to actually go and double, triple check which is real and which isn't. And out of the five or six, I think it was six. I saw two of them were not accurate. They were just statements. So it's just, it's a space that we, we want to keep an eye on. And I think one day it'll probably be a space that we we want to keep an eye on. And I think one day it'll probably be a topic that we're going to discuss. I don't think it is today. And that's the same with the Bitcoin ATMs of that are starting to pop up all over the place. You know, if it's in a retail establishment, you know, today there isn't any due diligence requirements.

But I can almost guarantee you that the government's going to start to have SARS and requirements around it. So as you're building out, start to think of those things because the last thing you want to do is get 10,000 machines in and then find out a year later that you're going to have heavy, heavy regulation. And then I think that there is a constant swing of ransomware attacks that are occurring. Ransomware attacks that are occurring. What I would say, and I say this all the time, is we're now in this evolution very similar to what we talk about in the LPRC with physical theft. It starts as ransomware and turns into a much more greater attack. I think I talked about it last week. You're starting to see these attacks where someone gets into your computer. They actually take some information, which is a data breach.

They actually take some information, which is a data breach. They then do phishing and then they do ransomware all at once now to really capitalize on it and even going to the extent of blackmailing companies, large companies to say we're going to release these emails if you don't pay us. So I don't think that's going to go away. As long as there's a financial motivation for bad guys, I think that's going to be there. I think it's just continuously education, awareness, what we always talk about. And then last but certainly not least, I think we'll probably in the next couple of days, there are a lot of Supreme Court things that are coming, which could lead to civil unrest. I only think one of the cases was there was a decision so far officially, I think, which was the one on religion in school. But regardless of the outcome of some of these, there may be civil unrest.

So we'll certainly be ready to turn the fusion on and be here to help support it. But I think we're in this – it feels like a book, right? Like we finished the apocalypse. We finished the pandemic chapter and then we went to the war and now we're in this new element of hyperinflation and now we have all of these huge, really all of the cases that have really, really strong impacts regardless of where you sit. There's going to be a pretty – a one, which will affect, you know, California, Chicago, New York City on concealed carries. So, you know, like I said, I could suspect that there'd be some civil unrest there too. So we just want to keep an eye on it. And as we know, when it's warmer out, that's sometimes when the civil unrest gets a little unruly,

you know, because people are hot and in certain markets. So we're, you know, I'm watching that. I've seen a lot of chatter this morning. I got up really early this morning. I don't know why it was up at five. And I saw a tremendous amount of chatter about, about, you know, if this happens, you know, meet here. So we're going to have to watch that. And as we're all here, the bad guys know we're all here by the way so so so we'll pay attention what are you looking forward to this week what do you expect that um no it's good good stuff um i think that uh touching base with people is going to be the number one thing right just trying to get an idea in person where are they what are they dealing with what are they looking at doing differently um and doing same, right, in the past?

A lot of new faces, a lot of the same faces, and a lot of, like, Mike Lamb that was different and the same again at Kroger Company. I understand he's not here right now. So I'm really looking forward to touching base with a lot of people. We're excited about the things we're doing in violence and understanding the harm that's created by individuals that are homeless. And so I want to talk to some people about that. I want to understand, see if they want to get involved in some of the research we're doing in the area. I mentioned activist assailant. What are the things we can do there? We talked about riots a little bit ago. And with James Martin, he's got two graduate students that are

working on right now. We're going to retrospectively be looking at the 2020 riots and looking at what all was posted and came out during that time frame to see how much of that might be predictive of those events. So we're going to isolate some events, see what all was posted and put out there in the Ethernet, and see how well that might help us predict. So I think those are going to be some big ones. We're working a couple of serial crimes to understand with crime mapping how to better make sense of the world and we'll be talking about that at InterRef this week actually with Esri you know using ArcPro, ArcGIS technologies. So a lot a lot going on and touching base. Long answer to your short question Tony but I think we just got a lot to talk about. Yeah, let me close this week in terms of a little statistic about Cleveland. So we're in Cleveland. It turns out Cleveland has got a very strong link to retail. Cleveland was the place where the first

indoor shopping mall was created. So it was actually, it's not too far from here, still exists, although because the offices are open, downtown is almost deserted. But Cleveland's got a strong link back to the retail and retail. So it will be interesting to see where we all go next. So, Reed, if you want to take us home. Okay. So I want to thank everybody for Diego for his production and a quality job there. Tony, all your insights and all your efforts.

And, of course, Tom, the same with you. And I want to thank you all, the listener out there. Please stay tuned, stay in touch. Let us know what else you want to know about, what else that we should know about at lpresearch.org. So signing off for the crime science team. Everybody stay safe, stay in touch. 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 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.