November 10, 2023 • 33 mins
How far would you go to secure your retail store and protect your associates? If you're one of the countless retailers grappling with the growing problem of theft and violence, this episode is a must-listen. We're joined by industry experts Mark Self, Gus Downing, Ted McCaffrey and Pedro Ramos to examine the alarming trend of organized retail crime and its devastating impact on businesses and communities.
We not only shine a light on the harsh realities of retail shrinkage but also the influence of technology and social media on employee retention and customer experience. You'll discover a variety of strategies retailers are using to secure their stores and the tough reality of needing to add extra time to customers' shopping experiences for the sake of security. Moreover, we tackle the implications of using more militarized language to address theft and discuss the broken window theory, underlining the urgency for proactive measures.
We delve into the importance of understanding inventory loss as a means to measure results and touch upon the advantages of RFID technology. As our conversation progresses, we explore how different retailers approach inventory counts and stress the need for creating standards to understand what's leaving the stores, helping to differentiate between counterfeit and legit items. Tune in for an insightful and compelling conversation that you won't want to miss.
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:11):
The question burning on everyone's mind is is retail
shrink as catastrophic as it'spainted in the media?
Mark Self, what do you think?
Speaker 2 (00:21):
I think it's worse than how it's being painted in
the media.
I mean, for me there's morethan a few proof points.
When you have a CNN reporterliterally interviewing a store
manager at Walgreens andsomebody's on camera walking out
with a bunch of stuff and theinterviewer says, hey, did they
pay for that?
This is worse than catastrophic.
This is like the apocalypse forretail, my view.
(00:42):
I'm sure there's tons ofreasons why, but it used to be
that loss prevention and I'msure Guskin, if I could talk to
this loss prevention used to besomething that wasn't spoken
about widely because a lot of itwas coming from inside the
store.
Things like sweet-harding,where a cashier would kind of
wink and let you go throughwithout paying, or people taking
(01:03):
things from the back of thestore.
Those are all problems forretailers and there were
problems that they tried toaddress, but they weren't
problems that they tried tohighlight or promote.
Now you've got flash mobsliterally smashing through an
Apple store in Philadelphia andrunning out, literally running
(01:23):
over police people to get out ofthe store.
Then you have some of ourmembers in Congress saying
things like well, they're justtrying to feed their families.
This is worse than catastrophicin my view and it's societal.
I don't know what retailersshould be expected to do about
it, because me seeingmerchandise behind locked plated
(01:47):
glass or whatever thosepartitions are that I'm seeing
in the news and expecting peopleto be happy with that shopping
experience, that's not going towork either.
I think this is really reallybad and towns and counties need
to think throughout what they'regoing to do to augment
retailer's own efforts.
(02:08):
One other thing that's on mymind and then I'll pass on to
some of the other speakersthere's been some noticeable
trends from companies wherethey're giving police people
free coffee.
Now you've got a situationwhere different retailers I
forget if it was Walmart,walmart, I think it was is doing
something special in theAtlanta area, whether giving
(02:29):
police officers a place wherethey can hang out.
Now you've got retailerspromoting for attention from
local law enforcement and in myopinion, that doesn't really
work either, because otherpeople are going to jump in and
someone gives you free donutsand someone else is going to
give you a free hamburger.
Really, the core problem istheft is happening and is very
(02:50):
visible.
Do you agree with?
Speaker 3 (02:52):
this?
Oh, absolutely.
I mean we as a digitalnewspaper collect data on
organized retail crime and wereported in one of our reports
exclusive report so far, justmid year.
This year we've seen a 36%increase in the caseload in the
first quarter, a 4% increase, alittle bit of subsiding in the
(03:14):
second quarter, which means ORCcases on average we're up about
18% this year alone in a fullnumber of percent.
One of the other things thatwe're seeing is average case
value is up 95%.
The average case value, thedollar amounts, are up 131%.
So it is a much moresophisticated and aggressive
(03:35):
situation that's going on in thestores than it's ever been.
That kind of runs hand in handwith what even the FBI crime
index said recently, a couple ofweeks ago, when they reported
violent crime retail actuallyrepresents 60% of all violent
crime victims in the UnitedStates in 2002.
It's up 7%.
(03:59):
Property crime is up over 7%.
So there in those are numbersfrom the law enforcement
agencies.
Actually they had more agenciesreporting than in industry.
They're not really apprehending, following through and
prosecuting that many shoplipbecause of the progressive
movement, because of thedecriminalization, the lowering
(04:21):
of the felony thresholds andsuch.
So there's been this whole pushto decriminalize shoplifting
period across the boat.
So where do you draw that line?
I mean, what shoplifting andwhat's ORC?
When the professional knowsthat it only steals $800 worth,
(04:42):
$900 worth he's not going to geta felony, okay.
So oftentimes the castle justgive me a ticket and won't even
take them into the jail or thestation and process it, because
the police departments areoverworked, under staffed, the
jails are just filled with thebrim and the judges just don't
(05:04):
have the space.
Speaker 4 (05:06):
And let me add to that, gus.
I mean, you're a legend in theindustry and you also know,
probably, joe Cole, who was thevice president of the Lost
Prevention for Macy's, and oneof the things that he did, one
of the things that Peter Druckersays you can't manage what you
can't measure, and sometimes wedon't know what's leaving the
stores, we don't know what'sbeing stolen from the stores
until you take a physicalinventory.
What have you, joe Cole, workedwith my former company to
(05:27):
install these smart eggs iswhere you have not only alarming
, but you've got RFID and it'stied to me.
So you probably heard thisstory.
But in Queens, queens, macy'sthey actually caught a guy not
only stealing a boatload ofRalph Lauren items, but he stole
a suitcase to wheel it out.
They followed him.
They followed him all the wayout to a fence location which
(05:48):
happened to be a beauty shop inQueens, and these investigators
went in with these littlehandhelds and put them in their
back and went into this beautyshop and well, on the whole,
they went downstairs and therewas $90,000 worth of Macy's
clothing down there.
But here's the thing because ofRFID and everything serialized,
they were able to determinethat a portion of that was from
(06:09):
the Queen's store, a portion ofthat was from a San Diego store
and another portion was fromChicago.
So there has to be some kind ofstandards from a standpoint of
understanding what's leaving thestores, what eBay is selling.
There needs to be some kind ofa certification to say this is
either counterfeit or it's legit.
So we need to get to that pointwhere we give law enforcement
(06:29):
the tools to be able to saythat's you who stole it, because
I saw the video and I saw theitems that left the store.
Speaker 2 (06:34):
I think $90,000,.
Ted, that's chump change.
Those people need to up their.
I think that's a little bit.
Speaker 3 (06:41):
Well, RFID and obviously a big solution from a
standpoint of recovery,identification and such, but not
all the retailers can affordthat.
And then that's somethingthat's been the last 20 years
they've been fighting for andfighting for, and the price of
the ads are down, obviously, butit's still not applicable to
probably 60, 70% of theretailers out there.
(07:04):
Certainly Walmart and Target, Imean.
They're pretty much into theRFID rollout and that should
have a massive impact.
So I agree with you on that.
Speaker 5 (07:13):
That's a guy that he originally asked a question,
though.
Speaker 1 (07:18):
Let me intro Pedro, because a late entry into the
conversation, but he was meantto be here at the beginning.
Some technical difficulties.
So, pedro, welcome to the stagehe's from.
He's the chief revenue officerat APRAS Retail.
Over 20 years in fraud and lossprevention experience One of
the best I had.
Former AVP of loss preventionat Walmart stores.
(07:38):
So thank you.
Speaker 5 (07:40):
Thank you to the state Apologies for joining late
.
I just want to thank my friendsthat are the largest software
companies for all their privacyand security technology.
Now I do agree that you askedthe question is the retail
shrink problem overblown?
If you look at the data that'scoming out of the NRF study,
(08:00):
it's just suggests up actually20%.
It is clear from myconversations with some of my ex
coworkers and partners in thisindustry and they're all so my
partners and friends that theviolence they're experiencing.
20 years ago, 25 years ago, Iwas actually one of those folks
(08:20):
in the stores.
In my entire career I probablywould experience three to four
violent acts a year and I workedin some tough neighbor.
Today, the conversations we'rehaving with industry I think my
experience with my industrypeers is that this is the
average short attack that we'reso associate in the asset
(08:42):
protection field, unprovoked, isdealing with violence several
times a day and actuallyencountering weapons on a
regular basis.
Little scary, I mean, not foreveryone, right?
So see it's loss preventionprofessionals, the store
associates and the public atlarge.
So it's clear that violence ORCare at least.
(09:07):
The violence seems to haveescalated and I think we're
hopefully we're coming out ofthe end of what was a kind of
tumultuous four years, what willbe four years next March, of a
very kind tumultuous retailenvironment and just an overall
societal environment.
Hopefully we'll start tonormalize in late 2024.
Speaker 3 (09:28):
Well, I don't think when in debut or C number, quite
frankly, with relaparationsonline.
Speaker 5 (09:35):
Oh, absolutely so.
What we do see in our owncustomer base and prospect base
are the requests for onlinefraud prevention.
So our technologies areanalytical, which basically are
backward looking and analyzingtrends and predicting some
future trends, and the othertechnology we have actually
(09:57):
stops behavior at store level inreal time, which is returned.
In my brief six months here atthis new organization, the
requests for online fraudprotection have exploded, and by
at least 40% compared to thenew year's requests.
A lot of that is beingperpetuated by what's like ORC
(10:19):
has tried to find differentvehicles to distribute the
merchandise, and not onlydistribute it but the return
merchandise.
Flashmots, for example.
Right, they pick up the stuff.
They have no receipts, theywant to return it and they a lot
of times try to just convertthat to cash and want their
products back into cash at theretail stores they sold them.
Speaker 3 (10:41):
Yeah, one point and I'll hand it over to you guys.
We do a retail violencefatality report every year and
have been doing it now for eight, nine years.
And just this past year, in2022, there were 694 violent
fatalities in the retailindustry.
Now that's as a result of acrime, something that happened
(11:02):
in the store, or as a result ofa store incident 17% up from
2022 and 86% up from 2016.
And that's we're only reportingwhat is publicly reported.
We're not reportingconfidential information or
information that is associatedwith any one retailer.
(11:22):
This is what the news outlet isreporting, this is what they
are reporting.
So, and there's a you knowthere's a distinction there, but
nonetheless, you can followthose trends all the way to the
FBI crime stat and it kind of.
They go hand in hand.
Very frankly, and from an ORCperspective, it's also much
(11:46):
bigger than what a lot of ushave even been thinking about,
in that we have recently foundthat a large manufacturer of
apparel of the retail industryand a group of them and we won't
name the country or thecompanies are experiencing some
unbelievable cargo theft issues,and that apparel is made for
(12:09):
the American, our country headedto the same ship and ends up in
the United States and thatmerchandise is probably being
sold on the marketplaces.
Obviously there's a hugechannel there happening as well
that we're going to be reportingon in the next month, by the
(12:30):
way, so that's not new guys.
Speaker 2 (12:33):
Well, the number of fatalities mentioned in that
report to me somewhat.
Even though I think it's, Istill think it's ludicrous.
But it somewhat endorses someof the procedures in place by
companies like Lulu Lemon thathave famously said we don't want
our employees to do anythingwhen someone comes in and shop
lists to let it go right.
So it endorses the fact thatthey're trying to protect their
(12:57):
associates.
And yet, conversely, when youmake it public that, hey, no one
in the store is going to doanything about it if you come in
and steal, that's to me likeputting up a sign saying you
know, pay if you want, becausewe're not going to do anything
to prevent you from just takingit.
It's a double-edged sword thatdoesn't have a very good answer,
(13:17):
in my view.
Speaker 5 (13:18):
Right, but we don't in our recession earlier about
RFID and overall controls oninventory.
There are ways to target byminimizing the exposed product,
the amount of product that isexposed on the sales floor and
subject to loss.
Now there's all kinds of othercosts associated with that.
(13:41):
It means you have to cycleproduct more often and train
associates.
I mean there are legitimatereasons to publish to associates
that you don't want theminvolved.
I mean, if you think about whatretailers had to do, they went
from closed locations tosuddenly having to open the
doors.
When it comes to people, youcan't just turn the lights on,
you need to find people.
(14:02):
And one of the worst labormarkets we have seen and that
way Mark was already kind of inplace when we get COVID it just
got exacerbated, not to mentionall the competition from the gig
economy where you know I haveto get their working-age kids,
their adults, but their kids andthe reality is they don't want
to be exposed and so they findout of all alternatives to the
(14:26):
work.
So these stores have to stayopen, have to find ways to
minimize the exposure or atleast hard with target in a way
that it uses inventory levelsand other protective measures,
so it makes it more difficult ormore Lavorious for the orc
actor or booster to come in andtry to lift the product.
If there's very minimal producton the shelf it's not worth
(14:50):
going in and it makes it for abetter environment and more safe
environment for these socials.
But I don't think that's me.
We've spent quite a bit of timetalking about orc but if you
look at the data, there's otherand some of the retail or some
of the big retailers that startto kind of Re-evaluate their
positions.
I think there's a lot of otherissues driving the shrink
(15:10):
numbers.
Speaker 4 (15:11):
I was just gonna say I think.
I think that 9-11 and I don'twant to draw Evan, but this is
kind of retails 9-11 momentwhere we have to wake up as to
how we enter and exit stores,and I think that if you think
about Costco, you think aboutBJ's, they don't have quite as
much of a of a staff problembecause a you got to be a member
to get in there, be you getchecked on the way out.
(15:34):
So I think there could be a somepoint, a not a TSA, but some
kind of a TSA scenario whereit's not as easy just to leave a
store with a bag of items orwhat have you, that that item,
those items, have to go throughsomething that is almost like a
conveyor belt that basicallyscans everything via video or or
(15:55):
RFID and To make it a safeprocess to where it's safe but
it's also Secure and it's alsoSomething that is fast for the
customer.
I think we got to figure thatout because we now We've
adjusted ourselves when to go tothe airport, we know we're
gonna add another half hour to45 minutes to get to the airport
(16:15):
, knowing that we have to dealwith that line.
I think we've got to figure itout in retail and use the
technology so that we can movepeople through safely and also
Scan everything that goesthrough well, well, well
intentioned.
Speaker 2 (16:28):
I think that you know that's gonna have a
dramatically Negative impact onstore environment and the
quote-unquote shoppingexperience.
I mean, wouldn't you love toget on a plane and and not go
through TSA checkpoints?
That's been gone for what?
30 years now.
It does nothing to enhancingthe experience it's to your
point, ted yet lengthens theexperience.
(16:50):
Now I think if I'm going towear name a store, I'm not gonna
be real excited about doing it.
Yeah, if I know that I've gotto add another 30 minutes to my
journey.
Just an observation I agreewith you that something
pragmatic needs to happen, butI'm not sure what the answer is
when you've got we've beentalking a little bit in veiled
(17:10):
terms about organized crime, butwhen you've got a flash mob
that just runs through a Storeand taking whatever they want I
mean, did you see thePhiladelphia video without the
feathers?
Like nothing left for anybodyto Drink.
That is gonna be a dry, dryblock for a while because all
the flickers been stolen, right?
Well?
Speaker 3 (17:28):
the young people.
The young people are absolutelya head of law enforcement over
use, the social media andtechnology and this usually
always the case.
The criminal always adds theadvantage in the beginning.
Right, I could the number ofreasons, obviously, from privacy
issues being that whole litanyof you know, privacy issues,
(17:50):
like I said.
But in we really haven't had asa law enforcement, either
public or private, the manpowerto really Monitor social media
to the point where we canprevent these.
For a react, you know, in realtime, I mean it's always a
reactive method that they movein.
By that time You've got 300kids, they're beaten up tops and
(18:14):
you're kidding, yeah.
And, by the way, this isn'tjust happening in the United
States.
I mean this is happeningsimultaneously.
Exact same thing in the UK isgoing on in Canada and it's
going on a number of othercountries.
So this is not some phenomenonof the United States.
This is the retail industry asa whole.
Speaker 2 (18:33):
So for almost from a global perspective, but hey, you
know, there's a bank robberback in whatever by the name of
Willie Sutton and any, famously,that's why you drop banks.
And he said that's where themoney is.
And it seems to me that now themoney's in retail.
Yeah, you know, there is.
It's just an Apple store.
There's hundreds of thousands,probably millions of dollars
(18:54):
worth of equipment in there andthat's where the money is.
So something has to happen.
Speaker 4 (18:59):
Well, I think this is not only our 9-11, but this is
also our COVID moment, where weneed all the different the
governments, the localgovernments, the authorities,
the retailers, technologycompanies all working together.
I mean, you've got a guy likegovernor gas and Gavin Newsom is
putting they may not be enough,but $267 million into a whole
effort to stop this, and he saysyou're gonna steal, you're
(19:21):
gonna go to jail, and so we needmore of that in supporting the
stores.
And I know that that is, youknow it.
That may be, that may not beenough, but I think that's what
we need to do.
Speaker 5 (19:31):
Yeah.
So, ted, you make a great point.
I think the industry is doing agreat job Educating law
enforcement both the regionalall the way up to national, and
less of the recent nationallegislation and it's also using
technology, for example, to shutdown the the way this stuff
gets laundered.
I mean, nobody's gonna need 20Louis Vuitton backs or 50 rounds
(19:54):
of lipstick lipstick maybe Gusdoes, but you know the average
and does they need place toresell the product, and the
digital marketplaces is prettytypical go.
So there is federal legislation, but there are technologies
where we can help stop thisproblem by enhancing the
(20:15):
security measures in digitalmarketplaces to prevent some of
the stuff from so I'm getting tothat Just started, pedro, with
the informant.
Speaker 3 (20:24):
I mean it's correct.
So I need to kind of regulatethem at least.
But it's only the first step,which everyone obviously is
aware.
But you, still read.
Speaker 5 (20:32):
You're still requiring the merchants or the,
the operators of the digitalmarketplaces, to manage
thousands upon thousands ofRecentlers, which you're putting
them in the role of beingpolice of their own marketplaces
.
And generally you, gus, youknow as well as I do they will
react.
I think so.
When someone Notifies them of apotential problem.
(20:53):
They'll investigate it.
But to ask them to monitorevery single person, you're
basically it's the comment thatTed made earlier and the
conversation she said in Markhad you, we could put gates at
the front of every store and ithad.
Some of the Europeans do that,but it just becomes a burden on
everyone else.
So there are those measures arein place, but there's
(21:14):
technologies that can actuallyenhance the ability To stop that
behavior at the at the actualmarket place.
Speaker 2 (21:23):
One thing that strikes me was we talked is that
Eventually, sadly, all of thesecosts, whether it's technical
or more law enforcement or gopolice, the Yo, I'm her sights
those costs are going to getlarder back on to all of us at
every level associate I'm extraout of and it's going to be
larder on as additional costs.
We're gonna everybody's good,so kind of.
(21:45):
Coming back very briefly to anearlier theme in our
conversation, I think this isthis is a societal problem.
It's not just a retail problem.
I remember and I'm dating myselfbut I don't know how old I was
I literally took like a SingleBB gun target.
It must.
It was like less than a pennyand the dude followed me out of
(22:06):
the store I was hiding.
It was somebody like my fur I'mone and only attempted
joblifting.
The guy popped me in theparking lot and I never touched
anything again.
I was like less than a penny, Iwas scared to death.
That would never happen now.
And no, and I'm not saying I'mnot, I'm also not trying to make
a point for the quote-unquotegood old days.
Speaker 3 (22:26):
I just think that this is a huge societal Problem
that is more than just on theretailers and, if I may inject
one point there, there are anumber of community right now
that are actually going to someof these retailers and asking
them why aren't she doingsomething to stop our kid, you
know, from coming into the store?
(22:46):
There's one particular incidentthat we reported that high
school gets out at three o'clock.
20, 30 kids go to this onestore.
They steal the heck out of itand everybody just stay in the
fair and watch them and themanager says well, that's
because we can't touch them.
They go over to a smaller storeand the store manager standing
by the door and wouldn't evenallow me in.
We got community leadersthroughout the country going to
(23:06):
some of these retailers Askingthem to get involved in in kind
of getting up about it.
But once again, you know, youget the retailer in all kinds of
liability.
It may don't want anyone to gethurt over a shirt or blouse or
a candy bar.
I mean that's ridiculous.
Speaker 5 (23:24):
Yeah, I think we all agree that this is Mark.
I completely agree, and we nowknow that markets and
Shoplisters so.
I think we all agree that thatis a larger societal problem,
absolutely.
But if you go back to you knowChase's original question, if
you look at the RF study, youknow retailers who responded to
(23:46):
this are still telling you,regardless of what's in the
headlines, that over 50% of itOf strength.
So it tributed back to sometype of an internal process
issue and journal associateissue.
And if I'd heard you call itcorrectly, I'm still back to the
old days when I was now one ofthe black, to the old day.
That was our purpose, right,fix the process.
(24:08):
If you look about at any grow,any retailer that's in the
grocery business I don't thinkanybody's doing flash mob that
perishable products or any ofthose other things.
So there's still a significantfocus that needs to take place,
given the current labor market,given turnover, on Training
issues on basic shrinkprevention principles, inventory
(24:29):
controls, basic watering,analyzing data to determine
where your issues are, and RFIDis one of those components.
There's still a lot of basicblocking and tackling that the
industry can take and it'sstarting to focus on again from
my Savas fears of that LPRC twoweeks ago, for those of you
don't Understand, it's a lot forventure research council at the
(24:51):
University of Florida for thelisteners that may not Be
familiar with it and I haveseveral conversations with three
tellers and a couple of othersolution providers.
Out the conversation, althoughit remains important, focus on
our C and crime and all theseother issues to start Kind of
focusing again back inside thebox under internal process and
(25:14):
other training issues andassociate theft right, which
that's continued to be adecision.
Speaker 4 (25:21):
So when does a barcode turn into, say, full-on
RFID?
I mean, if Carter's with an AURof under $10 per item can put a
5 cent tag on, I think justabout anyone can, except for
small trinket items but whendoes?
What I love about RFID is itserializes every item.
So if you can certify that outof based on a serialized display
(25:43):
, you're going to try to returnthat.
You know what they're going toknow exactly where that came
from.
It was stolen.
If you've got the gates to showit, you've got the gates to
show who stole it.
So, and at some point, do weever have some kind of a body
that keeps track of that?
A knock, if he will, that theysee, razorblades just got stolen
from the target on Route 9 inFramingham and then all of a
(26:06):
sudden the Walmart gets hit onRoute 9 heading west.
So now you know, maybe at thethird store where the
Razorblades are, that you canhit them at the third store.
I mean, rudy Giuliani talkedabout the broken I hate to use
the name, but the broken windowconcept of all these train cars
that were getting painted withgraffiti, and what he did is he
(26:27):
hit them every time they gotpainted.
He put them in and he washedthem every night, and so when
you have graffiti, everythingelse looks bad, everything else
is a blight and so, but if youhit them back every time, and
hit them quickly, I thinkthey're not going to do it.
They're not going to do it asmuch anyways.
Speaker 1 (26:44):
So as we wrap up, pick one of your favorite
solutions, and we've establishedthere is a problem.
I think most was the consensushere that it was as bad as the
headlines say, or even worse, orwas there anyone who was on the
side of?
It's not as bad as they say?
Definitely it's bad, definitelygood.
If you had to choose onesolution, it's probably a
(27:07):
holistic thing.
Right, it's a lot of things,but what is one solution that
retailers that you would putyour money on Really do?
Rfid?
Speaker 5 (27:15):
Yeah, I'm going to have a biased answer, so I'm
shot out the link with the salespitch.
I'm trying to really make this.
I think the solutions are goingto be the evolution of
technology in the business.
I think RFID and properinventory controls are going to
be critical to stopping externaltheft.
But I think solutions that helpretailers take as much of the
(27:36):
decision process out of theemployee's hands as possible and
automate that decision processand then focus their employees
training on core issues and he'sjust going to provide general,
overall, better benefits.
Right, I am also like the restof my peers, except at the
Umbringer.
I have lived through several ofthese cycles.
(27:57):
They are a little bit magnifiedbecause of social media.
Inevitably, I've always fallenback on.
Where can I focus on bestpractices?
Back to core, and I justpointed down I think law
enforcement is taking a verypassive and process and they're
starting to come back.
So my solution is ourtechnology, because that's kind
(28:20):
of where I made my decision.
What's the technology solution.
Speaker 2 (28:26):
I would say this is probably 65% tongue-tied, but
35%.
I'd put the baddest lookingWagner mercenary in front of
every store and just have themfully vested.
I bet they wouldn't have totouch anybody, they just stand
there and be bored all day.
I would do something veryprovocative and very visible,
(28:49):
like the German Shepherd's inNew York City.
Yeah, I have the same with theMasson and Frowlin, oh well
that's going to go well.
Speaker 5 (29:04):
The German Shepherd's in New York City Everybody go
out and start.
Speaker 1 (29:08):
Oh, I know two retailers that did it, Gus.
What was your number onesolution?
Speaker 3 (29:13):
I would say there's two things.
Speaker 1 (29:17):
No, making the rules Only one.
Speaker 3 (29:20):
I got to say it is passing the current federal
organized retail crimelegislation in Congress.
That's an absolute necessity totruly get it on the boards, not
just within retail but in thelaw enforcement community.
A lot of this money that's beengoing into the law enforcement
(29:43):
locales like Newsom's and allaround the country doesn't
really end up going to fightingORC.
I mean there's got to be a bigpercentage of that that's
probably going to be psyched offat other places.
But anyway I don't mean to gothere.
But we have the Interact has ahuge effort right now, on the
(30:04):
26th tomorrow I believe it's the26th for a white retail crime
effort, which is what they'redoing is kind of bringing all
the people together in theindustry in order to be able to
communicate with their localrepresentative, senators and
such and show their support ofthe federal legislation.
(30:24):
We need this just to get on theblackboard, because right now,
if you look at the FBI crime indebt, we really can't determine
anything about ORC there.
It was hard enough to getshoplifting on the years ago.
That's one thing.
So it gets spanner F whiteretail crime day, looking up on
(30:46):
the net, on the web, and jumpingand getting involved.
And the second thing I'd liketo say is facial recognition.
I since we believe that thatcan be a very different
experience in the diamond agescenario is a necessity To
increase the safety and thesecurity of every box out there.
As long as there are parametersand it's able accordingly,
(31:10):
bottom line, those might dosalute.
Speaker 1 (31:14):
I think really three actually.
Speaker 4 (31:16):
So much took to a mind.
Yeah, but I just let him knowit.
Yeah, we put off.
Well, I think he is, he's.
I really how I'm gonna either.
I had you know, like.
Speaker 1 (31:27):
Yeah, we had RFID, we had technology.
Good answer.
Speaker 3 (31:31):
Pedro.
Speaker 1 (31:33):
We had a guard or some kind of physical presence,
knowing that we walk through thedoor.
And then Gus's answer facialand facial recognition.
This has been such aninsightful conversation.
Oh, did you have a?
Speaker 2 (31:45):
I just one one, one, one more observation for for my
colleagues here and for you tochase, I would I strongly
suggest that we stop calling itloss prevention.
It's theft.
Loss prevention is, like youknow, sounds like we're making
an excuse for something.
It's theft, whether it's comingout through the back door or a
sweet arning, or its splash mobsor its organized crime.
The industry should talk aboutkind of I don't know
(32:08):
militarizing its language aboutthis, because it's go backwards
to security.
Yeah, yeah, exactly, all right,pedro, I so anyway.
Yeah, I, I support Pedro andsecurity.
Speaker 4 (32:19):
So one thing that people forget about is that lost
, there's the loss, and thenthere's a loss to sell it to the
next customer.
The beauty I'll go back to it,rfid is that when those items
leave the store, you knowthey're gone, so you know to
replenish them right away,versus the next week, the next
month.
Macy's counts their entirestore once a month.
You're gonna wait 30 days toreplenish those items that
(32:40):
especially the items that justcame in for the season You're
out of stock.
So it's important to know whatleft, and so you know what left,
you know how to measure yourresults, and that's that's the
key thing for me the very goodpoint.
Speaker 1 (32:51):
Very good point, all good points.
Guys, this has been such aninsightful conversation for me
to be part of.
I feel lucky to be here and I'msure I'm sure the audience
feels the same.
We'll be sharing this acrossdifferent social channels.
We'll have clips and we'll havea replay available that we can
share with.
You know, any of yourcolleagues or Friends, or
anybody else you think it was,would would benefit from this.
(33:14):
Thank you all for being here.
The question burning on everyone's mind is is retail
shrink as catastrophic as it'spainted in the media?
Mark Self, what do you think?
Speaker 2 (00:21):
I think it's worse than how it's being painted in
the media.
I mean, for me there's morethan a few proof points.
When you have a CNN reporterliterally interviewing a store
manager at Walgreens andsomebody's on camera walking out
with a bunch of stuff and theinterviewer says, hey, did they
pay for that?
This is worse than catastrophic.
This is like the apocalypse forretail, my view.
(00:42):
I'm sure there's tons ofreasons why, but it used to be
that loss prevention and I'msure Guskin, if I could talk to
this loss prevention used to besomething that wasn't spoken
about widely because a lot of itwas coming from inside the
store.
Things like sweet-harding,where a cashier would kind of
wink and let you go throughwithout paying, or people taking
(01:03):
things from the back of thestore.
Those are all problems forretailers and there were
problems that they tried toaddress, but they weren't
problems that they tried tohighlight or promote.
Now you've got flash mobsliterally smashing through an
Apple store in Philadelphia andrunning out, literally running
(01:23):
over police people to get out ofthe store.
Then you have some of ourmembers in Congress saying
things like well, they're justtrying to feed their families.
This is worse than catastrophicin my view and it's societal.
I don't know what retailersshould be expected to do about
it, because me seeingmerchandise behind locked plated
(01:47):
glass or whatever thosepartitions are that I'm seeing
in the news and expecting peopleto be happy with that shopping
experience, that's not going towork either.
I think this is really reallybad and towns and counties need
to think throughout what they'regoing to do to augment
retailer's own efforts.
(02:08):
One other thing that's on mymind and then I'll pass on to
some of the other speakersthere's been some noticeable
trends from companies wherethey're giving police people
free coffee.
Now you've got a situationwhere different retailers I
forget if it was Walmart,walmart, I think it was is doing
something special in theAtlanta area, whether giving
(02:29):
police officers a place wherethey can hang out.
Now you've got retailerspromoting for attention from
local law enforcement and in myopinion, that doesn't really
work either, because otherpeople are going to jump in and
someone gives you free donutsand someone else is going to
give you a free hamburger.
Really, the core problem istheft is happening and is very
(02:50):
visible.
Do you agree with?
Speaker 3 (02:52):
this?
Oh, absolutely.
I mean we as a digitalnewspaper collect data on
organized retail crime and wereported in one of our reports
exclusive report so far, justmid year.
This year we've seen a 36%increase in the caseload in the
first quarter, a 4% increase, alittle bit of subsiding in the
(03:14):
second quarter, which means ORCcases on average we're up about
18% this year alone in a fullnumber of percent.
One of the other things thatwe're seeing is average case
value is up 95%.
The average case value, thedollar amounts, are up 131%.
So it is a much moresophisticated and aggressive
(03:35):
situation that's going on in thestores than it's ever been.
That kind of runs hand in handwith what even the FBI crime
index said recently, a couple ofweeks ago, when they reported
violent crime retail actuallyrepresents 60% of all violent
crime victims in the UnitedStates in 2002.
It's up 7%.
(03:59):
Property crime is up over 7%.
So there in those are numbersfrom the law enforcement
agencies.
Actually they had more agenciesreporting than in industry.
They're not really apprehending, following through and
prosecuting that many shoplipbecause of the progressive
movement, because of thedecriminalization, the lowering
(04:21):
of the felony thresholds andsuch.
So there's been this whole pushto decriminalize shoplifting
period across the boat.
So where do you draw that line?
I mean, what shoplifting andwhat's ORC?
When the professional knowsthat it only steals $800 worth,
(04:42):
$900 worth he's not going to geta felony, okay.
So oftentimes the castle justgive me a ticket and won't even
take them into the jail or thestation and process it, because
the police departments areoverworked, under staffed, the
jails are just filled with thebrim and the judges just don't
(05:04):
have the space.
Speaker 4 (05:06):
And let me add to that, gus.
I mean, you're a legend in theindustry and you also know,
probably, joe Cole, who was thevice president of the Lost
Prevention for Macy's, and oneof the things that he did, one
of the things that Peter Druckersays you can't manage what you
can't measure, and sometimes wedon't know what's leaving the
stores, we don't know what'sbeing stolen from the stores
until you take a physicalinventory.
What have you, joe Cole, workedwith my former company to
(05:27):
install these smart eggs iswhere you have not only alarming
, but you've got RFID and it'stied to me.
So you probably heard thisstory.
But in Queens, queens, macy'sthey actually caught a guy not
only stealing a boatload ofRalph Lauren items, but he stole
a suitcase to wheel it out.
They followed him.
They followed him all the wayout to a fence location which
(05:48):
happened to be a beauty shop inQueens, and these investigators
went in with these littlehandhelds and put them in their
back and went into this beautyshop and well, on the whole,
they went downstairs and therewas $90,000 worth of Macy's
clothing down there.
But here's the thing because ofRFID and everything serialized,
they were able to determinethat a portion of that was from
(06:09):
the Queen's store, a portion ofthat was from a San Diego store
and another portion was fromChicago.
So there has to be some kind ofstandards from a standpoint of
understanding what's leaving thestores, what eBay is selling.
There needs to be some kind ofa certification to say this is
either counterfeit or it's legit.
So we need to get to that pointwhere we give law enforcement
(06:29):
the tools to be able to saythat's you who stole it, because
I saw the video and I saw theitems that left the store.
Speaker 2 (06:34):
I think $90,000,.
Ted, that's chump change.
Those people need to up their.
I think that's a little bit.
Speaker 3 (06:41):
Well, RFID and obviously a big solution from a
standpoint of recovery,identification and such, but not
all the retailers can affordthat.
And then that's somethingthat's been the last 20 years
they've been fighting for andfighting for, and the price of
the ads are down, obviously, butit's still not applicable to
probably 60, 70% of theretailers out there.
(07:04):
Certainly Walmart and Target, Imean.
They're pretty much into theRFID rollout and that should
have a massive impact.
So I agree with you on that.
Speaker 5 (07:13):
That's a guy that he originally asked a question,
though.
Speaker 1 (07:18):
Let me intro Pedro, because a late entry into the
conversation, but he was meantto be here at the beginning.
Some technical difficulties.
So, pedro, welcome to the stagehe's from.
He's the chief revenue officerat APRAS Retail.
Over 20 years in fraud and lossprevention experience One of
the best I had.
Former AVP of loss preventionat Walmart stores.
(07:38):
So thank you.
Speaker 5 (07:40):
Thank you to the state Apologies for joining late
.
I just want to thank my friendsthat are the largest software
companies for all their privacyand security technology.
Now I do agree that you askedthe question is the retail
shrink problem overblown?
If you look at the data that'scoming out of the NRF study,
(08:00):
it's just suggests up actually20%.
It is clear from myconversations with some of my ex
coworkers and partners in thisindustry and they're all so my
partners and friends that theviolence they're experiencing.
20 years ago, 25 years ago, Iwas actually one of those folks
(08:20):
in the stores.
In my entire career I probablywould experience three to four
violent acts a year and I workedin some tough neighbor.
Today, the conversations we'rehaving with industry I think my
experience with my industrypeers is that this is the
average short attack that we'reso associate in the asset
(08:42):
protection field, unprovoked, isdealing with violence several
times a day and actuallyencountering weapons on a
regular basis.
Little scary, I mean, not foreveryone, right?
So see it's loss preventionprofessionals, the store
associates and the public atlarge.
So it's clear that violence ORCare at least.
(09:07):
The violence seems to haveescalated and I think we're
hopefully we're coming out ofthe end of what was a kind of
tumultuous four years, what willbe four years next March, of a
very kind tumultuous retailenvironment and just an overall
societal environment.
Hopefully we'll start tonormalize in late 2024.
Speaker 3 (09:28):
Well, I don't think when in debut or C number, quite
frankly, with relaparationsonline.
Speaker 5 (09:35):
Oh, absolutely so.
What we do see in our owncustomer base and prospect base
are the requests for onlinefraud prevention.
So our technologies areanalytical, which basically are
backward looking and analyzingtrends and predicting some
future trends, and the othertechnology we have actually
(09:57):
stops behavior at store level inreal time, which is returned.
In my brief six months here atthis new organization, the
requests for online fraudprotection have exploded, and by
at least 40% compared to thenew year's requests.
A lot of that is beingperpetuated by what's like ORC
(10:19):
has tried to find differentvehicles to distribute the
merchandise, and not onlydistribute it but the return
merchandise.
Flashmots, for example.
Right, they pick up the stuff.
They have no receipts, theywant to return it and they a lot
of times try to just convertthat to cash and want their
products back into cash at theretail stores they sold them.
Speaker 3 (10:41):
Yeah, one point and I'll hand it over to you guys.
We do a retail violencefatality report every year and
have been doing it now for eight, nine years.
And just this past year, in2022, there were 694 violent
fatalities in the retailindustry.
Now that's as a result of acrime, something that happened
(11:02):
in the store, or as a result ofa store incident 17% up from
2022 and 86% up from 2016.
And that's we're only reportingwhat is publicly reported.
We're not reportingconfidential information or
information that is associatedwith any one retailer.
(11:22):
This is what the news outlet isreporting, this is what they
are reporting.
So, and there's a you knowthere's a distinction there, but
nonetheless, you can followthose trends all the way to the
FBI crime stat and it kind of.
They go hand in hand.
Very frankly, and from an ORCperspective, it's also much
(11:46):
bigger than what a lot of ushave even been thinking about,
in that we have recently foundthat a large manufacturer of
apparel of the retail industryand a group of them and we won't
name the country or thecompanies are experiencing some
unbelievable cargo theft issues,and that apparel is made for
(12:09):
the American, our country headedto the same ship and ends up in
the United States and thatmerchandise is probably being
sold on the marketplaces.
Obviously there's a hugechannel there happening as well
that we're going to be reportingon in the next month, by the
(12:30):
way, so that's not new guys.
Speaker 2 (12:33):
Well, the number of fatalities mentioned in that
report to me somewhat.
Even though I think it's, Istill think it's ludicrous.
But it somewhat endorses someof the procedures in place by
companies like Lulu Lemon thathave famously said we don't want
our employees to do anythingwhen someone comes in and shop
lists to let it go right.
So it endorses the fact thatthey're trying to protect their
(12:57):
associates.
And yet, conversely, when youmake it public that, hey, no one
in the store is going to doanything about it if you come in
and steal, that's to me likeputting up a sign saying you
know, pay if you want, becausewe're not going to do anything
to prevent you from just takingit.
It's a double-edged sword thatdoesn't have a very good answer,
(13:17):
in my view.
Speaker 5 (13:18):
Right, but we don't in our recession earlier about
RFID and overall controls oninventory.
There are ways to target byminimizing the exposed product,
the amount of product that isexposed on the sales floor and
subject to loss.
Now there's all kinds of othercosts associated with that.
(13:41):
It means you have to cycleproduct more often and train
associates.
I mean there are legitimatereasons to publish to associates
that you don't want theminvolved.
I mean, if you think about whatretailers had to do, they went
from closed locations tosuddenly having to open the
doors.
When it comes to people, youcan't just turn the lights on,
you need to find people.
(14:02):
And one of the worst labormarkets we have seen and that
way Mark was already kind of inplace when we get COVID it just
got exacerbated, not to mentionall the competition from the gig
economy where you know I haveto get their working-age kids,
their adults, but their kids andthe reality is they don't want
to be exposed and so they findout of all alternatives to the
(14:26):
work.
So these stores have to stayopen, have to find ways to
minimize the exposure or atleast hard with target in a way
that it uses inventory levelsand other protective measures,
so it makes it more difficult ormore Lavorious for the orc
actor or booster to come in andtry to lift the product.
If there's very minimal producton the shelf it's not worth
(14:50):
going in and it makes it for abetter environment and more safe
environment for these socials.
But I don't think that's me.
We've spent quite a bit of timetalking about orc but if you
look at the data, there's otherand some of the retail or some
of the big retailers that startto kind of Re-evaluate their
positions.
I think there's a lot of otherissues driving the shrink
(15:10):
numbers.
Speaker 4 (15:11):
I was just gonna say I think.
I think that 9-11 and I don'twant to draw Evan, but this is
kind of retails 9-11 momentwhere we have to wake up as to
how we enter and exit stores,and I think that if you think
about Costco, you think aboutBJ's, they don't have quite as
much of a of a staff problembecause a you got to be a member
to get in there, be you getchecked on the way out.
(15:34):
So I think there could be a somepoint, a not a TSA, but some
kind of a TSA scenario whereit's not as easy just to leave a
store with a bag of items orwhat have you, that that item,
those items, have to go throughsomething that is almost like a
conveyor belt that basicallyscans everything via video or or
(15:55):
RFID and To make it a safeprocess to where it's safe but
it's also Secure and it's alsoSomething that is fast for the
customer.
I think we got to figure thatout because we now We've
adjusted ourselves when to go tothe airport, we know we're
gonna add another half hour to45 minutes to get to the airport
(16:15):
, knowing that we have to dealwith that line.
I think we've got to figure itout in retail and use the
technology so that we can movepeople through safely and also
Scan everything that goesthrough well, well, well
intentioned.
Speaker 2 (16:28):
I think that you know that's gonna have a
dramatically Negative impact onstore environment and the
quote-unquote shoppingexperience.
I mean, wouldn't you love toget on a plane and and not go
through TSA checkpoints?
That's been gone for what?
30 years now.
It does nothing to enhancingthe experience it's to your
point, ted yet lengthens theexperience.
(16:50):
Now I think if I'm going towear name a store, I'm not gonna
be real excited about doing it.
Yeah, if I know that I've gotto add another 30 minutes to my
journey.
Just an observation I agreewith you that something
pragmatic needs to happen, butI'm not sure what the answer is
when you've got we've beentalking a little bit in veiled
(17:10):
terms about organized crime, butwhen you've got a flash mob
that just runs through a Storeand taking whatever they want I
mean, did you see thePhiladelphia video without the
feathers?
Like nothing left for anybodyto Drink.
That is gonna be a dry, dryblock for a while because all
the flickers been stolen, right?
Well?
Speaker 3 (17:28):
the young people.
The young people are absolutelya head of law enforcement over
use, the social media andtechnology and this usually
always the case.
The criminal always adds theadvantage in the beginning.
Right, I could the number ofreasons, obviously, from privacy
issues being that whole litanyof you know, privacy issues,
(17:50):
like I said.
But in we really haven't had asa law enforcement, either
public or private, the manpowerto really Monitor social media
to the point where we canprevent these.
For a react, you know, in realtime, I mean it's always a
reactive method that they movein.
By that time You've got 300kids, they're beaten up tops and
(18:14):
you're kidding, yeah.
And, by the way, this isn'tjust happening in the United
States.
I mean this is happeningsimultaneously.
Exact same thing in the UK isgoing on in Canada and it's
going on a number of othercountries.
So this is not some phenomenonof the United States.
This is the retail industry asa whole.
Speaker 2 (18:33):
So for almost from a global perspective, but hey, you
know, there's a bank robberback in whatever by the name of
Willie Sutton and any, famously,that's why you drop banks.
And he said that's where themoney is.
And it seems to me that now themoney's in retail.
Yeah, you know, there is.
It's just an Apple store.
There's hundreds of thousands,probably millions of dollars
(18:54):
worth of equipment in there andthat's where the money is.
So something has to happen.
Speaker 4 (18:59):
Well, I think this is not only our 9-11, but this is
also our COVID moment, where weneed all the different the
governments, the localgovernments, the authorities,
the retailers, technologycompanies all working together.
I mean, you've got a guy likegovernor gas and Gavin Newsom is
putting they may not be enough,but $267 million into a whole
effort to stop this, and he saysyou're gonna steal, you're
(19:21):
gonna go to jail, and so we needmore of that in supporting the
stores.
And I know that that is, youknow it.
That may be, that may not beenough, but I think that's what
we need to do.
Speaker 5 (19:31):
Yeah.
So, ted, you make a great point.
I think the industry is doing agreat job Educating law
enforcement both the regionalall the way up to national, and
less of the recent nationallegislation and it's also using
technology, for example, to shutdown the the way this stuff
gets laundered.
I mean, nobody's gonna need 20Louis Vuitton backs or 50 rounds
(19:54):
of lipstick lipstick maybe Gusdoes, but you know the average
and does they need place toresell the product, and the
digital marketplaces is prettytypical go.
So there is federal legislation, but there are technologies
where we can help stop thisproblem by enhancing the
(20:15):
security measures in digitalmarketplaces to prevent some of
the stuff from so I'm getting tothat Just started, pedro, with
the informant.
Speaker 3 (20:24):
I mean it's correct.
So I need to kind of regulatethem at least.
But it's only the first step,which everyone obviously is
aware.
But you, still read.
Speaker 5 (20:32):
You're still requiring the merchants or the,
the operators of the digitalmarketplaces, to manage
thousands upon thousands ofRecentlers, which you're putting
them in the role of beingpolice of their own marketplaces
.
And generally you, gus, youknow as well as I do they will
react.
I think so.
When someone Notifies them of apotential problem.
(20:53):
They'll investigate it.
But to ask them to monitorevery single person, you're
basically it's the comment thatTed made earlier and the
conversation she said in Markhad you, we could put gates at
the front of every store and ithad.
Some of the Europeans do that,but it just becomes a burden on
everyone else.
So there are those measures arein place, but there's
(21:14):
technologies that can actuallyenhance the ability To stop that
behavior at the at the actualmarket place.
Speaker 2 (21:23):
One thing that strikes me was we talked is that
Eventually, sadly, all of thesecosts, whether it's technical
or more law enforcement or gopolice, the Yo, I'm her sights
those costs are going to getlarder back on to all of us at
every level associate I'm extraout of and it's going to be
larder on as additional costs.
We're gonna everybody's good,so kind of.
(21:45):
Coming back very briefly to anearlier theme in our
conversation, I think this isthis is a societal problem.
It's not just a retail problem.
I remember and I'm dating myselfbut I don't know how old I was
I literally took like a SingleBB gun target.
It must.
It was like less than a pennyand the dude followed me out of
(22:06):
the store I was hiding.
It was somebody like my fur I'mone and only attempted
joblifting.
The guy popped me in theparking lot and I never touched
anything again.
I was like less than a penny, Iwas scared to death.
That would never happen now.
And no, and I'm not saying I'mnot, I'm also not trying to make
a point for the quote-unquotegood old days.
Speaker 3 (22:26):
I just think that this is a huge societal Problem
that is more than just on theretailers and, if I may inject
one point there, there are anumber of community right now
that are actually going to someof these retailers and asking
them why aren't she doingsomething to stop our kid, you
know, from coming into the store?
(22:46):
There's one particular incidentthat we reported that high
school gets out at three o'clock.
20, 30 kids go to this onestore.
They steal the heck out of itand everybody just stay in the
fair and watch them and themanager says well, that's
because we can't touch them.
They go over to a smaller storeand the store manager standing
by the door and wouldn't evenallow me in.
We got community leadersthroughout the country going to
(23:06):
some of these retailers Askingthem to get involved in in kind
of getting up about it.
But once again, you know, youget the retailer in all kinds of
liability.
It may don't want anyone to gethurt over a shirt or blouse or
a candy bar.
I mean that's ridiculous.
Speaker 5 (23:24):
Yeah, I think we all agree that this is Mark.
I completely agree, and we nowknow that markets and
Shoplisters so.
I think we all agree that thatis a larger societal problem,
absolutely.
But if you go back to you knowChase's original question, if
you look at the RF study, youknow retailers who responded to
(23:46):
this are still telling you,regardless of what's in the
headlines, that over 50% of itOf strength.
So it tributed back to sometype of an internal process
issue and journal associateissue.
And if I'd heard you call itcorrectly, I'm still back to the
old days when I was now one ofthe black, to the old day.
That was our purpose, right,fix the process.
(24:08):
If you look about at any grow,any retailer that's in the
grocery business I don't thinkanybody's doing flash mob that
perishable products or any ofthose other things.
So there's still a significantfocus that needs to take place,
given the current labor market,given turnover, on Training
issues on basic shrinkprevention principles, inventory
(24:29):
controls, basic watering,analyzing data to determine
where your issues are, and RFIDis one of those components.
There's still a lot of basicblocking and tackling that the
industry can take and it'sstarting to focus on again from
my Savas fears of that LPRC twoweeks ago, for those of you
don't Understand, it's a lot forventure research council at the
(24:51):
University of Florida for thelisteners that may not Be
familiar with it and I haveseveral conversations with three
tellers and a couple of othersolution providers.
Out the conversation, althoughit remains important, focus on
our C and crime and all theseother issues to start Kind of
focusing again back inside thebox under internal process and
(25:14):
other training issues andassociate theft right, which
that's continued to be adecision.
Speaker 4 (25:21):
So when does a barcode turn into, say, full-on
RFID?
I mean, if Carter's with an AURof under $10 per item can put a
5 cent tag on, I think justabout anyone can, except for
small trinket items but whendoes?
What I love about RFID is itserializes every item.
So if you can certify that outof based on a serialized display
(25:43):
, you're going to try to returnthat.
You know what they're going toknow exactly where that came
from.
It was stolen.
If you've got the gates to showit, you've got the gates to
show who stole it.
So, and at some point, do weever have some kind of a body
that keeps track of that?
A knock, if he will, that theysee, razorblades just got stolen
from the target on Route 9 inFramingham and then all of a
(26:06):
sudden the Walmart gets hit onRoute 9 heading west.
So now you know, maybe at thethird store where the
Razorblades are, that you canhit them at the third store.
I mean, rudy Giuliani talkedabout the broken I hate to use
the name, but the broken windowconcept of all these train cars
that were getting painted withgraffiti, and what he did is he
(26:27):
hit them every time they gotpainted.
He put them in and he washedthem every night, and so when
you have graffiti, everythingelse looks bad, everything else
is a blight and so, but if youhit them back every time, and
hit them quickly, I thinkthey're not going to do it.
They're not going to do it asmuch anyways.
Speaker 1 (26:44):
So as we wrap up, pick one of your favorite
solutions, and we've establishedthere is a problem.
I think most was the consensushere that it was as bad as the
headlines say, or even worse, orwas there anyone who was on the
side of?
It's not as bad as they say?
Definitely it's bad, definitelygood.
If you had to choose onesolution, it's probably a
(27:07):
holistic thing.
Right, it's a lot of things,but what is one solution that
retailers that you would putyour money on Really do?
Rfid?
Speaker 5 (27:15):
Yeah, I'm going to have a biased answer, so I'm
shot out the link with the salespitch.
I'm trying to really make this.
I think the solutions are goingto be the evolution of
technology in the business.
I think RFID and properinventory controls are going to
be critical to stopping externaltheft.
But I think solutions that helpretailers take as much of the
(27:36):
decision process out of theemployee's hands as possible and
automate that decision processand then focus their employees
training on core issues and he'sjust going to provide general,
overall, better benefits.
Right, I am also like the restof my peers, except at the
Umbringer.
I have lived through several ofthese cycles.
(27:57):
They are a little bit magnifiedbecause of social media.
Inevitably, I've always fallenback on.
Where can I focus on bestpractices?
Back to core, and I justpointed down I think law
enforcement is taking a verypassive and process and they're
starting to come back.
So my solution is ourtechnology, because that's kind
(28:20):
of where I made my decision.
What's the technology solution.
Speaker 2 (28:26):
I would say this is probably 65% tongue-tied, but
35%.
I'd put the baddest lookingWagner mercenary in front of
every store and just have themfully vested.
I bet they wouldn't have totouch anybody, they just stand
there and be bored all day.
I would do something veryprovocative and very visible,
(28:49):
like the German Shepherd's inNew York City.
Yeah, I have the same with theMasson and Frowlin, oh well
that's going to go well.
Speaker 5 (29:04):
The German Shepherd's in New York City Everybody go
out and start.
Speaker 1 (29:08):
Oh, I know two retailers that did it, Gus.
What was your number onesolution?
Speaker 3 (29:13):
I would say there's two things.
Speaker 1 (29:17):
No, making the rules Only one.
Speaker 3 (29:20):
I got to say it is passing the current federal
organized retail crimelegislation in Congress.
That's an absolute necessity totruly get it on the boards, not
just within retail but in thelaw enforcement community.
A lot of this money that's beengoing into the law enforcement
(29:43):
locales like Newsom's and allaround the country doesn't
really end up going to fightingORC.
I mean there's got to be a bigpercentage of that that's
probably going to be psyched offat other places.
But anyway I don't mean to gothere.
But we have the Interact has ahuge effort right now, on the
(30:04):
26th tomorrow I believe it's the26th for a white retail crime
effort, which is what they'redoing is kind of bringing all
the people together in theindustry in order to be able to
communicate with their localrepresentative, senators and
such and show their support ofthe federal legislation.
(30:24):
We need this just to get on theblackboard, because right now,
if you look at the FBI crime indebt, we really can't determine
anything about ORC there.
It was hard enough to getshoplifting on the years ago.
That's one thing.
So it gets spanner F whiteretail crime day, looking up on
(30:46):
the net, on the web, and jumpingand getting involved.
And the second thing I'd liketo say is facial recognition.
I since we believe that thatcan be a very different
experience in the diamond agescenario is a necessity To
increase the safety and thesecurity of every box out there.
As long as there are parametersand it's able accordingly,
(31:10):
bottom line, those might dosalute.
Speaker 1 (31:14):
I think really three actually.
Speaker 4 (31:16):
So much took to a mind.
Yeah, but I just let him knowit.
Yeah, we put off.
Well, I think he is, he's.
I really how I'm gonna either.
I had you know, like.
Speaker 1 (31:27):
Yeah, we had RFID, we had technology.
Good answer.
Speaker 3 (31:31):
Pedro.
Speaker 1 (31:33):
We had a guard or some kind of physical presence,
knowing that we walk through thedoor.
And then Gus's answer facialand facial recognition.
This has been such aninsightful conversation.
Oh, did you have a?
Speaker 2 (31:45):
I just one one, one, one more observation for for my
colleagues here and for you tochase, I would I strongly
suggest that we stop calling itloss prevention.
It's theft.
Loss prevention is, like youknow, sounds like we're making
an excuse for something.
It's theft, whether it's comingout through the back door or a
sweet arning, or its splash mobsor its organized crime.
The industry should talk aboutkind of I don't know
(32:08):
militarizing its language aboutthis, because it's go backwards
to security.
Yeah, yeah, exactly, all right,pedro, I so anyway.
Yeah, I, I support Pedro andsecurity.
Speaker 4 (32:19):
So one thing that people forget about is that lost
, there's the loss, and thenthere's a loss to sell it to the
next customer.
The beauty I'll go back to it,rfid is that when those items
leave the store, you knowthey're gone, so you know to
replenish them right away,versus the next week, the next
month.
Macy's counts their entirestore once a month.
You're gonna wait 30 days toreplenish those items that
(32:40):
especially the items that justcame in for the season You're
out of stock.
So it's important to know whatleft, and so you know what left,
you know how to measure yourresults, and that's that's the
key thing for me the very goodpoint.
Speaker 1 (32:51):
Very good point, all good points.
Guys, this has been such aninsightful conversation for me
to be part of.
I feel lucky to be here and I'msure I'm sure the audience
feels the same.
We'll be sharing this acrossdifferent social channels.
We'll have clips and we'll havea replay available that we can
share with.
You know, any of yourcolleagues or Friends, or
anybody else you think it was,would would benefit from this.
(33:14):
Thank you all for being here.
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