LPPORTAL.COM | V14.6 NOVEMBER - DECEMBER 2015
LOSS PREVENTION
MAGAZINE THE VOICE OF LOSS PREVENTION
MANAGING THE FRONTIERS OF
RETAIL INNOVATION UNDERSTANDING THE POTENTIAL IMPACT OF MOBILE SCAN AND PAY TECHNOLOGIES ON RETAIL LOSSES STAYING CONNECTED TO THE FIELD WITH MIKE SILVEIRA OF CVS HEALTH LP AT AUTOMATED RETAIL GIANT OUTERWALL 2016 PRODUCT SHOWCASE AND RESOURCE GUIDE
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CONTENTS 6
PUBLISHER’S LETTER Welcome to Our New Digital Platform By Jack Trlica
8
ON THE WEB
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Managing the Frontiers of Retail Innovation
Understanding the potential impact of mobile scan and pay technologies on retail losses
By Professor Adrian Beck and Matt Hopkins, PhD, University of Leicester
27
Staying Connected to the Field
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RETAIL SPONSORS
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INTERVIEWING It’s All about Context: Part 4 By David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP
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CERTIFICATION Forging Partnerships With Cita Doyle, LPQ, InstaKey
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EVIDENCE-BASED LP Good Sensors Lead to Good Data By Read Hayes, PhD, CPP
38
FUTURE OF LP Things to Consider By Tom Meehan, CFI
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DIGITAL DIALOGUE When Dealing with Shoplifters, Safety Is Always Our First Option By Jacque Brittain, LPC
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SOLUTIONS SHOWCASE - Axis Communications - Intelligent Loss Prevention - Digilock - Industrial Security Solutions - LP Software - Securitime - The Retail Equation - Security Resources
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INDUSTRY NEWS - International ORC Summit Held in Florida - Second US-Mexico LP Summit
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ANNUAL INDEX
87
PEOPLE ON THE MOVE
87
CALENDAR
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ADVERTISER DIRECTORY
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VENDOR SPONSORS
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PARTING WORDS Reflecting on 2015 By Jim Lee, LPC
A conversation with Mike Silveira of CVS Health By James Lee, LPC, Executive Editor
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The Art of the Kiosk
Loss prevention at automated retail giant Outerwall By Chris Trlica, Contributing Writer
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2016 LP Product Showcase and Resource Guide
A special section for retailers looking for product and service solutions
4
2016 Product Showcase and Resource Guide
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PUBLISHER’S LETTER
MAGAZINE
Welcome to Our New Digital Platform
J
ust as the retail world is rapidly changing to meet the demands of a technology-enabled consumer, so too is the publishing industry. Today’s publishing consumer—our readers like you—consume information in a variety of ways. No longer is a printed magazine the only vehicle required. Now you might scan headlines with your smartphone app, read articles on your tablet, and receive timely updates in your email inbox. Not to mention tweets, blogs, and posts on your favorite social media. Keeping up with this challenge is not unlike LP professionals trying to keep up with omnichannel retailing and other marketing and merchandising changes moving quickly into both brick-and-mortar and online stores. Getting it right requires investment in both financial and people resources. For almost the past decade, we’ve provided content for our readers on our website. We’ve produced monthly, then weekly, then multiple emailed newsletters per week. We added an app, presented webinars, and produced videos and podcasts. All the while, focusing on original content from our writers and contributors who know the industry, not just spamming you with links to items on the Internet that may or may not be valuable or even factual. Last year we decided to up our game. We found a technology partner and invested in a new digital platform that has taken most of 2015 to implement. We launched the new platform in early November. As you read this, you likely have started to experience our new digital offerings. The foundation of the new platform is a fully redesigned website at LossPreventionMedia.com. Most, if not all, of the archives and content that lived on LPportal.com has been moved to the new site. Our print magazine is available in a viewer-friendly format on the new site.
We also maintain the PDF version of the print magazine. One of the more important changes is an e-newsletter series that will go out daily, sometimes twice daily, with short, focused editorial that will give you a quick read of what is important for the day. If you’re thinking, “More emails are the last thing I need,” we understand. The last thing we want to do is send you something you don’t want or can’t use. Our goal is to only send out a handful of items that we think will interest you. And if we don’t, we have given you an easy way to manage the content you receive. Our new website will require a login and password to access the entire site. The primary purpose of the login is to allow you to subscribe or unsubscribe to the content you want. The secondary purpose is to give us a glimpse of our readership by industry segment and role to help us better tailor the editorial we write to fit the profile of our readers. By now, you have hopefully received and responded to our welcome emails about the new web platform and are already enjoying the new website. If not, go to LossPreventionMedia.com and check out the new site. You’ll be prompted to sign up if you have not already. There’s news, special in-depth reports on a variety of topics, directory of products and services, and much more added on a daily basis. Our goal is that you will continue to trust LP Magazine to be your best source for all things loss prevention and asset protection.
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NEW OR CHANGE OF ADDRESS myLPmag.com POSTMASTER Send change of address forms to Loss Prevention Magazine P.O. Box 92558 Long Beach, CA 90809-2558
Jack Trlica Editor and Publisher
LossPrevention, LP Magazine, and LP Magazine EU are service marks owned by the publishers and their use is restricted. All editorial content is copyrighted. No article may be reproduced by any means without expressed, written permission from the publisher. Reprints or PDF versions of articles are available by contacting the publisher. Statements of fact or opinion are the responsibility of the authors and do not necessarily represent the opinion of the publishers. Advertising in the publication does not imply endorsement by the publishers. The editor reserves the right to accept or reject any article or advertisement.
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700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax EDITOR AND PUBLISHER Jack Trlica JackT@LPportal.com EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com EDITORIAL DIRECTOR, DIGITAL Jacque Brittain, LPC JacB@LPportal.com CONTRIBUTORS Dave DiSilva Read Hayes, PhD, CPP Richard C. Hollinger, PhD Walter Palmer, CFI, CPP, CFE Gene Smith, LPC Shane G. Sturman, CFI, CPP David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF MARKETING Merek Bigelow MerekB@LPportal.com DIRECTOR OF DIGITAL OPERATIONS John Selevitch JohnS@LPportal.com SPECIAL PROJECTS MANAGERS Kat Houston, LPQ Justin Kemp, LPQ Karen Rondeau DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com 704-844-6080 CREATIVE DIRECTOR Larry Preslar
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LossPrevention aka LP Magazine (USPS 000-710) is published bimonthly by Loss Prevention Magazine, Inc., 700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105. Print subscriptions are available free to qualified loss prevention and associated professionals in the U.S. and Canada at www.myLPmag.com. The publisher reserves the right to determine qualification standards. International print subscriptions are available for $99 per year payable in U.S. funds at www.LPportal.com. For questions about subscriptions, contact circulation@LPportal.com or call 888-881-5861. Periodicals postage paid at Matthews, NC, and additional mailing offices.
© 2015 Loss Prevention Magazine, Inc.
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ON THE WEB
EDITORIAL BOARD
Daily NewslettersSpecial Reports Careers EyeOnLP Videos News Education Industry Events Article Archives Webinars SDR Monthly Product Directory
LossPreventionMedia.com
Careers
Daily Newsletters Webinars EyeOnLP Videos Industry Events Education Special Reports Article Archives SDR Monthly Product Directory News
NEW MAGAZINE WEBSITE
Leo Anguiano, LPC Senior Director, Asset Protection, Rite Aid
Bob MacLea Senior Vice President, Loss Prevention, TJX
Shawn Blankenship Vice President of Asset Protection, The Home Depot
John Matas Vice President, Asset Protection, Investigations & ORC, Macy’s
Jim Carr, CFI Senior Director, Global Loss Prevention, Rent-A-Center
Chris McDonald Senior Vice President, Loss Prevention, Compass Group NA
Francis D’Addario Emeritus Faculty Member, Strategic Influence and Innovation, Security Executive Council
Randy Meadows Senior Vice President, Loss Prevention, Kohl’s
Charles Delgado, LPC Vice President, Asset Protection, Meijer Scott Glenn Chief Security Officer, Sears Holdings Tim Gorman Divisional Vice President, Loss Prevention, Asset Protection, and Business Continuity, Walgreens Barry Grant Chief Operating Officer, Canadian Images Bill Heine Senior Director, Global Security, Brinker International
NOVEMBER - DECEMBER 2015
Tina Sellers Director of Loss Prevention, Delhaize America Mark Stinde Vice President, Asset Protection, 7-Eleven Paul Stone, LPC Vice President, Loss Prevention and Risk Management, Best Buy Claude Verville, LPC Vice President, Loss Prevention, Safety & Hazmat, Lowe’s
Gary Johnson Vice President, Loss Prevention, The Vitamin Shoppe
Robert Vranek Vice President, Loss Prevention Belk
Paul Jones, LPC Senior Director, Global Asset Protection, eBay
Stanley Welch, LPC Vice President, Director of Loss Prevention, JCPenney
Mike Lamb, LPC Vice President, Asset Protection & Safety, Walmart Stores US
Keith White, LPC Senior Vice President, Loss Prevention and Corporate Administration, Gap Inc.
Karl Langhorst, CPP, CFI Corporate Director, Loss Prevention, The Kroger Co.
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Dan Provost, LPC Vice President, Global Loss Prevention, Staples
Frank Johns, LPC Chairman, The Loss Prevention Foundation
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Melissa Mitchell Director of Loss Prevention, LifeWay Christian Stores
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11
INTERVIEWING
It’s All about Context: Part 4 T
by David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP
he non-confrontational monologue delivered by the investigator has an evolving context between the guilty party and the investigator. The context changes significantly from sharing the opening biographical information to the discussion of how investigations are conducted. As the guilty subject listens to the investigator’s monologue, he or she is incrementally moved through reducing resistance to making an admission. This is all done in a collaborative non-confrontational way that allows the subject to preserve their self-image even in light of their participation in criminal acts. The key in the introductory statement is developing a context where the individual can come to their own conclusion about whether or not their guilt is known. In addition, if the same words are said to an innocent person these words have no effect because they have done nothing wrong. Essentially, the context provided by the first three parts of the introductory statement creates a collaborative environment where the guilty can come to their own conclusion whether or not their dishonesty has been discovered. In allowing the guilty party to come to their own conclusion, it prevents them from seeing the investigator as an opponent and someone to be challenged. This sets the stage for the next part of the non-confrontational interview where the investigator shows understanding for the subject’s plight and offers reasons and excuses that reframe the seriousness of the incident and preserve the subject’s self-image.
© 2015 Wicklander-Zulawski & Associates, Inc.
In essence, the human creature is a herd animal following the group when there is uncertainty. We watch the same movies. We dress in the same fashions. We go to the same restaurants. Effectively, we follow the crowd. The presentation of showing understanding to the subject reinforces the feeling that the interviewer is not an opponent but simply trying to understand the reasons why something has happened.
The presentation of showing understanding to the subject reinforces the feeling that the interviewer is not an opponent but simply trying to understand the reasons why something has happened.
Showing Understanding
The opening of showing understanding involves a presentation of a number of basic rationalizations by the interviewer that fit the background of the subject and plausibly could have been the reason the individual made the decision to commit a crime. These very basic rationalizations allow the interviewer to open the subject’s mind to the world of possible justifications for his or her actions and to test their applicability. The context at this point is a subject looking for direction that can be taken of one’s own free will without being told what to do. Certainly, the subject is also still suspicious of the interviewer’s motives and is carefully evaluating everything that is said. The choice of the first rationalization provides a continuation of the rapport building while offering the subject a way to potentially shield their self-image. The subject, recognizing that he or she has been caught, is now looking for a way to salvage an untenable situation. If he were to confess prior to the showing-understanding portion, he must admit that he was involved in the incident and is a bad person. The process of showing understanding provides
As the interviewer enters the showing-understanding portion of the non-confrontational interview, there is another shift in the context of the conversation. In most cases the subject has come to the conclusion that he or she been caught but has not been forced to take a position that must be protected. As the interviewer moves into showing understanding, the subject is generally uncertain what to do and is evaluating what the interviewer is saying. There is also likely some confusion as the subject searches for a way out of the situation. The interviewer uses stories as a metaphor, which helps the subject formulate a direction and potential strategy to handle the situation. The stories used by the interviewer involve social proof establishing how others handle certain difficult situations. While most people like to think of themselves as independent free spirits paving their own road, it is actually quite the opposite. When most people are uncertain as to what they should do in a situation, they actually seek validation of their decision in the acts of others. How are other people handling a difficult situation?
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Zulawski and Sturman are executives in the investigative and training firm of Wicklander-Zulawski & Associates (w-z.com). Zulawski is a senior partner, and Sturman is president. Sturman is also a member of ASIS International’s Retail Loss Prevention Council. They can be reached at 800-222-7789 or via email at dzulawski@w-z.com and ssturman@w-z.com.
continued on page 14
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wastebasket. Here the interviewer recognizes the financial burden of starting a new home and the financial pressure that puts on people. The story mimics the situation that the subject finds himself in, but that alone does not provide the full context of why he made the decision to commit the crime. The next rationalization brings the situation full-circle by changing the story to revolve around peer pressure. The young man who has just rented his first apartment and is for the first time fully realizing the financial implications is approached by someone else who can alleviate the subject’s money problems. The subject’s view of the preceding conversation fits neatly with his need to find a way out that reasonably explains his becoming involved in the crime. His financial needs coupled with the peer pressure of the other person who could provide the additional money that was necessary to get him out of his shortfall. The context has now changed again. The subject came to the conclusion that his guilt was known and now he has found a plausible explanation why he did what he did. Now the subject reevaluates the interviewer and re-examines the initial suspicions that he had of the interviewer. To handle this, the interviewer must now address the subject’s suspicions and remaining fear of consequences and create an urgency to make a decision. These lingering questions in the mind of the subject must be handled, or they will reinitiate a resistance against making an admission. Probably the strongest question remaining unanswered is why the investigator has not presented the evidence linking the subject to the incident. If this is unanswered, the subject’s context reverts to suspicion, which will foster resistance. The interviewer must handle this suspicion by changing the context of the conversation of evidence to one that would put the individual into a bad light. Effectively, the interviewer argues that giving up the investigation’s evidence would jeopardize how the subject was viewed by others. Once these final unspoken questions have been resolved in the subject’s mind, the context again changes to resignation of his situation. The interviewer tests for submission with a statement such as, “The problem is we don’t know what difficulties you face in your life.” Generally, the subject at this point in the interview responds with a nonverbal cue like a nod of the head to offer tacit agreement that both he and the interviewer are in agreement to talk about the situation. Since there is agreement between the parties, it is appropriate for the interviewer to use an assumptive question to begin the conversation. Because the subject has not denied anything up to this point and has tacitly communicated his agreement, the assumptive question provides an excellent starting point for the conversation to develop the admission. The development component of the interview takes on the context of collaboration as the interviewer and subject work together to develop the totality of the subject’s involvement in the incident(s) under investigation. This is not to say the subject might not use some measure of concealment to protect incidents he believes may not have been discovered as yet. In any conversation, in or outside of an interview room, there may be an underlying change in the context between the individuals speaking as the conversation evolves. The prudent interviewer tries to establish what that context is so that the words and physical behavior may have more meaning and give greater breath to the conversation.
In any conversation, in or outside of an interview room, there may be an underlying change in the context between the individuals speaking as the conversation evolves. continued from page 12
a context whereby the subject can put a positive spin on his circumstances to make him look and feel better. The first rationalization is selected based on the background of the individual and clearly could be the likely reason the subject became involved in the incident. The interviewer presents a story revolving around a rationalization that is the reason or likely reason the person made the error in judgment. While the story has little appeal to an innocent party, the guilty evaluate it in an entirely different context since they are searching for a way to relieve their guilt and/or make themselves look better. As later rationalizations are presented, the stories begin to align with the subject’s background more closely. For example, if a young male had just gotten his first apartment, the initial story could revolve around the financial implications of starting one’s first home. Everything has to be purchased new. There’s no salt or pepper, plastic bags, or food in the refrigerator. There’s no broom or
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COVER FEATURE
RETAIL INNOVATION MANAGING THE FRONTIERS OF
UNDERSTANDING THE POTENTIAL IMPACT OF MOBILE SCAN AND PAY TECHNOLOGIES ON RETAIL LOSSES By Professor Adrian Beck and Matt Hopkins, PhD
MANAGING THE FRONTIERS OF RETAIL INNOVATION
R
apid developments in mobile technologies now mean that some retailers are offering customers the opportunity to use their own devices to scan and pay for products in their stores, frequently with little or no staff interaction. For some this represents the natural next step in the seemingly relentless move toward giving consumers yet more choice and control over their shopping experience. For others it represents a significant and profound change in the extent to which retailers are able to control the problem of shop theft and non-malicious stock loss. This article presents the findings from a twelve-month study funded by the UK government’s Economic and Social Research Council (ESRC), undertaken by academics from the University of Leicester’s Department of Criminology, to understand how retailers are beginning to use mobile scan and pay technologies (MSP), what the risks of using it might be, how they are currently being managed, and how these risks might be mitigated in the future. The study is based upon extensive interviews with staff involved in the development and implementation of MSP systems across four retailers in the UK, two in the US, one in Belgium, and one in Holland. In addition, loss prevention practitioners were interviewed, analysis of shrinkage data from one retail partner was undertaken, and researchers also carried out on-site observation and testing in three of the retailers taking part. All retailers in the study were at different stages in the development of MSP, with one UK retailer piloting MSP across several stores, another was in the process of conducting a trial within one store, one had piloted a system though the company had (for the time being) shelved roll-out plans, and another had not got past the planning stage of a pilot project. All four international retailers taking part had rolled out MSP to varying degrees, with three currently running versions across a number of their stores, while one had recently withdrawn the option from a group of trial stores. Across the majority of the retailers taking part, MSP was currently focused upon only offering customers the opportunity to use their own mobile
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The development of fixed self-scan technologies required a considerable leap of faith in the integrity and honesty of the shopper, who needed to be trusted to scan and pay for all items they wished to purchase. With the introduction of mobile self-scanning and payment, then arguably this leap of faith becomes even greater as the potential opportunities for risk-free noncompliance grow yet further. device to scan items, rather than developing a payment wallet. Only one retailer in the study was currently trialing both a scan and payment wallet with its MSP system.
Innovation and Retailing
The cornerstone of modern retailing is the necessity to innovate and change. As competition increases and consumers become more and more demanding, the pressure to offer new and exciting products in dynamic and enthralling retail spaces, some of which now reside in cyberspace, continues to grow. This has driven a number of developments in the customer experience in recent times, moving from a time when most products were primarily held behind a counter to one where
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the consumer now has much greater engagement with, and responsibility for, the selection and purchase of goods. This is best exemplified by moves toward open display and, more recently, the use of fixed self-scan checkouts where customers not only have to find and select items themselves, but also are expected to take responsibility for payment as well at dedicated self-scan checkouts. Alongside this has been a rapid growth in mobile commerce and online shopping, allowing customers to search and pay for products online via their own computers, tablets, or mobile devices. Most recently, and the focus of this article, is the development of systems that allow the customer to use their own mobile device “in-store” to not only scan items they wish to purchase, but
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MANAGING THE FRONTIERS OF RETAIL INNOVATION also in some circumstances pay for them using the same device through the use of downloadable smartphone apps, anywhere in the store. All of this can be seen as part of long-term changes in the retail industry where increased customer autonomy and self-service is being introduced at the expense of formalized staff-customer interactions. These changes have generated impressive rewards for some retailers—fewer staff need to be employed, and store designs can be radically changed to maximize the display of goods, both of which have led to significant increases in sales and retail profits. However, there is a price to pay. More open and less-controlled retail spaces make it not only significantly easier for motivated offenders to steal products, but also reduces perceptions of risk for customers, encouraging more to think about taking advantage of the new opportunities for deviancy presented to them. For instance, the development of fixed self-scan technologies required a considerable leap of faith in the integrity and honesty of
the shopper, who needed to be trusted to scan and pay for all items they wished to purchase. With the introduction of mobile self-scanning and payment, then arguably this leap of faith becomes even greater as the potential opportunities for risk-free noncompliance grow yet further. Many of the risk amplifiers introduced to provide a modicum of control at fixed self-scan checkouts, such as weight control and employee oversight, are stripped away leaving relatively few options available.
Perceived Benefits of Mobile Scan Technologies
Although the pace at which MSP systems were being developed and implemented across the retailers included in this study was slow—and in many cases not without difficulties—respondents highlighted several potential benefits. These included consumer convenience and the streamlining of the purchase process. As one respondent stated, “Customers don’t have to empty their trolley [basket] and reload it all again at the end, which ultimately speeds up the process.”
It was also positively perceived to enable customers to know exactly what they have spent at all points of the shopper journey and pay within the aisle rather than at a payment bank at the end of the shopping journey. Indeed, the potential for the “personalization of shopping” was thought beneficial as it allowed the customer to keep a closer track on their purchase history and any loyalty points accrued. Another benefit for customers was thought to be the ability to utilize geolocation data and real-time messaging with integrated webpage or store hubs. Geolocation data could allow stores to identify where customers are in-store, which could then be linked to store maps and directions to specific products. Integrated webpage/store hubs would allow customers to browse goods via the retailer webpage, while also being sent information about where the products are located in-store, if they are available, and at what price. There is also the potential to relate items purchased to other commonly purchased items, such as shaving gel to
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MANAGING THE FRONTIERS OF RETAIL INNOVATION razors, tonic to gin, or children’s shoes to children’s clothes, and to send the customer real-time push notifications about offers on other related products. Benefits were also identified for retailers as well. While much has been made of the potential savings that might be made on staff costs as a benefit of customer self-checkouts, this was also cited as a key potential benefit of MSP. For some retailers the use of this technology would
offer two staffing-related opportunities—to enable more staff to be utilized away from checkouts and on to more customer-focused services such as in-aisle assistance, and a reduction in the overall staff hours allocated to stores. An add-on effect would be savings on the purchase costs of physical checkout equipment as less would be needed, as well as the associated maintenance and cash-handling costs. In addition, less
physical checkout equipment would free up more space for product displays. Other key benefits related to customer retention and the marketing of products. As eluded to above, forms of loyalty bonuses and product offers could be offered to MSP customers. Ultimately, registering customers as MSP users would also allow retailers to hold even more information about them that could yield shopping pattern data,
Technological and Process Challenges of MSP
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CHALLENGES
DESCRIPTION
Phone types
At present systems tend to support Apple devices, not those using Android or Windows operating systems even though Apple accounts for only about 20 percent of the smartphone market.
Slow app downloads
Registering and downloading the app can be slow and frustrating.
Registration and getting started
In most of the trial companies, getting started in store was challenging. Available leaflets were often unclear, with the steps to be taken often proving to be confusing and opaque.
WiFi access/passwords in store
Accessing in-store WiFi was sometimes difficult and confusing.
Problems scanning barcodes
Scanning barcodes using a mobile phone can be difficult. There was often glare from store lights depending upon angle and type of product packaging. However, persistence usually led to a successful scan, although all were much slower than infrared systems. There was considerable difference in barcode identification rates between retailers. Some were significantly faster than others, and this had a major impact on the shopping experience.
Multi-buys
When buying the same item several times, the in-app process could be laborious in some of the MSPs as there was no facility to enter quantity.
Three hands syndrome
Holding the phone, selecting items from the shelves, and pushing a trolley or holding a basket is difficult to manage. It also increases the likelihood of dropping the mobile device.
Phone battery life
Some apps required a large amount of battery power, which could be problematic on extended shopping visits.
WiFi dead spots
On several visits to one retailer, the WiFi connection consistently cut out in a particular part of the store.
Voiding purchases
This sometimes requires a product re-scan, but this did not always cancel the purchase. In most of the trial stores, the researchers were able to easily crash the app through multiple voiding of products.
Age restrictions
Purchase of age-restricted products always required staff intervention at the payment stage. Only some of the apps made the consumer aware of this requirement.
Product protection: safer cases/EAS hard tags
Purchase of items with hard product protection devices attached required staff intervention to remove the device. Only some of the apps alerted the consumer to the need for tag removal.
Product protection: EAS soft/source tags
In the one retailer using this technology, there was no facility to deactivate soft EAS tags. The exit alarm would always be activated when MSP customers left who had purchased a soft-tagged protected product.
Payment QR codes
Payment QR codes did not always work, and verification bar codes proved highly unreliable. It was also found that not all commercially available QR readers would read the displayed codes. In one store, the researchers had to download two QR apps before being able to continue.
Non-country registered users
In some countries, the UK-based researchers could not use the MSP systems because either the app was not made available in the country app store or the app required a local address or loyalty card number.
Payment wallets
Many systems still rely on payment at fixed payment terminals through cash or card, rather than through a payment wallet.
Paying and security audits
Payment process was often slow, and audit checks were sometimes frustrating.
Shopper distraction
It is easy to forget to scan items before placing in bag/basket/trolley, particularly when searching for other items or chatting to friends and family.
Ineligibility for vouchers
In the company with a payment wallet option, those consumers making use of this facility could not receive the voucher options available to non-MSP customers.
Non-scannable barcodes
While overall scan accuracy was high, on two occasions products would not scan, which meant the shopping trip could not be completed. One was a faulty barcode, while the other was a system product setup issue. A single point of failure can add significantly to customer inconvenience to the point the MSP shop had to be abandoned and conventional shopping journey taken instead.
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MANAGING THE FRONTIERS OF RETAIL INNOVATION enabling opportunities for yet further personalization of the shopping experience. Despite these perceived benefits, the research revealed a considerable number of problems associated with using this type of technology, which are summarized in the table below.
Potential Impact on Theft and Loss
The study found that MSP systems were likely to impact upon crime and loss in at least four ways: Theft through malicious non-scanning of goods. Non-malicious loss through non-scan or scanning errors. Physical and verbal abuse against staff generated via audit checks. Transaction frauds or fraudulent use of payment wallets. Respondents to the study were particularly concerned about the increased risk of theft, but not necessarily from what might be regarded as professional thieves. As one respondent put it, “Moving toward the ultimate in self-service [MSP] not
only might send out the wrong physical cues to potential offenders, but also those shoppers who might not necessarily plan to steal may start to take opportunities to exploit weaknesses in systems.” Thus, retailers using MSP might actually begin to encourage shoppers who fully intend to scan and pay for products to engage in criminal activity. Another respondent said, “What you might see is people who traditionally don’t intend to steal, but realize when I buy twenty, I can get five for free. Maybe I’ll continue to do that.” There are a number of factors that might begin to explain why this could happen. Ease of Effort and Access to Products. Whereas traditional counter shopping limits access to goods, the rationale for MSP is that customers have open access to products and take responsibility for payment with limited or no staff involvement. As one respondent observed, “It’s the ultimate in trust.” Another said, “They call it ‘Scan and Rob.’” Thus, MSP potentially promotes ease of effort for theft by removing any human contact throughout the shopping
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process and in some cases—possibly most importantly—at the final payment stage. Increased Rewards for Offenders and Non-scanners. The MSP environment might generate long-term rewards for offenders and non-scanners. Indeed, several respondents suggested that non-scanning behavior could become part of the routine behaviors of some shoppers, and they may begin to target stores where this shopping option is offered. Reduction in Risk Perception. A number of studies have shown the important role staff presence can play in reducing the risk of theft occurring, typically by making any would-be offender feel there is a greater risk of being caught. Within the MSP environment the potential for staff to interact with consumers is markedly reduced—sometimes to the point where no contact whatsoever is necessary. This could act to significantly reduce the perceived risk of non-scanning items. Likely Excuses. Self-scan technologies present the user with ready-made excuses as to why products may not have been
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MANAGING THE FRONTIERS OF RETAIL INNOVATION scanned properly—what the authors have termed the “self-scan defense.” Giving customers the freedom to self-scan gives them the opportunity to blame faulty technology or problems with the product barcodes, or to claim that they are not technically proficient as reasons for non-scan. Indeed, proving intent can be tricky—“I scan twenty items, and I don’t scan five; am I a thief or just someone who’s not very competent?” While some retailers had made efforts to tackle this problem, such as in-app prompts requesting confirmation that all items had been scanned and sharing non-scanning behavior between retailers, analysis of audit data and interviews with staff suggest that virtually all identified non-scan transgressions were typically condoned by the retailers, leading to no formal sanctions whatsoever. As things stand, the self-scan defense is potentially a powerful tool for diluting any risk of being found not to have scanned certain items when utilizing MSP. Likely Provocations. At present, there are a number of points in the MSP shopper journey that could trigger
disputes with staff. Store visits identified frustration points when products would not scan, when staff had to intervene to remove EAS devices or do age verifications, and when payment wallets would not work. In addition, audit checks (random checks carried out at the point of payment) could also cause grievances especially if particular customers felt as though they were being targeted.
Impact on the Rate of Shrinkage
While a number of retailers have been operating versions of MSP for the last few years, no data has been published to date analyzing the impact these systems have on rates of store shrinkage. One of the retailers taking part in this study did agree to share data although to protect their anonymity, we will not disclose the currency of the numbers being presented. The retailer is a multi-billion [dollar/ euro] business with many hundreds of stores providing a wide range of products. As part of their MSP process they carried out random audit checks on
those utilizing the technology. They also provided the consumer with a retailer scan gun to perform the same function as their mobile device. Over a twelve-month period, covering 12 million shopping trips encompassing just over 1 billion in sales, they undertook just over 1 million audits that involved checking 6 million items (staff were limited to checking on average six items per basket). Staff found products with a value of 850,000 had not been scanned out of a total audit value of 21 million. This generated a shrinkage rate of 3.97 percent (calculated as a percentage of retail turnover). The overall company average for shrinkage was 1.47 percent. Therefore, the mobile scan rate was 170 percent higher. This is a profound difference, and with retailer profit margins being continually squeezed, it would appear to make this form of shopping at best borderline profitable for some businesses. The study was not able to ascertain what if any savings the retailer had made from introducing the technology, such as continued on page 22
Behavior Control through Risk Amplification The Shopper Journey Pre-visit
Store Entry
In-Store
Store Exit
Post-visit
Risk Amplification Opportunities Identity Awareness & Verification
Scheme sign up
Deviancy Notification
Deviancy Response
In-store location mapping
Product-driven guardianship
Geo-fencing alerts
Product-proximity tracking
Non-scan notification
App locking
Log in on arrival
Product-related messaging
Product-related messaging
Identity confirmation
Discount messaging
Location awareness
Pre-visit messaging Mobile device registration
Some Current Capacity 20
Virtual Visibility & Communication
Scan accuracy prompts
Post Visit Confirmation
Payment control
E-receipts
Audit risk
Future shopping vouchers
Exit control
Employee notifications
Detagging point
Employee interventions
Age-related check point
CCTV tracking
Little or No Current Capacity
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Checkout & Exit Control
Main Current Capacity
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MANAGING THE FRONTIERS OF RETAIL INNOVATION continued from page 20
reduced staffing and equipment costs, which may have mitigated these losses, nor was it able to shed light on what proportion of the non-scan events were malicious or non-malicious in nature. That is, were customers trying to steal, or had they genuinely forgotten to scan the items due to difficulties with the technology, distraction, or absentmindedness? This is a critically important question in determining how to generate risk amplification with this form of shopping. If it is predominantly malicious, then this points to the importance of risk amplification through approaches such as audits to act as a credible deterrent; while if it is largely non-malicious, then it points toward the need to improve consumer communication and awareness training.
Amplifying Risk for the Mobile Shopper
As things currently stand, the retailers taking part in this study had only two points in the mobile shopping journey when they had an opportunity to amplify the risk—at the point of store entry when users must register or sign in to use the system and at the point of payment when a user could be subject to an audit check. The first opportunity generates some risk by reducing the degree of anonymity as the store lets the user know that they have arrived, while the second increases the risk of non-scanned items being identified in a shopper’s basket, although proving intent to purposely non-scan remains problematic. For the rest of the shopping journey, there is little or no capacity to amplify risk. Traditional forms of security such as guards, CCTV, and product security tags offer little in the way of a viable concern to the mobile shopper. They can simply move through the store placing products in their basket or shopping bag without any real opportunities to verify whether they have been scanned or not. Detailed in the chart on page 20 are some of the ways in which risk could be amplified across the entire shopping journey for the mobile shopper of the future. While there is not sufficient space to discuss them in detail at this time, the key is to develop ways in which the
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The study found that mobile scan and payment systems were likely to impact upon crime and loss in at least four ways—theft through malicious non-scanning of goods, non-malicious loss through non-scan or scanning errors, physical and verbal abuse against staff generated via audit checks, and transaction frauds or fraudulent use of payment wallets. mobile shopper perceives that they are operating within a controlled space—that non-scan activity in particular will generate a response and that they will be easily associated with that activity. Some of this can be achieved through better registration and user monitoring systems, but the majority of the risk amplification could be done by the products themselves—essentially they could become their own guardians and amplifiers of risk. This could be done through direct communication with the shopper—“Excuse me; I think you forgot to scan me”—or through communication with store staff—“Customer X has not scanned me; you may want to offer assistance.” For this solution to become a reality, technology providers need to develop the next generation of product tagging—moving beyond the well-known limitations of radio frequency to utilize new ways in which objects can communicate with each other. This may then begin to deliver the much vaunted, but ultimately flawed businesses cases developed as part of the RFID bubble. MSP may be the trigger to generate the technological innovation that finally begins to deliver true product transparency across the retail supply chain.
the moment. This research found that it was not terribly easy to use, relatively few consumers had taken up the opportunity to utilize it thus far, and a number of technological barriers remained. However, research on current usage does shed some important light on how consumers may use and abuse such systems and how increasing customer autonomy in the retail space, particularly when perceptions of risk are reduced and sanctions are difficult to apply, can lead to very adverse outcomes for a retailer’s bottom line. Amplifying risk across the shopping journey is critical, but it needs to move beyond the current foci and requires the industry to develop new ways in which products themselves can be tasked to become their own guardians. If not, then there is a real danger that the mobile shopper of the future will routinely rely upon the self-scan defense to generate their own discounts.
The Industry Challenge
Without doubt innovation in the consumer shopping experience will continue at a rapid pace. Whether consumers using their own mobile devices to scan and pay for items will become mainstream is certainly open to debate at
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PROFESSOR ADRIAN BECK and MATT HOPKINS, PhD, work in the Department of Criminology at the University of Leicester, UK. For a free copy of the research report Developments in Retail Mobile Scanning Technologies: Understanding the Potential Impact on Shrinkage and Loss Prevention, please email Professor Beck at bna@le.ac.uk.
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ACADEMIC VIEWPOINT CERTIFICATION
Forging Partnerships
Interview with Cita Doyle, LPQ Cita Doyle, LPQ, is the director of sales and marketing for InstaKey Security Systems. In over fourteen years of security consulting, she has published many articles, hosted multiple webinars, and conducted national training seminars. Doyle openly shares her knowledge and experience through education of effective key control practices. She is also an active member of The Loss Prevention Foundation, ASIS International, and the National Retail Federation, and serves on the Vendor Advisory Board for LP Magazine.
T
his is another in a series of interviews with working professionals who have earned their LPQ or LPC certifications from the Loss Prevention Foundation (LPF) to hear in their own words why they pursued certification and how it has benefited their careers.
I have more confidence and truly feel it has made me a better leader professionally, both inside and outside of my organization. I have a better empathy and understanding for the role and challenges that loss prevention professionals and retailers face. As a result, our organization implemented sharing best practices in all of our marketplaces as we realized that one’s pain is usually shared by others.
When did you get certified? I received my LPQ certification in 2012. Why did you decide to pursue certification? From the initial start of the LP Foundation, our organization saw value in promoting education and growth in our industry and became a sponsor. Several members of our team, myself included, decided to go through certification so that we could have a better understanding of the role that loss prevention plays in the retail industry and learn what we could do to offer more value. How would you compare certification to other educational courses that you’ve taken? Most courses that I have taken focus on one topic or practice. This certification covered more of a global operational business approach. Tell us more about the process. Having the coursework online really made it easy to work on at home and on the road traveling. The coursework was laid out very well and was easy to go through. Having videos to review was very helpful as well. When we went to take the proctored exam, the questions were more challenging than the coursework practice questions. You really had to think about what was being asked and apply what you learned.
How has certification changed your expectations of loss prevention as a career, for yourself and for others? I have been a security solution provider for almost fifteen years in multiple marketplaces. After going through certification, I have even greater respect for this industry. I am very proud to be part of it. Is there anything else that you would like to share regarding the learning experience? I would highly recommend that solutions providers consider going through certification. Beyond learning more about retail operations and loss prevention, this course gave me a greater understanding of what our vendor community provides and has allowed me to make introductions that have created valued relationships and partnerships.
How has going through the certification process influenced the way that you approach your job? I have more confidence and truly feel it has made me a better leader professionally, both inside and outside of my organization. I have a better empathy and understanding for the role and challenges that loss prevention professionals and retailers face. As a result, our organization implemented sharing best practices in all of our marketplaces as we realized that one’s pain is usually shared by others.
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NOVEMBER - DECEMBER 2015
continued on page 26
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Newly Certified Following are individuals who recently earned their certifications.
Recent LPC Recipients
David Scully, LPC, CVS Health Amy Spiehs-Hicks, CFI, LPC, CVS Health Charles Vega, LPC, Rite Aid Mark Wyand, LPC
Ronald Benkey, II, LPC, Lowe’s Amanda Bowen, LPC, Outerwall Bernard Brown, Jr., LPC, Belk Department Stores Christopher Caruthers, LPC, Publix Super Markets Andria Chrabot, LPC, Macy’s Logistics and Operations Mo Ferdause, LPC, Ahold USA Michael Forgione, LPC, Sterling Jewelers Jacob Gordon, CFI, CFE, LPC, Mattress Firm Sheila Hunt, LPC, Sears Holdings Eric Ives, LPC, FBI Headquarters Nicholas Mayer, LPC, Ahold USA Lindsey Miller, LPC, Brookshires Grocery John Norman, LPC, Lowes Food Stores Shawn Norris, LPC, The Vitamin Shoppe Christopher Ochs, LPC, Quality Food Centers Brandi Priest, LPC, Strategic Sustainable Solutionary Services Consulting Russ Raymond, LPC, Ahold USA Erik Robles, LPC, Stage Stores John Robson, Jr., LPC, Walmart Stores James Roper, LPC, Meijer
Recent LPQ Recipients Eva Alvarez, LPQ, Bed, Bath & Beyond Robert Brady, LPQ, 7-Eleven Gabriel Daigle, LPQ, AT&T/Cricket Communications Justin Gantz, LPQ, Zallie Supermarkets Ryan Hepburn, LPQ, Securitas Security Services USA Rick Hughes, LPQ, retired Wesley Justice, LPQ Timothy Larson, CFI, LPC, LPQ, Lowe’s Leneda Maxey, LPQ, Goodwill Industries International William Miller, LPQ, Delhaize America Sharon Myers, LPQ, Ahold USA John Sand, LPQ, Webster University Sylwia Urbaniec, LPQ, CAP Index Matthew Webb, LPQ, Lowe’s Ryan Wiltz, LPQ, Army veteran
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INTERVIEW
STAYING CONNECTED TOTHE FIELD
A CONVERSATION WITH MIKE SILVEIRA OF CVS HEALTH By James Lee, LPC, Executive Editor
INTERVIEW
EDITOR’S NOTE: Mike Silveira is vice president of loss prevention for CVS Health. Prior to CVS, he held numerous management positions with Home Depot. EDITOR: How did you get started in loss prevention? SILVEIRA: After high school and through
college, I wanted to become a police officer. But before trying to join the police department, I had a part-time job at Ames Department Store in 1988 as a store detective. I’m proud of that background because CVS employs about 500 store detectives, and it’s important for credibility when you can provide leadership around issues in the stores with a history of being a store detective. I later joined the Providence [CT] Police Department, but after getting married and moving to Boston, I re-evaluated my career path. Thinking about my LP experience with Ames, I
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decided to get back in the industry, so I took a job with Home Depot as an in-store loss prevention manager. That position grew to two stores and then a region. I had a very exciting career at Home Depot with lots of growth in the nearly ten years I was there. Leaving Home Depot was something I never thought I would do, but I had an opportunity to join a company that was right here in New England, a company that I grew up visiting and shopping at with my parents—CVS/pharmacy, which today is part of CVS Health. I took on a director role at CVS, managing a loss prevention team throughout New England for about seven years. I was then asked to take on the
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leadership role of the department, which was extremely exciting knowing that the company was growing so quickly. We have such great people here, and having the opportunity to lead this team was an easy decision to make. EDITOR: What is your current position at CVS? SILVEIRA: I’ve been vice president of loss
prevention for eight years and have been with CVS Health for about fourteen years total. EDITOR: As you reflect back on the beginning of your career at Home Depot, did you ever imagine that you would become a VP of loss prevention? SILVEIRA: I think lots of entry-level
loss prevention people aspire to be in leadership one day. It starts with drive. I
LOSSPREVENTIONMEDIA.COM
INTERVIEW
Despite our very effective field structure, I also think it’s important for me to personally get out into the field regularly to keep close tabs on what’s happening in the stores and what’s happening in the market. I’m the kind of leader that likes to be involved, likes to understand the details, and knows the importance of sticking close to the stores. had a drive to excel and take on new roles and more responsibility. I was hopeful and driven toward it. When I was given the opportunity, it was a very exciting step in my career, like it would be for any LP professional. I’m very proud of this organization and proud to work here. I appreciate the opportunity that they gave me to lead. EDITOR: When young people sit across the desk from you and say, “Someday I’d
like to have your job,” what advice and counsel do you give them? SILVEIRA: I think what’s most important
is to have a good work ethic. And that includes the professional life of a driven person balanced with home life. I can think back to hundreds of conversations I’ve had with my wife about achieving success, and I’ve always gotten outstanding advice. There’s a tremendous amount that you need to learn before you take on
LP MAGAZINE | NOVEMBER - DECEMBER 2015
a leadership role. It’s very important to be patient. Learn as much as you can about the industry—the role, strategies, techniques, organizational structures, and the business side of the house. Understand budgeting, forecasting, and shrink budgeting for the front of the store as well as for anything specialized the company does, such as the pharmacy in my case and the many facets of the Caremark side of our business. I think being innovative and reinventing yourself every year is also a key component. Being an outstanding leader, who is fearless and willing to take risks, is also an extremely important attribute that helps lead you to succeed in this industry. It’s important to give people good, solid feedback that is honest and direct and that people can learn and grow from. One of the things that I really value in my role is being able to get in front of the team frequently and be able to talk about issues at ground level. EDITOR: What does your job as VP entail? What functions report to
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INTERVIEW you? What do you regard as your main responsibilities? SILVEIRA: My primary responsibility is to
administer an innovative loss prevention program across the enterprise, which includes our retail segment and our distribution centers. We also administer an audit protocol and action planning to mitigate shrink. I also provide LP service to our PBM—the prescription benefit management business, which includes physical security and fraud-related investigations. And then there’s also a component on safety where we manage and measure the accident frequency rate in the distribution centers. EDITOR: How many stores does CVS have now? SILVEIRA: We have more than 7,800
retail locations. EDITOR: With such a large number of stores, how have you structured the LP program? SILVEIRA: We have nine area directors that
manage the field. They have senior regional LP managers that manage anywhere from eight to ten regional LP managers (RLPMs). Then our RLPMs, among many other duties, lead a market investigator team. I also have three senior directors here in the office responsible for operations, analytics, and compliance. Despite our very effective field structure, I also think it’s important for me to personally get out into the field regularly to keep close tabs on what’s happening in the stores and what’s happening in the market. I’m the kind of leader that likes to be involved, likes to understand the details, and knows the importance of sticking close to the stores. EDITOR: What do your boots-on-the-ground people out in the stores spend their time doing? What are their priorities on the job? SILVEIRA: The market investigator team
is responsible for external shoplifting and some internal theft identification. The RLPMs are really our boots on the ground with respect to executing and implementing our shrink-reduction strategies in the stores. They facilitate post inventory and shrink action plans in
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all stores. They monitor what seems like hundreds of reports that help monitor growth. We also work hard to predict stores that will have high shrink and then deploy countermeasures in the event that current action plans aren’t working. They also deploy a very aggressive baseline audit that covers all aspects of the retail business and really measures operational conditions. And they are responsible for internal investigations in the front store and the pharmacy. EDITOR: What value do you place on cross-functional relationships in achieving your objectives, including with operations, finance, and merchants? SILVEIRA: Those are key priorities for
us. Having cross-functional partnerships with finance and merchandising is an absolute must. We would not be able to execute a strategy without having good relationships with our merchants, for example, and that will drive how we deploy what product-protection devices we use. The finance team is critical for budgeting and forecasting, so the relationship has to be there and has to be effective. I structure the field so that there’s always an “operating mirror” so that our LP management team has a corresponding partner from our field
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management organization—area LP directors partner with our area vice presidents, senior LP managers partner with our regional sales managers, and so on. Having a strong partnership in the field is just as important as having a strong partnership in the corporate office. I pride myself on our team being completely ingrained in the business. We are a true business partner within the organization. EDITOR: Were there any surprises or challenges that came with the role as VP? How did you deal with them? SILVEIRA: There are always challenges
in a company as large and complex as ours. But those challenges are exciting and fun. We don’t really have the sort of challenges that prevent us from moving forward. We get our heads together, we figure it out, and we move on. EDITOR: What important strategies or technologies have you implemented in order to achieve your objectives? SILVEIRA: We recently created an
exception-reporting program that is tailored to CVS and is really dynamic and powerful. It has been a tremendous effort, but it lets us get truly groundbreaking and innovative with how we detect drug
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INTERVIEW
Diversion detection and diversion management in the pharmacy continue to be primary focuses for us and not only from a shrink perspective. We do measure shrink in the pharmacy, and we’re proud of that number, but diversion has a community impact when drugs get on the streets, so we take that very seriously. diversion. It’s amazing how much more efficiently it lets us size up an investigation and bring it to a close. Also, I think that our team that works on innovations around product protection has been extremely creative with balancing a good product-protection program with the importance of the service-oriented nature of our company and ensuring our customers have convenient access to the products we sell. We’ve been
very nimble with regard to striking that balance between customer service and managing our external theft. In the pharmacy we’ve rolled out some innovations around GPS tracking with respect to robberies, and we’ve recently started to install time-delay safes, which are important tools to help protect our pharmacies. EDITOR: Is there a different mindset or different set of action plans that you
LP MAGAZINE | NOVEMBER - DECEMBER 2015
have for the pharmacy as opposed to the main store? SILVEIRA: The front store is similar to
a traditional retailer. Just like any other retailer, the front store is susceptible to external theft, and we have initiatives that go after the very small number of our customers that do choose to shoplift. The pharmacy is a little different because it’s a secured environment. There is basically no external theft unless there’s a robbery, so we have and are continuing to deploy initiatives to address internal diversion in the pharmacy. Diversion detection and diversion management continue to be primary focuses for us and not only from a shrink perspective. We do measure shrink in the pharmacy, and we’re proud of that number, but diversion has a community impact when drugs get on the streets, so we take that very seriously. The pharmacy is also a more complex side of the business with respect to the regulations that govern the business. Investigations involve the DEA for example, so they’re obviously more complicated.
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INTERVIEW
EDITOR: How does your responsibility for LP logistics distribution functions and supply chains differ? SILVEIRA: We do have merchandise going
through our distribution centers (DC), so there’s a component of our plan that targets internal theft in those facilities. Another component manages systemic shrink in the DCs. And for prescription drugs, there’s a diversion component that also extends all the way through our supply chain. There is also the safety aspect of managing a warehouse, managing our accident frequency rate, and deploying efforts in support of our safety group to minimize as much as possible the number of accidents that we have in the DCs. EDITOR: You have an environment that is susceptible to ORC issues. What have you done to handle ORC over the years? SILVEIRA: I am really proud of our ORC
team here at CVS. They’re a six-person team led by Jim Lynch and Tony Shepherd, who both come from law enforcement and LP operational backgrounds. They do an outstanding job with a small staff of people who are spread around the country in strategic locations. The team has done a tremendous amount of work with local, state, and federal law enforcement. They really have been able to deploy an ORC program that is collaborative, effective, and results-oriented with our partner retailers. And their recovery rates have been outstanding. Whenever I look at their results, I am just so impressed with how well they partner with not only other retailers within the pharmacy and convenience store sectors, but also some of the big-box retailers. Their relationships with the police, which are obviously an essential part of an effective ORC program, are outstanding. EDITOR: Other than in the ORC arena, are there other ways you collaborate with retailers, especially other pharmacy companies? SILVEIRA: I have a very good
relationship with Tim Gorman at Walgreens and Bob Oberosler at Rite Aid. We talk every once in a while about
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I have a very good relationship with Tim Gorman at Walgreens and Bob Oberosler at Rite Aid. We talk every once in a while about more specific strategies. Robberies have been one of the more recent items on our agenda that we discuss and share specifics and really support each other. And I’ve always been really happy with the relationship that we have because it extends beyond any kind of competitive discussion. more specific strategies. Robberies have been one of the more recent items on our agenda that we discuss and share specifics and really support each other. And I’ve always been really happy with the relationship that we have because it extends beyond any kind of competitive discussion. The loss prevention and asset protection folks all share common goals. The same risks affect us as affect Rite Aid or Walgreens, so I’ve always been very open with Bob and Tim, and they have always had a willingness to share. The three of us have had a very effective partnership.
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EDITOR: What programs at CVS do you have for educating and training your LP team? SILVEIRA: Education and continuing
education are extremely important to me. We have a number of training programs that make us much stronger. We have somebody on our team that manages development and training and oversees the deployment of these programs. In addition to ongoing training within the company, I think that industry training is very important. The Loss Prevention Foundation, for example, is
LOSSPREVENTIONMEDIA.COM
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INTERVIEW continued from page 32
one group that is extremely important. My personal involvement with the foundation is relatively new to me. I’ve been a board member for just over a year now, and it’s extremely exciting to be part of this group of leaders. And the LPC certification program is one that we’ve planned for and are going to be deploying internally as a program to
really enhance the skill sets of our team. I’ve been looking forward to the program, and I certainly continue to look forward to being a part of this great group of leaders in the industry. I look forward to providing whatever input I can in order to continue to promote continuing education both internally as well as outside the company in the industry at large.
Having cross-functional partnerships with finance and merchandising is an absolute must. We would not be able to execute a strategy without having good relationships with our merchants, for example, and that will drive how we deploy what product-protection devices we use. The finance team is critical for budgeting and forecasting so the relationship has to be there and has to be effective.
EDITOR: Are there any personal mentors that helped you get to where you are today? What have you learned from them and how has that helped you? SILVEIRA: I’ve had several important
mentors, and they have all added value in different ways. I currently report to two great leaders that I learn from every day—Carol Denale and Dave Denton. When I worked at Home Depot, I learned a lot from Ed Wolfe and from Keith Aubele. There are things I learned from operating partners over the years both at Home Depot and CVS. When I came to CVS, I learned a lot from my operations AVP Scott Baker at the time, a tremendous leader who really taught me a lot about the business and how he views loss prevention’s role and how LP fits into an organization. He’s someone who is still a mentor today. I’m proud to say that some of my best mentors have been from the operation side. But from an LP side, you certainly learn from everybody. I try to pull a lesson from everybody that I’ve either worked for or have been led by. I certainly learned a lot from Ernie Deyle who was here in the VP role when I was a director. EDITOR: I know that CVS has always had a long-term relationship with the LPRC. How do you make use of the LPRC? SILVEIRA: We’ve had a very long
relationship with the LPRC, and I think that the studies we’ve been involved in have been critical to shaping many of our initiatives. A lot of our product-protection deployment efforts have come from that research. So I’m very pleased and proud to be part of that team. EDITOR: When you’re not working, what occupies your time? SILVEIRA: I enjoy my job, and I enjoy
investing time in it. I enjoy the discipline this job requires. I enjoy being someone who spends a lot of time out in the field. I’ve also been married for twenty-one years and have one 14-year-old son. I can’t think of anything better to do on my weekends than watching him play baseball or soccer, and when he’s not playing team sports, I enjoy a day of golf with him and my wife. When I’m not working, I try to spend as much time with my family as possible.
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EVIDENCE-BASED LP by Read Hayes, PhD, CPP
Good Sensors Lead to Good Data
Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2015 Loss Prevention Research Council
Parking Lot Entry. Cameras, auto tag look up, parking lot patrols, and other sensors can detect and warn about problems before they unfold. Store Entry. Facial recognition, metal detection, RFID and EAS tag sensors, smartphone signatures, and other signals can warn of known or suspected offenders before they can strike. In-Store. Video analytics, sensor pads and beams, special CCTV applications, digital beacons, and human sources help us keep track of problematic people, especially in higher-risk places and approaches to those places like hot products display and storage areas, hidden spots, stockrooms, restrooms, and cash offices. This listing isn’t all-inclusive, but it illustrates opportunities to gather and quickly display digital data and images to decision-makers to sell more while reducing crime efforts.
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hey’re out there, and they’re headed our way. In the last column, I discussed how we need to improve our data to improve our decisions and then of course our positive impact. But just as critical as good data are good sensors. Think Star Trek; think unmanned drones over a battlespace; think about knowing so much more than now and being able to more rapidly do something. Everyone needs situational awareness. In our case, it’s who is planning to hit our stores, who is coming to hit us now, and who is already in our stores and wants to hurt us?
Situational Awareness
A key focus for the Loss Prevention Research Council (LPRC) and University of Florida Innovation Lab is just this—early detection, instant notification, and automatic or manual-focused deterrent or handling protocols. Place managers and loss prevention and asset protection team members need to more rapidly know what’s happening and who’s involved and have the ability to make more rapid responses.
Violent Crime
The LPRC Violent Crime Task Force’s multiple research and development projects continue. The drugstore robbery prevention project has CVS, Rite Aid, and Walgreens LP executives working with our team crunching data for patterns, pouring over crime event videos, and making store visits to enhance prevention and response. This month the group is jointly reviewing robbery attempts via webinar with multiple videos looking for actionable methods of operation. The parking lot and robbery crime project visited Jacksonville, Florida, reviewing robbery mapping and analyses with five retail chains. The group then walked repeat victimization stores as we all planned upcoming parking lot and in-store changes and trials. The group is also working on mall parking lot environments as ways to have mall security, police, and LP work together on blitzes and routine protective and apprehension operations.
Everyone needs situational awareness. In our case, it’s who is planning to hit our stores, who is coming to hit us now, and who is already in our stores and wants to hurt us? We are working to enhance and tie together multiple sensors for rapid display and usage in concentric scales including: Community Level. Offender databases, social and traditional media, local law enforcement, and other human sources can indicate what motivated people are contemplating and even planning. Pre-event indicators generated by gossiping, planning, recruiting, picking each other’s thoughts, and so forth are good examples of this type of warning data. Online selling, flea market, pawnshop, and other fencing sources can also inform and help predict issues. Surrounding Area. Knowledge of mass transit, limited-access highway, and other approach activity can help spot upcoming civil disobedience and other problems.
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NOVEMBER - DECEMBER 2015
Future of LP
After a highly successful Seattle field trip to Amazon and Microsoft, the LPRC Future of LP Working Group is planning to visit California Bay Area innovation labs and then Cincinnati as part of its research into protecting future retail enterprises.
Impact Conference 2015
Over 200 loss prevention and asset protection professionals gathered in Gainesville on October 3–5 and worked together in group breakouts, in the Innovation Lab, and during general sessions. Texas State University’s Lucia Summers, PhD, presented |
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Dr. Lucia Summers of Texas State University was the keynote speaker at this year’s Impact conference discussing her research on “Affecting Offender Decisions.”
new offender interview data, new LPRC research findings were discussed, an offender panel answered Impact participant questions, and the group enjoyed multiple social events. Please mark the first week in October 3–5, 2016, for an even better Impact conference on the University of Florida campus. The Impact planning team has already reviewed almost 100 conference reviews and is working up exciting new ways to continue to review new research and share ideas. And we invite you to join us.
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Recommended Reading
Crime and Place, edited by Eck and Weisburd, features fourteen chapters highlighting the prime role places and spaces play in crime. All LPRC research is grounded in environmental and place-based crime control theories. As always, our University of Florida and LPRC teams are working to support you, so please let me know your thoughts and suggestions on LinkedIn or at rhayes@lpresearch.org.
To start optimizing your cash handling activities across your entire organization today, call (800) 342-3033 ext. 3001 or email info@fireking.com.
LP MAGAZINE | NOVEMBER - DECEMBER 2015
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FUTURE OF LP By Tom Meehan, CFI Meehan is the corporate manager of data, systems, and central investigations with Bloomingdale’s where he is responsible for physical security, internal investigations, LP systems, and data analytics. Meehan specializes in new technology deployments, business intelligence, industrial intelligence, and systems implementation and design. Meehan brings nineteen years of expertise in retail LP, information technology, and process improvement, the last eleven years with Bloomingdale’s and eight years prior to that with Home Depot. Meehan is also chair of the LPRC’s future of LP working group and co-chair of the fraud working group. He can be reached at tom.meehan@bloomingdales.com.
Things to Consider
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his column will discuss a series of broad topics of things to consider as we face the rapidly changing future of retail loss prevention. With the advancement of technology today, how will business keep up? How can we better leverage the connectivity of everything with an off/on switch? How will we as LP professionals need to adapt? We hope to address these questions in the scope of the following topics—Internet of Things, mobile POS, RFID, the dual role of LP and customer service, big data, EMV, advanced video, facial recognition, omnichannel, and many others.
see what folks are saying. Unfortunately, less than 30 percent of social media information is geotagged. You have to have a solution that looks for both geotagged and non-geotagged information. What about metadata in photos? Again very cool, but not a lot out there. Most of the online services remove metadata from photos automatically.
A Daunting Future
If you try to keep a handle on all the evolving things of the tech world alone, you will quickly end up shorthanded. There are a lot of questions to be answered. Who is an expert on omnichannel? How will social media, the “Internet of Things,” and data breaches shape our future? Within this context, we need to answer even more direct questions. How can we as intelligent professionals take our practical knowledge and apply them to a brand new, but somewhat familiar field? How can we enhance the way we reduce and prevent loss related to new avenues of business? As our business changes, so do our roles in protecting profits and our brands. Where do you as an LP professional start? Do you want to start working with something you already have knowledge in? Do you want to dive into a new field? Do you want to roll the dice and invest your time into a practice that has a greater risk and greater reward, or do you want to play it safe with lesser reward? Typically, we rely on our experience in many fields to guide how we handle issues in the future. Technology is evolving at such a rapid rate, we can no longer rely solely on our own experience on a technology that may be less than a decade old.
To Pay Or Not to Pay?
There are a lot of free tools available, but at some point you will have to make an investment. You may decide to mine more data and invest a person or outsource altogether. One of the things to consider in a paid solution is how to overcome private vs. public data. There are solutions today that can get you anonymized private data to help identify trends. If your company is going to use it for investigation purposes, what are your legal department’s thoughts? Consider the availability of live feed information—get it while it’s hot. SMS and email notification can bring information to your computer, smartphone, or tablet as soon as it is on the web. If there is an event across the country or around the world, you get a text the second it hits the Internet. Live streaming services like Mercat, Ustream, and Periscope are able to see it live as it happens. How will this affect what we do? Everyone has HD cameras in their hands. If your company still apprehends shoplifters, when will someone post a video on YouTube? How will you handle that? There is also a gray area in social media monitoring. When does it become true intelligence gathering using open source data? I would venture to say that in the next few years it will be more about open source Intel than social media monitoring. Just look at the information you see today. A lot of it ties back to news, selling sites, or some other form of Internet-driven communications or information. What about big data? If you collect social media data, use it. Try adding it to a risk model or using it in a shrink analysis. Imagine you have all of the times your company is mentioned in Twitter and Facebook in relation to robbery, theft, and violence. Next time you have an unexplained shortage, see what eBay, Facebook market place, or Instagram can tell you. The possibilities are endless. Our future is bright—just don’t get blinded by the light. As with all technology, do your research. That is why the LPRC put in place a future of LP working group, to address and hopefully answer many of these important questions.
First Things First
No matter where you start, establish a program that has defined actionable deliverables. For example, we want to know about civil disturbance, threat of violence, or the large-scale sale of stolen goods. Keep your focus somewhat narrow at first because if everything is a priority, then nothing is a priority. Do you have a social media monitoring strategy? What are you looking to get out of it? When we started to monitor social media in 2011, we had a plan. However, the program and plan has changed dramatically. First we checked what we are looking for. We thought technology would allow reviewing everything. It’s also very important to not get a call from a CEO asking about a video that’s posted to the Internet before you are even aware. An early question for everyone must be where to start. A single technology tool is not the end all. You need good technology and people that understand it. If you are relying on someone else’s program for PR, brand protection, social media, or marketing, you will most likely not be able to get your deliverables. I find a lot folks are intrigued by geotagged data. It’s very sexy to look at a map and
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PROFILE
THE ART OF THE KIOSK LOSS PREVENTION AT AUTOMATED RETAIL GIANT OUTERWALL By Chris Trlica, Contributing Writer
THE ART OF THE KIOSK
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passerby might be forgiven for walking by a Coinstar or Redbox kiosk and regarding it as a glorified vending machine. But behind the scenes, these kiosks resemble vending machines about as much as modern high-performance automobiles resemble a horse and buggy. Outerwall is the parent company that operates Coinstar and Redbox, as well as newer Coinstar Exchange and ecoATM kiosks. A leading player in the fascinating, emerging retail arena called “automated retail,” Outerwall faces a variety of unique and complex challenges, with loss prevention at center stage. At almost every turn, the LP considerations surrounding these kiosks are highlighted by how the businesses differ from traditional retail approaches. For one, all Outerwall kiosks are hosted on other retail premises, usually inside a retail partner’s store or occasionally in a shopping mall. About the size of a refrigerator, they are entirely unmanned, only being visited by service personnel anywhere from several times per week to once per month. Two of Outerwall’s newer kiosks actually accept items from customers, giving them cash in exchange. It is only Redbox, the company’s most successful and most visible brand, that stocks inventory and dispenses it to customers. Redbox is about all that remains of previous decades’ home movie rental chains. Consumers who want to rent a physical copy of a movie or video game, rather than using streaming services or Internet distribution, can find a wide variety of titles at their nearest Redbox kiosk. And more than likely, the nearest Redbox kiosk is not very far away. Numbering more than 40,000 in the US, there are three times as many Redbox locations as there are Starbucks, perhaps the most infamously ubiquitous chain in the US retail landscape. Of Outerwall’s total portfolio of 64,000 kiosks, Coinstar accounts for 20,000 of the rest. The remainder is primarily made up of ecoATM kiosks, which offer cash in exchange for smartphones, tablets, and mp3 players, and Coinstar Exchange kiosks, which lets customers trade in
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gift cards for cash. “Coinstar Exchange is what LP professionals will be most interested in,” predicted Paul LaBlanc, senior manager of LP for ecoATM. “Though gift cards remain a concern within our industry, we’re confident that once they see how it works—and who’s behind it—they’ll be glad we’re around.” LaBlanc added, “A lot of people might walk by and incorrectly think of our kiosks as vending machines as opposed to a sophisticated, technology-based business. Introducing this concept of automated retail really changes that perception, dissociating our kiosks from simple vending machines. The more retail channel LP people learn, the more they realize that “there’s a valuable potential partner behind those kiosks.”
Different Hats
“Small but mighty.” That’s the phrase Dave Hiatt, senior vice president of risk, audit, and compliance, uses to describe his team—a twelve-strong core group with more than 200 years of LP experience Dave Hiatt between them. And
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considering what they’ve been able to accomplish, it’s hard to argue with his assessment. Lacking the need for security personnel on location, the team is free to concentrate on data analysis, problem solving, and process design. To an outside observer, what’s especially impressive is how many different hats each team member wears. For example, LaBlanc is senior manager of LP not only for ecoATM, but also for enterprise physical security and for new ventures. “When you look at all the different things we do, nowhere in any of our careers have we been tasked to design physical security for both buildings and kiosks, design badging programs,and unique camera applications, provide executive protection, build policies/ procedures to improve controls, forensics analysis, conduct LP and HR investigations, collaborate programmatically with other retailer LP folks, and implement safety programs—all concurrently. A company our size usually has dedicated individuals or departments that handle each of those,” said Hiatt. Stu Deske is manager of LP for Redbox. He is heavily involved in all new hire trainings. “I’m involved in all new
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THE ART OF THE KIOSK hire orientations,” he explained. “What is unique here is that they’re done over the phone, providing us the opportunity to talk about loss and fraud very early on and give them some tools to help know how to handle fraud. Paul and LeeRoy do the same in their respective lines of business.” LeeRoy Hegwood is senior manager of LP for Coinstar. He also runs e-discovery and forensics for Outerwall. “If there’s foul play within the company, I look at web history, chat activities, and file access logs. I recover deleted files and partitions. If we have a suspected intrusion of a kiosk, if a kiosk is transmitting high amounts of data or behaving abnormally, it’s part of my role to forensically examine the electronic data as well. I definitely play a role as a bridge between IT security and LP (both a part of the risk, audit, and compliance function). I also handle all our legal e-discovery. “Whenever somebody comes to me and says, ‘I wanna get out of retail,’ I always ask them, ‘then what are you skilled to do?’ The job here gets you out of retail to some degree, but still uses the same skill
set while allowing you to develop new skill sets. They are just deployed in different directions,” said Hegwood.
loss exposures and challenges when conducting investigations.” This also leads to a somewhat unique threat that Deske terms “car vs. kiosk.” While all Coinstar and ecoATM kiosks are inside buildings and only accessible to the public when the store is open, a significant portion of Redbox kiosks are outside, available for use 24/7/365, putting them at much higher risk. “In the literal case of car vs. kiosk, your entire storefront is vulnerable to being wiped out,” said Deske. “But more generally they are vulnerable to vandalism, especially those open 24 hours. If somebody vandalizes a kiosk, shatters the touchscreen, it isn’t as though you can go out with a dustpan, sweep it up, and you’re back in business.” If vandalism is bad enough to take a kiosk offline, that location will be closed for the time it takes for the damage to be reported, a field employee to be contacted and to travel to the location, plus the actual repair time, which in total could be hours or days. And if new parts need to be ordered, it could be closed for even longer. “In most cases the vandalism is more
Car vs. Kiosk
So what are these different directions the retail LP skill set is applied to? How is LP at Outerwall different than at most retailers? On the plus side, shoplifting is completely off the radar since there is no exposed product to shoplift (LaBlanc says he’s not aware of any case where somebody physically stole a kiosk). But that’s where the easy part ends. “The biggest major difference is the fact that we are an unattended transaction,” said Deske. “In other stores, transactions typically end in an interaction with a human, face to face, whether it’s a good customer or a fraudulent one, and that gives you a lot of opportunities. Many of our kiosks are not only unattended; they might not even be within view of an employee of the host store. And because a lot of the host stores are not open 24 hours, the area might not even be monitored. This creates many unique
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THE ART OF THE KIOSK
(Left to right) Paul LaBlanc, Stuart Deske, LeeRoy Hegwood, and Dave Hiatt.
costly to repair than anything they could possibly take,” said LaBlanc. Even when an act of vandalism doesn’t close the kiosk, it’s imperative that it be repaired as quickly as possible. Since there are no employees on location, the kiosks are the only public-facing part of the company. Sixty-four-thousand kiosks means 64,000 places customers, as well as potential bad actors, are walking by and interacting with the business, even if those locations have a footprint of only eight to twelve square feet and only make money a few dollars at a time. “Because we’re a micro-transaction business, we’re not perceived by many as a front and center attack target, and that can accrue to our benefit,” said Hiatt. “But there are a huge number of locations, plus the sheer number of transactions. There are 700 million annual transactions just in Redbox, all in payment cards. That’s a significant risk, more akin to a retailer with eight to ten times our revenue and a commensurate amount of staffing. We have to be really sophisticated in our approach and competent in delivering our services.”
Coinstar
According to Hiatt, one of the most striking aspects of the LP function at Outerwall is that loss prevention doesn’t just drive incremental margin; it is a
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foundational part of the business. “Here, LP is really more a part of a strategic core operational competency of the business that enables the business to exist,” he said. “If you don’t have the loss prevention piece, then you can’t have the business.” Take Coinstar, the oldest of Outerwall’s brands. Customers deposit their loose change in the kiosk, which sorts the coins, counts them, and prints a voucher for the customer to redeem at the retail partner’s register for cash. Coinstar charges a small percentage of the amount processed but is liable for 100 percent of the cash processed, having to reimburse the retailer for the value of the voucher. “The unique thing about Coinstar,” explained Hegwood, “is we only deal with currency. We process $3 billion in coin per year, ten times the amount of revenue produced by that business. That’s a large amount of currency relative to our revenue, so our risk exposure is pretty big. In traditional retail models, inventory loss of a couple points is built into the cost of an item, and the more pilferable it is, the more that is factored in. Here, a couple points of loss would equal roughly 20 percent of our revenue, effectively decimating our bottom line. So this concept of being able to process cash in a safe and secure fashion doesn’t just add
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value—if you can’t do it, you can’t have the business.” “Furthermore,” he added, “since the retailer is giving the customer cash and we’re reimbursing the retailer, if we can’t demonstrate that we have this competency, we can’t sell the business into the retailer. There would be no place for our kiosks. The LP mission is literally a core strategic part of the business, similar to how traditional retail views their supply chain. If it goes down, you’re out of business.” Protecting Coinstar kiosks from loss has surprisingly little to do with fighting robberies. Coins are heavy, and gaining physical access to the coins inside Coinstar kiosks is difficult enough that smash-and-run robberies are very rare. But occasionally, fraudsters will attempt to duplicate a voucher. To combat voucher fraud, Outerwall uses special thermal paper that, while not as sophisticated as that used by the US mint to print currency, borrows some of its techniques. “Ours is touted as one of the world’s most secure thermal papers,” said Hegwood. “It has special thermal properties, perforated edges, scratch-to-reveal watermarks, and thermochromatic ink that reappears when it cools off.” Again, it’s a very unique area for LP to engage the business.
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THE ART OF THE KIOSK But the larger threat to Coinstar kiosks is a bad actor with key access. Not only do technicians and currency pickup personnel have keys, but in an effort to optimize customer experience, Coinstar provides keys to retail partners at each store with a Coinstar kiosk. “If one little coin gets jammed in one little paddle, the kiosk won’t work, and it’s out of business,” said Hegwood. “We want to make sure the customer is taken care of, so we make sure there is access locally.” However, this increased access also means there is an increased threat. If coins show up to be counted and there is $2,000 missing, is the thief a service technician, the driver of the currency pickup vehicle, a store employee, or somebody who stole a key? Furthermore, in conventional retail, employees know their till will be counted down periodically. But Coinstar kiosks might only be emptied once every few weeks, or even months, which can increase the perception of lack of control even further. “If you have a kiosk that shows up at a branch missing $2,000,” said Hegwood, “where did that loss happen?
Did it happen in transit? Did it happen at the kiosk? And if that kiosk didn’t fill up for a month, when did that loss happen? To answer these questions, we spend a lot of time doing route analysis. Our kiosks do have electronic logging capabilities, so our investigations are very much data driven, not just based on transaction logs, but on event logs as well. Who was there? When? Why? What did they do? Did that make sense at that time?” Hegwood added, “Our losses are very acceptable, but the risk profile is huge. It takes a lot of effort to maintain that level of control. We don’t see a lot of losses, but probably our biggest risk and our largest cases are transport, the people out on the road with our coin. If you’re out there running routes alone, you know anybody in that store has access to a key, so you might have the perception that even if money is missing, they can’t pin it on you. So you reach in and take out a couple hundred bucks.” Because Outerwall employees are widely distributed, and there’s no physical environment for messaging and
awareness campaigns, the Outerwall LP team develops quarterly newsletters and monthly awareness flyers to distribute to their employees addressing loss issues. “We’re very transparent about people who were stealing,” said Hegwood. “We discuss what they were doing, what happened when they got caught, and the tools we used to catch them. That kind of visibility drives home the point that we have the capability to determine who’s responsible for a loss.” Besides emphasizing visibility with their employees, Outerwall also emphasizes collaboration with their retail partners. “Working with retail partners is a big part of what we do,” said Hegwood. “If loss patterns point toward a store employee rather than transport, we’ll reach out and hand off the case to the retailer. If we had voucher fraud, they’re our primary points of contact. If we have images, we share those across retail lines. We organize almost all the ORC cases—one store might have a picture here, another might have a license plate there, somebody might have information
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THE ART OF THE KIOSK about their methods. We aggregate that information and share it among all our retail partners.”
Redbox
The fast food giant McDonalds started Redbox in 2002 as a strategy to attract more in-store customers. After being acquired by Coinstar, now Outerwall, the business found great success offering low-cost, low-effort rentals—customers simply make a selection on the kiosk touchscreen and slide a payment card. DVDs cost $1.50 to rent per day, Blu-ray Discs are $2, and video games are $3 per day. Customers are welcome to keep a disc for as long as they like, and their cards are charged the cumulative balance when the disc is returned to the kiosk. If the disc is not returned, they have effectively bought the title and are charged the equivalent of seventeen to twenty days rental. The first problem Redbox ran into was inventory shrinkage. Each disc has an inventory control sticker on it for tracking purposes. Since the transactions are unattended, a thief could transfer the inventory control sticker to a blank disc and return that or even return a photocopy of the inventory control sticker. And the loss is compounded when the next customer makes a rental and ends up with a blank disc. “The customer service line started getting calls saying, ‘I didn’t get the movie I wanted,’ or ‘There’s nothing on this disc,’” said Deske. “But by looking at the rental history of that disc, it’s not hard to determine who the fraudster was. When you’re renting hundreds of millions of discs each year, there are going to be issues. We try to be as proactive as possible. We quickly identify discs that have been compromised, and we can remove them from circulation with the click of a button.” Another issue arose when credit card thieves used a Redbox transaction to test stolen credit cards. “It’s perfect for the bad guy because you don’t have to give anything up. There’s no information required. We get people who will rent a disc just to test stolen credit cards for a bigger purchase they’re going to make elsewhere,”
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said LaBlanc. Transaction velocity monitoring is a key. But the biggest issue involves collecting on a disc that has been rented for a long time. “The big issue is not about losing discs,” said Hiatt, “it’s about whether or not you can collect from the consumer. If someone comes in and rents a disc, we don’t know how long they’re going to keep it. It could be one night or twenty nights. The big LP challenge is can you collect on that if they keep it for the whole time? Solutions are similar to e-commerce with transaction risk modeling to determine whether or not to accept a transaction. But we’re looking at very different data attributes. With e-commerce, they have a bit of time built in before shipping to cancel the transaction. For us, the customer walks away with our inventory immediately, so we need to get it right before the transaction is completed.” The process behind Redbox’s decision to add video games to their offering drives home the core enabling role LP has at Outerwall. In test markets for this new product, video games had a very different risk profile than movies, because selling a stolen video game is much more lucrative than selling a stolen video disc. “We found during proof of concept (PoC) testing that 13 percent of the video game discs in the kiosk were fraudulent,” said Hiatt, a rate at which the financial model of the business would not work. “Solving the fraud disc issue was the last PoC hurdle for executive management
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to green light this new business. Loss prevention was therefore placed in the role of a business enabler. The goal wasn’t to simply add value by reducing shrinkage; rather, it was to develop a new, strategic core competency of the business, much like logistics is for a traditional retailer. So we looked at it in a different way than a LP department of a traditional retailer would. Technology enhancements and sophisticated transaction risk scoring quickly dropped that fraud rate to under 1 percent, allowing the business to successfully launch. But without strong, proactive LP engagement, Redbox’s video games business would not have survived.”
ecoATM and Coinstar Exchange
Outerwall’s store partners benefit from the kiosks in several ways. Retailers are paid by Outerwall for hosting the kiosks. But they also benefit from the exposure the kiosks bring. “Store partners love to have our kiosks because it drives foot traffic to their store. If people aren’t coming there to rent from Redbox, they aren’t going to come inside to buy a gallon of milk or a pair of pants,” said Deske. “Plus, our kiosk square footage typically becomes some of the most profitable square footage in our retail partner’s store.” ecoATM. But the Outerwall LP team makes sure to emphasize another benefit to retail partners—the value of
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LP collaboration with Outerwall. Take ecoATM as an example. The ecoATM business lets customers exchange a used cellphone, tablet, or mp3 player for cash. At first glance, an unmanned POS terminal like an ecoATM could appear to support crime by enabling the sale of stolen devices. But the Outerwall team has implemented controls that take this possibility and flip it on its head, not only preventing the purchase of stolen devices, but also gathering data to help catch a person who has possession of a stolen device. The kiosk captures three or more images of the consumer, the consumer’s driver’s license, the consumer’s fingerprint, and images of the device. “These PII attributes are required to be collected for regulatory purposes, but can also be helpful in pursuing bad actors,” said LaBlanc. “What we really want is for LP folks out there to know that they can reach out to us for assistance in their own internal investigations. Lots of retailers are selling cell phones now. If they have missing devices, send us those IMEIs. Maybe the person who stole those tried to sell them to ecoATM. It’s very rare that a business is photographing the consumer as they transact. When you pair images with names, addresses, DOB, and a transaction history that includes make and model of each device, a tremendous investigative tool emerges.” In fact, said LaBlanc, the LP team routinely scrubs ecoATM transactions for suspicious activity and reaches out proactively to retailers and cellular carriers with tips on transactions that might involve stolen goods. “Our counterparts in the asset protection and loss prevention departments of major carriers and retailers have collectively been able to close several dozen internal cases as a result of the leads we have provided.” Coinstar Exchange. The fourth of Outerwall’s kiosk brands, Coinstar Exchange faces a similar set of issues. Coinstar Exchange lets a consumer trade in gift cards for cash. The Outerwall LP team expects this kiosk to generate the biggest stir in LP circles owing to the volume of gift-card-related fraud in the greater market. How does Outerwall
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know they’re not buying fraudulently obtained gift cards or stolen phones? Furthermore, if these kiosks provide an easy place for criminals to sell their stolen goods, is that driving crime more broadly? “Fraudsters can sell gift cards or digital devices through pawn shops or Craigslist or online dealers,” said LaBlanc. “The secondhand dealer market is going to exist regardless of whether Coinstar Exchange or ecoATM do. But what we do is bring controls that are unique within the secondary marketplace to help identify and prevent the sale of stolen property. If they try to commit their crimes through our kiosks, we can help out the retailers who are the victims and law enforcement who are investigating these cases. We’re one of the only places that is databasing this kind of behavior.”
Reputational Risk
Loss prevention at Outerwall thus faces another unique challenge. Since the company relies on retail partners to host kiosks in their stores, if any of these kiosks gain a reputation for contributing to the retailer’s own loss, that retailer will refuse to host them. “The way we think about reputational risk is there’s this ecosystem of key external stakeholders in the secondary market environment,” explained Hiatt. “If we’re not solving for our retail partners’ business problems, if we’re introducing problems, we can’t have a business. If they think our kiosks are driving loss, they’ll say, ‘That’s crazy, we’re not putting those in here.’ “Conversely, if they see that we’re taking photos, taking thumbprints, providing information to law enforcement, feeding potential issues proactively to our retail partners, they’ll want us to be there as a way to catch the bad guys who are already stealing from them. If our retail partners lack confidence in our ability to do this, we can’t have a business. So in each of these businesses you can see where the LP challenges are very different not just in a tactical way, but also in a strategic way.” “We’re a visible brand,” added LaBlanc. “You go to get your groceries, and there we are. LP folks walk past and see a sign that says cash for your gift cards or cash for your phones and start to think about all the ways it can be used
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to facilitate crime and ORC activity. But the LP team here is very aligned to the fact that that element exists in society, and we’re building our systems to be an asset against that element rather than just a way to capitalize on that space.” The Outerwall team’s commitment to addressing risks shared by their retail partners is underscored by the depth of their LP experience. Dave Hiatt comes from Amazon and Eddie Bauer, Stu Deske from Lord & Taylor, Paul LaBlanc from Zale Corp and Fred Meyer, and LeeRoy Hegwood from Petco and Ross, not to mention the rest of their team. “The people who are helping to design our products are your loss prevention brethren,” said Hiatt. “They come from your space. These are people who eat, sleep, and drink stopping the bad guys just like all the LP professionals out there.” The “small but mighty” Outerwall LP team has an array of unique challenges to contend with. But individually, there are also opportunities. Because each team member wears several different hats, they are rewarded for learning new skills. And they use their retail LP skill sets in an arena that, while still retail, feels different and acts different. It’s apparent that the team members are excited to be where they are. And as the world of automated retail grows, like the rest of our increasingly automated economy, so will the challenges that come with it—and the opportunities. EDITOR’S NOTE: For LP professionals who wish to contact the Outerwall team, email Paul.Lablanc@outerwall.com for ecoATM questions. Contact Stuart.Deske@outerwall.com regarding Red Box. And email LeeRoy.Hegwood@outerwall.com for Coinstar and Coinstar Exchange.
CHRIS TRLICA is a business and technology analyst based in North Carolina. He is a contributing writer to LP Magazine focusing on emerging technologies. Trlica can be reached at chris.trlica@gmail.com.
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DIGITAL DIALOGUE By Jacque Brittain, LPC Brittain is editorial director, digital, for LP Magazine. Formerly a director of learning design and certification, Brittain managed the development of the LPC and LPQ certification programs in collaboration with the Loss Prevention Foundation. Prior to that he was vice president of operations for the industry’s largest executive search and consulting firm. In his thirty-plus years in the LP industry, he has helped build and enhance many learning initiatives and provided career counseling for thousands of industry professionals. Brittain can be reached at jacb@lpportal.com or by phone at 704-246-3143.
When Dealing with Shoplifters, Safety Is Always Our First Option
of the apprehension process. We preach behavior-based shoplifter surveillance techniques. We lecture on shoplifter approach and detainment. We prohibit shoplifter pursuit. We demand appropriate training and awareness programs. We lecture on the importance of good customer service. Each step leads us in the right direction—strategically moving forward toward the right goals: safety, control, protection, and profitability. As we navigate through another holiday season, it’s also a good time to remind ourselves that moving forward often requires that we occasionally take a step back to gain a better perspective on the road that lies ahead. While a season of hope and celebration, it is also a time of stress and difficulty for many, which often leads to bad decisions. Stores are a blur of activity, and sales are the pinnacle of every retail company. What happens over the last two months of the year is critical to many organizations, and making the right management decisions are at a premium. From a loss prevention perspective, a big part of our responsibility this time of year is to stay out of the way. The needs of the business remain our primary objective, and our attention must remain fixed on service and protection. But shoplifters also flock to the stores this time of year, looking to capitalize on the chaos. With that in mind, it’s also a good time for all of us to take a glance back into the stores, focus on the basics, and take the steps to keep our teams, our employees, and our customers safe. While none of this information will spark any new revelations, it’s still a healthy reminder for everyone, from store-level employees to loss prevention leadership, to review best practices for addressing shoplifters in retail stores.
T
he evolution of loss prevention is a common topic of discussion throughout the industry. It is a focal point of many loss prevention conference presentations. It is the subject of many loss prevention team meetings. It has been the topic of C-suite conversations. It is a regular discussion here at LP Magazine. By the same respect, shoplifting and shoplifter apprehensions typically aren’t found in the titles of many company presentations today unless associated with the relationship to organized retail crime. We discuss loss prevention technology, data security, e-commerce, omnichannel retailing, and a host of topics that focus on the latest retail industry trends and innovations. These are all extremely important aspects of the loss prevention profession and absolutely relevant and valued topics of discussion. However, evolution doesn’t just occur at the top. At the very core of the profession, the evolution of the loss prevention industry must start with the fundamentals. So many things have changed, and it’s easy to get caught up in what’s new, fresh, and “cutting edge” across the industry. But there are thousands of stories dealing with shoplifters that appear every week across digital media in a continuous stream of petit crimes and tragic events. We learn of shoplifters stealing to support drug habits. We hear of parents shoplifting with their children. We roll our eyes at the bizarre and ridiculous shoplifters and their creative pilferage. We cringe at shoplifter confrontations gone wrong and people getting hurt. Drowning in a river of bad decisions, the stories flow on and on into an ocean of unfortunate outcomes and lost profits.
Customer Service
Employees must remain productive, and the company must remain profitable; and customer service is a time-proven approach to these goals. Customer service also remains our weapon of choice against shoplifting in the stores. Attentive employees armed with service and a smile will disarm most potential shoplifters and even carry the opportunity to turn a prospective shoplifter into a customer sale. A proactive approach should remain a first option, offering appropriate attention both on the selling floor and at the register area. Keeping our store sales teams sharp and attentive over the holiday season serves important objectives on many levels, but it will also mitigate many potential shoplifter incidents. Taking a leadership role by championing this aspect of the business underscores the value and partnership of the loss prevention program with the retail management teams. The importance of a
Moving Forward
Shoplifting is only one piece of a much larger puzzle. From a loss prevention perspective, shrink reduction and profit enhancement require a comprehensive management strategy that fits all of the needs and interests of a particular retail organization. It is monumentally more complicated than stopping a shoplifter in a store. But shoplifting concerns are still front and center in many ways, from the impact on profits and the incidents in retail stores to the impressions and influence that often dominate digital dialogue. Fortunately, retail’s approach to shoplifters and shoplifting has evolved as well. Despite the daily reminders and disastrous choices of the lawfully challenged, we’ve made tremendous strides in our approach to shoplifting incidents. We have the “five steps”
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As a member of The Loss Prevention Foundation, you join an association founded by and for loss prevention professionals. With access to an elite network of fellow industry professionals, development tools tailored specifically to our industry to help you advance your career and other great member benefits such as exclusive access to elite savings and discounts on thousands of products and services nationwide. Your membership is not only a demonstration of industry leadership; it’s a commitment to the profession and to your own professional development. Elevating the Industry, One Leader at a Time. For more information, visit losspreventionfoundation.org or call (866)433-5545 LP MAGAZINE | NOVEMBER - DECEMBER 2015
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to the approach and escort will substantially influence the entire shoplifter apprehension process, improving control and encouraging cooperation while mitigating many of the potential risks associated with the stop. When completing any shoplifter apprehension, the ultimate concern is for the safety of all involved. Approaching the shoplifter with confidence and authority while remaining professional without being threatening typically results in a safe and successful detention. However, it is absolutely essential to follow all company guidelines and policies anytime a shoplifter apprehension is made.
continued from page 48
smile and a helping hand should never be underestimated in providing our employees with additional confidence, enhancing the customer experience, and keeping our stores safe.
Shoplifter Surveillance
Developing effective methods of observation requires careful practice and the ability to understand, interpret, categorize, and rationalize the information at our disposal. Generally speaking, there are four basic criteria that we should use when making the decision to pursue a shoplifter surveillance: Behaviors are the way that we function or conduct ourselves in response to our environment. They involve the actions, reactions, and manner of conduct you observe that may point to potential shoplifting and other criminal activity. Indicators are pieces of information that reflect the intention or capability to follow a particular course of action. A theft indicator would be something visible or relevant that gives us grounds to believe that a theft or potential shoplifting incident may take place. Means involves the instruments by which an act can be accomplished or an end achieved. This would include the resources and tools that support the ability to steal. Opportunity involves the favorable or advantageous circumstances and the related prospects that support the potential or capability to commit dishonest acts. These are the elements that set the stage for shoplifting incidents and other dishonest acts, and the only acceptable criteria for placing someone under a shoplifter surveillance.
Use of Force
As part of a recent litigation decision, a jury recently ordered a discount retail store to pay a man—who was convicted of shoplifting—$750,000 for injuries he received from a loss prevention employee who confronted him over the theft of a pair of eyebrow scissors and a pair of nose-hair clippers. When confronted by loss prevention, the shoplifter refused to return to the store, and an altercation ensued. In the process, the shoplifter struck his head on the pavement, suffering several skull fractures, bleeding on the brain, two black eyes, and a permanent traumatic brain injury. The man pleaded no contest in court to shoplifting and was fined $50. Did the punishment fit the crime? According to the Loss Prevention Foundation’s LPQualified certification course, reasonable force is “that force necessary and within reason to obtain and maintain control during a shoplifter apprehension.” Often that “force” is simply the command in one’s voice. The only acceptable purpose for the use of force during a shoplifter detainment is to obtain and maintain control. Excessive force is any force above that which is needed to obtain and maintain control and is never justified, regardless of the value of the merchandise or the seriousness of the offense. Many companies prohibit the use of force by any means during a shoplifter detainment and advise their teams that if the shoplifter resists, they should simply let them go and avoid any altercation. Every loss prevention professional should be well versed on specific company policies prior to any action.
The Five Steps
Throughout the loss prevention industry, there is a universally accepted process to making apprehensions that is most commonly referred to as the five steps. It is critical that all of these steps are followed before making a shoplifter apprehension. You must see the subject ENTER the department or merchandise display area. You must see the subject SELECT and remove store merchandise from its place of display. You must see the subject CONCEAL the merchandise or take other actions that clearly demonstrate the intent to steal. You must maintain 100 percent CONTINUOUS OBSERVATION of the subject throughout the process up to the point of apprehension. You must allow the subject to EXIT the store whenever possible or proceed toward the exit if the intent to steal is clearly established. Following these steps will ensure a productive shoplifter detainment, the recovery of merchandise, and a reduction of liability to the company.
Know the Rules and Stay Safe
Most of our readers are very familiar with these common rules regarding shoplifter apprehensions, and there can be many more policies and guidelines depending on the particular retailer. For many, this is simply a look back at a different time in our careers—but a look back can still serve as a glimpse forward. Often when things go wrong it’s because one of these fundamental rules were bent or broken. Shoplifter apprehensions can be very dangerous and in many ways very costly if mishandled. For those companies that deal with shoplifter apprehensions, this may serve as a brief reminder to review all relevant information with your teams as we head into the holidays. For those that don’t, it may serve as a reminder why we don’t allow shoplifter apprehensions by store employees and the importance of training and follow-through. From all of us at LP Magazine we would like to thank our readers for actively sharing their opinions on this and other topics discussed through our digital resources, and we look forward to your comments and opinions as we move into the New Year. Have a safe and happy holiday season.
Approach
The approach itself represents the initial point of confrontation with the shoplifter. While most individuals are generally cooperative, such situations can quickly escalate, arousing the potential for unpredictable results. This is why it is so critical that only those appropriately trained and authorized should be involved in shoplifter apprehensions. Proper attention
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2016 PRODUCT SHOWCASE AND RESOURCE GUIDE
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2016 PRODUCT SHOWCASE AND RESOURCE GUIDE
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VIDEO SURVEILLANCE
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2016 PRODUCT SHOWCASE AND RESOURCE GUIDE
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INDEX Alpha, 11
Indyme, 6, 11, 14
Securitech, 11
AFA, 2, 8, 13, 14
InstaKey, 2, 9
Security Resources, 9
Agilence, 8
Intelligent Loss Prevention, 6
Sennco Solutions, 11
Axis Communications, 2, 13
ISS, 10
Setronics, 2, 15
BSI, 5
Loss Prevention Foundation, 7
Stanley Security Solutions, 3
CAP Index, 6
Loss Prevention Recruiters, 7
StopLift, 8
CEC, 13
LP Software, 5
Sysrepublic, 6
ClickIt, 14
LPjobs.com, 8
The Retail Equation, 12
Contact, Inc., 4
NASP, 13
Think LP, 5
Datalogic, 4
Nedap, 12
Turning Point Justice, 12
Detex, 2, 9
NetWise Data, 10
Tyco Integrated Security, 13
Diebold, 14
ONCAM, 15
USS, 12
Digilock, 10
Palmer, Reifler & Associates, 5
Verisk, 6
FKI, 5
Protos Security, 9
GIS, 7
Salient Systems, 15
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2016 PRODUCT SHOWCASE AND RESOURCE GUIDE
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At LossPreventionMedia.com you will find the latest news, special reports of key topics, print magazine articles, archives of past issues, EyeOnLP videos, and much, much more. All from the team at LP Magazine you trust for original articles that provide educational content and perspective on the rapidly changing world of retail security, loss prevention, and asset protection.
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SOLUTIONS SHOWCASE AXIS COMMUNICATIONS
IP Security Solutions Aren’t Just for the “Big Stores”
N
ot all video surveillance systems are created equal. As the demand for IP surveillance networks has increased among all types of organizations, retailers have a number of options to choose from. What they choose depends on the environment and level of complexity, as well as the overall security and business objectives at hand. It can be overwhelming to find solutions, especially for smaller applications. Retailers with small locations need a solution that is easy and simple. That is why it is important to maintain the quick “plug-and-play” functionality associated with traditional analog surveillance systems, commonly used in small and medium-sized businesses, restaurants, retail, and hospitality.
Video Surveillance Just Became Simpler
Together, Axis Communications and Buffalo Technology offer a solution to this problem—a video surveillance system for small installations of up to sixteen cameras. The validated turnkey solution is easy to install and offers cost-effective redundant managed storage for your video. The solution provides benefits far beyond surveillance, with business intelligence options and a lower total cost of ownership over the lifetime of the system. Business intelligence and analytics makes all the difference when it comes to effective loss prevention. Buffalo and Axis have partnered to provide consumers and retail businesses with versatile IP surveillance networks that can be effortlessly set up and maintained over long periods. Surveillance
is what’s important to us, so you can focus on what’s important to you.
The Full Turnkey Solution
This system includes a Buffalo TeraStation 5200s NAS (network-attached storage), up to sixteen Axis cameras, free AXIS Camera Companion software, and a Buffalo network switch. It is optimized to deliver video surveillance for functionality with a wide variety of features and capabilities. Network—Simply utilize your existing network infrastructure with the Buffalo PoE enabled switch of your choice. Cameras—This system is designed to offer scalable surveillance of up to sixteen Axis network cameras. Start with just a few cameras at a particular store location and scale up at any time, without any extra fees or hardware. Video Recording and Storage—The Buffalo TeraStation 5200s NAS provides easily deployed redundant storage for enhanced reliability. It has dedicated support for surveillance NAS units preconfigured with Axis products. Software—The AXIS Camera Companion software was created with a focus on ease of use for any operator. It has an intuitive interface that allows you to search for live and recorded video with clear HDTV image quality. Once the software is installed, you can record and playback video from any attached Axis network camera at any time, from anywhere. You can do so by using the mobile viewing app available for download from iOS and Android app stores. Support and Protection—Both Axis and Buffalo offer technical support via phone or chat. Axis provides warranty options ranging from one to five years with the extended warranty coverage option. Buffalo’s warranty option includes a standard three-year hardware warranty with free lifetime technical support. Learn more about the simplicity of the Axis and Buffalo solution for your small surveillance applications. Give the Axis team a call at 800-444-2947 option 1 or visit online at axis.com or buffalotech.com.
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SOLUTIONS SHOWCASE INTELLIGENT LOSS PREVENTION
Research Shows the Turtle Is Effective at Preventing Theft of High-Loss Products
T
he Turtle is a multi-functional EAS tag device that is used to secure packaged goods or display products. The Turtle emits a pre-alarm upon slight lifting or sliding. A full alarm sounds if the Turtle is removed from the product or if it passes through an EAS gate. The Turtle can be used independently by attaching its adhesive backing to any packaged good. It can also be attached directly to strapped packaging. Or it can be used with accessories to protect display merchandise. Accessories include a variety of cables with loop, sensor, or USB attachments that connect the Turtle to a display product. The Turtle is available in RF or AM versions. Retail product theft and its impact on a shopper’s safety and shopping experience are critical issues associated with numerous high-loss products. Retailers want to do their best at deterring theft while simultaneously not harming the customer experience within the store. The Loss Prevention Research Council (LPRC) conducted a series of in-person survey interviews in the Gainesville, Florida, store of a major big-box retailer in order to understand the impact of the Turtle on associates, shoppers, and shoplifters. This research focused on the Turtle’s impact on protecting DEWALT power drills, one of the big-box retailer’s high-loss products. Below are the general findings of the research.
Customers
97 percent of customers stated that the presence of the Turtle did not have a negative impact on their shopping experience. Four out of five customers surveyed said that the presence of the Turtle on the drills did not concern them. Over one-quarter of the interviewed customers didn’t even see that the turtle was there. 90 percent of the customers believe the Turtle is effective at preventing theft.
Associates
The Turtle was proven to reduce theft of high-loss products. Offenders’ reaction to the Turtle was that they could see it, they understood what it was, and it deterred them from stealing the item. Visit IntelligentLossPrevention.com to download the full white paper and get more information on other innovative loss prevention solutions.
100 percent of interviewed associates agreed that the Turtle is effective in deterring theft. Results indicate 100 percent of associates interviewed about the Turtle strongly agree that it is not disruptive to their daily duties. 87 percent of associates feel more aware of high-risk items protected by the Turtle.
Offenders
85 percent of the offenders said they would not steal the product if it was protected by the Turtle. 38 percent of offenders interviewed about the Turtle said they would go to another store that didn’t have this measure. Over 90 percent of shoplifters noticed the Turtle and all of them understood the purpose of the Turtle.
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SOLUTIONS SHOWCASE DIGILOCK
Providing a State-of-the-Art Secure Personal Storage Solution for Retail
D
igilock® is a global leader in delivering high-performance electronic locks and locker-security solutions that use patented technology on either a keypad or an RFID interface. Digilock’s ADA-compliant locks are offered in several architectural finishes, locking interfaces, functionalities, and security platforms and seamlessly integrate to any personal storage fixture and case good while their lockers deliver design, durability, and security through the comprehensive selection of door types, frame features, and storage configurations, always secured with locks by Digilock. Its commitment to providing superior customer support and responsiveness to market demands enables Digilock to be recognized as the industry influencer. Every aspect of environment and operation impacts the experience that a retail facility provides. With a precision focus on style, ease-of-use, and lock management, Digilock enhances this experience with sleek and stylish security solutions.
How to Expand without Compromising Security
Digilock’s goal is to make security simplified®, blending science with the artistry that transforms the user experience. Digilock is seen in nearly all high-end locker rooms around the world, offering security and elegance that customers demand. The company also customizes products to fit a wide variety of applications across a multitude of diverse industries. Following is a case study that proves how the industry leader and the original manufacturer of electronic locker locks establishes the highest standards for unparalleled security solutions for locker rooms and personal storage areas.
La Maison Simons: Creativity, Architecture, Art
La Maison Simons is a popular Canadian fashion and home décor retailer that uniquely pairs its private-label fashion with higher-priced designers. After 175 years, La Maison Simons (simons.ca) is making a major aggressive expansion push in at least eight Canadian cities in the next four years. “We had a vision of what we wanted to accomplish and be able to do in terms of design and innovation in retail, and I felt that we had to enlarge,” CEO Peter Simons said in a phone interview to The Canadian Press. Its new West Edmonton Mall store earned the Retail Store of the Year award from Chain Store Age for its innovative design, bright colors, and avant-garde fitting rooms that feature social-media-connected screens and a lighting installation that evokes the Northern Lights. Recently, La Maison Simons opened its tenth location—an 80,000-square-foot store at Les Promenades Gatineau. CEO Peter Simons realizes that “it’s definitely a very competitive, dynamic market, with a new equilibrium forming between electronic sales and bricks-and-mortar.” To stand out from the crowd, he put a strong emphasis on creating unique experiences both for customers and for employees. As in all new La Maison Simons stores, in the
Photo: Simons, via Twitter
Julie Tremlay’s Morphodynamique art installation in the women’s accessories department.
effort to enrich the community and to support the artists, it features a one-of-a-kind art installation. “We’re trying to create a unique proposition that fits in, that offers something different. We’re going to do it through our store environments and also through social and interpersonal experience,” said Simons in an interview with The Montreal Gazette. When the company is so focused on art and style and is so open to innovation, it comes as no surprise that its management strives to be consistent and wants to invest in improving its store appearance
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SOLUTIONS SHOWCASE DIGILOCK
Photo: courtesy of La Maison Simons store management.
Installation of Digilock in the employee locker room.
chain,” said Robert Mackalski, a brand expert and faculty lecturer at McGill University. Retail analyst Randy Harris of Trendex believes Simons’ gradual expansion will make it a “national powerhouse” in the Canadian apparel market. “We’re trying to hold on to this belief in creativity and architecture and art,” Simons pointed out in his interview with Carol Toller from Canadian Business magazine. With such a thorough approach to style, art, customer service, and sophisticated loss prevention solutions, no doubt this retailer is going to win the hearts of consumers.
and functionality not only in the front but also in the back, in the store employee area. The company has over 2,000 employees, and the issue of securing their personal items and belongings was solved easily with the installation of Digilock electronic locks—a perfect shared-use keyless security solution, operated with the input of a user-selected four-digit code. The retail store provides a readily accessible solution for its employees when they are able to secure their lockers for the duration of their shifts. After the locker has been opened and vacated by the previous employee, it becomes available for the next employee. In case of emergency, management simply uses a patented electronic “manager key” to easily access the locker with a single touch. This complete innovative line of keyless security solutions saves both money and time and requires minimal maintenance while contributing to loss prevention efforts with the auditable feature. Robert Pretto, security and LP director at La Maison Simons, has chosen Digilock since 2012 to supply digital locks for all Simons stores’ employee locker rooms. Simons has been using the Digilock products for several years now and appreciates the value and the quality that Digilock provides. The main benefits of the product are its simplicity and proven reliability. Store management said, “We are happy with this effective solution for managing lockers and will continue to use the product in our new stores.” The company is proud of its superior customer service and is inclined to invest into enhancing user experience. In two years, all employees will have iPads to access information about products and to instantly deliver answers to customer’s inquiries. “Local shoppers unfamiliar with Simons can expect a family feel across the
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Why Digilock?
Founded in 1981 and headquartered in California with sales offices in the Netherlands and Hong Kong, Digilock continues to innovate since it delivered the first electronic lock for personal storage in 1992. Combining security with simplicity, locks by Digilock operate with a patented electronic manager key for a credible management system that significantly enhances productivity and reduces cost. Delivered fully assembled and ready to use, lockers by Digilock provide a turn-key personal storage system. To this day, Digilock remains the number one preferred manufacturer of high-performance security simplified® solutions for all industries.
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SOLUTIONS SHOWCASE INDUSTRIAL SECURITY SOLUTIONS
Custom-Engineered EAS Solutions to Meet Any Need
I
ndustrial Security Solutions (ISS) specializes in providing a complete range of EAS and CCTV products and services focused on the most beneficial and cost-effective solution catered to the size of the retailer. By manufacturing tags and systems in both AM and RF frequencies, ISS is able to offer competitive pricing on the most specific of solutions. Customers may even choose from an impressive range of refurbished products. With partnership as a keystone in the ISS business philosophy and the ability to install and service in all fifty states, no retailer is left behind.
The ISS Difference
Industrial Security Solutions understands that with the evolving retail industry the importance of maximizing profits for brick-and-mortars is at its highest. Unfortunately, these profits are lost daily to internal and external theft of the store’s inventory. Only the most specific of solutions can offer the least loss, and ISS is prepared to customize solutions for a range of complicated needs. Many potential customers have been in business for decades and often find EAS solutions that worked in the past are now obsolete. ISS has the services needed to address these issues including: Upgrading outdated EAS systems, Refurbishing EAS systems, Service and maintenance of EAS systems, and Tag trade-out/recycle programs.
Service and Maintenance
Industrial Security Solutions recognizes the importance of customer service. Every day at ISS new procedures and technologies that maintain an industry-leading response time are being developed by the brightest minds in the EAS industry. This year alone ISS hired a number of experienced technicians across the country to further reduce response times to all installations and service calls. In addition, technicians are trained to tune almost all manufacturer models in the industry. With a constant supply of refurbished products, technicians are always prepared to replace specific parts or entire pedestals. For customers that decide to install EAS manufactured by ISS, a remote tuning unit known as an eComm Module can be included. The eComm enables technicians to adjust the systems remotely and drastically reduces the need to dispatch a service call. With in-store service calls often exceeding $300, this is a significant savings to customers.
black, gray, or any custom color needed and is offered in AM and RF frequencies. Additionally, customers always complained that older EAS systems look scuffed and chipped from being hit. To address this ISS designed marketing covers that slide over and fit flush with the beat-up pedestals. This not only improves the store’s aesthetics, but also provides an additional opportunity to market to customers. ISS also takes on the challenge of innovating old solutions that have since been abandoned. In order to change the industry standard for providing customers with cumbersome ink tags, ISS technicians designed a lightweight, triangle ink tag that is no wider than one and a half inches and alarms AM frequency systems. This tag revolutionized the way loss prevention looks at ink tags. Finally, this year ISS brought on a specialist for developing and instituting a source tag program. With recyclable source tagging, EAS tags can be applied to a much wider range of goods with a more consistent compliance rate. ISS also works together with vendors to make sure they provide products to the customer’s stores with tags properly applied. Once tags are removed at the point-of-sale and returned to ISS, the tags are cleaned and resold to vendors and stores. Don’t you deserve an EAS solution custom engineered to your specific needs? Contact Industrial Security Solutions at 800-466-4502 with your next loss prevention project to discover the ISS difference.
Customized EAS Solutions
Over the years, ISS has been asked to create various customized loss prevention solutions. Once a product is produced that fits one customer’s needs, it is always helpful to others as well. For example, ISS produced a door-mounted Aegis system in multiple colors, so the system would blend with any store color scheme. This Aegis can be ordered in white, LP MAGAZINE | NOVEMBER - DECEMBER 2015
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SOLUTIONS SHOWCASE LP SOFTWARE
Incident and Case Management Secrets to Success By Brian Eskra
T
he team at LP Software is once again changing the game in the retail loss prevention arena. LP Software has been providing incident/case management (LPMS), compliance auditing (CAMS), and recently, service request (SRMS) management software to retailers around the world since 1999. It’s not surprising that LP Software holds the largest market share when it comes to incident and case management software solutions. The time-tested solutions are used by both small and large companies in the world. What started out as a simple incident management system to track theft issues has grown into a centralized repository to track theft incidents, HR incidents, investigations, accidents, OSHA, customer service issues, hotline anonymous reporting, awards, inventory results, and so much more. All this, coupled with our CAMS tool, to manage compliance audits for loss prevention, safety, HR, and numerous other departments is a big win. The best part is it’s all backed by our world-class support. After all, what good is a pretty software tool without any end user support? LP Software’s combination of having a great product and the great service to back it up is what separates them from the crowd. Service and support is what makes the company stand out among the rest.
makeover. We are putting the tools in the hands of our clients to enhance their incident management experience. For example, our new screen builder tool will allow end users to build their own forms. Imagine building your own forms that can be used across multiple case types, specific to your business needs. Additionally, we are also placing an increased focus on mobile as well. LP Software is the leading provider for incident management and compliance auditing solutions. The solutions provide the industry’s most powerful and adaptive tools on the market today.
More than Incident and Case Management
Success Secrets
Tracking incidents and cases in a computerized system is great. However, with the LP Software tools, clients can do so much more. Why not manage your company’s hotline program via our anonymous entry forms? Our system can transmit incident data to third-party companies. We integrate with insurance companies (TPAs), civil collection vendors, shoplifting alternative programs, exception reporting systems, HR systems, and many more.
As a decision maker for your incident management tool, the company you select is typically the most important decision you can make. With LP Software’s long track record of providing great customer service, support, and innovative products, you can’t go wrong. In addition to that, the product is undergoing a huge
About the Author
Brian Eskra is the president and co-founder of LP Software, Inc. Eskra’s background in loss prevention and technology has guided LP Software to its sixteen years of success by providing the industry with innovative software and incredible customer service.
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SOLUTIONS SHOWCASE SECURITIME
Increasing Control and Transparency for Businesses Truly Concerned with Security Performance and Billing Accuracy
I
magine trying to drive your car without a speedometer, an odometer, or a gas gauge. How would you know how fast you’re driving, how much gas you have left in the tank, or when that next oil change is due? Just as you depend on the gauges in your car to drive safely and to alert you when there’s a problem, the same principle applies to your guard program. What gets measured gets managed. For too long, the loss prevention industry has been using guard services without access to measurable performance data. So when one of the world’s largest retailers started asking why it couldn’t expect the same sophistication, analytics, reporting, and transparency in its security operations that it demands in other parts of its business, it raised some eyebrows industry-wide by taking a dramatically different approach that ultimately improved its bottom line. It wanted a modern security program, and Securitime stepped up with the only right answer—a well-tested, third-party software system that improved transparency, reduced risk, streamlined workforce performance, and ultimately cut operating costs.
Founding Securitime
Securitime is a new Software as a Service (SaaS) provider in the LP industry, but is built on a proven and prestigious history. The solution was crafted over nearly ten years of high-performance, on-the-job testing as the internal proprietary software for a well-known market leader in the security industry. Securitime is now independently available for forward-thinking firms who want to raise their loss prevention standards. Securitime SaaS excels in three unique areas: Actionable real-time communication between the security workforce and your corporate loss prevention and site management teams, Increased program-wide accountability with clear benchmarking, and Real-time analytics. The lack of technology that promoted this accountability caused one of the largest retailers, who wanted a modern, third-party, time-and-attendance service, to seek out the creators of Securitime for its pilot program. Based on the overwhelming success of that implementation effort, this retailer has completed
the Securitime rollout to sites across North America and is reaping the benefits and notes a significant ROI—much more than the cost of the overall program.
Time and Attendance: Saving Money While Reducing Costs
Many security guards still use paper timecards, which have finally started disappearing. This has helped to improve billing accuracy, but when vendors control the time-and-attendance software, verifying accuracy and authenticity is a difficult task. An independent, third-party software solution prioritizes the client’s interest and holds all parties to the same standards of effective communication and workforce accountability. Overbilling issues can be quickly identified and addressed without burdensome audit systems. Securitime helps identify ongoing tardiness issues, coverage gaps, and other accountability and business vulnerabilities in order to remove systemic risk from client operations—and Securitime can easily handle these tasks at scale.
Incident Reporting: Reducing Liability with Actionable Data
Communication is a challenge for all large security programs. Securitime was built from the ground up to provide a centralized communication hub that seamlessly collects, disseminates, and archives data for actionable future application. Each officer represents a collectable data point for your company’s long-term profitability. Their observations provide valuable information for those in loss prevention and asset protection leadership roles, but only if you can collect their insights in a way that can be mined on-demand and in a meaningful way.
Implementation
While the benefits of Securitime are readily apparent, all large-scale system rollouts require proactive change management. Vendor partners and security guards often push back against change, especially when that change doesn’t appear to be in their favor. In the pilot program cited above, established security vendors were quick to point out that they had time-and-attendance software and didn’t understand the need for an independent or client-run system like Securitime. However,
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after deployment, Securitime revealed long-hidden timekeeping problems that made the debate futile for all parties. Securitime’s location-based verification system uses caller ID validation, which quickly revealed notable “irregularities.” Officers who had previously clocked-in by cell phone were now unable to do so with Securitime. Site supervisors were alerted to the distressing truth—they had been paying guards who were not actually on site, and worse, their facilities had systemic coverage lapses that exposed both their inventory and staff to avoidable risk. Securitime’s communication processes also force engagement between the client and the vendor both at the local and national levels. Guard performance and invoicing conversations could be addressed and resolved quickly with clear, well-documented, and easily accessible supporting data, which resulted in an instant increase in program performance. When both the client and the vendor have access to the same accurate time-and-attendance information, issues can be resolved quickly, and long-term trusted partnerships can flourish.
In addition, there was a number of unexpected big wins for the client: Previously, schedule change policies had been ignored at the regional and store levels. These discrepancies created budget challenges at the end of year. Once the schedules fell into alignment, unauthorized attempts to make schedule changes could be quickly identified and dealt with appropriately. Securitime’s incident-reporting services proved to be valuable strategic data points. Security officers are great eyes and ears in the field, but if the information is not reaching key personnel in a timely manner, it loses its value, and officers begin to disengage. Securitime’s ability to disseminate incident information quickly through automated, severity-based channels gives clients quick, actionable information.
Real, Measurable ROI Delivered
After a full two-year deployment, the client recognized an average 2 percent reduction in non-billable time reported in the weekly punch reports—a direct savings. An additional, non-direct savings from 1 to 3 percent are also consistently reported from greater schedule alignment, a near elimination of unauthorized schedule changes, reduced liability exposure, onsite validations to improve billing to performance actuals, reduced administrative burden, and clear, consistent key performance indicators (KPIs) to evaluate security team performance at the enterprise level. If you are interested in a conversation to determine if Securitime could work for your organization as well, contact us at 866-254-1237 or visit our securitimewfx.com. We’d be glad to provide a fully confidential consultation.
Unexpected Benefits
Apart from the anticipated value of Securitime, there were a number of unexpected benefits realized by the security management provider: Good performance was noticed. Security vendors could now be ranked on verifiable data, and great performance could be recognized and rewarded. Administrative costs went down. Securitime’s validations, alerts, and billing systems decreased administrative overhead, reduced vendor costs opening up greater margin, and increased negotiation capacity in competitive bids. Client communication improved. By allowing incidents to be addressed quickly, vendors could more accurately evaluate and improve their staff, increase client trust, and proactively plan for long-term growth.
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SOLUTIONS SHOWCASE THE RETAIL EQUATION
How Strict Return Rules Can Decrease Retail Revenue By David Speights, PhD, Daniel Downs, PhD, and Adi Raz, MBA
M
erchandise return transactions are a critical part of the customer experience of retail. The objective is an optimal return rate, where the retailer finds the right balance between too many returns that may lead to fraud and abuse, and too few returns that may lead to customer unhappiness. But how does one arrive at such a measure? A major retailer recently asked the same question. As a customer of The Retail Equation (TRE), the retailer asked for help in understanding the impact return policies have on business. The retailer, who was experiencing declining sales, needed to pinpoint areas where it might improve, and one of the areas to be evaluated was the return counter. With return authorization solutions deployed in more than 34,000 retail locations, TRE evaluates an unprecedented amount of return data and, in turn, is able to provide its customers with powerful insights to help them understand and improve their business. Therefore, TRE set forth on a benchmark study to examine the impact different return policies could have on net sales and return rate.
The Methodology
Stores were divided into three groups. The first group, which made up approximately one-fourth of the customer’s stores, was placed into a “strict return rules” test group, designated as the “Strict Group.”
The second store group of similar size began testing The Retail Equation’s Verify return authorization solution—a “friendlier return experience”—at the same time as the first group underwent its strict return rules policy. This second group was designated the “Friendly Group.” The third or control group operated as usual and was designated as the “Balance of Chain Group” or “BOC Group.” The Strict Group and the Friendly Group were the most easily compared since they rolled out their new return procedures at the same time. And the results speak for themselves. Over the course of the test, which ran for six months, the Strict Group showed an 11.2 percent decrease in net sales, while the BOC stores showed a 6.4 percent decrease in net sales. And the Friendly Group showed only a 2.6 percent decrease in net sales—this is an 8.6 percent improvement over the Strict Group. Taking a closer look, the customer evaluated the net sales trend by store group, comparing the time in the months leading up to the deployment date with the months following. During that time, the Friendly Group showed a minimal change. The net sales decrease leading up to the deployment date was 0.1 percent, while after the deploy date it was 0.2 percent. However, the net sales decrease in the stores where a strict policy was implemented had a 0.6 percent net sales decrease leading up to the change, while a whopping 2.1
Net Sales Trend (Strict Stores Only)
Significant Decline Following Strict Return Rules Deployment
Revenue
SRR Deployment Date
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SOLUTIONS SHOWCASE THE RETAIL EQUATION
Return Rate Comparison Group
Prior Year
Current Year
% Change
Strict stores
7.8%
7.2%
-7.7%
Friendly stores
6.4%
5.9%
-7.8%
Control stores
7.3%
7.4%
2.0%
percent decrease in the months after they adopted the strict return rules policy. TRE dug deeper to determine whether these trends differed based on region, and the decline in the Strict Group was universal and widespread across all tested regions.
Stricter return rules and policies significantly harm net sales. As mentioned above, the Strict Group of stores showed almost a 9 percent reduction in net sales as compared to the Friendly Group. Depending on chain size, the unintended consequence of stricter return rules and policies can cause a revenue decline of hundreds of millions or even billions of dollars. Stricter return rules and policies do not lead to any better return-rate reductions when compared to The Retail Equation’s Verify solution.
Return Rate Impact
TRE also evaluated the impact of stricter return policies versus friendlier return policies on return rate. Based on the findings, the Friendly Group and Strict Group both had better return rate reductions than the Balance of Chain Group. The Friendly Group exhibited return-rate reductions due to TRE’s targeted predictive-modeling approach that only impacts a small portion of all returns—typically less than 2 percent. The Strict Group exhibited return-rate reductions using more punitive rules and policies, for example, by declining all non-receipted returns and directly impacting the overall consumer experience of every shopper.
About the Authors
David Speights, PhD, is the chief data scientist; Daniel Downs, PhD, is a statistical criminologist; and Adi Raz, MBA, is director of modeling and analytics for The Retail Equation.
About The Retail Equation
Headquartered in Irvine, California, The Retail Equation optimizes retailers’ revenue and margin by shaping behavior in every customer transaction. The company’s solutions use predictive analytics to turn each individual shopper visit into a more profitable experience. This yields immediate financial payback, increasing store comps by as much as 2 percent, with significant return on investment. Their Software-as-a-Service applications operate in more than 34,000 stores in North America, supporting a diverse retail base of specialty apparel, footwear, hard goods, department, big box, auto parts, and more. For more information, visit TheRetailEquation.com.
Strict Return Rules Negatively Affect Stores and Consumers
At the end of the six-month test period, the Strict Group of stores showed an 8.6 percent reduction in net sales compared to sales from the Friendly Group. Stated a different way, if sales declined in the entire chain by 8.6 percent and the overall return rate was 7.2 percent, the retailer would have to reduce their total return dollars by approximately 118 percent to offset the loss in revenue—which is impossible because the total dollars of lost sales would have already exceeded the total return dollars for the retailer. This shows a real revenue impact and telling statistics for the retailer, plus a key learning point for other retailers. There were several other important conclusions drawn from the study: Stricter return rules and policies negatively impact all shoppers, even those who never make a return, because return policies are typically a consideration on every purchase.
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SOLUTIONS SHOWCASE SECURITY RESOURCES
Love the Technology…Don’t Forget the People By Joseph Malone
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echnology is everywhere. From emails to smart phones to social media and everything wireless, we have become a society fixated on the newest and best technology. Think you’re immune? Have you ever left your home or office without your smartphone and immediately returned to pick it up? Most people would say, “Yes.” Could you get through an entire evening without checking your work emails on your smartphone or tablet? Most people would say, “No.” Many people would be surprised to discover that the technological advancements of recent decades are quite similar to the effects of the Industrial Revolution in the eighteenth century. Both movements accelerated the displacement of workers by machines that could perform tasks faster and more accurately. However, there is a major difference. In earlier generations you could leave the office at five o’clock and not have to think about work again until the next morning. You weren’t expected to take phone calls or respond to requests if you were sick or on vacation. Today, thanks to email and smartphones, the length of the average workday along with your accessibility has dramatically increased.
Connecting vs. Communicating
While there’s no question that technology has radically altered the manner in which companies are doing business, the price of this progress is not without its downside. Sadly, as businesses are expanding, they are becoming more and more dependent upon technological and automated services, throwing the human side of customer service out the window. It’s as if corporate America has developed a severe case of amnesia, forgetting that our clients butter our bread. We inappropriately thank them by automating our services instead of providing the indispensable human element that is so necessary for building and maintaining strong business relationships. However, some companies are quickly catching on. According to New York job placement expert Carla Gigante, owner of The Gigante Agency, “An overwhelming majority of companies say ‘soft skills’ and the ‘human touch’ in customer service are just as important and in many cases more important than technical skills. Many are actually hiring people skills over
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SOLUTIONS SHOWCASE SECURITY RESOURCES All of us at Security Resources want to assure our clients that no matter how much technology we have, we will never lose sight of the fact that we are in the “people business.” providing outstanding client service with an emphasis on providing the essential human touch. We are also determined to drive our client-centric model throughout every level of our company. To illustrate our commitment, we have recently added a corporate client services trainer as a core member of our client satisfaction team. In addition to all our regular, ongoing job training, everyone from field supervisors to the CEO level is participating in weekly client services training. Our topics range from writing professional emails and telephone etiquette to developing assertive and effective communication skills.
technical skills. Why? People skills are a talent that is more inborn than learned. Therefore, it’s much more difficult to train.” Technology is a powerful tool for generating massive amounts of information, yet without trained people who know how to utilize and communicate that data effectively, the value is significantly reduced if not completely worthless. Technology has enabled users to interact with clients and coworkers on the other side of the globe. However, it has also diminished some of the trust and rapport that previously evolved from face-to-face meetings and phone conversations. Perhaps you’ve observed this in your own office space. Workers are more often inclined to chat electronically rather than physically walking over to the next cubicle and speaking with someone. The issue is that we’re spending too much time maintaining superficial online connections without dedicating enough time or effort for cultivating real-life business and personal relationships. Did you ever think we’d live in an age where people could window shop for their soulmates utilizing online dating services? This technology allows people to make snap judgments and decisions based exclusively upon a picture and a profile. While we may have hundreds of LinkedIn connections, many are people we would have never met otherwise. Although we can share many new concepts or ideas with these contacts, do they really provide the kind of human interaction that is so essential for our business growth or emotional health? If we are constantly checking in with our “virtual worlds,” little time is left for our “real-world” relationships. Too much chatter… too little real conversation. There is a huge difference between connecting and communicating.
Moving from Good to Great
We are on a mission to take everything that is good about Security Resources and make it great by providing outstanding client services. To guarantee we get there, we have created a Client Relations Department, and our client relations director now serves as part of the executive management team. Together, we are responsible for all aspects of our client satisfaction and quality assurance. Our ultimate goal is to provide expectation-shattering service in every client interaction. We know we can only achieve this objective by keeping our focus on the human element. After all, it’s the people that actually get things done. Security Resources is in the people business, providing security guard services for our clients. We recognize that our clients, partner companies, and suppliers are people too. We don’t just do business with XYZ Company; we do business with Maria, Tom, or Ed working at XYZ Company. We appreciate that change and technology are here to stay, and our company is excited about it. However, technology will never replace our commitment to serve our clients with the highest levels of personalized integrity that they so rightly deserve. Love the technology…don’t forget the people.
Technology to Enhance Client Services
Now, before you think that we don’t appreciate the technological revolution, let me state that we wholeheartedly embrace it. We value the objectives it has allowed our company to achieve and the growth it has helped us realize in the last twenty years. In fact, we are in the process of launching the first part of our new enterprise platform. This is our largest technological effort to date, and it will include our new client portal and mobile application. Throughout each step of its development, we have asked the question—how will this affect our clients, partner companies, and employees? In having these discussions, we’ve acknowledged that efficiency in the process can’t replace steadfast person-to-person interaction. All of us at Security Resources want to assure our clients that no matter how much technology we have, we will never lose sight of the fact that we are in the “people business.” You will always be able to reach our live, accountable personnel—day or night. Everything we are developing has been designed with the goal of
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About the Author
Joseph Malone is Chief Executive Officer for Security Resources, a national security firm providing security guard and investigative services based in Cherry Hill, New Jersey. |
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INDUSTRY NEWS
International Organized Retail Crime Summit Held in Florida Event Features ORC Subject-Matter Experts from Both the US and Japan By James Lee, LPC, LP Magazine
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crimes, drugs and drug trafficking, identity theft, money laundering, cybercrimes, and even financing terror groups. While the global figure is unknown, industry experts estimate the cost of organized retail crime at about $30 to $40 billion annually the US alone.
rganized retail crime prevention recently took on an international flavor when Tyco Retail Solutions hosted the International Organized Retail Crime Summit 2015 at their Boca Raton, Florida, campus in late October. LP Magazine was there to report on the event, which offered a unique opportunity for retail loss prevention, law enforcement, academia, and technology solution providers from the US and Japan to meet and collaborate face-to-face on the growing concern of organized retail crime (ORC). Recognizing the impact and magnitude of this global problem, the two-day summit was attended by some of the industry’s top subject-matter experts from both countries. The event featured an open, interactive format where attendees had the opportunity to learn and share information regarding the latest approaches being employed to combat ORC. Different than traditional forms of shoplifting, organized retail crime encompasses large-scale retail theft and other fraudulent activity primarily involving incidents where stolen goods are converted into cash. Yet even more troubling is the role that ORC plays as a “gateway crime” with incidents increasingly linked to even more serious issues such as violent
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Market Updates on Organized Retail Crime
Monday’s events began with a US market update on ORC hosted by Paul Jones, LPC. Jones, eBay’s executive director of global asset protection, offered unique insights on ORC challenges facing both brick-and-mortar and online retailers based on his experience in both formats. ORC once depended largely on black-market operations and physical locations such as flea markets and other illicit brick-and-mortar locations to sell stolen goods. Now, ORC operations are increasingly turning to online marketplaces as an easier, broader reaching, and more profitable way to sell stolen merchandise. According to Jones, maintaining trust is a key element in the eBay business model. Stolen goods create an unfair and untrustworthy market place for buyers and sellers. He outlined
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initiatives within his company for identifying and shutting down resale of stolen merchandise. “To confront the challenges related to organized retail theft and the sale of stolen goods, we all must remain vigilant and leverage an ORC ecosystem of strong strategic partnerships. Our dedicated global teams are focused on enforcing policies, ensuring we have the right technology in place, collaborating with rights owners and working closely with law enforcement to combat ORC,” said Jones. “The best response to organized retail crime is to implement best-in-class solutions. At the store level, this would include CCTV cameras, analytics, EAS tagging standards, and other tools
matched with customer traffic and sales information. These efforts complemented with good customer service offer our best chance at deterring ORC. As it relates to online solutions, it’s critical to know and understand the habits of your customers that shop online as well as you know the customers in your stores; and synchronize and analyze that data,” he emphasized. Every solution requires teamwork, collaboration, and cooperation. Dave DiSilva with eBay discussed the role that online retailing has taken in combating ORC. DiSilva discussed research and detection methodology, the eBay PROACT team, as well as several examples of the cooperative relationships that eBay has
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developed with retail organizations and law enforcement agencies to successfully support efforts to mitigate organized retail crime.
A behind-the-scenes site tour of the Tyco Retail Experience Center included a closer look at some of the latest in technologies and product enhancements to address ORC issues. The tour showcased tagging solutions, dual-technology detection platform, metal foil and jammer detection sensors, and RFID as EAS solutions. Tyco’s wide range of advanced IP video surveillance solutions include public view monitors (PVMs) and video analytics to help monitor and capture ORC activities, while providing law enforcement evidence for potential prosecution. These solutions enable retailers to be alerted to possible suspicious activities such as a shelf-sweep event or crowd formation, and to receive point-of-sale analytics on potential internal theft. Facial recognition is one of the latest solutions offering retailers the ability to be alerted when possible known offenders come into their stores.
ORC Issues in Japan
A market update reviewing ORC issues in Japan was also presented by Yoshinori Inamoto with the National Shoplifting Prevention Organization (NSPO), a nonprofit organization comprised of major Japanese retail businesses dedicated to combating organized retail crime and other retail theft issues in Japan. Many of the ORC issues occurring in Japan that were discussed by Inamoto were very similar to ORC incidents occurring here in the states. Gang activity, booster operations, illicit websites, and online auctions involving stolen goods are just some of the ORC operations currently active and causing significant retail losses in Japan. As these concerns continue to grow, property crimes involving retail theft have climbed steadily across the country with reported shoplifting cases now eclipsing 10 percent of all reported penal code offenses. Throughout the course of the summit the delegates from Japan gathered insights from US subject matter experts to further support their ongoing efforts to tackle the rising threat of organized retail crime in Japan.
The Power of Collaboration
One of the most powerful sessions of the event involved a “retailer collaboration” presentation by Brendan Dugan with Walgreens and Terrence Mullen with CVS. Featuring a discussion on the importance of cooperative efforts in the battle against organized retail crime, Dugan and Mullen elaborated on joint efforts involving multiple ORC investigations between the retailers that have successfully resolved several multi-million dollar cases. The presentation clearly demonstrated the power of collaboration and the results that can be achieved by working together. A related discussion on “Active Involvement of Local, State, and Federal Law Enforcement” was shared by Scott Campbell with the Federal Bureau of Investigation and Rich Rossman of the Broward County Sherriff’s Office. This presentation offered highlights on the importance of developing strong partnerships with law enforcement partners and the results that we can reach and build upon when we work together. The final session of the event was a presentation by Dr. Read Hayes, director of the Loss Prevention Research Council
Embracing Technology
Keeping pace with the ongoing changes in retail is a critical aspect of the evolution of the loss prevention industry. This requires a commitment to growth and innovation in all areas of the profession whether it involves learning new skills, accepting new roles and responsibilities, modifying our approach to the business, or exploring new and creative solutions. With increasing support to fight ORC issues, a growing number of retail companies are allocating additional resources to help fight organized retail crime, with many looking to add or enhance innovative new technology solutions. This ongoing loss prevention industry trend was also addressed as part of the summit and supported by the host of the event.
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and research scientist at the University of Florida. Dr. Hayes presented his results on how to identify and prevent ORC by affecting offender decisions through deterrence methods. “All crime starts with offenders making a decision to weigh the risks and benefits. Our research on the science of deterrence reveals offenders recognize and respond to cue mechanisms, which are technologies such as video surveillance cameras, enhanced public-view monitors (PVMs), and electronic tags, that clearly signal a crime is too difficult, too risky, or not worth it.” This discussion once again underscored the
importance of applying research and analytics in efforts to find effective solutions. The importance of working together to reach productive and successful results in the battle against organized retail crime—whether those partnerships are between retail organizations, law enforcement, solution providers, academia, or between nations—was an overriding theme for the entire event. Organized retail crime may be an international concern, but some of our best solutions may be found when we forge international cooperation.
Second US-Mexico LP Summit Shares Best Practices on Retail Security and Loss Prevention Strategies
Roundtables Discuss Supply-Chain Security, Extortion, and Crisis Management By Jack Trlica, LP Magazine
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early thirty retail executives representing nine Mexican and US retailers gathered at the Sheraton Santa Fe hotel in Mexico City October 13–14 to share their experiences with the challenges of operating retail locations and supply chains in Mexico. This second conference follows last November’s inaugural event held in Guadalajara. This conference included representatives from drug store chains Farmacia Guadalajara and Farmacias Benavides; Liverpool, Mexico’s largest department store chain and operator of over fifteen malls across Mexico; OfficeMax; Walmart Mexico; and US retailers operating in country—Fossil, Nike, Old Navy, and Walgreens, who recently acquired Farmacias Benavides. Representatives from ANTAD, Mexico’s retail trade association, and Wicklander-Zulawski also participated. Hosted by LP Magazine and PCG Solutions and sponsored by Checkpoint Systems and Axis Communications, the summit is meant to bring together both Mexican and US loss prevention professionals in an intimate atmosphere to ask questions and share best practices on significant threats and issues. The conference consists of two half days of roundtable discussions and presentations with an evening networking dinner.
Roundtable Discussions
Moderated by Walter Palmer, the roundtables focused on three topics determined from the consensus input of the attendees. The first topic addressed was supply-chain security and cargo theft, which is an ongoing issue from organized retail crime gangs. Tactics such as using unbranded trucks, routing vehicles around high-risk areas, and collaborating with law enforcement to map high-crime parts of the country, were discussed.
“Mexico’s retail scene has seen some explosive growth over the past ten years, but there are unique challenges to operating in this environment,” said Palmer. “This roundtable is a great opportunity for US retailers to learn from in-country experts on the operating environment, differences in regulatory codes, and cultural factors that might inform strategy. For the Mexican retailers, this is a chance for them to hear an outside perspective on loss prevention strategies and get perspective from those companies that are new to the market and, therefore, looking at issues with fresh eyes.” The second roundtable addressed extortion and violence against employees. Two types of extortion were identified—extortion by telephone where criminals call retail stores and pressure employees to put money on gift cards with threats to the store or the person, as well as robbers entering stores for cash and threatening violence. Other instances of violence against employees, including angry customers, individuals under the influence of drugs or alcohol, and kidnapping, were mentioned. According to Sergio Dominguez, CFE, director of investigations, frauds, and centralized affairs for Walmart Mexico, “This summit helped to confirm the permanent interest of retailers in Mexico and the US for innovating their loss prevention programs under stricter compliance regulations and an increased concern for maintaining a positive reputation before the eyes of different stakeholders. Keeping an efficient loss prevention program is one of the obligations of a socially responsible company.” The third roundtable focused on crisis management of incidents like hurricanes, earthquakes, and civil unrest. The strategies discussed were similar to US strategies of developing crisis and business continuity plans, practicing and communicating plans and procedures with employees, and using crisis operations centers to manage events.
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Promoting Communication, Proficiency, and Rapport
”This summit helped to confirm the permanent interest of retailers in Mexico and the US for innovating their loss prevention programs under stricter compliance regulations and an increased concern for maintaining a positive reputation before the eyes of different stakeholders. Keeping an efficient loss prevention program is one of the obligations of a socially responsible company.”
“The LP summit was a productive way to discuss common issues with both US and Mexican retailers, including our new partner Farmacias Benavides,” said Tim Gorman, vice president of asset protection solutions for Walgreens. “I was especially interested in the discussion about crisis management and business continuity hearing how Mexican retailers, especially Walmart Mexico, handle emergency response and crisis communications.” Ivan Islas, loss prevention executive from Liverpool, presented attendees with his approach to developing and executing a shrink-reduction program. His presentation illustrated the financial analysis, risk assessment, and steps needed to implement and evaluate the success of a comprehensive shrink program. Wicklander-Zulawski’s Latin American manager, Juan Valverdes, presented on investigations and interviewing in Mexico. Manuel Cardona, the government affairs executive with ANTAD, discussed his organization’s efforts at promoting retail security needs to federal, state, and local law enforcement and other government authorities. The conference ended with discussion of the need in Mexico for ways to promote the loss prevention industry through similar events and other educational opportunities, sharing information through LP Magazine’s print and digital channels, and methods for recruiting new LP employees. “As criminals become smarter and embrace new technologies and processes to inflict pain on retailers, LP managers in Latin America need to move to a higher level of proficiency to address these issues. The LP summit in Mexico is an example of how LP executives can come together to share their experience,” said Miguel
Calo, Checkpoint’s vice president and director general LATAM. “I thought the discussion this year proved beneficial to everyone with a number of valuable best practices the attendees could take back to their companies. I hope this format can be duplicated in other countries throughout Latin America.” For more information about this or future US-Mexico LP Summits, contact the author at JackT@LPportal.com or Checkpoint’s Mexico director, Mohamar Silva, at Mohamar.Silva@checkpt.net.
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ANNUAL INDEX January/February 2015 From Adversary to Trusted Partner by John Selevitch, LP Magazine (p. 15) The Global Retail Theft Barometer by Ernie Deyle, Sysrepublic (p. 37) Winning the Super Bowl of Alarm Conversions by Lee A. Pernice, LPC, Contributing Writer (p. 49) March/April 2015 e-Commerce Fraud by Chris Trlica, Contributing Writer (p. 15) Aria Resort & Casino, Las Vegas by John Wilson, LP Magazine EU (p. 43) Precious Cargo by Steven Palumbo, LPC, CFI, Tiffany & Co. (p. 55) May/June 2015 From Alarm Monitoring to Crisis Management by Bill Turner, LPC, Loss Prevention Foundation (p. 15) Mobile Payments by Lee A. Pernice, LPC, Contributing Writer (p. 43) Attacks on POS Systems by JD Sherry, Cavirin Systems (p. 57) July/August 2015 Finish Line Is Winning Big with Big Data by Mike Smith, Finish Line, and David Speights, PhD, The Retail Equation (p.15) Guardians of the Golden Arches by Adam Paul, Contributing Writer (p. 41) What Next for EAS? by Colin Peacock, ECR Europe (p. 53) September/October 2015 Keeping International Travelers Safe by Garett Seivold, Security Directors’ Report (p. 15) Engaging Merchants in the Protection of Assets by Chris Trlica, Contributing Writer (p. 39) Driving Third-Party Logistics Solutions by Jacque Brittain, LPC, Editorial Director, Digital (p. 51) November/December 2015 Managing the Frontiers of Retail Innovation by Professor Adrian Beck and Matt Hopkins, PhD, University of Leicester (p. 15) The Art of the Kiosk by Chris Trlica, Contributing Writer (p. 39) 2016 Product Showcase and Resource Guide (p. 51) Interviews by James Lee, LPC, Executive Editor Extending LP Technologies to the Entire Enterprise with Mike Limauro, Weis Markets (Jan/Feb 2015, p. 25) From Leading Her Team in Technical Fouls to Leading RILA’s AP Efforts with Lisa LaBruno (Mar/Apr 2015 p. 29) The Attitude of Success with Melissa Mitchell, LifeWay Christian Stores (May/Jun 2015 p. 29) Operational Standards Support with Anne Sullivan, CKE Restaurants (Jul/Aug 2015, p. 27) Loss Prevention Consulting with Bob DiLonardo (Sep/Oct 2015 p. 27) Staying Connected to the Field with Mike Silveira, CVS Health (Nov/Dec 2015 p. 27) Academic Viewpoint by Richard C Hollinger, PhD Coworker Competition (Mar/Apr 2015 p. 26) 2015 NRSS Executive Summary (Jul/Aug 2015 p.24) Ask the Expert Video Analytics: Crafting a System for Success with Dan Cremins, March Networks (Jul/Aug 2015 p. 64) Associations in Action Critically Assessing Your 2015 Approach
to Asset Protection by Rhett Asher, FMI (Jan/Feb 2015 p. 24) Certification Understanding the Bigger Picture with Brent Smerczynski, LPC, 7-Eleven (Jan/Feb 2015 p. 58) Separating Yourself from the Pack with Troy Young, LPC, AutoZone (Mar/Apr 2015 p. 66) An Early Education with Andrew Radak, LPC, Rite Aid (May/Jun 2015 p. 40) Expanding Our Knowledge with Karen VanBrunt, LPC, Agilence (Jul/Aug 2015 p. 38) A New Perspective with Karla Hutchinson, LPC, Brookshire Grocery (Sep/Oct 2015 p. 36) Forging Partnerships with Cita Doyle, LPQ, InstaKey (Nov/Dec 2015 p. 24) Digital Dialogue by Jacque Brittain, LPC A Look Back, a Glimpse Forward (Jan/Feb 2015 p. 48) Something Given, Something Earned, Something Lost (Mar/Apr 2015 p. 52) What’s the Right Path? (May/Jun 2015 p. 54) Taking a Fresh Look (Jul/Aug 2015 p. 50) And Our Survey Says… (Sep/Oct 2015 p. 48) When Dealing with Shoplifters, Safety Is Always Our First Option (Nov/Dec 2015 p. 48) Evidence-Based LP by Read Hayes, PhD, CPP Preventing and Dealing with Crime Events (Jan/Feb 2015 p. 36) State of the Industry (Mar/Apr 2015 p. 40) Focusing on What Offenders Think (May/Jun 2015 p. 68) Walmart Moving More to an EvidenceBased Approach (Jul/Aug 2015 p. 62) Navigate the LP Highway with Good Data (Sep/Oct 2015 p. 60) Good Sensors Lead to Good Data (Nov/Dec 2015 p. 36) Future of LP by Tom Meehan, CFI Things to Consider (Nov/Dec 2015 p. 38) Interviewing by David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP Not Everyone Is Hannibal Lector: Part 2 (Jan/Feb 2015 p. 12) Words… (Mar/Apr 2015 p. 12) It’s All about Context: Part 1 (May/Jun 2015 p. 12) It’s All about Context: Part 2 (Jul/Aug 2015 p. 12) It’s All about Context: Part 3 (Sep/Oct 2015 p. 12)
It’s All about Context: Part 4 (Nov/Dec 2015 p. 12) My Turn Time for Some Hard Work on Soft Sentencing by Frank Muscato (Mar/Apr 2015 p. 64) One Question to Improve Your Store Visits by Walter Palmer, CFI, CPP, CFE, PCG Solutions (May/Jun 2015 p.72) Franchisees: Building an LP Program from Scratch? by Jeff Levit, LPC, CPP, Panera Bread (Jul/Aug 2015 p.70) Using Technology to Enhance the Local Law Enforcement by Detective Raquel Betti (Sep/Oct 2015, p. 24) Parting Words by Jim Lee, LPC Unforgettable People (Jan/Feb 2015 p. 66) Change—You Reap What You Sow (Mar/Apr 2015 p. 78) Making a Difference (May/Jun 2015 p. 82) Sick and Tired and Pleased as Punch (Jul/Aug 2015 p. 74) Enough Is Enough, I’m Retiring (Sep/Oct 2015 p. 78) Reflecting on 2015 (Nov/Dec 2015 p. 90) Partnering with Retailers by Dave DiSilva Connect and Collaborate (Mar/Apr 2015 p. 28) Joint ORC Investigations (May/Jun 2015 p. 28) Basic Training in Network Security (Jul/Aug 2015 p. 26) eBay Celebrates Twenty Years (Sep/Oct 2015 p.26) Publisher’s Letter by Jack Trlica A Powerhouse (Jan/Feb 2015 p. 6) Tiffany’s Peer-to-Peer Recognition Program (Mar/Apr 2015 p. 6) Tweeting in Orlando (May/Jun 2015 p. 6) Well Done, Bob (Jul/Aug 2015 p. 6) Tripping Over Technology (Sep/Oct 2015 p. 6) Welcome to Our New Digital Platform (Nov/Dec 2015 p. 6) Strategies How to Get More Money for Technology Acquisitions by Gerald Becker, USS (Mar/Apr 2015 p.62) Remote Connectivity: Easier, Faster, Better LP by Gerald Becker, USS (May/Jun 2015 p.66) Supply Chain It's 10 p.m. Do You Know Where Your Package Is? by Glenn Master, Newgistics (Jan/Feb 2015 p.60)
Statement of Ownership Publication title: LossPrevention Filing date: 10/1/2015 Issue frequency: bi-monthly No. of issues annually: 6 Mailing address of office of publication: 700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105 Mailing address of headquarters: same Name and address of publisher, editor, and managing editor: Jack Trlica, same address as above Corporate owner: Loss Prevention Magazine, Inc., 10433 Pullengreen Dr., Charlotte, NC 28277 Stockholders: Jim Lee, 10433 Pullengreen Dr., Charlotte, NC 28277; Jack Trlica, 7436 Leharne Dr., Charlotte, NC 28270 Publication title: LossPrevention Issue date of circulation data below: July-August 2015 Avg. No. Copies No. Copies of Single Each Issue During Issue Published Preceding 12 Months Nearest to Filing Date Total no. of copies 26,000 26,000 Outside county paid/requested subscriptions 17,330 17,574 In-county paid/requested subscriptions 0 0 Other paid/requested distribution outside USPS 6,105 6,090 Requested copies distributed by other mail classes through USPS 0 0 Total paid and/or requested circulation 23,435 23,664 Outside county nonrequested copies 713 696 In-county nonrequested copies 0 0 Nonrequested copies distributed by other mail classes through USPS 0 0 Nonrequested copies distributed outside the mail 1,143 890 Total nonrequested distribution 1,858 1,586 Total distribution 25,291 25,250 Copies not distributed 709 750 Total 26,000 26,000 Percent paid and/or requested circulation 92.7% 93.7% Name and title of publisher: Jack Trlica, Editor and Publisher Date: 10/1/2015
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PEOPLE ON THE MOVE
Larry Carroll has been appointed Vice President of AP for 99 Cents Only Stores. Steven Panarelli was made District Manager of AP for Abercrombie & Fitch.
Laura Morris was made Corporate AP Management, for Rastelli Foods Group. Diane Valdez and Brandon Luedecker were made Senior Area LP Managers for Ross Stores.
Jesse Ratliff is now Regional Safety Manager for Amazon.
Murray Sinclair was appointed Associate Vice President of AP for Regis.
Brad Raeburn was promoted to Area LP Manager for Bed Bath & Beyond.
Kennarios Kirk was made AP District Manager for Rite Aid.
Steve Bryant is now Senior Manager, Profit and Protection for Caribou Coffee.
Sears Holdings announced the following appointments: Carol Zielinski, LPC to Asset and Profit Protection Analyst; Frank Devlin to Director of Safety Operations; Daniel Perea and Mike Calvert to Market Asset & Profit Protection Managers; and Kazuya Ohara to Senior Analyst for the Asset and Profit Protection Department.
Jackie Cato, CFI, LPC was made Manager of LP for Cracker Barrel. Delhaize America has announced the appointment of John Williams as Central Station Manager and Aaron Safrit as Distribution Center LP Manager. Justina Reading was promoted to Regional LP Manager for DSW. Joseph Martino Jr. was named Regional LP Manager for Family Dollar Stores. Jay Joseph was made Market LP Agent for GAP. Dawn Roller was appointed Division LP Manager for The Great Atlantic & Pacific Tea Company.
Anton Williams is now District AP Manager, and Michael Anderson is now Area AP Investigator for The Sports Authority. Daniel Bambas, LPQ is now an Area AP Coordinator for Stein Mart. Mellisa Slavik, CFI was appointed Regional LP Manager for The Swatch Group. Mike Andreotti is now Director, AP Field Operations for Target.
Merrissa Nacht is now Investigations Manager for Gucci.
Stanley Kirsch has joined U.S. Security Associates, Retail LP Services Division.
Ben Thomas was made Area LP Manager for HEB.
Richard Flowers is now a Corporate Investigator for Walgreens.
Kathleen Avariano is now LP Manager for Hermes of Paris.
David Konop was made Regional Compliance Manager, and Chad Robin was made Regional AP Investigator for Walmart.
Mark Shoemaker was appointed Senior Manager, Corporate LP for JCPenney. Jason Shaw, CFI, LPC was made Manager, LP Programs, North America for Nike. Protection 1 announced the appointments of Bob Ryan as Senior Vice President and Joe Longfield as Regional Vice President. Roberto Borges is now Director, AP Facilities & Technology, for Ralph Lauren.
To stay up-to-date on the latest career moves as they happen, sign up for LP Insider, the magazine’s weekly e-newsletter, or visit the People on the Move page on the magazine’s website, LPportal.com. Information for People on the Move is provided by the Loss Prevention Foundation, Loss Prevention Recruiters, Jennings Executive Recruiting, and readers like you. To inform us of a promotion or new hire, email us at peopleonthemove@LPportal.com.
CALENDAR
November 18–19, 2015 ISC East Javits Center, New York City isceast.com January 17–20, 2016 National Retail Federation Big Show 2016 Jacob Javits Convention Center New York City bigshow16.nrf.com March 1–3, 2016 Jewelers’ Security Alliance 38th Annual Security Seminar & Expo Hard Rock Hotel & Casino Hollywood, FL jewelerssecurity.org March 7–10, 2016 Merchant Risk Council e-Commerce Payments & Risk Conference Aria Resort and Casino Las Vegas, NV merchantriskcouncil.org March 14–17, 2016 Food Marketing Institute Asset Protection Conference Westin La Paloma Resort & Spa Tucson, AZ fmi.org April 5–8, 2016 ISC West Sands Expo & Convention Center Las Vegas, NV iscwest.com April 17–20, 2016 Retail Industry Leaders Association Retail Asset Protection Conference Gaylord Texan Resort & Convention Center Dallas, TX rila.org June 14–16, 2016 National Retail Federation NRF PROTECT Loss Prevention Conference & Expo Pennsylvania Convention Center Philadelphia, PA nrfprotect16.nrf.com July 24–27, 2016 Restaurant Loss Prevention & Security Association Annual Conference La Cantera Hills Resort San Antonio, TX rlpsa.com
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State/Province _________________ Zip/Postal Code ___________________Country 1. What is your company’s primary business? (Check one only) Retail
(A) Department store/mass merchandiser (B) Discount/wholesale club/outlet/ off-price (C) Specialty apparel/footwear/gifts/ jewelry/sporting goods (D) Home center/hardware/appliances/ furniture (E) Drug store/pharmacy/vitamins (F) Office supplies/electronics/videos/ music/books (G) Grocery/supermarket/ convenience store (H) Restaurant/hospitality/ entertainment (X) Other retailer ____________________ Non-Retail
(N) Consulting/integrator (P) Product manufacturer (R) Services/outsourcing (S) Law enforcement/government/military (T) Education/library/media (Z) Other non-retail ________________
NOVEMBER - DECEMBER 2015
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2. What is the primary focus of your job? (Check one only) Retail Loss Prevention/Security
(10) Corporate/regional/district manager (11) Store LP manger/investigator/ associate (12) DC/logistics/supply-chain manager (19) Other LP manager _______________________________
Other Retail
(20) Corporate operations/store manager (21) Finance/HR/legal/IT/training manager (29) Other retail manager _______________________________
Non-Retail
(30) Vendor executive/owner/ manager (31) Consultant (32) Sales/marketing manager (33) Police officer/active military (34) Educator/student/librarian (39) Other non-retail manager _______________________________
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VENDOR ADVISORY BOARD Alpha Diane Wise Global Marketing Manager Axis Communication Hedgie Bartol Business Development Manager, Retail Best Security Systems (BSI) John Gantenbein President CAP Index Stephen B. Longo Vice President, Strategic Initiatives Checkpoint Carlos Perez Senior Director, Global Marketing ClickIt Inc. Jim Paul Director of Sales
FireKing Security Group James Currey Senior Vice President Cash Management Solutions
Intelligent Loss Prevention Joerg Niederhuefner Director, Business Development
Security Resources, Inc. Patricia M. Rusak Director of Sales
Nedap Retail Patrick O’Leary Vice President & General Manager NA
Sysrepublic Christopher D'Amore Owner/Partner, Global Sales
Palmer, Reifler & Associates Jeff Welch Executive Director
Turning Point Justice Lohra Miller President and CEO
Protos Security Kris Vece Director of Client Relations
Tyco Integrated Security Kevin E. Lynch, LPC Executive Director
Industrial Security Solutions Dave Sandoval President
The Retail Equation Tom Rittman Vice President, Marketing
Universal Surveillance Systems Steve Sell Chief Marketing Officer
InstaKey Security Systems Cita Doyle, LPQ Director of Sales & Marketing
Salient Systems David Miller Business Development Manager, Retail
Verisk Retail David Duhaime President Verisk Crime Analytics
Corrective Education Company Jeff Powers Chief Operating Officer Detex Ken Kuehler National Account Manager Digilock Mila Adamovica Marketing Communications
LP MAGAZINE | NOVEMBER - DECEMBER 2015
89
PARTING WORDS
Reflecting on 2015
Jim Lee, LPC Executive Editor
E
very day, every week, and every year we laugh, we think, we remember. Things happen to us that are funny, rude, or down right upsetting. Reflecting on them, we laugh them off. Things happen that cause us to think about ourselves, our job, our future. Reflecting on them makes us better. Things happen that cause us to remember the past. Reflecting on memories about family and friends can be bittersweet.
Our thoughts and prayers go out to those present and past LP professionals and vendors who are fighting health issues. There by the grace of God go you or me.
Things We Just Plain Laugh Off
impressed by their professionalism, their thoughtfulness, and their thought leadership.” - Lisa LaBruno, RILA “I never think of myself as a ‘female LP executive,’ I just think of myself as an ‘LP executive.’ I don’t separate one from the other. I can’t tell anyone how to succeed as a female in loss prevention because I only know how to succeed as a person.” Melissa Mitchell, LifeWay Christian Stores “Hiring a consultant is a good investment. The right consultant is worth his weight in gold when you’re looking at making multi-million dollar procurements.” Bob DiLonardo
When you wake up and think it is Saturday, but it’s only Friday. After washing your hands and face, you find the rest room is out of paper towels. People who say, “I may be stupid but…” Mail stamped “You may already be a winner!” People who constantly use the phrase “You know...” Drivers who speed up to prevent you from passing. Calling out to someone you think you know, but it’s not them. When the only ATM around is out of order. Waking up in the middle of a good dream. When you barely miss the traffic light. Paying for air for your tires. When the next rest area is twenty miles away. Discovering a seat is wet after you sit down. People who say “awesome” to describe everything. A family at a restaurant who are all fixed on their phones. People who start sentences with “Don’t take this the wrong way, but...”
Things That Cause Us to Remember
This time of year brings us many holidays. Two of my personal favorites are Thanksgiving and Veterans Day. Best wishes to each of your families and enjoy the time together. Photos at Thanksgiving dinner table are special memories. Our thoughts and prayers go out to those present and past LP professionals and vendors who are fighting health issues. There by the grace of God go you or me. A special tribute and thank you to our friends and relatives who wore a uniform proudly. Is there a better calling than to have served our country?
Things the Magazine Gave Us to Think About
“The roadmap used by eBay to help retailers address ORC problems should be adopted by other online companies. Engagement and partnership always leads to a better solution.” - Scott Sanford, Barnes & Noble “I think there are still companies out there that are focused primarily on malicious activity. The progressive folks out there today, however, are looking at total loss.” - Mike Limauro, Weis Markets “I was surprised to find that many of the AP executives were a lot like Mike Lamb. I was pleasantly surprised that most of them are exceptional. I’m continuously
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NOVEMBER - DECEMBER 2015
We laugh, we think, we remember.
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Cada artículo que falta son oportunidades de venta que se pierden. CONOCER L A REALI DAD D EL INVENTARIO ES BÁSI CO PAR A EVITAR ROTU R AS D E STO CK Checkpoint Systems ha desarrollado aplicaciones de RFID para identificar y proteger productos en origen y así optimizar visibilidad y gestión de inventarios desde la fabricación, hasta el punto de venta. Checkpoint es el proveedor que le ofrece soluciones globales para toda la cadena de suministro, con productos, instalación y servicio postventa, propios. Aproveche las ventajas de RFID: Incremento de ventas. Incremento de márgenes. Mejor control de operaciones. Mejor experiencia de compra.
CheckpointSystems.com.mx
Encuentre las 7 diferencias
Fallos de detección.
Alto índice de detección que reduce el hurto.
Falsas alarmas.
Alta
Errores de desactivación.
Ratios de desactivación cercanos al 100%.
No adecuadas para contacto con alimentos.
en las alarmas.
ISEGA para contacto con alimentos.(*)
Reactivación espontánea de las etiquetas.
Desactivación permanente.
Sin protección antiestática.
Protección antiestática para aplicación automática.
Sin la garantía de un líder.
Garantía Checkpoint.
Una buena etiqueta RF antihurto se distingue por las ventajas que ofrece. Checkpoint es un referente mundial en etiquetas de seguridad, porque dispone de un proceso continuo de investigación + desarrollo y somete cada etiqueta a un estricto control de calidad. (*) Etiqueta 2010 y 4010 Food
TODO UN MUNDO de protección antihurto La gama de productos Alpha protege los artículos con alto riesgo de hurto. Incrementan las ventas. Mejoran la experiencia de ompra de los artículos de libre exposición. Facilitan la disponibilidad de la mercancía. Más de 100 nuevos productos lanzados en los últimos años. Constante inversión en I+D. Compatibles con sistemas RF, AM y preparados para la RFID. Con un inmediato Retorno de la Inversión. Un equipo internacional con más de 4000 personas a su servicio.
Checkpoint de México
55 5022 1080 | info-mx@checkpt.net CheckpointSystems.com
¡No solo son pérdidas financieras!
*
?
AFECTA LA CONFIABILIDAD DEL INVENTARIO, IMPACTANDO LA GESTIÓN DEl ABASTO.
eL CAMINO ES LARGO, PERO YA LO HEMOS HECHO. sIEMPRE LLEGAMOS A LA META CON RESULTADOS EJEMPLARES.
Para saber más sobre el programa contra la merma, ponte en contacto con nuestros ejecutivos de cuenta.
@ *Fuente: Resultados del XVIII Censo de Mermas 2013 de ANTAD