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WOMEN OF LOSS PREVENTION SURVEY RESULTS REVEAL HOW WOMEN VIEW THEIR CURRENT ROLES IN THE INDUSTRY

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TABLE OF CONTENTS 6 EDITOR’S LETTER

Diversity in the LP Industry

By Jack Trlica

10 RETAIL SPONSORS 12 INTERVIEWING

Women in Loss Prevention

Life Is Like a Circle: Part Two By David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

Survey results reveal how women view their current roles in the industry

24 PERSPECTIVES

A Culture of Innovation

By Jacque Brittain, LPC, Editorial Director

With Randy Dunn, Vy Hoang, and Steve Sell

36 CERTIFICATION

Investing in Your Career Interview with Miranda Collins, LPC, Petco

Taking a Data-Centric Role to Add Value to Your Company

38 LPM EXCELLENCE

LPM “Magpie” Award: Applauding Excellence Featuring Cathy Langley, LPC, and Louise Kadege

48 FUTURE OF LP

An insightful discussion with Dan Faketty of Southeastern Grocers

We Gave Up Privacy for Convenience Years Ago

By James Lee, LPC, Executive Editor

By Tom Meehan, CFI

59 SOLUTIONS SHOWCASE

- Checkpoint - Indyme Solutions - Nedap

Security at the Source

62 EVIDENCE-BASED LP

Monitors or Locked Displays? By Read Hayes, PhD, CPP

Manufacturers and retailers collaborate to meet product protection challenges, but can we do better?

66 LPM DIGITAL

The Exit Inspection, the Retreat of Toys“R”Us, and a Farewell to Sticky Myths

By Garett Seivold, Contributing Writer

By Kelsey Seidler

69 PRODUCT SHOWCASE 70 CALENDAR 71 PEOPLE ON THE MOVE 72 ADVERTISERS 72 SUBSCRIPTION FORM 73 VENDOR SPONSORS 74 PARTING WORDS

Retail Crime in Los Angeles

Crime rates have been dropping for decades. Are we nearing a floor?

The Underdog

By Jim Lee, LPC

By Basia Pietrawska, CAP Index

MAY–JUNE 2018

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EDITOR’S LETTER

Diversity in the LP Industry E

thnic and gender diversity in loss prevention has been a topic of conversation in our industry for certainly the three decades I’ve been involved in LP. Given the dominate white, male demographics of retail security through most of the twentieth century, it’s no wonder that industry leaders have actively put programs in place to recruit a more diverse, professional, asset protection team. When this magazine launched in 2001, diversity was a topic we wanted to cover. In fact, diversity was the feature article in our fourth issue in May–June 2002 and one of our most popular covers. We also found Mimi Welch, a writer with roots in retail human resources and training, who agreed to write an ongoing column on Women in LP that evolved into Diversity in LP that ran for the first four years of our publication. Over the past several years, the LPM team has continued our internal discussion about diversity and women in the industry. The topic was often one that we discussed at our annual editorial board meetings as well. Late last year, we decided to move forward with a survey of women in LP. Jacque Brittain, LPC, the magazine’s editorial director and someone with an extensive recruiting, education, and writing background, volunteered to lead the effort. The feature article on page 15 summarizes the results of this effort. Whenever one begins a survey project of this type, you never

know how it will be received. In this case from the beginning, the reception from the industry was, frankly, overwhelming. We started by contacting female leaders in the industry to discuss the project and develop the questionnaire. What started with a few conversations snowballed into ultimately twenty LP executives—some of whom included others on their team—who provided input into what topics to include in the survey. After many weeks of development, the end result was a fifty-question survey that was promoted to the industry from January 5 to February 5, 2018. Considering the survey took approximately twenty minutes to complete, we were unsure how many women would take the time to complete the questionnaire. To our delight, we had 500 busy, female loss prevention professionals answer the survey. By any standard, that is a very strong response and further evidence that the topic had an enthusiastic audience in our industry. The magazine wishes to thank the executives who took ownership in driving this project, as well as the LP leadership at the Retail Industry Leaders Association, National Retail Federation, and NRF’s Women in LP council. Their support and promotion of the survey to their teams helped make this project a success. Apart from this feature article that summarizes the results, what should the response to this survey

MAY–JUNE 2018

achieve? Our hope all along was not just to gauge the attitudes of females working in our industry but also start an in-depth conversation about those positive and negative issues women encounter in the workplace. This first article is just the starting point. A second article will appear in our upcoming July–August issue that will focus on industry reaction to the survey results from both male and female LP professionals. While we chose to work with female leadership during the development of this project, it should be understood that many male LP executives were aware and equally supportive of this initiative. As it should be. A detailed survey report is available for download on the magazine website at LossPreventionMedia.com. Anyone interested in reading the report is welcome to download the document. We hope you not only find the opinions expressed in this survey interesting but also fodder for internal discussions that result in a better connected, more diverse asset protection team. We want to hear your opinions of the survey results and, especially, any thoughts or changes that come from your internal discussions. If you would like to contribute your voice to the upcoming article, please reach out to Jac at JacB@LPportal.com.

Jack Trlica Managing Editor

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EDITORIAL BOARD Charles Bernard Group Vice President, Asset Protection and Comprehensive Loss, Walgreens Erik Buttlar Vice President, Asset Protection, Best Buy Jim Carr, CFI Senior Director, Global Asset Protection, Rent-A-Center Ray Cloud Senior Vice President, Loss Prevention, Ross Stores Francis D’Addario, CPP, CFE Emeritus Faculty Member, Strategic Influence and Innovation, Security Executive Council Charles Delgado, LPC Regional Vice President, Store Operations, Academy Sports Scott Draher, LPC Vice President, Loss Prevention, Safety, and Operations, Lowe’s Scott Glenn, LPC Chief Security Officer, Sears Holdings Barry Grant Chief Operating Officer, Photos Unlimited Bill Heine Senior Director, Global Security, Brinker International Frank Johns, LPC Chairman, The Loss Prevention Foundation

Mike Lamb, LPC Vice President, Asset Protection, The Kroger Co. David Lund, LPC Vice President of Loss Prevention, DICK’S Sporting Goods John Matas, CFE, CFCI Vice President, Asset Protection, Investigations, Fraud, & ORC, Macy’s Chris McDonald Senior Vice President, Loss Prevention, Compass Group NA Randy Meadows Senior Vice President, Loss Prevention, Kohl’s Melissa Mitchell, CFI Director of Asset Protection and Retail Supply Chain, LifeWay Christian Stores Joe Schrauder Vice President, Asset Protection, Walmart Stores Tina Sellers, LPC Director of Asset Protection, Retail Business Services LLC, an Ahold-Delhaize Company Quinby Squire Vice President, Asset Analytics and Insights, CVS Health Mark Stinde, LPC Vice President, Asset Protection, 7-Eleven Keith White, LPC Senior Vice President, Loss Prevention and Corporate Administration, Gap Inc.

Loss Prevention, LP Magazine, LP Magazine Europe, LPM, and LPM Online 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.

MAY–JUNE 2018

LOSS PREVENTION MAGAZINE 700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax MANAGING EDITOR Jack Trlica JackT@LPportal.com EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com EDITORIAL DIRECTOR Jacque Brittain, LPC JacB@LPportal.com MANAGING EDITOR, DIGITAL Kelsey Seidler KelseyS@LPportal.com CONTRIBUTING WRITERS Adrian Beck Read Hayes, PhD, CPP Tom Meehan, CFI Walter Palmer, CFI, CPP, CFE Colin Peacock Maurizio P. Scrofani, CCSP, LPC Garett Seivold Shane G. Sturman, CFI, CPP Bill Turner, LPC David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF DIGITAL OPERATIONS John Selevitch JohnS@LPportal.com SPECIAL PROJECTS MANAGERS Justin Kemp, LPQ Karen Rondeau DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com CREATIVE DIRECTOR Larry Preslar ADVERTISING MANAGER Ben Skidmore 972-587-9064 office, 972-692-8138 fax BenS@LPportal.com SUBSCRIPTION SERVICES

NEW OR CHANGE OF ADDRESS LPMsubscription.com or circulation@LPportal.com POSTMASTER Send change of address forms to Loss Prevention Magazine P.O. Box 92558 Long Beach, CA 90809-2558 Loss Prevention aka LP Magazine aka LPM (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 LPMsubscription.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 circulation@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.

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MAY–JUNE 2018

INTERVIEWING

Life Is Like a Circle: Part Two

by David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

n part one of this article, we addressed some of the preliminary historical basis for investigating sexual harassment claims and internal investigations. We also talked about organizing the investigation and creating a general strategy for those who need to be interviewed. In part two, we will discuss some of the mechanics of organizing the investigation. While investigations often differ in the number of potential witnesses and the order in which they need to be interviewed, it is essential to open the interviews with the person making the complaint. This first interview with the complainant will provide the basis for the objectionable actions and may assist the investigator with determining the order of the other interviews and locating the supporting documentation or evidence. It may be that the first interview is not with the actual victim but with someone whom the victim approached shortly after the event and who felt compelled to report the alleged actions to management. Since the complainant in this scenario is not the victim but merely the reporter, the investigator must identify the victim and persuade that person to cooperate in the investigation. If the victim does not want to cooperate in the investigation, the organization must determine whether to proceed to investigate independent of the victim. In some situations, the company may determine an independent basis to substantiate events in the allegation’s investigation, and the investigation should be continued. In either case, if the complaint is deemed worthy of continued investigation, an investigator should attempt to substantiate the facts independently and be appropriately skeptical of any information that appears biased or made on the basis of assumptions. Information that is biased or based on assumptions may ultimately be determined to be truthful and relevant, but it is only useful when it can be substantiated through other means.

Confidentiality

In any workplace investigation, there is a need for confidentiality. Unfortunately, the National Labor Relations Board (NLRB) ruled in Banner Health that the company could not require confidentiality of the investigation from its employees as a blanket rule. The NLRB decision said that confidentially could be requested from those involved in situations where there was a danger of evidence being altered or destroyed or in situations where there was potential for injury to those involved. In light of this recent ruling, the investigator should seek a decision from the company’s general

MAY–JUNE 2018

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.

counsel or outside labor lawyers before asking those interviewed to keep the investigation confidential. If there is a decision to require confidentiality of those involved in the investigation, a clear set of reasons should be outlined to support the company’s decision to do so. The victim and potential witnesses will undoubtedly be curious about the investigation and what others may have said during their interviews. It is the investigator’s job to obtain information, not to share it with others who don’t have a need to know. Sharing information may taint future interviews since witnesses may make assumptions or allow bias to creep into their memories. In short, the statements of other witnesses should not be shared, nor should there be an in-depth discussion of evidence for or against the alleged harasser.

The investigation should be carried out promptly and completed as soon as possible. It is generally advisable to apprise the victim and, if appropriate, the complainant that the investigation is ongoing and work is still being conducted. There is no need to discuss the direction or information uncovered at this point, but it reinforces the fact that the investigation is proceeding and taken

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continued on page 14

continued from page 12

areas of the investigator’s notes to indicate correctness even before having the individual write a statement containing the relevant information.

seriously. Not updating the victim or complainant could lead to civil suits because they didn’t believe the company was pursuing their allegations. In addition, timeliness is important to clear innocent people whose reputations could be sullied and to protect employees from any further misconduct if the allegations are substantiated. In the event of a civil suit alleging discrimination, retaliation, or harassment, the timeliness and thoroughness of an investigation can mitigate some of the organization’s liability.

Protect Identity and Evidence

Recording Interviews

Certainly, the most thorough way of documenting what went on during the interview and the information obtained would be through recording the conversation. This can be valuable since others can hear firsthand what the victim said and the emotions at play as the story was told. However, many organizations have a blanket policy not to record interviews or allow those being interviewed to record the conversation. Again, the National Labor Relations Board recently decided that an employee can record conversations (Whole Foods Market, Inc. and United Food and Commercial Workers, Local 919 and Workers Organizing Committee of Chicago). If the subject of an interview wants to record, the investigator should consult with the organization’s general counsel, outside labor lawyer, or at a minimum with their supervisor before rejecting the request.

On occasion it may be useful for the investigator to have the subject of the conversation initial areas of the investigator’s notes to indicate correctness even before having the individual write a statement containing the relevant information. If a decision were made to allow the associate to record a conversation, we would encourage the investigator also to record the conversation so that any tampering with the recording would be readily evident. With the sophistication and availability of editing tools, conversations can be deleted or altered even by those who might be less sophisticated in operating a computer. At a minimum, the investigator should keep handwritten notes of the conversation including the location in which it was conducted and the times it began and ended. In addition, any requests to use the restroom, obtain water, or anything else should be documented, and the time that they occurred should be noted. The investigator’s notes should also reflect any specific statements made by the subject in quotation marks to reflect the exact words that were used. On occasion it may be useful for the investigator to have the subject of the conversation initial

MAY–JUNE 2018

The investigator should protect the identity of witnesses who cooperate in the investigation. These witnesses should also be alerted that if they face any retaliation for cooperating in the investigation, they should contact the investigator immediately. Any evidence recovered from cooperating witnesses or other subjects should be properly logged into an evidence file. Original documents should always be obtained and, if necessary, a copy retained by the owner. Any evidence should be stored in a secure location and safeguarded from tampering. This evidence and any witness statements should be kept confidential and limited to only those who have a need to know.

Preparing for the Interview

Once the investigator has obtained a complete list of those to be interviewed and their locations and completed the background investigation, it’s time to prepare for the actual interviews. Since the investigator is interviewing employees who serve an important business function within the organization, they must make sure the department is adequately staffed while the associate sits for the interview. This may require that the individual’s supervisor be alerted of the intention to interview the employee. This can be done either by the investigator or someone who knows the general purpose of the investigation. Depending on the investigative plan, the supervisor may be told the reason for the conversation but should not be made aware of the direction of the investigation or who is being interviewed. The supervisor should also be made aware of the potential for retaliation or other reactions that might affect the associate. Depending on the investigative plan, the associate might be interviewed at an on-site location or asked to meet the investigator off-site. The decision to do either may affect the spread of rumors or prompt retaliation. Whichever location is chosen, it should provide privacy and limit any embarrassment for the person being interviewed. There is nothing more uncomfortable than having coworkers walking past the conversation looking into the room through glass doors or walls. The investigator should also have a suitable witness present to listen to the conversation and take notes. If the investigator plans to record the encounter, the use of a witness becomes more of an option. Like any traditional internal investigation, the employee’s supervisor should be alerted to the conversation and provide any assistance necessary to the investigator. Many organizations partner with the human resource manager either to witness the conversation or to support the investigator in arranging locations and times for the interviews. In the next part of this series, we will address the actual interview process of the victim, witness, and alleged harasser. These can be especially difficult investigations because there may be no witness to the event other than the two parties. These two parties may tell amazingly different stories about what occurred in the incident. We will look to the structure of the interview and some of the telltale signs of a truthful story to help in judging the veracity of the parties in part three of this series.

LOSSPREVENTIONMEDIA.COM

FEATURE

WOMEN OF LOSS PREVENTION SURVEY RESULTS REVEAL HOW WOMEN VIEW THEIR CURRENT ROLES IN THE INDUSTRY By Jacque Brittain, LPC, Editorial Director

WOMEN OF LOSS PREVENTION

oss prevention has evolved significantly over the past several decades. Today’s loss prevention professionals are expected to be multidimensional, open minded, global thinking, enterprising, and intelligent. Company leaders now understand and respect the importance of protecting the company’s assets against the challenges of total retail loss (rather than simply making shoplifter apprehensions), recognizing the value of training and awareness, and respecting the benefits of partnerships and diplomacy. This has encouraged a new and improved retail industry where effective loss prevention strategies are echoed from the C-suite and entwined in the retail business model. Yet as far as we have come, there are still mountains to climb. Talented, driven, intelligent, and capable women have long been an integral part of the loss prevention industry, but the profession is still largely male-dominated. Why? Is it the general perception women have of the profession? Is it the potential physical aspects of the job, the culture of the times, or other choices available to women? Is it the way women are treated or perceived within the industry? Is it something else? As women continue to perform and excel in the loss prevention industry, every opportunity should be taken to ensure that everyone on our LP teams is treated fairly, equally, and respectfully regardless of gender—or other bias. This commitment must be shared across the loss prevention community, supported by company leadership, and equally respected by both the men and women of our organizations. While many individuals and organizations do an outstanding job, others lag behind. Either way, there are always opportunities to learn and improve. How do women feel about their role in loss prevention? We spoke directly to the women of loss prevention to find out.

The Survey

LP Magazine’s Women of Loss Prevention survey provides a unique, comprehensive look at how women view their current roles in our industry, how

they feel they are perceived as industry professionals, the role they feel gender and gender bias has played in their ongoing career opportunities, and the responsibility that every LP professional holds to remain accountable for their own career growth and development. The goal of the survey was to provide an objective window into the thoughts, ideas, and opinions of the women of LP regarding these key areas and to open doors for additional discussion. By offering an anonymous venue for women to openly voice their views on these topics, we gained a more complete and comprehensive understanding of how the

LP Magazine’s Women of Loss Prevention survey provides a unique, comprehensive look at how women view their current roles in our industry, how they feel they are perceived as industry professionals, the role they feel gender and gender bias has played in their ongoing career opportunities, and the responsibility that every LP professional holds to remain accountable for their own career growth and development. MAY–JUNE 2018

LOSSPREVENTIONMEDIA.COM

women of loss prevention perceive these important questions and perhaps can spark fresh thoughts and ideas on how we can best address these topics to further enhance our LP teams.

Survey Questions

The survey was constructed by women for the women of loss prevention. We began by approaching approximately twenty prominent women in leadership roles across the loss prevention industry, asking them to provide a list of questions they felt represented important and productive topics relevant to the industry. Several of these leaders further encouraged women on their teams to participate in the process, resulting in a wide spectrum of topics. For practical purposes, their feedback was narrowed to a pool of fifty questions, with the final product submitted to these leaders for additional feedback prior to distribution. All the women participating in the question-writing process remained anonymous.

Survey Distribution

Invitations to participate in the Women of Loss Prevention survey were extended through several different outlets. Participation was limited exclusively to women with experience in the profession. In order to most accurately represent the thoughts and opinions of all women in the industry, we did not further limit participation based on experience levels or other qualities. All participants were informed that their participation would remain anonymous to further encourage honest, open, and complete responses. The survey distribution process uncovered an initial, critical finding—as we contacted loss prevention leaders from across the industry, we were met with overwhelming support for the survey process. Every comment was positive, every response cooperative and encouraging. As leaders distributed survey information to the women on their teams, many shared additional words of support and encouragement for their participation. This response displayed much more than a willingness by loss prevention leadership to participate in the process; it

WOMEN OF LOSS PREVENTION spectrum of perspectives from those just launching their careers to those who have dedicated their professional lives to retail loss prevention. ■■ Women in roles from store-level to department pyramid heads participated in the survey, offering perspectives within these different roles, in different settings, and while holding different levels of responsibility. ■■ Approximately 90 percent of respondents reported that loss prevention was not their original choice as a career path. One in four participants started their careers in retail loss prevention and have remained in that role. Nearly three out of four indicated they began their careers in an area outside of loss prevention, with approximately half indicating they started their careers in retail but in a function other than loss prevention. ■■ Respondents would be considered well educated, with nine out of ten indicating at least some college education and nearly three in five a bachelor’s degree or higher.

appeared to be a genuine sign of interest with what the women of loss prevention have to say. Opening dialogue and committing to the process is a constructive step forward that should be recognized and applauded across the LP community.

Collecting and Reporting Survey Results

Constructing the survey and collecting results was managed through a professional survey platform to further protect result accuracy, process integrity, and respondents’ anonymity. Only minor edits were made to respondents’ comments to correct spelling and grammar, further protect anonymity, and alleviate similar concerns. Otherwise, the thoughts and opinions shared in these comments are strictly those expressed by individual respondents. The content summarized here represents a high-level overview of the survey results. Those interested in a more detailed perspective of survey results and comments should visit LossPreventionMedia.com.

The Respondents

Approximately 500 women participated in the fifty-question survey. These respondents represented diverse experience levels, backgrounds, positions, aspirations, and career responsibility within the industry, which provided comprehensive views and opinions of the various subjects discussed from within all levels of the loss prevention structure. ■■ Every level of professional experience was well represented, providing a broad

Career Advancement

Do the women of loss prevention believe they have the support of their companies in terms of professional development and career advancement? Several questions focused on gauging women’s responses concerning this topic. ■■ The women who participated in our survey overwhelmingly felt they have the opportunity to further their

Which of the following best describes your role in loss prevention? LP Manager or Equivalent

26%

Multistore Field LP

36% 20%

Corporate LP or Equivalent

11%

Vice President/Director of LP

Other 0

25 LP MAGAZINE

30 |

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A large majority of respondents (89%) said they believe the industry has become more inclusive for women since they’ve joined the profession. While many felt the industry has made great strides, others believed there is still somewhat of a “glass ceiling,” especially at the upper levels of management.

careers in loss prevention if they choose to do so, with 90 percent of respondents agreeing that advancement is attainable. ■■ The majority of respondents felt they have the same opportunity to further their careers in loss prevention as a man would have, with 70 percent voicing their agreement. ■■ A large majority (79%) felt their companies are doing an effective job of recruiting female talent into loss prevention. ■■ Similarly, a large majority (78%) felt their companies are doing an effective job of developing female talent for loss prevention leadership roles. ■■ A larger majority (82%) also felt their companies are doing an effective job of promoting gender diversity within their loss prevention programs. Despite these encouraging outcomes, some areas resulted in very mixed responses. ■■ The respondents were evenly split when asked whether they felt they missed out

WOMEN OF LOSS PREVENTION on a raise, promotion, key assignment, or chance to get ahead simply because they were female, with 53 percent agreeing and 47 percent disagreeing that this had been an issue. ■■ Similarly, they disagreed on whether an opportunity for a position or promotion was negatively impacted due to gender, with responses divided between those who agreed (40%) and those who disagreed (60%). As one might expect, respondents’ comments were also diverse, many offering incidents, examples, and/or beliefs based on their personal experiences. Looking at the comments as a whole, most seemed to agree that the overall effectiveness of these efforts depended largely on the leadership within the department and the culture of the organization.

Being Part of the Team

Diversity and inclusion in the workforce have long been recognized as critical aspects of professional success, increasing our creativity and problem-solving, enhancing our learning experiences, shaping new attitudes, increasing flexibility, and improving workforce quality. This must be channeled through every member of the team— celebrating our differences and seeing the value that every individual brings to the table is a shared responsibility as much as it is an individual point of view. However, it’s just as important that we see our similarities and share a common respect for one another. When it comes to being a member of the loss prevention team, our survey respondents said they believe they have the support and respect of the men that they work with. ■■ They overwhelmingly felt they belonged as part of the loss prevention team, with 96 percent indicating that they agree. ■■ Participants left no doubt they feel as capable of performing their job responsibilities as their male counterparts, with 100 percent in agreement on the issue. ■■ When it comes to sharing opinions and speaking their minds, respondents overwhelmingly felt (88%) they

There have been times when I’ve felt that I’ve missed out on a raise, promotion, key assignment, or chance to get ahead because I am a woman. 25%

20%

15%

10% 5%

0% Strongly Agree

Agree

Somewhat Agree

have an equal voice to their male counterparts. ■■ Nine out of ten respondents felt they have the respect and support of their bosses regarding their career aspirations. When asked if it

The respondents were evenly split when asked whether they felt that they missed out on a raise, promotion, key assignment, or chance to get ahead simply because they were female, with 53 percent agreeing and 47 percent disagreeing that this has been an issue. MAY–JUNE 2018

LOSSPREVENTIONMEDIA.COM

Somewhat Disagree

Disagree

Strongly Disagree

mattered whether their boss was a man or a woman on this subject, 80 percent indicated that it didn’t matter. Eighty-one percent of women indicated that their boss was male, while 19 percent reported to a female. ■■ The vast majority (92%) of respondents agreed they have the support and respect of their male peers, with 82 percent also believing they have the support and respect of their male subordinates and 10 percent reporting they do not have subordinates. Do women feel they are often asked to perform assignments that are more stereotypical for women such as the note taker or activity coordinator? Responses to this question were very mixed, divided between those who disagreed (63%) and those who agreed (37%). By the same respect, when asked if women often volunteer to perform assignments that are more stereotypical for women, there was a similar division between those who agreed (55%) and those who disagreed (45%). When asked if there were situations where they felt more at risk as a woman, the respondents also had a very mixed response, divided almost equally between those who agreed (49%) and those who disagreed (51%). The comments provided were also somewhat diverse based on personal experiences, with many women indicating that pregnancy was a primary reason they felt more at risk. Others

WOMEN OF LOSS PREVENTION were more inclined to perceive a risk of losing their job rather than a risk of personal safety.

Professional Development

Nearly eight of ten (77%) responded that they aspire to reach senior loss prevention leadership roles during their careers. While several shared they didn’t feel it was likely they would assume a senior leadership role, several others shared they had already reached a senior leadership position during their careers. These women overwhelmingly indicated they believe they have the opportunity for a productive and long-term career in loss prevention if they choose to have one, with 95 percent of respondents agreeing that career options in the profession will remain available and attainable. Eight-six percent felt they would continue to hold positions in loss prevention five years from now, while many who disagreed did so based on retirement. Others said they might explore other areas of retail to help further advance their careers, while some felt

that workforce reductions might impact the profession. Most expressed that they really enjoy working in loss prevention. ■■ Participants overwhelmingly stated that they have established a personal plan for their professional growth and development (96%). ■■ They indicated strong belief that it’s important to develop their own skills and abilities as part of career growth, rating the importance as a nine on a scale of one to ten. As one might expect, there were some strong responses regarding the need to take personal responsibility for one’s own growth and development. ■■ The vast majority (94%) stated that they seek out opportunities for continuing education to support growth and investment in their careers. Industry certifications were offered as the most frequent option for continuing education, followed by formal college education, online courses, company courses, industry conferences, and more informal means such as reading

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books and staying current through industry newsletters. ■■ A majority (83%) recognized the importance of the various industry certifications for growth and investment in their careers. The most frequently identified certifications that participants have obtained or were pursuing included (in this order) the LPCertified (LPC), Certified Forensic Interviewer (CFI), Wicklander-Zulawski Interview and Interrogation (W-Z), LPQualified (LPQ), and Certified Fraud Examiner (CFE). ■■ Approximately 85 percent stated they seek out professional networking opportunities that could benefit their careers. The most frequently identified networking opportunities included national conferences, followed by local and regional events. LinkedIn was also a popular networking venue, followed by organized retail crime associations (ORCAs) and company-sponsored events. ■■ Approximately nine in ten participants stated they use online tools and social

WOMEN OF LOSS PREVENTION media such as websites, newsletters, and similar resources to educate themselves and stay current as loss prevention professionals. ■■ A large majority (90%) also said they volunteer to get involved in tasks or special projects in the workplace.

Mentors and Sponsors

Effective leaders must possess integrity and humility, recognizing the importance of having others who can help them grow and develop. Our willingness to take advice and direction greatly impacts our ability to expand our talents and make a difference. By the same respect, a leader must be willing to help others to act, assuming the responsibility to nurture others in a way that will help them grow. We must seek out and accept mentors while also undertaking the guidance and responsibility of mentorship, assuming both roles with equal passion, enthusiasm, and accountability. Approximately 78 percent of participants indicated they have an individual who has served as a mentor during their careers, with 13 percent stating that their primary mentor is a woman, 30 percent a man, and 35 percent revealing they have had both male and female mentors. Highlighting a clear area of opportunity, approximately one in five indicated they do not feel they’ve had mentors who played significant roles in their careers. A sponsor is someone who can both advise you on your career and help to advance it. They promote, protect, prepare, and push you. Similarly, more than half of the women surveyed indicated they do not feel they’ve had sponsors who have played significant roles in their careers.

Work-Life Balance

There was a time not long ago when the boundaries between work life and home life were fairly clear. But the world has changed, and unfortunately for many of us, the lines that once defined those boundaries have blurred. As a result, finding common ground and a viable work-life balance has become more and more challenging. All of us must learn to manage our work-life balance better and more efficiently, finding

When looking at the perceptions and stereotypes that the women of LP feel they’ve had to overcome, many commented on the difficulties of leadership in a male-dominated profession, salary and promotional disparities, and stereotypes of women being “too soft,” “too emotional,” or “too sensitive.” Additional remarks included issues with appearance, sexual harassment, and other inappropriate comments and behavior.

harmony between our personal and professional responsibilities. Approximately 78 percent of participants responded that they are currently satisfied with their work-life balance at some level. Most of the comments focused on the demanding schedule, rigorous hours, and regular travel hours that they felt can lead to stress on occasion. On a positive note, an overwhelming majority (96%) felt that their families are supportive of their careers.

Industry Support

A large majority of respondents (89%) said they believe the industry has become

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more inclusive for women since they’ve joined the profession. While many felt the industry has made great strides, others believed there is still somewhat of a “glass ceiling,” especially at the upper levels of management. Approximately 72 percent of respondents felt gender biases remain in the loss prevention industry today. Many of the comments throughout the survey referenced an ongoing “good old boys” network that they believed still exists. ■■ On a scale of one (poor) to ten (excellent), respondents gave the industry an average score of approximately a seven in its treatment of women within the industry. ■■ Respondents perceived the ability to influence change across the industry, overcoming misconceptions and stereotypes, inspiring others, and injecting a different approach and perspective as important aspects that women offer to the industry. ■■ Looking at some of the greatest hurdles, the most common responses included work-life balance, self-confidence and self-advocacy, and the ongoing need for mentors and strong female leadership. Additional remarks included salary issues, sexism, overcoming stereotypes, and overall respect as a general theme. ■■ Responses were mixed as to whether being a woman provided any particular advantage or disadvantage as an LP professional. Many indicated they didn’t feel that women face hurdles any different than those that men face, with some further stressing the need to embrace our differences and have greater self-confidence. “We stand in our own way” was a repetitive theme. When looking at the perceptions and stereotypes that the women of LP feel they’ve had to overcome, many commented on the difficulties of leadership in a male-dominated profession, salary and promotional disparities, and stereotypes of women being “too soft,” “too emotional,” or “too sensitive.” Additional remarks included issues with appearance, sexual harassment, and other inappropriate comments and behavior.

WOMEN OF LOSS PREVENTION There were also those who felt that perceptions and stereotypes were minimal, claiming they insisted upon being evaluated by performance rather than other factors, praising the women who came before them for paving the way for performance-based standards.

Finding Common Ground

When asked to describe how the loss prevention industry benefits from being more gender diverse, the respondents overwhelmingly referred to the importance of garnering different perspectives and the value this brings to every aspect of the business. Many focused on balance, quality, creativity, flexibility, and morale, while others discussed diversity of thought, the importance of life experiences, creating a stronger and more sustainable industry, and the power of big-picture solutions. Many felt the industry has made significant strides in creating a more inclusive environment for women and is currently on the right track. But there remains a need for both men

There are gender biases in the loss prevention industry today. 35% 30% 25% 20% 15% 10% 5% 0% Strongly Agree

Agree

Somewhat Agree

and women to change our attitudes and perspectives on how we approach women in the industry, which should be a primary imperative to accomplishing real change.

Somewhat Disagree ■■

Disagree

Strongly Disagree

When asked to describe the greatest misconception that men have, respondents persistently commented that they do not want to be perceived as “weak” or incapable of performing

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WOMEN OF LOSS PREVENTION

Most felt that LP will remain a good career path for women, underscoring the evolving nature of the industry, the prospects for continuing growth and development, learning, and problem-solving to meet the evolving changes and challenges of the retail business, and bringing new and diverse perspectives to the industry as a whole. everyday responsibilities that might be deemed difficult due to the potential for physical altercations and similar situations that occasionally occur in the retail LP setting. ■■ Common responses also focused on dedication, respect, resiliency, professionalism, and individuality. Others emphasized concentrating on the value of diverse solutions and shared skills, ideas, and other similarities rather than differences. To ensure that women are provided equal opportunities, mentorship and sponsorship programs were among the most common responses. Others suggested training and education, enhanced policies, and hiring and recruiting practices that would attract more women to the profession. While some stressed the need for companies to take additional action,

many women emphasized the need for women to look inside themselves to influence real change. Continuing self-improvement and speaking up to promote their strengths and abilities were frequent responses.

Moving Forward

While the women who responded envisioned many different ways the role of women in the workforce may change over the next five years, most believed that there would be positive change. Most felt that LP will remain a good career path for women, underscoring the evolving nature of the industry, the prospects for continuing growth and development, learning, and problem-solving to meet the evolving changes and challenges of the retail business, and bringing new and diverse perspectives to the industry as a whole. Many further added that they felt these opportunities were gender-neutral and applied to all LP professionals equally. The most prominent message respondents want other women to know and understand is the need to focus attention on building a successful and productive career based on hard work and exceptional performance rather than allowing distractions and narrow-minded perceptions—whether someone else’s perceptions or one’ own—to stand in the way. Generally speaking, there was recognition of the need to devote energy to growth and self-development, self-responsibility, self-promotion, and self-confidence. They said integrity is paramount and a successful career is built primarily upon drive, passion, and results. When asked to offer additional advice to young women just starting out in the loss prevention profession, the most prominent message was the importance of seeking out strong mentors, both male and female, who can offer guidance and counseling as they progress as loss prevention professionals. Almost all of the women surveyed described loss prevention as an exciting and rewarding career, sharing messages of support and the opportunity to make a difference.

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Final Thoughts from the Survey

When asked for final comments, concerns, or suggestions, the respondents discussed the strides they feel have been made in loss prevention regarding gender equality, as well as the ongoing need to ensure that men and women are treated as equal partners in the workplace. The women emphasized that while most individuals and organization actively and persistently support gender diversity and equality in the workplace, some still fall short of expectations. By the same respect, most of our respondents felt that women are equally responsible to earn merit through performance rather than gender or any other nonperformance metric. They said time is up for excuses, and we all must work hard, be heard, focus on our own growth and development, remain professional and respectful, and strive to be the best if we want to get ahead professionally.

What’s Next?

What are the next steps? How will loss prevention leadership, retail organizations, and the loss prevention industry in general respond to the Women of Loss Prevention survey? Who is responsible for moving the conversation forward? How should the discussion move forward? What action if any should be taken? Information provides a vehicle for change, but it’s still up to us to take the wheel. In part two of our conversation about the women of LP scheduled for the July–August issue of LP Magazine, we’ll share the thoughts, perspectives, ideas, insights, and suggestions from leaders—both female and male—across the loss prevention industry. JACQUE BRITTAIN, LPC, is editorial director for LP Magazine. Prior to joining the magazine, he was director of learning design and certification for Learn It Solutions, where he helped coordinate and write the online coursework for the Loss Prevention Foundation’s LPC and LPQ certifications. Earlier in his career, Brittain was vice president of operations for one of the largest executive recruiting firms in the LP industry. He can be reached at JacB@LPportal.com.

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PERSPECTIVES

A Culture of Innovation

By Jacque Brittain, LPC

Brittain is editorial director for LP Magazine. Prior to joining the magazine, he was director of learning design and certification for Learn It Solutions, where he helped coordinate and write the online coursework for the Loss Prevention Foundation’s LPC and LPQ certifications. Earlier in his career, Brittain was vice president of operations for one of the largest executive recruiting firms in the LP industry. He can be reached at JacB@LPportal.com.

Building on the Insights and Ideas of Those Willing to Think Outside the Box

avvy leaders shape the cultures of their departments to drive innovation. They know that culture—the values, norms, unconscious messages, and subtle behaviors of leaders and employees—will either enhance or limit performance. This type of creative thinking can be encouraged and rewarded, or discouraged. What’s important is that we take the steps to get it right. It’s the power of open minds that often leads to the greatest and most productive results. In fact, we need not look any further than our own loss prevention community for answers. Whether originating with our peers across the industry, our solution provider partners, or from within our own teams, the past, present, and future of loss prevention will be built on the insights and ideas of those willing to step up and think outside the box. So how do you develop a culture of innovation? For perspective and input we turned to executive leadership from three leading solution providers to discuss their thoughts on the subject.

and avoid significant budget cuts, taking on more responsibility while embedding themselves in areas that may not traditionally be associated with asset protection. Simply put, doing the same things AP has always done won’t be enough. With dwindling resources and refined investment strategies, being creative and driving innovation will become the norm. SELL: Some $50 billion is still stolen or lost in retail annually, which is an increase from previous years. This is the market reality that should automatically motivate us. Until this number is much closer to zero, we will need better ideas and solutions. Not trying new things is not an option, even in a mature industry like ours. In his book Only the Paranoid Survive, Andy Grove of Intel said twenty years ago that “sooner or later, something fundamental in your business world will change.” In retail, we see change almost daily that requires new thinking. DUNN: The retail industry may be one of the fastest-changing industries in the US. Siloed technology solutions are a thing of the past. Amazon has redefined the nature of competition in retail around technology and data, and every retailer needs a response. The only way to navigate a path through this environment is to be constantly testing, learning, and innovating.

We see some companies where innovation thrives and others where it’s nowhere to be found. As a solution provider, what are the conditions that make disruptive innovation most likely and productive?

Randy Dunn Sales Director, America’s, Inventory Intelligence, Tyco Retail Solutions

Vy Hoang Executive Vice President, Sales and Marketing, i3 International

Steve Sell Vice President, Global Sales and Marketing, CONTROLTEK USA

What do you see as the greatest motivation to encourage the loss prevention industry to be more innovative?

HOANG: The retail industry is going through some dramatic changes. Technology has presented consumers with more options on how and where they can purchase products and services than ever before. Competition is no longer restricted to the vertical or market arena that each individual retailer has been competing in. In an effort to maintain market share and increase sales, retailers are trying new ideas and redirecting efforts toward customer-facing initiatives. This can leave AP with less money to invest. Today’s AP leaders are tasked with being more productive while using fewer resources. They will need to find ways to add value throughout their entire companies in order to stay relevant

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SELL: Innovation starts with people. The naturally curious tend to feel that the more things stay the same, the more it’s like running in sand. So first you need to have people with the right mindset. Then you need to build a structure that allows trial and error. This means having meaningful motivators to reward the turning over of rocks and the challenging of status quo. It also means accepting a certain failure rate and not punishing innovators who are trying to produce something new. It doesn’t hurt to have a process that fosters regular attempts to innovate either, such as allowing employees a certain number of hours per week to work on projects of their own choosing or having cross-functional teams that meet regularly to brainstorm. Ideas don’t come from the genie in a bottle; they are almost always the result of a multistep process that requires time and discipline. DUNN: The biggest factor that distinguishes innovative retailers from those that aren’t are the quality of “change agents” within the organization. Change agents are able to see a better future, articulate that future in clear and convincing ways, and gather the resources to make that future the organization’s

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new reality. Change agents have deep respect for the organizations they work for but are willing to break the rules in order to help create a better future. HOANG: Courage and necessity drive innovation. Sometimes AP leaders are inspired to think differently in order to create solutions and solve problems. However, it takes a bit of courage to try a new way of doing things, especially if there is any chance of failure. At the end of the day, it’s about the company’s leadership and the culture that they create. Fear and lack of empowerment are probably two of the biggest innovation killers in retail today. As a solution provider, I look for leaders that want to be different and are not satisfied with the status quo. They not only want the best out of themselves but also the best out of their teams. These particular individuals look at innovation as a key performance indicator used to differentiate themselves from the rest of the pack.

How can we help loss prevention leaders think in more innovative ways?

DUNN: LP leaders of the future will need to be able to demonstrate not only how their strategies and programs help the organization “lose less” but also how it helps them “sell more.” As retailers work to make their interactions with shoppers more “frictionless,” the LP leaders of the future will need to know how to enable that without forfeiting all of their LP controls. HOANG: As a technology company, we pay particular attention to what our clients need rather than sell them what we have. Sometimes this requires us to innovate new ideas and technology together. I would also ask AP leaders to place real meaning behind each and every initiative. In other words, stop doing what has always been done simply because it has always been done. AP leaders sometimes fall into this pattern, and the fact is that some shrink reduction techniques are no longer effective or applicable in today’s retail environment. AP leaders should strive to implement programs and technology that actually show a measurable impact and desired result rather than using technology they are comfortable with. I personally surround myself with problem-solvers who do not necessarily think like me. I recommend that leaders go outside of their businesses and learn from others. Recently I went to China for two weeks to learn about how retail has changed there. I learned that China is going through similar changes in their retail segment. I saw an eighty-year-old merchant on the street selling baked potatoes, but instead of taking cash he pulled out his phone to settle the payment with his customer using mobile payment. I saw the effects of financial technologies on brick-and-mortar stores. These experiences have given me a greater understanding of what the convergence of technology and retail could be like here. I encourage AP leaders to look outside their industry, outside their countries, and give themselves the ability to wonder and dream of the possibilities. SELL: Since I work for a security technology company, the starting point I’d suggest is to engage with your solutions providers and ask some tough questions. The “what if” questions should be discussed separately from the “what we get from you today” conversation and can lead to a strategic breakthrough.

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Second, share more insight and then define what innovation really means and how it will be measured. Like in a doctor-patient relationship, nontransparency hampers the treatment of the problem. Innovation is a mutual dialogue, not always a surprise delivered to the doorstep by somebody.

What do you consider to be the greatest innovation killers in the business?

HOANG: Fears of failure and change are the greatest innovation killers. Innovation takes courage! I recently asked a group of colleagues if they like change; most raised their hands. I then asked if they would be willing to move out of their office for a month, and most said no. Change is very difficult for most of us, and to some, impossible. If you want innovation to thrive within your business, you must first look at yourself and see if you are willing to change. Then you must convince others why they need to change. This will take some time, but once the group is convinced, you will be able to start the transformation. You may face many challenges along the way. But keep focus, and you will get there. SELL: Not setting aside enough time and money for it. All businesses are “busy.” The focus on short-term goals seems to gobble up the resources for innovation that would benefit the long term. I recall Mike Schroepfer, Facebook’s chief technology officer, once saying, “I have one hand in the day-to-day and one in the future.” I think he was saying that innovation can’t be a part-time hobby. It must be part of the culture where feeling “noninnovative” is like feeling not profitable. Innovation should be in schedules and budgets, and it has to genuinely become a part of the company strategy. DUNN: The greatest innovation killer is past success. One of the hardest things in business is to change before the company is broken. Books have been written about the “innovator’s dilemma” (Clayton Christensen) and why innovation in successful companies is so challenging.

What traits do you look for in an innovator?

DUNN: The most important traits for an innovator are “wonder” and “perseverance.” An innovator must be deeply curious about the world around and capable of forming new and testable hypotheses. An innovator also needs to be able to overcome all of the obstacles that will try and prevent a change from the status quo. Innovation is not for the faint of heart, but it is some of the most satisfying work a person can do. Knowing that you’re making a difference and helping create a better future for your organization is deeply rewarding. HOANG: The traits I look for in people who could be great innovators are someone who is a problem solver, who complements my weaknesses, who is not satisfied with the status quo, who is striving for excellence, who exhibits strong leadership skills, and people who want to win. SELL: You simply can’t be afraid to be wrong. I have a sign in my office that says, “If you’re not prepared to be wrong, you’ll never come up with anything original.” Being wrong in a thoughtful, prepared manner as we advance original thinking needs to be accepted, rather than expecting perfection in every initiative. After all, sometimes we land on the moon after we make mistakes, analyze them, and learn from them.

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FEATURE

TAKING A DATA-CENTRIC ROLE TO ADD VALUE TO YOUR COMPANY AN INSIGHTFUL DISCUSSION WITH DAN FAKETTY OF SOUTHEASTERN GROCERS

By James Lee, LPC, Executive Editor

INTERVIEW EDITOR’S NOTE: Dan Faketty is vice president of asset protection for Southeastern Grocers based in Jacksonville, Florida. Prior to moving into a leadership role with Winn-Dixie in 2005, he was vice president of loss prevention at Harris Teeter, director of loss control for Super Kmart Centers, and regional LP manager at Shopko. Faketty is the current chair of the National Retail Federation loss prevention council where he has played an active role for the past fifteen years. EDITOR: Thank you, Dan, for speaking with us again. We last interviewed you in 2003 when you were head of LP at Harris Teeter. Fifteen years later you are with Southeastern Grocers. Tell our readers about your current company and its various brands. FAKETTY: Thanks, Jim. Southeastern Grocers currently operates under four different banners. There’s Winn-Dixie, which is the largest. We also have the BI-LO, Harveys, and a new banner that we launched in June of 2016 called Fresco y Más, which means “fresh and more.” Combined, we have 580 locations operating in seven Southeastern states. EDITOR: And as the vice president of asset protection, what are your current responsibilities? FAKETTY: In some respects, I have the traditional loss prevention responsibilities that center on shrink reduction, but the organization has also entrusted us with additional responsibilities that I like to call nontraditional roles. For example, we oversee all corporate safety programs, including accident prevention and investigations. The audit program also reports into asset protection, and we have a field team auditing stores and reporting out daily on results. Additionally, we’re responsible for pharmacy oversight, which involves working closely with our pharmacy business partners to develop and implement targeted controls to ensure we’re in regulatory compliance in order to prevent theft and diversion. This includes using powerful analytic tools that enable my team to monitor the shipping and dispensing activity for “problematic” drugs, such as

opioids, and respond accordingly if we see overdispensing opportunities in stores or doctors who may be overprescribing. Asset protection also has recovery services, which predominately deals with the collection of bad checks and employee restitution. My peers often chuckle when I mention that and ask, “Who writes checks these days?” I can assure you they are alive and well in the supermarket industry. Rounding out the AP areas of responsibility are food safety and business continuity. When you look at things holistically, I think you’d agree that many are nontraditional roles from a loss prevention perspective. Ultimately, my primary responsibility is building the team, developing talent, working cross functionally with our business partners, and then developing and implementing strategies to help make us successful. EDITOR: All those areas have financial metric components that would help you measure where

you’re successful and what you need to improve upon. Is that correct? FAKETTY: I would agree. In fact, it’s interesting because most of these responsibilities were not those we went after. Over time, it was key leaders in the executive suite that came to us and asked if we could help drive measurable results by assisting in the development of proactive programs designed to either enhance profitability in the business, minimize loss, minimize brand damage, or all three. EDITOR: While you’ve picked up responsibilities that many of your peers in food retailing, and many in traditional retailing, do not have. What are some of the challenges that are specific to your company or food retailing in general? FAKETTY: The competitive nature of the grocery industry presses our organization to continuously look for ways to work

Over time, it was key leaders in the executive suite that came to us and asked if we could help drive measurable results by assisting in the development of proactive programs designed to either enhance profitability in the business, minimize loss, minimize brand damage, or all three. MAY–JUNE 2018

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INTERVIEW

We take the time and effort when designing our systems to ensure they interface with each other. We’ve made choices to purchase single-source equipment, use the same integrators to install it, and utilize the same software, where possible, to run it. All to be consistent across the enterprise and make things easy for stores and our AP team. more efficiently. As this happens, we’ve been asked to take on additional roles yet remain resource neutral. From a department standpoint, this has been one of the biggest challenges. With that said, we’re continuously looking to do more here if we can add value to the organization. Ultimately, our department is measured on each of the additional responsibilities we have inherited, which suits us just fine as we pride ourselves on being results driven. If we take on an additional role, it’s not uncommon for us to ask for resources. Sometimes it’s granted, sometimes it’s not, but we find ways to shift or reallocate resources, within the department, to get the job done—continually measuring the business impact financially. EDITOR: If you think back ten or twenty years ago, LP was basically concentrated on shoplifting and dishonest employee investigations. How would you describe the changes that have evolved to today? FAKETTY: In my opinion there’s still a strong emphasis on internal, external, and vendor theft. We’re active in those traditional roles here but you can’t ignore other problems that may be negatively impacting the business. What we’ve found is that as a department we can actually do more. I think it’s one of the reasons the organization has entrusted our team to take on the nontraditional roles we’ve been given. I remember when our organization was purchased by BI-LO. When I first met the chief financial officer from BI-LO, who is now the CFO here, I spent two hours walking him through the asset protection

program. When I began speaking about safety and the role we played in developing new programs, the work in defending accident claims, and others, he asked, “Why do you have safety; it’s in operations where I come from.” I said, “Because we have a field staff that can do more than just the traditional roles of theft detection.” At the time we were active in safety for about a year and a half and were making significant progress in accident reduction and cost savings, all of which were measurable. Safe to say he was impressed with not just safety but the other nontraditional roles we had in the department, as I was eventually identified to lead the asset protection team in the new company now called Southeastern Grocers. In the past, safety was managed by operations in Winn-Dixie, but since we had district asset protection managers in the field, I felt strongly we could help improve results. Considering these asset protection district managers were in stores every day, it only made sense that it should fall under my department. I also ran the corporate safety program in a previous life, and when you see the litigious exposure in supermarkets, especially slip-and-fall accidents and costs associated with workers’ compensation injuries, it made sense to be in my purview. Our CFO agreed wholeheartedly. Please recognize I don’t want to downplay the traditional roles and approaches to asset protection, but I think if you look at what has occurred in retail over the last fifteen years, you’ve seen better technology, systems, and effort go into measuring shrink. Even here we have the ability to measure what’s missing by category, subcategory, even on the item level in our stores, and we’ve had that LP MAGAZINE

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ability for seven years now. Based off the data, we can better understand that theft is not the only thing driving shrink. In fact, we have identified process failures as the leading driver. Put another way, with the data we have available today we can be laser focused on identifying what is driving shrink much more accurately than ever before. By using this same data we can also make smarter merchandising decisions on not just what products are driving shrink but more importantly what isn’t selling in stores. As you know, nothing good can happen to product that sits on store shelves or in the backroom. This also alleviates the need in having so many bodies in the field performing the traditional role of thief catcher, and instead we choose to reallocate those same resources to support other parts of the business. The traditional investigative role is important and will always need to be addressed, but you can now be more focused than ever before in identifying the root cause of shrink and allocating resources accordingly, whatever that is. EDITOR: What about the impact of organized retail crime? In your opinion, has it changed over time? FAKETTY: It’s still a serious problem. But as stated, using data, you can identify and truly recognize ORC much more quickly than you could ten or fifteen years ago. Our data-driven approach gives us the ability to immediately see where incidents are occurring, allowing us to address them in real time. Ironically if you look at external theft in general, you still have amateurs or opportunist. You train your people on how to deter that type of theft. There’s also the local booster—the individual coming into a store and taking all your deodorant, for example, and selling them on a street corner. You then have the more hardcore organized retail crime groups. How you deal with

INTERVIEW each one of those three classifications is completely different. I am disappointed that our industry tends to focus on the ORC problem only, when the other two, based off frequency, may be driving as much or more of the problem. Don’t get me wrong; resources must be allocated to deal with the ORC thief. In fact, we’re addressing a problem now as we do this interview. Our field teams investigate and resolve ORC problems as they come up, but from a resource allocation standpoint, we also have our field teams involved in safety, business continuity, audit, food safety, and all the other responsibilities we spoke about. One thing I will say is we throw every available resource at ORC problems involving violent crime. Grocery stores, in general, still have a lot of cash on hand and as such are prone to armed robberies. When dealing with a criminal enterprise that targets stores, and especially those involving takeover situations, these problems must be addressed immediately. The good news is our armed robbery incidents have dropped dramatically here over the past ten years, and while we don’t have many, our asset protection field team resolved 90 percent of the ones we did have last year, primarily through the use of technology and our AP field teams. Those are the situations that we’re aggressively paying attention to because they’re putting our associates and customers at risk. This is also an ORC crime, at least when you identify multiple suspects, targeting multiple retailers where the target is cash as opposed to merchandise. EDITOR: There are a lot of people who believe that crime has turned more violent in recent years. Are you one of those who believes that? FAKETTY: I don’t have a statistical measurement on it, although we have seen some increases here, mainly customer-on-customer violence, but in some cases customer-on-associate violence

as well. It just feels as if there’s more of it, and it is top of mind with the NRF loss prevention council. Six years ago, Larry Barton, a well-known expert on workplace violence, gave a presentation at the NRF PROTECT conference. A big part of his message dealt with the media and how the statistics on workplace violence at the time were low, yet he was suggesting the media was overexaggerating the true picture. It would be interesting to see what he would have to say today because violence in retail stores is real. I can assure you we have programs designed to proactively prevent and react to these situations if and when they arise. Much of our strategy has been designed through what we learned from Barton. We take protecting people very seriously here and put a lot of effort in keeping our customers and associates safe.

take the time and effort when designing our systems to ensure they interface with each other. We’ve made choices to purchase single-source equipment, use the same integrators to install it, and utilize the same software, where possible, to run it. All to be consistent across the enterprise and make things easy for stores and our AP team. For example, in our AP analytics center, you can immediately link any single transaction in a store to video. But in order to make that happen, you have to ensure that every single camera in every single store is centered on every single register. Since we’re regularly remodeling stores, that can be challenging and takes a lot of effort in preplanning, but we have strong relationships with our construction, maintenance, and merchandising groups, which helps us manage this program.

Once a week I report out to our executive leadership team on how many critical incidents were phoned in from stores, how many were responded to, and how many were closed. We then use the data to ensure we allocate resources into our highest-risk stores through enhanced security tools, updated equipment, even identifying which locations may need a contracted service.

EDITOR: Since you’ve been in your current role, you’ve made significant strides with the use of technology and, I assume, continue to contemplate new technologies that could help your program. Talk about some of those initiatives and solutions that you’ve put in place. FAKETTY: We’ve worked in this space quite a bit, actually. Five years ago, we launched our AP analytics center, which has been a tremendous success. So much so were adding resources in this area. We’ve also received tremendous support from our executive leadership team for supporting our technological solutions. We MAY–JUNE 2018

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We’re also involved in remote auditing from within this area. For example, recently our logistics team came to us about a concern with some of our third-party warehouse drivers. They asked if we could identify what time they’re showing up at stores, whether or not they’re actually helping store associates unload freight, and how long, on average, it takes them from the time they park in the loading bay until they leave. While GPS can tell you some of this, it can’t tell you if the driver parks his trailer and leaves the store for an hour or more. We did the comprehensive audit in over 100 stores, and within a few days we were able to report out and resolve a number of issues.

INTERVIEW We also use it for monitoring serious incidents live, such as workplace violence situations, and of course use the center for high-profile internal, external, and vendor theft detection and resolution. We’re also using it to conduct remote video accident investigations and evidence preservation by downloading video remotely to a server-based solution, which enables our risk management department to better defend accident claims. Those are just a few examples of how we use AP analytics. We’ve also partnered with our Store Help Desk. Now, every single incident that occurs in a store is phoned into this team and our operators, who man it 24/7, take the information and disseminate it accordingly. We call this our critical incident desk (CID). We’ve identified seventy-four different incident types. Obviously, if it’s an emergency situation, stores call 911. But if one of these seventy-four incidents occurs, they are phoned into the CID immediately. The information is then keyed into our software program and distributed to the asset protection field team in real time.

On extremely critical incidents, such as armed robberies, burglaries, or aggravated assaults, they are turned around in minutes and forwarded to our AP field team through text messaging with escalations of notification going to district operations managers, regional vice presidents, and others. The AP field team then follows up on each one to close them out. Once a week I report out to our executive leadership team on how many critical incidents were phoned in from stores, how many were responded to, and how many were closed. We then use the data to ensure we allocate resources into our highest-risk stores through enhanced security tools, updated equipment, even identifying which locations may need a contracted service. Those are just a couple of examples of how we use data to drive technology solutions and allocate manpower as needed. EDITOR: On another subject, how do you go about providing information, education, training,

LP MAGAZINE

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or awareness to store managers and associates in stores? FAKETTY: We’re pretty fortunate because our human resources group purchased a learning management system (LMS) from Axonify about two-and-a-half years ago. Ironically, I tried to introduce that company to Southeastern Grocers, unsuccessfully, years earlier. Up until then our asset protection team built all of the AP awareness modules, 180 in total, with the help of another service provider. When the new HR leadership team came on board and introduced us to the Axonify platform, all we had to do was take the content from our previous work and migrate it into the new software package. We now have incredible insight on every single associate in every single store. What modules they’ve gone through, which ones they haven’t, and how they scored to include pass or fail. Our HR team tracks all of this, so those that don’t score at a satisfactory level have to go back through them.

INTERVIEW EDITOR: What accomplishment are you most proud of for yourself or your team? FAKETTY: I’d reference the success I’ve had at hiring some really good people and putting them in positions where they can be successful, either here or elsewhere. I’ve been extremely fortunate to have incredible teams throughout my career. Here are a few examples. Will England, who was my director of loss prevention, was recently promoted to vice president of LP for Weis Markets. A few weeks ago I learned that David Homolka, whom I hired and trained years ago at Shopko, moved from vice president of asset protection and human resource for Cabela’s and accepted a position with Duluth Trading Company where he’s

FAKETTY: I have a director of asset protection operations, who manages the field from a traditional asset protection and safety standpoint. Within that structure, he has four regional directors that report to him. Under the regional directors we have asset protection district managers, and they support a territory or group of stores. We align ourselves as best we can with our district operations managers. Our AP field team is responsible for executing all the strategies that are developed, and ultimately cascading it into stores. This group performs all the traditional AP roles including investigative work in the field. They also handle those seventy-four incident types that are identified and reported by our stores. Depending on the severity of the incident, they are our first responders.

While retail is changing at a dramatic pace, I wish there were more loss prevention executives changing with it. For whatever reason, we seem to hold on to our old-school thinking that the detection, apprehension, and prosecution of shoplifting suspects and associates involved in internal theft will hopefully keep us employed. now the VP of HR. Mike Limauro, who I had hired and trained at Super Kmart Centers, recently joined Whole Foods as senior director of asset protection. Candidly, there are people I work with here that have the potential to become vice presidents of asset protection at some point in their future. We have a really good team here, and I believe in promotion from within when we can. If you hire the right people and give them the resources to be successful, they will be. As much as I hate to see people leave, as long as they’re bettering themselves, it’s all good. EDITOR: Speaking of people, let’s talk a little bit about the structure of your AP organization. If you would, summarize what your organization looks like.

I also have a senior director of food safety and audit who is responsible for our food safety program. The field audit team reports in through this area. There is a senior manager of corporate safety, whose office is here in Jacksonville, and he has regional safety managers in the field. I have a senior manager of pharmacy oversight and AP analytics. She runs our AP analytics center and is responsible for pharmacy oversight, which, as mentioned, is an important part of our added responsibility here. There’s also a business continuity manager and a senior manager of physical security, both of whom report directly to me. EDITOR: You’ve been an active leader in the LP industry apart MAY–JUNE 2018

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from your contributions to your company. Looking at the industry as a whole, what are your observations about the evolution of LP executives? FAKETTY: First, while retail is changing at a dramatic pace, I wish there were more loss prevention executives changing with it. For whatever reason, we seem to hold on to our old-school thinking that the detection, apprehension, and prosecution of shoplifting suspects and associates involved in internal theft will hopefully keep us employed. Unfortunately, those that continue to follow that mindset and make it the staple of their entire programs I fear are missing out on opportunities to make their companies more profitable. Additionally, absent strong metrics that support an ROI model for an asset protection department, it’s not if but when someone knocks on your door and asks, “What do you do for us?” This is especially true now due to mergers, acquisitions, replacement of CEOs, or when the dreaded consulting group is standing outside your office door. While not a popular position amongst my peers, I feel strongly that this is a contributor as to why some leaders in our industry have been replaced, asked to step down from their positions or, in some cases, causing entire asset protection departments to be eliminated. EDITOR: As you’ve discussed earlier, you obviously believe that LP executives should take on added roles in their companies. Why do you believe that? FAKETTY: I believe there are five reasons. First, I believe strongly that asset protection professionals can do it better. Second, done right, you will be able to produce a strong ROI, often with the same or perhaps even fewer resources. Third, you will add immediate credibility to your program and be looked upon as a problem solver. Fourth, you won’t need to self-promote within your organization because your continued on page 34

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INTERVIEW continued from page 32

executive leadership team will do that for you. Lastly, it protects you and your team from possible staff reductions or job loss. EDITOR: That’s tremendous advice, Dan. Let’s turn our attention to the upcoming National Retail Federation’s PROTECT conference in June. You serve as the council chair. What does that role encompass? FAKETTY: I don’t think most people understand just how large the conference has become over the past fifteen years. It’s the largest annual LP conference in North America with a solid track record for educational content. While at Harris Teeter and now here at Southeastern Grocers, I’ve been fortunate enough to receive the support of our CFO, whom I report to, who has allowed Southeastern Grocers to become an NRF member company. He has also been incredibly supportive as evident by him personally approving that I be able to take on the additional responsibility of NRF LP council chair. My role is to provide leadership, make recommendations on issues that may be impacting our industry, and, more than anything, support the seven different committees within the loss prevention council. The seven committees include awards and recognition, legislative, education and research, diversity, women in LP, the investigative network, and content planning. The last committee works closely with NRF and makes recommends on education content for the conference, location, and even making recommendations for keynote speakers. Throughout the year I am in touch with the vice chairs through meetings and conference calls where we discuss hot topics that are impacting our industry. I also support the committees to achieve their goals and objectives. All in all, it’s a great group of executives doing great work for the industry—all of whom volunteer their time. I’m proud I can be

There has been a lot of conversation over the past few years about loss prevention programs being downgraded or even eliminated, based on changes in retail. I don’t believe that will be the case at all. If I could recommend anything to anyone in our business, it would be to look for nontraditional ways you or your department can enhance your company’s profitability, even if that means taking on what you may feel is not in your job description. part of it and flattered that our president and CFO support me in the role. EDITOR: Where is the conference this year, and do you have any presentations you are especially looking forward to? FAKETTY: The 2018 conference is at the Gaylord Texan Resort in Dallas on June 11 to 13. I’m very interested in hearing our keynote speaker, Marv Ellison, who started his career in loss prevention and is now chairman and CEO of JCPenney. He’s speaking on “managing through change and adversity,” which he’s certainly been living in the department store world. With the recent impact of Hurricanes Irma and Harvey, we felt strongly that we needed sessions on disaster recovery and crisis management. We have several speakers talking about how to build a disaster recovery program and others who will talk about how they specifically handled those recent natural disasters. We have presentations on cyber crime, which continues to be top of mind, not only with chief information officers but also in LP as it’s typically a big responsibility in our world. There is also an interesting session called “Power Posse” with Melissa Mitchell on decoding nonverbal cues, which I’m really looking forward to. EDITOR: Dan, we’ve talked about a lot of different things MAY–JUNE 2018

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today. Is there anything that you would like to say to conclude our interview? FAKETTY: There has been a lot of conversation over the past few years about loss prevention programs being downgraded or even eliminated, based on changes in retail. I don’t believe that will be the case at all. If I could recommend anything to anyone in our business, it would be to look for nontraditional ways you or your department can enhance your company’s profitability, even if that means taking on what you may feel is not in your job description. By taking on additional roles and measuring the impact consistently, you will put yourself and your department in good standing with your organization. There are some in our industry that shy away from this mindset, and I think that’s unfortunate. While we will always be asked to show our impact on shrink, there is much more that we can do, and I feel we should embrace new roles and responsibilities, especially in this ever-changing retail environment. I think if more industry leaders thought this way, they could make an even larger impact in their companies’ success. This is not a dying profession as some have told me; it’s one that’s continually evolving, and it’s a very exciting time for loss prevention professionals, especially now. EDITOR: Well said, Dan. We look forward to seeing you in Dallas in June.

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CERTIFICATION

Investing in Your Career

Interview with Miranda Collins, LPC Collins has over twenty-three years of loss prevention and retail experience with Sears, Old Navy, and her current employer, Petco. After beginning her career as a sales associate, she’s held many roles, including store manager, loss prevention manager, corporate investigator, and the most challenging role, mother of three. Collins holds a degree in criminal justice.

Why did you decide to pursue your LPC certification? While preparing my annual performance review for this past year, I decided obtaining the LPC would be a great objective for 2017. I truly believe the only person responsible for your continued growth and development is you. There is no better investment than one that provides both personal growth and professional development.

Was the course work what you expected?

the loss prevention field impacts. I think sometimes we forget the other avenues open to those of us in the loss prevention field. Being reminded of this is especially critical in this ever-changing job landscape. This course material not only validated my experience but also prepared me to take on new challenges wherever my career should take me.

Yes, the course work is challenging and requires dedicated study time. It covers most areas relevant to the loss prevention field, and I enjoyed the background and historical information that was provided; I felt it added relevance to the process.

If you could offer one key takeaway to someone currently considering getting certified, what would it be?

Talk about the process of going through the course work and taking the exam. Working my way through the course work was initially a little more challenging than I expected. It really forced me to go back and review subjects I was not as familiar with or have not had as much experience with. Commitment to the training materials will prepare you for the actual exam. However, being able to apply your learnings in a practical application will be critical to a successful outcome on the final exam. I found it most helpful to look over all of the material first, take the chapter quizzes to determine what areas I needed additional focus on, and then study until I could pass each chapter exam 100 percent.

Looking at your own personal background and knowledge, what information in the course helped you the most? While I have been exposed to almost all of the subject material provided, I would say there were areas that I did not have the depth of knowledge required to pass the test without the provided study materials. This certification requires a deeper dive into all operational areas impacting the loss prevention field.

What was the most eye-opening information that was part of the curriculum? For me, I benefited a lot from the accounting and logistics material. The pharmacy section was also interesting as this is one of the areas with my least amount of exposure.

What benefits have you seen from taking the course? One of the benefits it provides is the ability to expand my knowledge base while refreshing my previous studies. It is also a great reminder of the different aspects of the industry

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Study. Not only is it important to understand the material provided, but also the ability to apply it in a practical application will be the key to the certification process. Work-life balance can already be a task for most, so careful consideration should be given to dedicated study time. The biggest takeaway I had is partnerships, both internal and external to your organization. There are a lot of moving parts to a successful long-term loss prevention plan. You need good working relationships with all the players and must know how to successfully leverage those partnerships.

I truly believe the only person responsible for your continued growth and development is you. There is no better investment than one that provides both personal growth and professional development. How would you compare the foundation certifications to other educational courses that you’ve taken? This was the first online certification I have obtained. I am hoping it prepares me for my next adventure as I undertake the CFI. I believe that the LPC indicates you see value in personal growth and education and helps you stay relevant in a competitive loss prevention market.

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How has certification changed your expectations of loss prevention as a career, for yourself and for others?

Our Success Starts with Our Partners

The LPC process is a great reminder that loss prevention impacts all areas of operations. If you want to have a seat at the table to influence members of your organization, you must have an understanding of how loss prevention impacts the whole business. Certification indicates we are prepared to support our organizations, increase profitability, and build partnerships to drive initiatives critical to a successful loss prevention program. I think the LPC is a clear indicator of this understanding.

DOCTORATE LEVEL PARTNERS

Would you recommend certification to others? Absolutely. This course provides for personal growth and development. The course is an investment for both the employee and the employer. It requires not only a monetary investment but also time and commitment to the course material. The LPC is a great investment.

MASTER LEVEL PARTNERS

Newly Certified

Following are individuals who recently earned their certifications.

Recent LPC Recipients

BACHELOR LEVEL PARTNERS

Lucio Amicci, LPC, Sears Holdings Charles Bailey, Jr., LPC, CFI, Vector Security Shawn Bradley, LPC, Lowe’s Darlene De Francesco, LPC, FedEx Tyler Grandy, LPC, DICK’S Sporting Goods Michael Hawkins, LPC, Lowe’s Aaron Henderson, LPC, CFI, Penske Bruce Herritt, LPC, Walmart Stores Slade Jordan, LPC, Walmart Stores Arron Knight, LPC, FleetPride Lincoln LeFebvre, LPC, Home Depot Alan Lott, LPC, 7-Eleven Kevin Mgrdichian, LPC, Sears Holdings Jennifer Ponicsan, LPC R. Bryant Price, LPC, Gabriel Brothers Bryan Shepherd, LPC Steven Smith, LPC, ULTA Beauty Christopher Weaver, LPC, Walmart Stores Ashley Winkelmann, LPC, 7- Eleven

SECURITY

R CONC E OU

IS YO U RN

ASSOCIATE LEVEL PARTNERS

Recent LPQ Recipients

DIPLOMA LEVEL PARTNERS

David Chartrand, LPQ, Goodwill Industries of Seattle Michael D’Antonio, LPQ, Stew Leonard’s Gregory Dolcich, LPQ, Security Resources Nathan Dowling, LPQ, Buffalo Run Casino Christopher Gipson, LPQ, 7-Eleven Ciera Hilton, LPQ, Protos Security Robert Jevarjian, LPQ, Stew Leonard’s Erin Koons, LPQ, Walmart Stores Kate McGorty, LPQ, L.L.Bean Brian Naughton, LPQ, Nordstrom Danielle Palentino-Dederick, LPQ, lululemon Pankaj Patel, LPQ, Indigo Kelley Portner, LPQ, Rite Aid Barbara Weaver, LPQ, Best Buy Mandie Wells, LPQ, KPH Healthcare Services LP MAGAZINE

Professional development is key to a fulfilling career. Visit www.LossPreventionFoundation.org to find out more. SM

Educating an industry one leader at a time. |

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LPM EXCELLENCE

LPM “Magpie” Awards: Applauding Excellence

The LPM “Magpie” Awards offer a means to celebrate industry accomplishments on an ongoing basis, recognizing the loss prevention professionals, teams, solution providers, law enforcement partners, and others that demonstrate a stellar contribution to the profession. The ability to influence change is a product of drive, creativity, and determination, but

it also requires a unique ability to create a shared vision that others will understand, respect, support, and pursue. Each of the following recipients reflects that standard of excellence, representing the quality and spirit of leadership that makes a difference in our lives, our people, and our programs. Please join us in celebrating the accomplishments of our latest honorees.

Excellence in Leadership

Excellence in Partnerships

“I don’t believe that leading in asset protection is much different than leading in other industries,” said Langley. “Of course, high integrity is a must. But ultimately, for any true leader, the focus has to be on people. I believe in and always attempt to practice servant leadership. I work for my team and not the other way around. If serving is below you, then leadership is beyond you.” Langley has spent her entire career with Rite Aid, starting as a file clerk for the security department while attending high school and business school in York, Pennsylvania. Since that time, she has held positions with increasing responsibility within the company, working her way up the ladder to become corporate director of loss prevention in 2000, director of loss prevention analytics in 2002, and then senior director of loss prevention in 2011. “Throughout my career, I’ve always believed that it’s important to work smarter, not harder,” she said. “I’ve always tried to instill that mentality in myself, my team, and our field leaders. By understanding the data, processes, people, and opportunities, you can develop new ways to support both the team and the business to drive results.” When considering what advice she would offer young leaders working their way up the career ladder, Langley believes that self-reflection is the best place to start. “The first step is to learn and understand who you are—really get to know yourself,” she said. “Embrace your strengths and the opportunities that arise once those strengths are recognized. This helps you learn to focus more on others and less on yourself. Only then can you truly accept the mantle of leadership.”

“The core objective of ORIS is to reduce risk in the retail sector through collaboration, education, and sharing best practices,” said Kadege. “I love the diversity of the role and the challenges that it brings. It’s very rewarding to bring retailers together and see them reduce risk as a result of the connections they make and the initiatives our members collaborate on. Hearing that our members return from an event so enthused and reenergized by what they learned makes it all worthwhile.” Kadege is currently the managing director for ORIS, which is made up of two companies. One is ORIS Forums, a not-for-profit business that brings together retailers from different retail verticals to network, collaborate, and share best practices on risk reduction in the retail environment. The second is ORIS Media, which publishes LP Magazine Europe, promotes the UK chapter of the Loss Prevention Foundation, and is the exclusive EU partner of Wicklander-Zulawski. To become a true partner in the loss prevention community, Kadege feels there are a few primary qualities that lead the way. “First, say what you’ll do and do what you say. If you say you’ll do something, do it. If you can’t do it, say that you can’t. People always prefer honesty. “It’s important to continually add value. Always look for ways to add value to your clients. Stay grounded and treat people with respect. It’s irrelevant whether you are the office administrator or the managing director; we’re all trying to achieve one common goal—being the best at what we do. “Finally, love what you do and have fun doing it. Support your team to help them do the same.”

Cathy Langley, LPC, Senior Director of Loss Prevention, Rite Aid

Louise Kadege, Managing Director, ORIS (United Kingdom)

Nominate Your Peers at Excellence@LPportal.com We want this to be your program. Those of you working as LP practitioners witness these exceptional performances on a regular and ongoing basis, and we strongly encourage you to provide us with nominees for each of the award categories. We encourage creative nominations and want the program to cast a positive light on the many tremendous contributions of the loss prevention community. Nominations can be submitted via email to excellence@LPportal.com. 38

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FEATURE

SECURITY AT THE SOURCE

MANUFACTURERS AND RETAILERS COLLABORATE TO MEET PRODUCT PROTECTION CHALLENGES, BUT CAN WE DO BETTER? By Garett Seivold, Contributing Writer

SECURITY AT THE SOURCE

anufacturer involvement in designing product protection is decades old, noted University of Florida research scientist Read Hayes, PhD, CPP. He remembers Walt Disney’s Buena Vista Pictures as being an early pioneer in coordinating with retailers to prevent theft. Video releases such as Beauty and the Beast were massive hits with kids—but also with shoplifters. “Maybe some executives at Disney Read Hayes, PhD, CPP saw it differently and thought it’s solely up to retailers to protect products, but the consensus for them was to see it as a mutual problem,” he recalled. “So we came up with portable fixtures and included some security features and were able to reduce theft by making it harder and less rewarding to steal and increasing the odds of being caught.” He remembers, too, working with a lip balm company on display options to increase shoplifters’ effort and to prevent the small product from falling into cracks and getting lost—an early industry effort to address “total retail loss.” In the industry’s most celebrated example involving Gillette, the company mapped its entire process for handling product—from the time it’s made all the way through to the shelf—looking for opportunities to improve process and handling to reduce the risk of loss. And, generally speaking, it’s not much different today, said Hayes. The roadmap and anti-theft menu is similar now as in these past examples. “Where you put it in the store, what types of display fixtures you use, employee positioning, prodding employees to pay particular attention to very high-loss SKUs, focused protective tech, what do you do, how often you do it—these are all options that are available for each solution.” As director of the Loss Prevention Research Council (LPRC), which conducts research into crime and theft prevention technologies for the retail

industry and includes manufacturers among its membership, Hayes has a unique seat from which to view the working relationship between retail LP and product manufacturers. He’s in the room when the two sides are discussing anti-theft solutions, both separately and when they are brainstorming solutions together. While the issue of theft prevention often divides the two sides, his job is in the middle—helping both. “I’d say the relationship is not necessarily better or worse than in decades past. I think it tends to go up and down,” said Hayes. He said he’s fortunate to work with manufacturers that want to work with retailers, but he knows that’s not universal, that some manufacturers still see retail theft as retail’s problem. “They think, ‘I’m already making a great product. I’m doing promotion to create demand. I’m shipping the product, so you have it when you want it. And now you want me to do more? You’re running the store.’”

The Manufacturers’ Perspective

“One stole is one sold” is still the perspective that some manufacturers cling to according to some loss prevention executives we interviewed. And a willingness to work with retail loss prevention isn’t as strong in some sectors of goods as others, they said. Manufacturers in the drug, food, and household goods sectors have tended to be more aggressive in pursuing product protection, according to industry experts. Several LP leaders specifically identified Procter & Gamble (P&G) as a model manufacturer partner, for example. Krista Marantos Monnin is a retail business leader at P&G and oversees the company’s on-shelf availability operation. “We see it as a collaborative role with our retailer partners; ultimately, it has to be a retailer solution because Krista Marantos everybody addresses Monnin

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shrink differently on the retailer side,” she said. Source tagging is certainly a primary part of product protection today, said Monnin, but even within that ubiquitous solution, retailers deviate on what frequency of tags they require. As such, she said manufacturers aren’t effectively positioned to forge across-the-board solutions on their own. Plus, even within the same product—Tide, for example— variation in packaging, size, and theft desirability often belies a single product protection strategy. “So if a customer comes to us and reports that it has a problem with Tide, we have to narrow it down to where and which SKUs, and then we can work together to find a solution that is effective, working off of a solutions matrix that we have built based on our experiences.” Certain manufacturers operate under heightened requirements for product protection due to consumer health and safety concerns. For these companies, product diversion is more than a nuisance—supply-chain risks are material to the business. One generic drugmaker, for example, wrote in its annual mandatory 10-K filing with the US Securities and Exchange Commission, “Cargo thefts and/or diversions, and economically or maliciously motivated product tampering on store shelves may occur, causing unexpected shortages, which may have a material impact on our operations.” Because of the stakes involved, such companies have led the way in product serialization to increase supply-chain visibility. Embedding security features into products as a selling point is also a possible trend as use cases for identification technology seeps into more product category niches. For example, manufacturers build technology by GearSecure, a mash-up of RFID and GPS, into musical instruments, which then allows end-users like touring bands to keep tabs on their gear. Collaboration between wireless companies and makers of cell phones has led to increasing adoption of kill-switch technology. There is an anti-counterfeiting sewing thread. There are apparel makers that mesh

SECURITY AT THE SOURCE RFID, NFC, and QR codes together for tags that capitalize on the benefits of each. And a few manufacturers are using anti-theft solutions to gain competitive advantage in high-shrink product categories, according to Hayes. By building in security measures, these companies can “go to a retailer and say, ‘Hey, I understand that this product category is a challenge for you, but what if I take these steps that will reduce the amount of loss?’” That can result in favorable treatment because they are helping the retailer solve a problem, said Hayes. One prominent example is RCA, a maker of tablet computers. By tweaking firmware during manufacture, the company’s devices require a code for activation available only at point-of-sale. Without a legitimate purchase, they’re bricks. By denying thieves the ability to use the device if they steal it, and thus the motive to steal, the company was able to sell the prospect of fewer losses to forge a more favorable deal with a big-box retailer. Adam Alford, senior director for loss prevention at GameStop, said his team has met with a few vendors in the last few months on the benefit-denial Adam Alford concept, with the goal of being able to put higher-value live products on the floor without increasing loss. Many merchants think such availability is vital to driving brick-and-mortar sales today as customers rely on stores as a place to touch and test products, rather than simply make purchases. Alford particularly likes the strategy’s potential in the mobile phone and tablet space. According to some LP practitioners, it’s somewhat rare for manufacturers to take individual initiative on theft prevention. The booming connected-home market is an example—smart thermostats, smart plugs, and the like. While these vendors understand their products

are in high demand and can be high theft—and will discuss the issue, ask for recommendations, and gladly take measures to prevent their product from being secured in a physical lock-up—it typically stops there. Vendors are not necessarily at the point where they go to retailers to say, “We know theft is an issue, so we’ve partnered with this

Manufacturers in the drug, food, and household goods sectors have tended to be more aggressive in pursuing product protection, according to industry experts. Several LP leaders specifically identified Procter & Gamble (P&G) as a model manufacturer partner, for example.

solution or built in this technology to prevent theft, and how will this work for you?” That conversation remains rare. The core obstacle is the same as it has always been, said several industry leaders. In some cases, manufacturers may not perceive that they have skin in the game and fail to see an impact on them if a retailer experiences high losses. Small brands may more easily recognize high losses as detrimental, LP MAGAZINE

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recognizing the possibility that a store may choose to buy fewer of their products, move their products to online sales only, or discontinue altogether a product with high shrink. But large vendors, ones that hold some leverage on retailers, can remain hesitant to implement solutions that are going to raise their costs. “It’s not adversarial; they’re willing to hear you out,” but they often fail to see enough value to drive them to take action, said one LP director. A requirement that high-shrink items must be source-tagged is fairly routine and well accepted by manufacturers, but working on new, innovative solutions can be more challenging, noted the LP executive. While their particular bottom-line interests naturally divide manufacturers and retailers on the issue of retail theft, Hayes sees goodwill—and recognition of the legitimacy of each other’s viewpoint—as a viable building block to successful LP-manufacturer collaboration. Rather than a unique challenge, Hayes characterizes the divergence between the two camps as similar to many business relationships. “It’s just complicated,” said Hayes. “Everyone has positive intentions, but everyone also wants to make their numbers.” Cultivating those good intentions are thus an important part of creating effective LP partnerships with product manufacturers. It may sound trite, but it’s nonetheless true, that it all comes down to relationships, agreed Richard E. Widup, Jr., CPP, CFE, global corporate security director at RB, which acquired Mead Johnson last year, the maker of Enfamil and other infant formulas. “We all have a part to play, and manufacturers Richard E. Widup, especially,” he Jr., CPP, CFE said. “We need to understand shrink at the policy level and at the store level. And we need to use that to help shape and enhance our partnerships and forge open and

SECURITY AT THE SOURCE honest discussions about what are the best solutions.”

Ties That Bind

Data provide a helpful building block to successful joint projects, according to Hayes. “Shoplifting can be very tightly clustered to specific products, specific brands, and even specific SKUs for specific brands,” he said. Most retailers have pretty good information on the rate of loss, down to the category brand, and sharing that data with manufacturer partners can help enhance coordination on theft prevention, he continued. “It’s still the case that some manufacturers are blind to it, and they don’t know anything until the retailer reaches out and shows them numbers on theft.” P&G’s Monnin sees data as a prerequisite to forging problem-specific solutions and is in the early stages of working on new protection strategies for the company’s Tide product. But to do it effectively, retailers need to partake. “We need our retailer partners to share data so that we can accurately assess the problem,” she said. The quality of the data collected and shared could also be improved to forge more meaningful cooperation, suggested Nicole DeHoratius, Nicole DeHoratius a professor at University of Chicago’s Booth School of Business and an expert in retail operations management. “Retailers shouldn’t just share their shrink lists. They need to conduct additional analyses and examine the underlying characteristics driving the shrink problem,” she advised. “LP needs to be far more analytical and examine what’s common about shrink across products, locations, retailers, and so on. “For example, do we observe commonalities across vendors, distribution channels, stores, and products with the same packaging? What are the underlying attributes of the shrink that might give an indication of the root cause?” This is particularly

true given the pace of churn among SKUs and vendors, she added. “So on the retailer side, the problem isn’t generally a particular unwillingness to share but rather the existing skill set of the traditional LP professional,” she said, noting that to successfully move the industry forward, LP needs to adopt a more robust analytical skill set.

“We need our retailer partners to share data so that we can accurately assess the problem.” – Krista Marantos Monnin, Proctor & Gamble

Data sharing is key, and so is robust evidence of the effectiveness of solutions, according to Hayes. Manufacturers may be willing to bear the cost of a theft prevention solution, but they want evidence it works, and year-over-year data doesn’t necessarily provide it. “Hundreds of things can happen during the year that can alter the results,” said Hayes. As such, controlled experiments play an important role in providing both sides with confidence in a solution’s worthiness and to forecast results, he advised. Without testing a range of solutions— multitudes of hard tags, spider wraps, and the like—and without data on how they impact shrink and sales, “then we can’t understand what works,” said Monnin. “We test them and then share the solutions to build a more robust solutions matrix.” MAY–JUNE 2018

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Stakeholder Involvement

A successful product protection partnership with a manufacturer can occasionally hinge on luck—right time, right ask. But as for elements that LP can influence, making sure merchant teams aren’t blind to inventory shrink and gaining their support is critical. “The key to success is when our merchants rally behind an effort,” said John Doggette, LPC, director of LP merchandise shrink solutions and analytics at Lowe’s, in discussing a recent success story in which a large manufacturer stepped up to fund a new product protection solution. “For LP, if you don’t have a robust relationship with buyers, if you’re not training them and John Doggette, LPC have a program for that, then you can’t expect things to get done. You need the buyer to be an advocate for the proposed solution.” At Lowe’s, Doggette said his team has worked hard to impress upon merchants that LP’s goal is to increase on-shelf availability, overall sales, and ultimately profit—and not act as a roadblock. “It starts with relationship building and having a dedicated person or a team of people whose sole purpose is to work with merchants,” advised Doggette. “A large retailer may have hundreds of buyers, so you need a retail LP organization that has someone on staff, if not a team, that is directly responsible for interfacing with buyers and for providing them with the data and analytics they need.” Lowe’s has dedicated staff members whose role is to interface with buyers from an LP lens, and their responsibilities include attending high-shrink merchandise division merchant meetings. In this way, the LP organization has insight into emerging developments. The LP-merchant liaisons also participate when merchants conduct product line reviews, playing an advisory role as the subject-matter experts around shrinkage and returns for the product category.

SECURITY AT THE SOURCE Finally, the LP team members worked alongside the LPRC to create a training module on inventory shrink for merchants that is hosted on the company’s online learning center. “So now if you are hired into Lowe’s as a buyer, or need occasional refresher training, the course work is part of your training so that you learn fundamentals about inventory shrink and, more importantly, what you can do to reduce it.” The merchant relationship has also been a focus for the AP team at Walgreens. “One of the things we’ve done effectively to work with merchant teams is to integrate shrink and waste metrics into the process for analyzing performance and for which products to carry,” explained Bill Inzeo, director of asset protection solutions. “So it’s no longer just Bill Inzeo

looking at sales and gross. Shrink and waste are now included in that decision-making process.” To arrive at the right merchandising strategy—one that is both driving sales and reducing loss—information sharing between merchants and asset protection should be a two-way street, advised Erik Buttlar, vice president of asset protection at Best Buy. Just as merchants need to understand protection strategies, AP needs to appreciate the sales imperative. “You don’t want to unnecessarily slow down transactions or make them more complex,” he said. “It’s not doing things to the customer but Erik Buttlar for the customer.” Efforts by LP to strengthen relationships with merchant teams surely please Professor DeHoratius. She coauthored a report for the Retail Industry Leaders Association (RILA)

on the subject, Opportunities & Challenges for Engaging Merchants in the Protection of Retail Assets. [For an excellent summary of the study, see Chris Trlica’s story in the September– October 2015 issue of LP Magazine.] Among other important lessons, DeHoratius said that her research has shown that an LP approach strictly focused on getting manufacturers to put tags on high-theft items can miss larger issues at play. “Our research has shown that many discrepancies in the inventory record are not solely attributable to theft. Instead, it’s about transaction errors, errors in delivery orders, and other operational issues that arise,” she said. Broadly, her research has led her to believe that LP discounts nonmalicious causes of shrink, while shrink caused by theft is overemphasized. “It’s not all about locking up products,” she advised. “Solutions should be focused on ‘how do I prevent the discrepancies that are impacting operations and sales?’”

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SECURITY AT THE SOURCE The issue is also broader than LP and buyers. That relationship is critical, but it is just one aspect of a larger ecosystem on the retailer’s side that requires proper alignment. LP, merchants, store operations, sales incentives—they all need to work together for retailers to work effectively with vendors, according to DeHoratius. After a challenging shrink year at GameStop in 2017, and with the company transitioning into collectibles and other merchandise, the company saw value in meeting more frequently and proactively on shrink issues. The internal partnering and communication has been very successful, according to GameStop’s Adam Alford. For more than six months, the company has held biweekly committee meetings to talk about shrink issues, testing, ideas, and high-risk product launches. The meetings include key department heads and representatives from inventory control; loss prevention; head merchants from collectibles, video games, and other key product categories; general counsel; and vice presidents of store operations, IT, and business planning and analytics. “The goal is to drive awareness around shrink and to bring up issues and discuss solutions,” said Alford. “It also reinforces the issue of shrink for merchants so that they can go to a vendor for new packaging or new fixtures and know that everyone is really behind it.” Monnin sees the same imperative for inclusiveness on the manufacturer’s side of the aisle, with operations leaders engaging with sales people. That team can then engage in collaboration with a retailer’s team, including buyers and LP. “There have to be bridges across all these different groups for effective collaboration,” she said. Specifically, Monnin thinks multifunctional meetings are critical when theft problems arise, where retailers bring in their team, including LP experts, and manufacturers include asset protection, operations leaders, analysts, and product supply people. “You need to have more people than just the category buyer and the sales person. There needs to be a more expansive meeting of many stakeholders

in order to build the trust that leads to data sharing and collaborative solutions that fit a retailer’s LP strategy, and for store operations to be effective.” External forums also play a useful role in facilitating solution sharing, according to industry leaders, such as Checkpoint Systems’ annual National Source Tagging Symposium (May 22) and the RILA annual conference. RB’s Rich Widup sat on the steering committee for RILA’s 2018 Retail Asset Protection Conference and said the

“Being involved in LPRC is valuable for building relationships, and in identifying what works, and for research that I can take back to my company and make people aware of,” said Monnin. LP directors said they see similar benefits on their end—learning about solutions that their peers are coordinating on with manufacturers and passing those ideas onto to their merchant teams. Doggette sees similar value—Lowe’s is also an LPRC member—and he hopes that the LPRC can provide a successful venue for addressing the traditional ad hoc approach to product protection. He believes that the LPRC is the key to bridge the gap between retailers, “so we can work with manufacturers on solutions that will work for everyone.” It’s a common sentiment that retailers don’t align with respect to the product protection they ask for from vendors— with one retailer asking for one thing and another for something else. Bill Inzeo expressed similar sympathy for manufacturers’ need to serve many of their retail partners and thinks joint data collection/sharing provides another way for retailers to broaden cooperation. The company participated in a data collection effort lead by Checkpoint Systems to provide manufacturers with anonymized, item-level theft data from a group of retailers, a fresh take at cooperation that he thought worked pretty well. “Retailers need to work together to enable the manufacturers to be more supportive,” he said. “And this allowed us to approach them with a more uniformed ask for support.”

Together into the Future involvement has been invaluable to his effort to work with retail partners. “Not only to hear where their pain points are but also to have open and honest discussions about solutions and to come up with creative ideas,” he said. “That has been really key from our perspective.” The LPRC boasts fifty-five major retail chain members, sixty-five solutions companies, and a half-dozen manufacturer members, including P&G. MAY–JUNE 2018

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SECURITY AT THE SOURCE continued from page 44

component of effective collaboration between manufacturers and LP organizations, mechanisms to encourage it could improve. Widup, for example, is a passionate advocate for current avenues of partnership but also wishes it were easier to share alert-type information between the two groups, to provide a heads-up on emerging theft issues and problems, for example. “I do wish we had more tools available for that kind of thing. What we have now is not really fast enough to keep pace with the accelerating timeline of threats,” he said. There is an idea, too, that while current deliberate processes are effective, LP and manufacturer partners might benefit from faster, more experimental approaches. “We’ve got to improve our comfort level with working with more leading-edge, start-up like service providers, and provide them the opportunity to test their products in a live environment and to be willing to create partnerships with them,” said Inzeo. “It is critical because the environment is changing so quickly that we don’t always have the time to go through the traditional phases of test, deploy, and roll out and to wait for scalable solutions. I think we have to identify and implement solutions much more rapidly.” As an efficient, cost-saving process, one that provides benefits to both retailers and product manufacturers, source tagging remains a dominant force in product protection. But even in the tried-and-true, there is change. Keith McUmber, director of source tagging at Checkpoint Systems, said a developing trend is to move source tags from inside product boxes to outside, where they are visible to potential thieves, as belief is waning in the “halo effect,” the idea that hidden tags on Keith McUmber

some products make thieves fear tags on all products and thus prevent theft more generally. Tests of visible source tagging “has showed some dramatic shrink results and lift in sales for chain drug stores,” said McUmber. Renee Micek, a sales specialist at Avery Dennison, said she’s seen manufacturers increasingly sourcing

No one seems to believe truly universal product protection solutions are viable today, but there is yearning on both the manufacturer and retailer side for additional uniformity, answers that can be applied more widely across retail channels. UHF RFID because more retailers are mandating it to be put onto their products to help with traceability throughout their supply chains. DeHoratius also sees opportunity in going after mistakes, rather than crooks. “A reason why we see a lot of discrepancies is because there are not sufficient visual cues on packaging, cues that simplify and make it easy to distinguish, easy to count, track, and reorder.” A solution, then, is getting vendors to think about imposing visual cues MAY–JUNE 2018

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to prevent problems. For example, Columbia Sportswear ships shirts in a colored container to match the color of the shirts inside it. Or perhaps a maker of deodorant can make a different color cap for each different fragrance. These are simple ideas that can help to reduce costly errors. More broadly, DeHoratius said her research points to a few keys to reducing shrink: reduce product variety; reduce inventory density; increase the frequency of audits, particularly smart audits, to utilize an inventory record that is not simply a point estimate but rather a distribution that can shift and adjust based on transactions over time. Inzeo, like many LP leaders, is anxiously awaiting solutions providers to embrace the “huge opportunity” that exists to deliver the next breakthrough solution—the one that carries manufacturers and LP forward. He suggested that hard solutions, such as boxes around products, aren’t really a great fit for how retail is rapidly transforming generally, that benefit denial is a terrific concept but that it can’t be applied to a tube of lipstick, and that there is less sense today in the industry that tags are the answer. “I don’t really see the EAS pedestal as being the solution that carries us all into the future,” Inzeo said. The extent to which tags are relied upon in the future could depend on retail’s perception of organized retail crime. In a 2016 survey by Colin Peacock of 107 global retailers, 72 percent of respondents said hard tags are “very/extremely effective” against opportunistic thieves, but only 16 percent felt that way about the technology’s effectiveness with respect to organized thieves. While Inzeo isn’t sure what the answer is, he knows what he needs: a solution that improves on-shelf availability, can scale to 20,000 items, and doesn’t demand additional work from the store team, or better yet, removes some. As a priority for Walgreens AP, product availability

SECURITY AT THE SOURCE is supplanting theft prevention—a consequence of the online effect. “In many cases today, that’s the whole reason people come into a physical store—it’s because they need ‘it’ now. And if we don’t have the product on the shelf, then we have missed the opportunity to meet that customer’s immediate need.” To fit that objective, he wondered if the next leap forward is a theft deterrent or something more aimed at on-shelf availability. “Cosmetics is a great example. There isn’t a fixture for a tube of lipstick, so the solution may be about, first, how do we leverage store team presence to deter theft and then to make sure we’re laser-focused on inventory accuracy, so we have product for the customer when they need it. By virtue of that accuracy, we’ll also have accurate insights into what we’re losing. The loss is undesirable, but if we at least know it occurred, we can get product back on the shelf for the customer, quickly.” Inzeo is intrigued by the idea of shelf pads that could automatically identify and count whatever product sits on it, and he is “cautiously optimistic” about blockchain technology. The tracking capabilities that blockchain promises “seems fantastic,” but he wondered if it could face hurdles similar to RFID in terms of scalability and implementation. There’s no end to the power of the insights retailer data has within it, and Walgreens is constantly exploring new ways to leverage those insights, expose them to their merchant, operations, and LP teams, and drive actions that improve product availability for the customer, according to Inzeo. “From a product standpoint, nothing’s more important than making sure we have it when that customer walks into our store. That’s why they’re there. They need it now.” Where, exactly, LP should place its bet is elusive. “We’re engaging with merchant teams and working directly with manufacturers. We’re at the table with the category manager having those exact conversations—can you put an EAS tag on it, or fund a fixture, or should we be talking about some other funding mechanism to help us with loss?” he asked. But what it all comes down to—and what still seems unclear to Inzeo and many others—is, “If I had a blank check from P&G, what’s the next disruptive solution I would spend it on?”

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GARETT SEIVOLD is a journalist who has covered corporate security for nearly twenty years. He has been recognized for outstanding writing, investigative reporting, and instructional journalism. He has authored dozens of survey-based research reports and best-practice manuals on security-related topics. Seivold can be reached at GarettS@LPportal.com. LP MAGAZINE

MAY–JUNE 2018

FUTURE OF LPVIEWPOINT ACADEMIC

We Gave Up Privacy for Convenience Years Ago T

By Tom Meehan, CFI Meehan is the chief strategy officer and chief information security officer for CONTROLTEK. Previously he was director of technology and investigations with Bloomingdale’s, where he was responsible for physical security, investigations, systems, and data analytics. He currently serves as the chair of the Loss Prevention Research Council’s innovations working group. Prior to his thirteen-year tenure at Bloomingdale’s, he worked for Home Depot in loss prevention, and has had various technology, loss prevention, and operational roles at several other companies. He can be reached at tom.meehan@controltekusa.com.

he only surprising thing about Facebook’s recent privacy fiasco is that anyone was actually surprised. Those of us who use social media and other free online services traded our privacy for convenience sometime in the early 2000s. How many of us are there? Out of 330 million Americans walking this Earth, 218 million are Facebook users. The remaining third of the country, while not on Facebook, is on one of the myriad other free sites that are not really free. It should be said that those calling for the boycott of Facebook are ignoring the fact that this company is neither the first nor the only one that collects personal information about its users for marketing purposes. In 1985, Prodigy and AOL became the first publicly available online service providers. Google was founded in 1998, Myspace in 2003, and Facebook in 2004. I recall in 1996 when Juno’s online service was founded, they were one of the first to offer free online access and email. In less than a decade, almost all online services became free. I recall my younger self wondering how could they be free. The answer was, of course, that they weren’t—it’s just that we did not pay with cash but with our data to be used to pitch us products and services.

When It’s Free, You’re the Product

Internet advertising was still largely unknown when the first dot-com crash occurred, leaving a high degree of uncertainty around Internet marketing. I, like many others at the time, didn’t have a full understanding of what Juno was doing with my info. I really didn’t think much of it—their service was free, and it worked. Of course, now I know that this was my first experience of giving up privacy for convenience. I do wish to underline that I used all the services mentioned, and I am not suggesting people should stop. With this article I just hope to provide a bit more insight into how this tradeoff between privacy and convenience occurred and continues to occur. Google came in the late ’90s, and from the start it was an advertising and data company. Google spent a lot of time mastering the indexing of the web, making it easy to search. At the same time, they became very good at sort of indexing their own users. Even early on, Google was able to tell where

MAY–JUNE 2018

and how a product or service would sell. Every time someone searched for something, Google became one data point smarter. When Gmail came out as the first free, full-featured email service, its success was guaranteed. By that time, we all should have learned that nothing was free. Our privacy was the cost.

Think about all the questions you get asked to verify that you are you when trying to log into your bank or credit card account. Things like birthday, place of birth, mother’s maiden name, favorite sport, first car—all this info is likely right in your Facebook profile and timeline, down to your favorite vacation spot and where you met your spouse. Google and Gmail use our search information and look for keywords or phrases in what we type, be it in the search box or in the emails we send. No human is reading our emails, of course—it’s an algorithm that looks for certain things. If, for example, you search for cell phone services and then email your significant other about it, Google takes that metadata and stores it. Then if a cell phone company wants to advertise, Google matches them to you. This can be as simple as a banner on a web site you visit or as advanced as changing the order of your search results. From my perspective, this is helpful. If you use Google’s Personal Assistant, it can tell you how to get to the airport

LOSSPREVENTIONMEDIA.COM

and when you should leave. On the backend, it is using that information to tailor ads for you. For most people, this by itself is not a major privacy concern. But the question is, what if Google lost control of that data or sold it to a third party? The answer, sadly, just came from Facebook. When social media became mainstream, everyone thought it was for kids. But today, as I mentioned, two thirds of Americans are on Facebook alone, meaning it and companies like it have a huge repository of our data. And the data got out, and was misused, and Mark Zuckerberg spent two days sweating in front of angry Congress members. Technically, Facebook didn’t do anything wrong—it was the third-party company that may have misused Facebook’s database. But it was a big deal, of course, because this incident may have impacted the elections. Could this have been prevented? It certainly didn’t help that Facebook’s terms of service are complicated even for the most well-educated attorney.

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I personally use Facebook to keep in touch with friends and family, while recognizing a few hidden dangers. One that isn’t often talked about is identity theft. Think about all the questions you get asked to verify that you are you when trying to log into your bank or credit card account. Things like birthday, place of birth, mother’s maiden name, favorite sport, first car—all this info is likely right in your Facebook profile and timeline, down to your favorite vacation spot and where you met your spouse. So be careful what details you share publicly. It is pretty easy to make some of that information private and still enjoy the benefits of Facebook. The next time you reset a password or call your credit company, think about which answers to the security questions are on your Facebook profile. Another thing to remember is that any service that uses your location could pose a risk. A recent study showed that the use of location data helped burglars in high-end break-ins. A good rule of thumb is to shut off location services if you’re not using them. And speaking of the rules of thumb, here are a few others to keep you and your data safe: ■■ Personal information like your birthday, address, email, phone, and maiden name should be private or restricted to close friends. ■■ Use a separate email for social media. Create a free email account just for this purpose, and don’t use it for banking or personal and business communications. ■■ Open social media accounts in your name even if you’re not going to use them. Social impersonation, when someone pretends to be you, happens in the professional world. By opening accounts under your name, you can limit your exposure to this. ■■ Do not post anything you wouldn’t want to say in court. I hope this article was useful in explaining how social media and other online services can use your data. For many of us, the customized shopping experience, location information, and custom discounts are worth it. Just be safe with your information, and do your best to read the terms. And remember—nothing is free. LP MAGAZINE

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FEATURE

RETAIL CRIME IN LOS ANGELES CRIME RATES HAVE BEEN DROPPING FOR DECADES. ARE WE NEARING A FLOOR? By Basia Pietrawska

RETAIL CRIME IN LOS ANGELES

“Crime is up.” “How should I protect my employees and customers from increasing violence?” “More and more shoplifting incidents escalate into physical assaults.”

omments or questions of this nature have certainly increased in frequency within the retail environment in the past two years or so. Is it just retail though? Certainly not. I have encountered similar statements in my work with the banking, restaurant, and other industries. We may not get to the bottom of all of this until experts study the situation in retrospect. The one thing we can do now is better understand the nature of these new trends and how different areas of the country are affected. Most importantly, how are your stores affected? Let’s start with a nationwide perspective. The Federal Bureau of Investigations (FBI) reported upward trends in violent crimes in the United States in 2015 and 2016, following many years of declining patterns. Property crimes, on the other hand, continued to decline at the nationwide level. A closer look at some of the regional statistics shows that these trends vary fairly significantly across the country. For instance, the District of Columbia was subject to an 8.6 percent increase in larceny-theft even though the FBI reported an overall decrease for the nation. While law enforcement trends

began to emerge, media reports sounded the alarm about crime increases for many cities across the country. Some reports were supported by factual information, but many were somewhat sensationalized and often misleading. What does all this mean? Well, the results are mixed. It is not clear that we have reached a floor and that crime rates are heading back up nationwide. It is important to examine local and regional trends to determine exactly what is going on. It does seem clear, though, that the old, decades-long narrative of endlessly falling crime rates may need to be updated.

Fiction versus Fact: A Closer Look at Data

In addition to changing crime trends, new crime-reporting practices have emerged. Police departments began making more comprehensive crime statistics available to the public. Chicago, Baltimore, and Houston are just some examples of agencies that provide access to impressive data portals. They are shifting from displaying aggregate information for a city or a district to providing address-specific data. Incident date, time, precise crime designation, and

Proposition 47 Proposition 47, the ballot initiative passed by California voters on November 4, 2014, reduces certain drug possession felonies to misdemeanors. It also requires misdemeanor sentencing for petty theft, receiving stolen property, and forging/writing bad checks when the amount involved is $950 or less. (Source: cdcr.ca.gov/news)

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even premises-type information are becoming increasingly available. Some of it can be accessed through online portals, while one must submit an official data request in other jurisdictions. It is important for the retail industry to take advantage of this information and conduct address-specific and retail-specific assessments. Each issue within this series will examine a different city, and the individual analyses will be customized to data available for that location. The goal is to provide you with information that will allow for informed benchmarking of crime at your stores against what your peers may be experiencing.

Why Los Angeles?

Los Angeles, the second-most populous city in the United States, has been the subject of many conversations among retailers, with many concerned about recent upward crime trends. Proposition 47, an initiative that reduced certain felonies to misdemeanors, is often mentioned in the context of these debates. It was passed in California in November 2014 and, according to many, resulted in unintended, negative consequences. This article looks at retail crime trends before and after the institution of Proposition 47, but there are a multitude of factors at play. We cannot make a definitive causal determination of Proposition 47’s impact. The Los Angeles Police Department (LAPD) is one of the agencies that has made comprehensive, site-specific crime statistics available to the public, and that is another reason why that particular city in California was chosen to open this series of assessments. CAP Index’s analytics team obtained 2011–2017 LAPD crime data from an online portal. Premises-type information allowed crimes reported at retail locations, including department stores, gas stations, and liquor stores, to be

RETAIL CRIME IN LOS ANGELES

Access the December edition of LPM Online on the archives page at LPM-online.com.

subsetted from all other offenses. We cannot take responsibility for the accuracy or completeness of this information, but we found it to be valuable in this high-level assessment of retail crime trends.

of the Office of the Los Angeles County District Attorney. Finally, Karl Langhorst, CPP, CFI, rounded out the panel of experts with his experience as a retail practitioner, former corporate director of loss prevention for the

“The Unintended Consequences of California’s Proposition 47 on Retail Theft” Podcast

Before we get into the findings of the analysis, I would like to highlight an EyeOnLP podcast from the December 2017 edition of LPM Online, which provided some excellent observations regarding Proposition 47 and recent retail crime trends in Los Angeles. The podcast featured Aaron Moreno, senior director of government relations for the California Grocers Association, and Bill Williams, retired captain with LAPD and also a founding member of the Los Angeles Area Organized Retail Crimes Association (LAAORCA). Also on the panel was Loren Naiman who retired in January 2017 from his last assignment in the Post Conviction Litigation and Discovery Division

Kroger Co., and currently executive vice president of ALTO US. The panel started by describing the background of Proposition 47, which was intended to reduce crowding in California’s overwhelmed prisons and provide treatment rather than jail time to qualifying drug offenders. However, the experts quickly moved on to highlight some of the unintended consequences of the new measure that, according to them, contributed to concerning changes in criminal behavior. One of the initiative’s main effects is conversion of many nonviolent offenses, including shoplifting, from felonies to misdemeanors. “Since the passage of Proposition 47 in California, many retailers have experienced a steady increase of both shoplifting and organized retail Karl Langhorst crime in their stores. This increase of incidents not only has impacted retailers’ profitability but also, more

Our study does not allow us to disentangle the causal relationships underlying these upward trends. However, the bottom line is that shoplifting is up for most retail segments. Shoplifting - Grand Theft 500

447 363

375 235

250 159

125 0

454

163

143

5,882

6000

5,327

4500 3000

4,979

4,216 3,198

3,488 3,364

1500

2011 2012 2013 2014 2015 2016 2017 LP MAGAZINE

Shoplifting - Petty Theft

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RETAIL CRIME IN LOS ANGELES importantly, has created an influx of recidivist offenders that are more brazen and, in many cases, more hostile to store employees Aaron Moreno who are trying to deter their criminal activity,” said Langhorst. “Since 2014, we have seen a significant increase in both incidents and in the value of cases as it became known that no matter how many times you’re caught—so long as you stay under $950—you’ll get a citation to show up in court,” added Moreno. The experts talked about the phenomenon of decriminalizing shoplifting with more and more offenders seeing this crime as low risk and high reward. Moreno compared the punishment for these newly established misdemeanor offenses to “a slap on the wrist.” Williams highlighted the Bill Williams fact that there’s

even been a shift in shoplifting offender types, with gangs getting more and more engaged in retail theft because they realize that the penalty is now

Loren Naiman

significantly lower. Finally, Naiman provided his prosecutor’s perspective and stated, “Since Prop 47 was voted into law in 2014, more than 13,500 prisoners were released to the streets, and another 200,000 felony convictions were retroactively made misdemeanors. The real question is whether or not this is a net positive or an extreme negative for the community. And the bottom line is that there are clearly people who should be in jail and are now out.” A lot of very strong and concerning statements were made throughout the podcast, and they echo comments of many retailers with stores in the area. It is evident that all panelists share serious concerns about the potential negative effects of Proposition 47, including upward crime trends and changes in criminal behavior, as well

Some of the comments made during the aforementioned podcast touched on the fact that retail criminals are getting more confrontational and violent. Aggravated Assault

Other Assault

400

1,167

1200 317

300

240

200 130

100 0

111

129

268

142

2011 2012 2013 2014 2015 2016 2017

939

900

973

807 663

684

671

600 300 0

2011 2012 2013 2014 2015 2016 2017

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as criminals’ perceptions of the penal system. Let’s shift to results of the LAPD crime analysis to see what is in the data.

Shoplifting Trends in Los Angeles

The shoplifting category provided by LAPD is divided into two groups: shoplifting-grand theft ($950.01 and over) and shoplifting-petty theft ($950.00 and under). This breakdown corresponds to the misdemeanor dividing line adopted by Proposition 47 and should be helpful for putting the trends into the perspective of this controversial measure. As is clearly evident in the graphs on page 53, both grand theft and petty theft shoplifting have gone up at Los Angeles retail locations in the past few years. Both are relatively flat from 2011 to 2013, followed by large increases through 2016 when the numbers either leveled off or decreased. While both types of shoplifting have increased over the last few years, the magnitude of these changes differs for the two. Grand theft shoplifting went up by 64.3 percent in 2014 versus 2013 and then by another 54.5 percent in 2015 versus 2014. Petty theft, on the other hand, increased by 25.3 percent in 2014 and by 26.4 percent in 2015 when compared to the previous years. Clearly, grand theft increases were more substantial than those for petty theft. A similar assessment was conducted for individual retail segments included within the aggregate retail category. The vast majority of them show upward trends in both grand theft and petty theft shoplifting that follow patterns similar to those reported above. However, there are several categories that differ. For instance, while petty theft shows a drop in 2017 for the aggregate retail group, several retail segments, including cell phone stores, gas stations, liquor stores, and mini-mart locations,

RETAIL CRIME IN LOS ANGELES continue to show an increase in 2017. Gas stations, for example, reported 71.6 percent more petty thefts in 2017 when compared to 2016, and mini-mart stores show a 64.3 percent increase. Drug stores show a distinctive trend as well. Petty theft shoplifting for drug stores went up by 73.4 percent in 2012 and by 17.0 percent in 2014 but began a consistent downward trend over the course of the next three years. Clearly, there are different patterns for various retail subgroups. However, in aggregate, a marked upward trend in both petty theft and grand theft began in 2014. Did Proposition 47 have an impact? Is increased reporting involved? Did data collection and recording practices change over time? Did organized retail crime skyrocket in Los Angeles? Our study does not allow us to disentangle the causal relationships underlying these upward trends. However, the bottom

While nationwide crime trends are more ambiguous, there’s a clearer picture for Los Angeles. Retail crime appears to be up, and regardless of the reasons behind this trend, it requires collaboration among retailers, law enforcement, and other experts to determine the best ways to address this issue. Burglary 800 744

Fraud & Forgery 733

711

600

513

600 472

400

200

2011 2012 2013 2014 2015 2016 2017

LP MAGAZINE

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730 665

400

740

646

639

618

800

468

513

522

2011 2012 2013 2014 2015 2016 2017

RETAIL CRIME IN LOS ANGELES line is that shoplifting is up for most retail segments. What about other retail crimes in Los Angeles? In order to provide a more well-rounded view of retail crime in Los Angeles, let’s take a look at trends for offenses other than shoplifting. Some of the comments made during the aforementioned podcast touched on the fact that retail criminals are getting more confrontational and violent. “And you’re starting to see more cases of these thieves becoming more brazen where now workers are in danger. We’ve had incidents here in California where we’ve had some workers assaulted. Last summer, there was a security officer who was killed trying to stop somebody from taking stuff from a store,” said Moreno. “During the past two years, we’ve seen officers shot and wounded and

Recently a coalition of retailers, prosecutors, and law enforcement formed the California Public Safety Partnership program. The group is sponsoring a new ballot measure to modify Proposition 47 to correct the negative outcomes of the original initiative.

Vandalism 512

450 361

320

354

403

392

150

450

2011 2012 2013 2014 2015 2016 2017

1,620

Other Theft 1.752

1,340

1350 900

killed by veteran felons who were on the street in times when previously they would have been in custody,” added Naiman. In support of these assertions, you can see some large violent crime increases in the data. Whether this is all due to increased offending or whether it relates to changes in data collection or recording practices remains to be determined. Aggravated assault, other assault, and robbery all went up over the last couple of years. Retail robberies went from 919 in 2011 to 1,752 in 2017, which represents a 90.6 percent increase. Aggravated assaults show an

1800

300

What Does All This Mean? Next Steps.

Fraud & Forgery 581

600

actually show a continuous decrease over the last six years. Vandalism is the one property-crime category that most closely mimics shoplifting and crimes-against-persons trends. Again, changes in data collection and recording practices may play a role in these changes.

919

906

846

958

4000 3,767 3,891 3,829 3,775 3,232

3000

3,097

2,832

2000 1000

2011 2012 2013 2014 2015 2016 2017

even more extreme upward shift with a 143.8 percent increase from 2011 to 2017. Finally, all other assaults show a 75.8 percent increase. The exact nature of these increases needs to be investigated. Property crimes, on the other hand, show a bit of a mixed trend. Burglary counts fluctuate across the study period, although the last two years show a consistent increase. Fraud and forgery incidents went up significantly in 2015 followed by a downward trend over the next two years. Other retail thefts, meaning any theft incidents not included in the shoplifting categories, MAY–JUNE 2018

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2011 2012 2013 2014 2015 2016 2017

some role in these concerning trends, but we cannot discount the potential impact of Proposition 47. Based on the persuasive comments made by experts on the “The Unintended Consequences of California’s Proposition 47 on Retail Theft” podcast, stakeholders should address some of the controversial aspects of the ballot initiative. In fact, recently a coalition of retailers, prosecutors, and law enforcement formed the California Public Safety Partnership program. The group is sponsoring a new ballot measure to modify Proposition 47 continued on page 58

RETAIL CRIME IN LOS ANGELES

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RETAIL CRIME IN LOS ANGELES continued from page 56

FBI: Uniform Crime Reporting ■ I n 2015, an estimated 1,197,704 violent crimes occurred nationwide, an increase of 3.9 percent from the 2014 estimate. ■ I n 2016, an estimated 1,248,185 violent crimes occurred nationwide, an increase of 4.1 percent from the 2015 estimate.

Property Crime

■ I n 2015, there were an estimated 7,993,631 property crime offenses in the nation. Property crime offenses declined 2.6 percent in 2015 when compared with the 2014 estimate. ■ I n 2016, there were an estimated 7,919,035 property crime offenses in the nation. Property crime offenses declined 1.3 percent in 2016 when compared with the 2015 estimate. Source: https://ucr. i.gov

to correct the negative outcomes of the original initiative. As Moreno said, the only way to amend a ballot initiative in California is by way of another ballot initiative. The “Reducing Crime and Keeping California Safe Act of 2018” is currently collecting signatures for inclusion on the November 2018 ballot. One of the changes proposed is to charge a felony for theft of $250 or more after two previous misdemeanor thefts. The goal, among other things, is to make prosecuting these cases more effective and to take repeat offenders off the streets. Finally, a lot more can be done with the data used for this high-level assessment. Temporal and spatial analyses can be conducted to determine various “hot spots” across the city. Even more questions could be answered with information collected directly from retailers. While data used in this analysis could be considered a

representative sample, some offenses may not get reported to LAPD. Therefore, this assessment could be telling only one side of the story. Bridging the gap between actual crime and reported crime is key to understanding the true magnitude of the issue and determining the optimal response to it. BASIA PIETRAWSKA joined CAP Index in 2007 and serves as the company’s vice president of crime intelligence analysis. In addition to building custom risk and loss models for retailers, Pietrawska analyzes bank robbery and skimming data for the American Bankers Association and the FBI, is the co-chair of the Loss Prevention Research Council’s Violent Crime Working Group, and regularly analyzes and presents crime trends at various industry conferences. Pietrawska received a master’s in criminology from the University of Pennsylvania. She can be reached at bpietrawska@capindex.com.

Don’t Miss LPM Online An All-Digital Magazine with All-New Content

LPM Online is an all-new magazine experience. LPM Online publishes every other month on even-numbered months in between our print editions. The inaugural edition went live in August. You can view it and our current edition on the LPM Online tab on our website, LossPreventionMedia.com, or by entering LPM-online.com in your browser.

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SOLUTIONS SHOWCASE CHECKPOINT

ALPHA—First and Foremost

ioneers at Checkpoint Systems’ brand of ALPHA® High-Theft Solutions take tremendous pride in their long history of “firsts.” Our patent list has grown from fifty-six in 2004 to hundreds in 2018. That’s why retailers nationwide think of ALPHA first and foremost. Spider Wraps®, CableLoks®, Keepers®, 3-Alarm, S3 Single Key Concept, and more—ALPHA was the first to develop these industry innovations. The list goes on as ALPHA focuses its efforts on developing compelling new solutions that attack specific high-theft problem areas for retailers around the world.

Case in Point

The ALPHA Keepers is where the innovation story truly began twenty years ago. S3 Keepers allow you to create attractive visual displays with the confidence that your merchandise is protected well. ■■ FIRST to develop an extensive line of Keeper solutions to protect an array of merchandise, beyond just electronic media ■■ FIRST to apply 2 Alarm and 3 Alarm Technology to Keepers ■■ FIRST to invest in and develop a product based on aesthetics to complement the merchandise it protects Spider Wraps. Customers then turned to ALPHA in search of a smaller footprint for larger products; thus the ALPHA Spider Wrap was born. This flexible, “spider-looking” technology entered the market twenty years ago as the first solution for larger, six-sided packages. ■■ FIRST solution for large, six-sided packages—a signature product that created “brand like” awareness in the industry—now one of the most copied security products ever ■■ FIRST to develop an ease-of-use solution using an auto-retractable cable ■■ FIRST to apply 2 and 3 Alarm Technology to this solution ■■ Now RFID-enabled CableLoks started as an answer for do-it-yourself and industrial applications fifteen years ago and quickly became the preferred choice for high-end apparel and other merchandise because of their never-ending capabilities to adapt to hard-to-protect items like leather coats, purses, and high-end denim. ■■ FIRST CableLok—ALPHA pioneered this breakthrough product, providing ease-of-use solutions across a wide spectrum of merchandise ■■ FIRST secure solution for racks of high-end merchandise, which allows customers to shop, compare, and try items without a store associate’s assistance ■■ FIRST to apply 2 and 3 Alarm Technology to this solution ■■ Now RFID-enabled