September - October 2015 by Loss Prevention Magazine

LPPORTAL.COM | V14.5 SEPTEMBER - OCTOBER 2015

LOSS PREVENTION

MAGAZINE THE VOICE OF LOSS PREVENTION

KEEPING INTERNATIONAL TRAVELERS SAFE WHEN EMPLOYEES OF AMERICAN EAGLE SOAR, SECURITY GOES WITH THEM

LOSS PREVENTION CONSULTING WITH BOB DILONARDO ENGAGING MERCHANTS IN THE PROTECTION OF ASSETS RYDER: DRIVING THIRD-PARTY LOGISTICS SOLUTIONS

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CONTENTS

Keeping International Travelers Safe

PUBLISHER’S LETTER Tripping Over Technology By Jack Trlica

ON THE WEB

RETAIL SPONSORS

INTERVIEWING It’s All about Context: Part 3 By David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP

MY TURN Using Technology to Enhance the Relationship between LP and Local Law Enforcement By Detective Raquel Betti

PARTNERING WITH RETAILERS eBay Celebrates Twenty Years By Dave DiSilva

CERTIFICATION A New Perspective With Karla Hutchinson, LPC, Brookshire Grocery

DIGITAL DIALOGUE And Our Survey Says… By Jacque Brittain, LPC

EVIDENCE-BASED LP Navigate the LP Highway with Good Data By Read Hayes, PhD, CPP

SOLUTIONS SHOWCASE - Alpha - Detex - Best Security Industries - Digilock - USS - Turning Point Justice

The challenges and opportunities for loss prevention

INDUSTRY NEWS - LPRC Members Converge on Seattle to Tour Amazon and Microsoft - LP Foundation’s Diversity Committee Solicits Industry Input

PEOPLE ON THE MOVE

CALENDAR

ADVERTISER DIRECTORY

VENDOR SPONSORS

PARTING WORDS Enough Is Enough. I’m Retiring By Jim Lee, LPC

When employees of American Eagle soar, security always goes with them

By Garett Seivold, Editor, Security Directors’ Report

Loss Prevention Consulting

A conversation with industry expert Bob DiLonardo

By James Lee, LPC, Executive Editor

Engaging Merchants in the Protection of Assets

By Chris Trlica, Contributing Writer

Driving Third-Party Logistics Solutions

How Ryder is serving retailers By Jacque Brittain, LPC, Editorial Director, Digital

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PUBLISHER’S LETTER

MAGAZINE

Tripping Over Technology

few months ago my wife and I were sitting at home in the early evening discussing some items we needed for our home. As an Amazon Prime user, I picked up my iPad and placed an order. The next morning when I walked out my front door to get the newspaper, I literally tripped over a box with our order. Somehow Amazon had delivered my merchandise in about thirteen hours…and there were no drones anywhere in sight. The retail experience is drastically changing right before our eyes, both as consumers and as loss prevention professionals. Today’s Holy Grail is “The Customer Experience” regardless of channel—brick and mortar, e-commerce, mobile, or whatever combination required. Technology is driving the customer demand, and technology is how retailers are attempting to answer the challenge. I spent a few days in Seattle in August with twenty or so members of the Loss Prevention Research Council’s (LPRC) Future of LP working group, which is made up primarily of retail members who are focusing research on emerging technologies and advanced LP strategies. The purpose of our trip was to tour one of Amazon’s fulfillment facilities as well as Microsoft’s Retail Experience Center.

Amazon

The tour at Amazon provided a start-to-finish look at the company’s fulfillment process. Starting with receipt of incoming merchandise to picking orders to boxing and shipping, the use of technology was evident. Product is scanned either by hand or automatically at multiple points to ensure inventory accuracy and correct routing of orders. Throughout the operation, various robotic technologies were in use primarily moving merchandise in and out of storage as needed for customer orders. The Amazon facility was tightly controlled for both security and safety. Multiple metal detectors were used for both visitors and employees entering or exiting the building.

Safety vests were worn by the tour members. Vests, eye protection, gloves, and other safety equipment were used by employees throughout the facility. I came away from the tour amazed at the efficiency, use of technology, and employee focus. They have put in place a combination of process and technology that is successfully meeting their customer demands. However, I still don’t know how they delivered my previously mentioned order literally overnight.

Microsoft

At Microsoft’s Retail Experience Center, the company has essentially built a retail mall inside the facility. Marty Ramos, CTO, worldwide retail, consumer products, and services for Microsoft, provided a lively, energetic tour highlighting numerous technologies currently in use by retailers worldwide. The demo center featured full-size retail stores and kiosks representing multiple retail environments from coffee shops to electronics stores to apparel, cosmetics, and even convenience stores. Dozens of technologies were in use for customer service, merchandising, retail operations, as well as loss prevention, including Bluetooth and audio beacons, WiFi location tracking, RFID EAS gates, virtual mirrors, mobile POS, facial recognition, and more. Ramos emphasized that all of the technologies on display are currently in use—not pie-in-the-sky prototypes. What I came away with was an appreciation for all the many tools at the disposal of retailers as well as a greater realization of the enormous challenge retailers’ face. As our global economy is shrinking our world and consumer demands are exploding, we are privileged to be in an industry that can contribute to the retail solutions needed to meet the challenge.

Jack Trlica Editor and Publisher

LossPrevention, LP Magazine, and LP Magazine EU are service marks owned by the publishers and their use is restricted. All editorial content is copyrighted. No article may be reproduced by any means without expressed, written permission from the publisher. Reprints or PDF versions of articles are available by contacting the publisher. Statements of fact or opinion are the responsibility of the authors and do not necessarily represent the opinion of the publishers. Advertising in the publication does not imply endorsement by the publishers. The editor reserves the right to accept or reject any article or advertisement.

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700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax EDITOR AND PUBLISHER Jack Trlica JackT@LPportal.com EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com EDITORIAL DIRECTOR, DIGITAL Jacque Brittain, LPC JacB@LPportal.com CONTRIBUTORS Robert L. DiLonardo Dave DiSilva Read Hayes, PhD, CPP Richard C. Hollinger, PhD Walter Palmer, CFI, CPP, CFE Gene Smith, LPC Shane G. Sturman, CFI, CPP David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF MARKETING Merek Bigelow MerekB@LPportal.com DIRECTOR OF DIGITAL OPERATIONS John Selevitch JohnS@LPportal.com SPECIAL PROJECTS MANAGERS Kat Houston, LPQ Justin Kemp, LPQ Karen Rondeau DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com 704-844-6080 CREATIVE DIRECTOR Larry Preslar ADVERTISING

ADVERTISING MANAGER Ben Skidmore 972-587-9064 office 972-692-8138 fax BenS@LPportal.com EAST COAST REP Kristie Thymes 972-782-9841 office 972-692-8138 fax KristieT@LPportal.com SUBSCRIPTION SERVICES

NEW OR CHANGE OF ADDRESS myLPmag.com POSTMASTER Send change of address forms to Loss Prevention Magazine P.O. Box 92558 Long Beach, CA 90809-2558 LossPrevention aka LP Magazine (USPS 000-710) is published bimonthly by Loss Prevention Magazine, Inc., 700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105. Print subscriptions are available free to qualified loss prevention and associated professionals in the U.S. and Canada at www.myLPmag.com. The publisher reserves the right to determine qualification standards. International print subscriptions are available for $99 per year payable in U.S. funds at www.LPportal.com. For questions about subscriptions, contact circulation@LPportal.com or call 888-881-5861. Periodicals postage paid at Matthews, NC, and additional mailing offices.

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ON THE WEB Check out our growing archives of videos with LP executives talking about current topics and events.

EDITORIAL BOARD

EYEONLP Powered by LP Magazine

The McDonald’s US Security Team

Hear how McDonald’s security team impacts 15,000 locations and 27 million visitors per day with just thirteen LP professionals.

Leo Anguiano, LPC Senior Director, Asset Protection, Rite Aid

Bob MacLea Senior Vice President, Loss Prevention, TJX

Shawn Blankenship Vice President of Asset Protection, The Home Depot

John Matas Vice President, Asset Protection, Investigations & ORC, Macy’s

Jim Carr, CFI Senior Director, Global Loss Prevention, Rent-A-Center

Chris McDonald Senior Vice President, Loss Prevention, Compass Group NA

Francis D’Addario Emeritus Faculty Member, Strategic Influence and Innovation, Security Executive Council

Randy Meadows Senior Vice President, Loss Prevention, Kohl’s

Charles Delgado, LPC Vice President, Asset Protection, Meijer Scott Glenn Chief Security Officer, Sears Holdings Tim Gorman Divisional Vice President, Loss Prevention, Asset Protection, and Business Continuity, Walgreens

Covering the RLPSA Conference

Barry Grant Chief Operating Officer, Canadian Images

The EyeOnLP team provided exclusive coverage of the 2015 Restaurant Loss Prevention and Safety Association conference in Las Vegas.

Bill Heine Senior Director, Global Security, Brinker International

LP101 Articles Offer Basic Information for LP Professionals We have published a large number of articles on fundamentals of loss prevention in cooperation with the Loss Prevention Foundation. Here are a few of the recent topics: Retail Management: Credit Card Fraud Retail Management: Policy Violations Investigations and Computer Forensics Coaching Investigations and the Importance of Human Intelligence Building a Program by Understanding Business Trends Use of Counterfeit Currency Transforming from a Manager to a Leader

SEPTEMBER - OCTOBER 2015

Dan Provost, LPC Vice President, Global Loss Prevention, Staples Tina Sellers Director of Loss Prevention, Delhaize America Mark Stinde Vice President, Asset Protection, 7-Eleven Paul Stone, LPC Vice President, Loss Prevention and Risk Management, Best Buy

Frank Johns, LPC Chairman, The Loss Prevention Foundation

Claude Verville, LPC Vice President, Loss Prevention, Safety & Hazmat, Lowe’s

Gary Johnson Vice President, Loss Prevention, The Vitamin Shoppe

Robert Vranek Vice President, Loss Prevention Belk

Paul Jones, LPC Senior Director, Global Asset Protection, eBay

Stanley Welch, LPC Vice President, Director of Loss Prevention, JCPenney

Mike Lamb, LPC Vice President, Asset Protection & Safety, Walmart Stores US

Keith White, LPC Senior Vice President, Loss Prevention and Corporate Administration, Gap Inc.

Karl Langhorst, CPP, CFI Corporate Director, Loss Prevention, The Kroger Co.

Building an Effective Program

Melissa Mitchell Director of Loss Prevention, LifeWay Christian Stores

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INTERVIEWING

It’s All about Context: Part 3 I

n our last two columns, we discussed how context matters in conversations and the questions that are appropriate to ask. In part two, we began the discussion of context and questions as they relate to the beginning of an admission-seeking interview. In this third part, we will look at the introductory statement as the context changes for the subject and the interviewer.

The Interviewer’s Introductory Statement

The beginning of the introductory statement transitions the context of the conversation from eliciting information about the subject’s life and interests to a discussion about the interviewer’s job and responsibilities. To a large extent the transition of the discussion to center around the interviewer’s role in an investigation is controlled by reciprocity. Reciprocity simply means a change in obligation. For example, if one is invited out to dinner there is an expectation that at some point the invitee reciprocate the invitation of the inviter. Simply stated, if I buy you dinner there’s an expectation you buy me dinner. Reciprocity is a cross-cultural, cross-gender, cross-geographic human characteristic making it applicable to almost everyone. The subject has had a chance to talk during the development of rapport and now is expected to listen while the interviewer discusses his or her job and interests. So essentially the context of the conversation has become an obligation where the subject should politely listen in the same way that the interviewer has done previously. However, as the interviewer begins to describe herself and what she does for a job, there is a subtext applicable only to the guilty party who now interprets the interviewer’s words in light of criminal activity. What starts out as a simple description of what the interviewer does for a living quickly turns into a somewhat disquieting conversation for the guilty. The interviewer describes their job and introduces the idea of employees stealing or other criminal behavior. An innocent individual does not understand the subtext and views the conversation as an interesting disclosure of what an investigator does. However, a guilty party views the same words as an indication that their dishonest behavior has been discovered. In the next part of the introductory statement, the interviewer describes different forms of dishonesty that they are responsible for investigating. The context for an innocent person is non-stressful and merely revolves around an interesting discussion of the ways criminals commit crimes. The guilty party listens carefully wondering when and if their method of theft or criminal activity will be listed in the discussion. For example, when the method of theft the subject is using is presented, there

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

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. © 2015 Wicklander-Zulawski & Associates, Inc.

is often a behavioral response reflecting the potential threat this discovery may have on the guilty person’s future. The third part of the introductory statement is a discussion of how investigations are conducted. Again, the innocent party reacts with interest since they have no fear of detection or discovery because they have done nothing wrong. The guilty party listens to the discussion of how investigations are conducted with a sense of fear that the interviewer knows of their dishonesty. At the conclusion of these three parts, the guilty party often comes to the conclusion that their guilt is known. Psychologically and

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continued on page 14 |

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therefore have nothing to fear. Guilty parties find themselves in an entirely different mental state and context.

No Opportunity for Denial

The interviewer has not directly accused the guilty party of doing anything, which makes it difficult for that subject to mount a defense using denial. The context set up by the interviewer is a non-confrontational approach that makes it difficult for the guilty subject to engage in any type of aggressive or denial behavior because the interviewer has not made any direct statements or accusations. Essentially, the first three parts of the introductory statement convey the message to the guilty that their dishonesty has been uncovered, but provides no opportunity for them to attempt a defense.

The context set up by the interviewer is a non-confrontational approach that makes it difficult for the guilty subject to engage in any type of aggressive or denial behavior because the interviewer has not made any direct statements or accusations. Instead, the context created by the interviewer does several things in a very powerful fashion. First, the introductory statement brings the guilty to the logical conclusion that their guilt is known without producing evidence or making any direct accusation to the individual. This is incredibly important since one of the primary reasons people ultimately confess is that they believe their guilt is known. The guilty subject desperately wants to know what the investigation has revealed and what evidence exists that indicates their involvement. The interviewer uses the context of the conversation to speak in generalities allowing the guilty subject to expand the evidence in their own mind. Ambiguity in the discussion of evidence creates a context where it is easy for the guilty party to apply the message to their own actions. A spiritualist often uses ambiguity to allow an audience to believe the statements apply to their own lives as in the following example. “I see that you have suffered a loss and this loss still troubles you today.” “My father passed away a number of years ago.” “I sense there were things left unsaid between you and he.” “Well, I wished we had more time at the end.” “Your father is here, and he says he feels the same way.”

The interviewer, even if they have specific evidence indicative of the subject’s guilt, can withhold these specifics and allow the context of the conversation and the ambiguity of their words to let the subject come to their own conclusion about what is known. The interviewer can observe the guilty party’s behavior and be relatively certain the person believes he or she is caught. However, what the subject believes is known may be entirely different than the evidence held by the investigator. Creating a non-confrontational context at the beginning of an admission-seeking interview also avoids an adversarial relationship between the investigator and the subject. Academic researchers recently explored the planning done by guilty parties in anticipation of an interview. About 20 percent of the guilty individuals planned to enter the interview and deny any involvement in the alleged incident. However, the non-confrontational approach does not provide a context where it is easy for them to deny their guilt because there is never a direct accusation nor an overt indirect accusation that allows them to do so. The remaining 80 percent of the guilty parties plan to do one of two things—admit their guilt or wait and see what the investigator was going to do or say. The non-confrontational context established by the investigator fits perfectly with this remaining 80 percent as well. It provides a context that allows guilty subjects to come to the conclusion that they are caught, but allows the interviewer an opportunity to show understanding, which preserves the person’s self-image. This encourages the percentage of guilty who are predisposed to confess to maintain that position while at the same time not doing anything to make the investigator reveal their overall strategy to the subject.

Moving Toward Admission

Essentially, the context provided by the first three parts of the introductory statement creates a collaborative environment where the guilty can come to their own conclusions whether or not their dishonesty has been discovered. In allowing the guilty to come to their own conclusions, it prevents them from seeing the investigator as an opponent and someone to be challenged. This sets the stage for the next part of the admission-seeking interview where the investigator shows understanding for the subject’s plight and offers reasons and excuses that mitigate the seriousness of the incident and preserve the subject’s self-image. In part four of this discussion in the next issue, we will continue to explain the evolving context of the conversation between the guilty party and the investigator. This is a complex exchange that occurs primarily during the investigator’s monologue, which moves the guilty subject incrementally through the process reducing resistance to making an admission. This is all done in a collaborative non-confrontational way that allows subjects to preserve their self-image even in light of participation in criminal acts. The key in the introductory statement is developing a context where the individual can come to their own conclusion about whether or not their guilt is known. In addition, if the same words are said to an innocent person, these words have no effect on the innocent because they have no fear of discovery.

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COVER FEATURE

KEEPING INTERNATIONAL TRAVELERS SAFE WHEN EMPLOYEES OF

AMERICAN EAGLE SOAR, SECURITY ALWAYS GOES WITH THEM By Garett Seivold

KEEPING INTERNATIONAL TRAVELERS SAFE

fter hitting a pause button several years ago, companies are back to sending employees on the road. Global business travel is on track to grow 6.5 percent in 2015 and should hit a record $1.25 trillion, according to a forecast released in July by the Global Business Travel Association. Business travel will continue to spike in the years ahead, the group predicts, with growth between 5.8 and 6.9 percent through 2019. Retailers are central to this surge in employee travel. As they look to become more nimble, many are focused on maximizing global sourcing opportunities, seeking new customers in emerging markets, and sending employees to comb the globe for the next jungle superfood or local fashion to turn into a trend on Brooklyn streets. Of course, opportunity—as it often does—runs headlong into risk. More workers on international assignments puts more workers outside of the protective shield that companies try to place around their workforce, and it’s tempting to let the prospect of capitalizing on the next hot global marketplace overwhelm security concerns. In a survey of clients, International SOS, a provider of medical and security assistance, found that of 3.5 million international trips taken by employees, 25 percent were to what the firm identifies as high- or extreme-risk destinations. Companies aren’t blind to the security and safety risks of international travel, of course. In a world where luxury hotels have become recognized terrorist targets, most organizations appreciate the importance of helping traveling workers stay safe. So why do companies struggle to make security central to corporate travel programs?

The Coordination Challenge

Communicating with traveling employees, tracking their whereabouts, and extending help to them if necessary are important parts

5.1%

Security Review/Approval of Employees’ International Travel Plans 25.3%

Always

42.6%

Sometimes No 27%

Don’t Know Based on a survey of 300 corporate safety and Security Director’s Report.

Travel Security Responsibility Entity or Department in Charge of Monitoring Travel Security Threats 39.8%

Security Contract security/risk firm

3.5%

Human resources

3.9%

Risk management

8.7%

In-house travel

3.9%

Travel agent/contract travel services company

7.8%

Traveling employee’s dept. manager or representative

16.0%

Not monitored/none

7.8%

Other

8.7%

Internal Department Overseeing Travel Risk Information Dissemination 34.4%

Security Human resources

9.5%

Risk management

9.5%

In-house travel

12.7%

Traveling employee’s dept. manager or representative

17.6%

Not monitored/none

7.2%

Other

9.0%

of an organization’s effort to protect employees from harm. However, a survey of 300 corporate security directors by Security Director’s Report (SDR) found that many international trips that employees take go without a security review (see chart above). Without sufficient advanced notification of employees’ travel plans, threat assessment and SEPTEMBER - OCTOBER 2015

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logistical planning to support safe travel are impossible. The SDR survey points to another difficult challenge—goal alignment. Employers may fail to meet their responsibilities for protecting traveling workers because responsibilities fall to different business areas and functions, which often have very different objectives. Individuals with

KEEPING INTERNATIONAL TRAVELERS SAFE responsibilities often such diverse roles as corporate security managers, risk managers, travel managers, medical directors, insurance managers, legal managers, heads of HR, global HR, and line managers. Improving the security of traveling workers overall relies on the extent to which the different players fill the security aspects of their broader assignment. For example, a corporate travel manager may issue a request for proposal (RFP) to develop a preferred list of hotel properties, with the ultimate goal of improving efficiency and reducing the cost of travel. Within the RFP, hotel properties will be asked a range of questions on which their suitability will be judged, from services and amenities, available technology, rate proposal, to whether or not they will provide a traveler with free transportation to a new hotel if they are oversold. A safety and security module will typically be part of this RFP, but the extent to which security criteria is examined in the selection of preferred properties can vary. A travel manager, whose primary objective is to please workers who want convenient and quality accommodations and heed management’s desire to trim expenses, may not let something like incomplete responses on safety issues interfere with property selection. So what is the key? In a word—coordination. With the amount of corporate travel ramping up, security executives might start by mapping out the security roles that different function areas are

Scott McBride, vice president of loss prevention, safety, and security for American Eagle.

expected to play in the protection of traveling associates and ensuring that the responsibility for those roles are assigned to specific employees. Security leaders might also want to review how well information is being shared among departments. It can be helpful to use a comprehensive database that houses all travel-related information, including employee profiles, corporate and employee contact information, and risk intelligence information on travel destinations. Through a centralized data collection point, security, HR, and the corporate travel department can better coordinate their activities and

Companies aren’t blind to the security and safety risks of international travel, of course. In a world where luxury hotels have become recognized terrorist targets, most organizations appreciate the importance of helping traveling workers stay safe. So why do companies struggle to make security central to corporate travel programs? LP MAGAZINE | SEPTEMBER - OCTOBER 2015

responsibilities with respect to ensuring the safety of traveling employees. Finally, security leaders might find it helpful to determine whether individuals who provide security advice to traveling employees are sufficiently informed and knowledgeable, and get them up to speed if they’re not.

A Good Foundation

There are challenges beyond coordination to keeping a travel safety program operating effectively—including cost and management complacency—and Scott McBride knows them well. As vice president of loss prevention, safety, and security for American Eagle, his security team regularly assesses the risk of international travel by staff in sourcing, design, business, and compliance, among others. In all, McBride and his American Eagle security team assess and manage more than 2,000 international employee trips annually. In a presentation at the recent National Retail Federation (NRF) Protect loss prevention conference in Long Beach, California, McBride described how his company’s travel

KEEPING INTERNATIONAL TRAVELERS SAFE safety program has, over time, built out to include a complete compendium of traveler safety information. A travel safety program typically includes the following items: Risk ratings for travel locations, A traveler tracking system, Pre-trip assessments, training, and awareness briefings, A travel safety website, and Emergency response procedures in the event a traveling worker runs into trouble. It should also define a process for examining employee travel itineraries, comparing them against the unique

risks and availability of services in the destination region, and concluding if additional security steps need be taken before travel, such as specialized traveler education or equipping the employee with tracking technology. But a travel safety program starts, of course, with a company travel policy, which McBride says to write with your duty of care in mind. To demonstrate a company’s due diligence, it should cover and include the following elements: A statement from management that employees’ personal safety is a primary concern of the organization

SEPTEMBER - OCTOBER 2015

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and that it does not want business interests to put workers at undue risk. How the company will determine which destinations are unsafe for travel, such as prohibiting employees to travel to countries or regions the US State Department has declared as unsafe. Responsibilities related to business travel for both employees and those in charge of monitoring the safety of travel destinations. Special action employees should take if they are traveling to high-risk locations.

KEEPING INTERNATIONAL TRAVELERS SAFE

Benchmarks on Travel Security Program Elements 24/7 travel assistance hotline available to traveling employees

74.6%

Subscribe to a commercial travel threat information service

62.4%

Contract with an international crisis response firm

48.1%

Require pre-approval by security or risk department for all proposed business travel

24.9%

Web site with up-to-date travel alerts and security information is available to employees

57.5%

Hold mandatory pre-trip security awareness briefings with all traveling employees

11.0%

Hold mandatory pre-trip security awareness briefings with all employees traveling internationally

22.7%

Require some employees to travel with devices, so organization can monitor whereabouts

16.0%

Require all employees who travel for work to attend a training session in travel safety/security

13.3%

The individuals who are responsible for the daily monitoring for notices about travel to high-risk countries to ensure the safety of employees during their travel out of the country. Procedures for communicating warnings to employees and for locating and communicating with employees in a crisis event.

30.5”

Actions employees must take before departure, such as leaving their supervisors with a detailed itinerary, flight information, destination contact information, contact numbers, and updated emergency contact information. As he built off the company’s core travel policy, McBride said his team realized that ancillary policies are also an important part of a robust travel

safety program. Data security, for example, has become an integral part of minimizing a company’s risk with respect to workers traveling abroad. Some of the ancillary policies his team identified included the following: Travel Code of Conduct. “We have a travel code of conduct policy in addition to an ethics policy,” McBride explained. More than just keeping

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KEEPING INTERNATIONAL TRAVELERS SAFE workers in line, American Eagle strives to provide traveling workers with information that will prevent them from unwittingly getting into sticky situations, which can result when local laws or customs differ from the US, such as on the treatment of homosexuality or alcohol consumption. “What about people living in a hotel overseas for two months? What are the acceptable behaviors? You need to spell those out in a policy so you have evidence you told people about them,” McBride warned.

Foreign Ground Transportation Policy. “With us, you’re not permitted to rent a car if you can’t read the language,” said McBride. Foreign Corrupt Practices Policy. Traveling workers need to be aware of actions they might take—to smooth out a travel snafu, for example—that could violate the FCPA.

Beyond the Basics

McBride and other security pros SDR interviewed offered additional tips for enhancing the value of a travel

Security Director’s Report Now Part of LP Magazine Since 1998 Security Director’s Report (SDR) has been helping security professionals manage their departments, boost their careers, and keep current with trends in security management. SDR is published monthly in a quick-read, printed newsletter format with additional source materials available online. SDR is a subscription-based publication comprised of original content with a singular focus— to help security, loss prevention, crisis management, and other corporate professionals across all industry segments do their jobs better and more cost-effectively. SDR disseminates best practices, provides updates on security regulations, and offers news and independent analysis on topics such as security budgets and ROI, contract security, crime prevention, emergency preparedness, information security, risk and threat analysis, workplace violence, and much more. SDR regularly conducts original research, which allows corporate executives to benchmark their operations and is included in the annual subscription. Readers of SDR enjoy unrestricted access to the subscription website, with complete access to the publication

archives as well as SDR’s online toolkit consisting of 100-plus sample policies, checklists, and forms to simplify security directors’ most time-consuming chores. New time-saving tools are added weekly. For a limited time, LP Magazine readers can subscribe to SDR for the discounted rate of $295 for fifteen monthly issues by going to SDRsubscription.com and using the discount code SDRLPM.

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safety program—without breaking the bank. Extend a Personal Touch. McBride says he tries to do at least one in-person safety briefing with each employee who travels internationally for work. “That way, you’re able to get a read on them,” he said. “Some people clearly have a handle on it and are capable of getting themselves out of a jam and some people are scared to death.” After an in-person briefing, a travel safety department should have a good sense of who will need hand-holding in the future. It’s Not Just “Where” That Matters, But “Who.” In line with its personal touch, American Eagle doesn’t just assess a trip’s risk based on danger at the destination, but also on who the employee is that is traveling. The Excel-based matrix it uses to grade the risk of each international trip includes a “traveler rating” category. For example, for Employee X’s trip to Mexico, the trip’s risk score goes up if he or she has never before traveled to a “level 4 country” or has expressed nervousness about traveling to Mexico. A trip for a more experienced traveler, expat, or a Mexican native would be scored lower. A trip’s risk rating is also influenced by the length of the trip, the frequency of the employee’s travel to the location, whether he or she is traveling alone or with others, and the level of direct support they’ll have available once they arrive. Based on this overall assessment of a trip’s risk, McBride’s team will provide the level of protection that is needed to keep the worker safe. For example, the level of risk will indicate whether the security team will ask the worker to consent to install a GPS app on their phone, so the company can keep track of them. Share Responsibility. When employees travel internationally for work their mindset of protection needs to change, from having security provided for them to playing a primary role in their own security and safety. Bruce McIndoe is the CEO of iJET International, a firm that offers myriad services to keep workers safe

KEEPING INTERNATIONAL TRAVELERS SAFE

Communicating with traveling employees, tracking their whereabouts, and extending help to them if necessary are important parts of an organization’s effort to protect employees from harm. However, a survey of 300 corporate security directors found that many international trips that employees take go without a security review. worldwide, from daily intelligence briefings to worldwide emergency evacuations. He told SDR that “the most important thing a company do to keep traveling workers safe is to provide employee training.” He said every employee needs general instruction on staying healthy, avoiding danger, and accident avoidance. “It will have the largest impact on the outcome [of dealing with global workers] than anything else a company can do,” he said. Look for Help—You Might Already Have It. The loss prevention director for a midsize grocery chain said he discovered by accident that their medical insurance company had available many of the services they were looking to extend to traveling workers. They also learned that their security company had developed an app that they could use to check-in on traveling workers. In both cases, the helpful tools were always available (and free). They just weren’t aware they existed. “So in two days I already had a workable program,” he said. Be Practical. Terrorism, international crime, regional unrest, environmental disasters, and political upheaval may drive a company to start a travel safety program, but the problems it manages are typically more mundane. “In recent years, most of the needs of our travelers have been medical,” said McBride. And even then, he explained, it’s typically not medical emergencies, but things like employees losing their prescription medicines. McBride said a travel safety program should include spelling out how it will enable the “little things” that make travel smoother, such as procedures for when an employee loses his or her phone while traveling abroad. Scott Shaw, CPP, CBCP, director of corporate security, transportation, and emergency preparedness for Aflac, Scott Shaw says he is always careful to stress the practical in travel safety training. To impress upon workers what they don’t know—employees who travel extensively often assume there is nothing for them to learn in travel training—“I like to throw out scenarios and have them continued on page 22 LP MAGAZINE | SEPTEMBER - OCTOBER 2015

KEEPING INTERNATIONAL TRAVELERS SAFE

Terrorism, international crime, regional unrest, environmental disasters, and political upheaval may drive a company to start a travel safety program, but the problems it manages are typically more mundane. “In recent years, most of the needs of our travelers have been medical,” said Scott McBride, VP of LP, safety, and security for American Eagle. continued from page 21

break out into teams to discuss the best course of action,” said Shaw. For example, what happens if it’s 10 p.m. and you’re eating alone in a Cairo café, and you realize your wallet and passport are missing? What would you do? What would you do if you suspect someone tampered with your laptop while you were out of your hotel room? What if you had a personal home emergency? Who could you call? If you lost your cell phone, would you know the actual phone numbers of your emergency contacts? Shaw thinks it’s a good idea to give workers plenty of time to share their own travel safety stories during training. “It always provides new scenario ideas,” he said. “Hide” Security. To encourage workers to do their part, such as entering all their travel itineraries and information into a tracking system, provide them with security tools that help—rather than hinder—their work routine. For example, the same intelligence monitoring and alert systems that inform workers of developing security situations can also warn workers of weather events and transportation strikes, assist with trip planning, and notify them of immunization and other health requirements of countries they visit. So rather than security blocking their work, international travelers can perceive travel safety protocols as a way to make trips easier and more productive.

Workers can quickly become advocates for the travel safety program if they see it as a tool for avoiding two days stuck in an airport by finding an alternate route to their destination, offered D. Jerry Rubino, CPP, senior security advisor at Creative Associates International, an international development organization. Stay Visible. McBride said it’s not uncommon for a travel safety program to fight complacency and for management to take a view of “why are we doing all this when nothing ever happens?” His team pushes out a daily report that accounts for every American Eagle worker traveling outside the country and issues a weekly report with a watch list of “developments we’re tracking that could impact our company’s travelers.” In addition to helping keep workers safe, McBride said the frequent touch points help advertise the value of the travel safety program. A program can also gain support by extending it to the personal travel of members of the board of directors. Finally, to pitch the ROI of his travel safety program, one security director told SDR he tracks business trips that the program enables. If a company

relies on sensationalized general media reports about violence overseas, it can be easy to make snap decisions to restrict business travel. But a robust travel program—one that debriefs traveling workers and puts travel threat information in context for the organization—often helps workers stay on the road and productive. Join OSAC. The Department of State’s Overseas Security Advisory Council (OSAC) has been aggressively recruiting member organizations. SDR bumped into an OSAC representative at the ISC conference in April and then again at the NRF conference in June. The representatives provided several good reasons to join: First, it’s free. OSAC provides businesses with information on threats abroad. They monitor and pass threat information to named US organizations and issue topical and country-specific reports. They have a deep repository of travel safety information that can supplement a company’s program or get an organization’s new program off the ground quickly. For example, they just released, Driving Overseas: Best Practices. They hold domestic and in-country meetings to facilitate exchange of security information and best practices. They created sector-specific councils, such as for academia, aviation, and energy, to facilitate targeted information sharing. OSAC can’t replace the 24/7 monitoring and real-time alerts from commercial travel threat information services, but with security budgets tight, it makes sense for companies to exploit all the free local resources available to them. For information on joining, visit OSAC online at osac.gov.

GARETT SEIVOLD is a journalist who has been covering corporate security for industry professionals for eighteen years. Since 1998, he has served as the principal writer and editor of Security Director’s Report, a monthly publication highlighting trends and best practices in corporate security management. Seivold has been recognized by several organizations 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.

SEPTEMBER - OCTOBER 2015

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AL 16-823; AR E 2006 0001; AZ ROC208756, 18259-0; CA ACQ 5382, ACO 6484; DC 398504182, ECS900301, DMS200495; DE 1995110043, FAL0197, 95-73; FL EF-0001052; GA LVA204856; IL 127-001224; IN LAC-000028; KY 145654; LA F2020 MD 107-496, 48578 [(888) 218-5925], 15721026; MI 3601205553; MO LC9707050; NC 2181-CSA; BPN 003018P6, 20481-SP-FA/LV; NJ P00951, NJ Burglar and Fire Alarm License 34BF00009100, 156800, 11 Penns Trail, Suite 400, Newtown, PA 18940, [(800) 776-8328]; NV 20081367594, 0078423; NY 12000234104; OH 53 89 1300; OK 951; OR 48921; PA 009679; RI 0608A; SC FAC3227, BAC5191; TN 00001438; TX B10340, ACR-1750945; UT 7437864-6501; VA 11-1907, 2705-026865; WA UBI 602819804; WI Sheboygan: 1679; WV WV033013

ACADEMIC MY TURN VIEWPOINT

Using Technology to Enhance the Relationship between Loss Prevention and Local Law Enforcement

t should come as no surprise that local law enforcement agencies have to carefully prioritize their resources, including their officers’ time. According to the US Department of Justice’s release, Local Police Departments, 2013: Personnel, Policies, and Practices, nearly half (48 percent) of all local law enforcement agencies employ fewer than ten officers, with only two officers employed per 1,000 residents on average. This means that law enforcement agencies need to efficiently address the service calls they respond to, giving more priority to immediate threats to public safety and less priority to misdemeanor crimes like shoplifting—a constant concern for all retailers, whether they are local mom-and-pop stores or national retailers with hundreds of store locations.

by Detective Raquel Betti Detective Betti is a police officer with the City of Stockton (CA) Police Department where she is currently assigned to Case Review as the online shoplifting program coordinator. In this position, she is responsible for training new store loss prevention team members on how to use the online shoplifting reporting program. Det. Betti has held a variety of other roles in the department, including assignments in the department’s patrol, robbery/homicide investigations, and school resource officer units. She can be reached at raquel.betti@stocktongov.com.

law enforcement officer and the suspect is required. The system is configured to capture all necessary information required to submit a full report to the appropriate agency, allowing for more accurate filings in a more efficient timeframe. Using this solution, loss prevention departments are able to save time in terms of response, increase the number of reports that are filed, improve the accuracy of the reports, and cut costs. The San Joaquin County District Attorney’s office has seen a marked improvement in the shoplifting reports coming from retailers that have implemented the technology solution. Deputy District Attorney John Calabrace says that the loss prevention departments will take the time to include all the details about the incident—details that may be unintentionally left out of a report that is written by a police officer. This is understandable since the

Delayed Response

To protect against shoplifting, many retailers employ loss prevention teams as the first line of defense to guard against theft and to apprehend any malefactors. It is the responsibility of the loss prevention department to detain any offenders until a law enforcement officer can arrive on the scene to take the alleged perpetrator’s information and file an official police report. Unfortunately, other more immediate threats to public safety may result in delayed response times to shoplifting incidents, which consequently results in the release of suspects without formal reports or charges being filed. This often causes strained relationships between loss prevention, the retailers they serve, and their local law enforcement agencies. The Stockton (CA) Police Department was facing these same challenges responding to shoplifting incidents reported by local retailers. Limited resources resulted in delayed response times that ranged from fifteen minutes to four hours, with the estimated average response being around one hour. As a result, a number of large retailers in the city worked with the department to implement a technology solution to streamline the shoplifting reporting process.

Reporting Solution

The shoplifter reporting solution from LexisNexis Risk Solutions allows loss prevention teams to process shoplifting suspects online in as little as ten to fifteen minutes, and then release them in instances where no direct interaction between a

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By integrating technology solutions like the shoplifting solution used in Stockton into their processes, retailers are enabling loss prevention departments to complete their jobs faster and more accurately and are allowing law enforcement agencies to allocate resources to where they are most urgently needed, thereby saving costs, increasing the probability of prosecution, and improving working relationships between retailers and their local law enforcement agencies. loss prevention representative is providing a first-hand account of what happened while the police officer’s reports are not. One local representative for a major retailer noted, “It simplifies the reporting process by giving us an opportunity to clarify and confirm information before submission, and it offers us a reduced sense of urgency when dealing with suspects. The ability to submit the report after the suspect is away takes an edge off of the interaction, meaning I can focus on processing the individual without the distraction of having to focus on a written report with a potentially agitated suspect.”

Ongoing Collaboration

The efficient collaboration between loss prevention and law enforcement is essential to the continued deterrence and prosecution of criminals negatively impacting the retail industry. It is not always possible for law enforcement to send an officer to handle a misdemeanor offense, allowing perpetrators to go unpunished. To ensure the continuation of an excellent working relationship with law enforcement, retailers should consider providing their loss prevention departments with the best, most streamlined tools to effectively guard their business from theft and encourage efficient interaction with local police. By integrating technology solutions like the shoplifting solution used in Stockton into their processes, retailers are enabling loss prevention departments to complete their jobs faster and more accurately and are allowing law enforcement agencies to allocate resources to where they are most urgently needed, thereby saving costs, increasing the probability of prosecution, and improving working relationships between retailers and their local law enforcement agencies.

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LP MAGAZINE | SEPTEMBER - OCTOBER 2015

An FKI Security Group Company

PARTNERING WITH RETAILERS By Dave DiSilva

eBay Celebrates Twenty Years

DiSilva is senior manager of global asset protection for eBay where he oversees eBay’s tools and PROACT teams. Prior to joining eBay in 2010, he held retail leadership roles in analytics, investigations, corporate LP, shortage control, e-commerce, and supply chain. DiSilva is an active member of the Loss Prevention Research Council, serving as co-chair of the predictive analytics group. Since 2011 he has been an LP Magazine contributor. DiSilva can be reached at 408-332-8666 or dadislva@ebay.com.

riginally called “Auction Web,” the site launched with the listing of a broken laser pointer on Labor Day in 1995. Our founder, software programmer Pierre Omidyar, wanted to create an online marketplace built on mutual trust and mutual reward, a marketplace where someone could buy something they wanted by selling something they didn’t. Omidyar tested the new site with a listing of a broken laser pointer. The item sold for $14.83 to a collector of broken laser pointers. Omidyar knew he was on to something big. Auction Web soon became ebay.com, short for Echo Bay, the name of Omidyar’s consulting firm at the time. By 1996 the company was large enough to require the skills of a Stanford MBA named Jeffrey Skoll, who came aboard an already profitable ship. Meg Whitman, a Harvard graduate, soon followed as president and CEO, along with a strong business team under whose leadership eBay grew rapidly, branching out from collectibles into nearly every type of market.

2008, eBay’s GAP team has sought more effective ways to detect, investigate, and combat organized retail crime. Our GAP team works with retail and law enforcement partners to combat organized retail crime every day. The shared experience of collaborative investigation improves our knowledge of criminal activity and is a force multiplier. Most importantly, the collaboration builds trust and ensures a safe and competitive market place for our users. GAP will continue to work with our

“We are one of the original Silicon Valley Internet success stories, even if the eBay of today is a very different company.”

Connecting the World

eBay’s vision for success transitioned from one of commerce—buying and selling things—to one of connecting people around the world. eBay thrived, experiencing exponential growth, and with strong branding eclipsed many auction sites. eBay went public in 1998 and today is a thriving community where treasure hunters, entrepreneurs, small businesses, and global brands are equally at home. Recently our CEO Devon Wenig wrote, “It’s been an incredible twenty years. From one seller, we grew to about 25 million. Pierre’s first buyer became a community of about 157 million. At any given time, we now have over 800 million items for sale. eBay changed commerce forever. We are one of the original Silicon Valley Internet success stories, even if the eBay of today is a very different company.” Today 80 percent of merchandise sold is new and arrives at your doorstep within three days. Sellers have sold enough cars to encircle the moon four times. eBay’s apps for iPhone and Android have been downloaded 279 million times. Any person with an idea, access to the Internet, and the will to succeed can build a better life for themselves and their families, secure in the knowledge that they’re operating in a safe and trusted marketplace. This is where eBay’s Global Asset Protection (GAP) team comes in.

Focused on Trust

For eBay nothing is more important than trust. Without trust, our marketplace could not function. As such, we take trust very seriously and work diligently to maintain trust in our systems and among the parties that rely on our platform. Since

- eBay CEO Devon Wenig retail and law enforcement partners and seek ways innovate and adapt our investigative methods to meet future challenges. Chip-and-Pin. As we head into our 21st year, several areas are on our radar. The first is chip-and-pin cards. This technology change improves the security of credit cards when used in a physical establishment, but has an unintended effect of moving criminal fraud to online retailers. Europe saw a 150 percent increase in online fraud as physical location fraud dropped as this technology was implemented. As the US moves to chip-and-pin cards, asset protection should prepare for the implications of this new technology shift and evaluate company fraud models. Triangle Fraud. The second is “triangle fraud.” This scam operates in the following manner. A criminal seller lists items for sale on their own website, a classifieds site, or auction site. When a buyer purchases the merchandise, the fraudster purchases the item from a retailer using stolen credit card information and instructs the retailer to ship directly to the unsuspecting buyer. The card holder of the stolen credit card will dispute the purchase, and the card company or retailer incurs the loss. This crime continues to gain traction according to our colleagues around the globe and certainly will continue to grow as credit crime is forced online. These are just two issues the GAP team will help solve with the help of our retail and law enforcement partners to ensure eBay remains a marketplace that buyers and sellers can trust.

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INTERVIEW

LOSS PREVENTION CONSULTING A CONVERSATION WITH INDUSTRY EXPERT BOB DILONARDO By James Lee, LPC, Executive Editor

INTERVIEW

DiLonardo (22) with the other starting defensive backfield at Georgetown University in 1966

obert L. “Bob” DiLonardo is the principal of Retail Consulting Partners LLC and a well-known authority on the electronic article surveillance business, cost justification of security products and services, and retail accounting. DiLonardo started his consulting practice after several years in sales and marketing for Sensormatic, Security Tag Systems, and Decision Point Data. Prior to that he held various accounting, shortage control, internal audit, and loss prevention positions with Macy’s and Carter Hawley Hale Stores. DiLonardo is a frequent seminar speaker for industry conferences and has written extensively for numerous business and security publications, including LP Magazine where he was the contributing writer of the Industry News column until his recent retirement. He holds a master’s degree in finance from George Washington University and a bachelor’s degree in economics from Georgetown University where he also played football and baseball. EDITOR: You have a lengthy resume, but let’s start by telling our readers who Bob DiLonardo is in just a sentence or two.

DILONARDO: I would describe myself as

a professional student and practitioner of retail loss prevention and shortage control SEPTEMBER - OCTOBER 2015

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methods. I would also say that those who know me value my hard work, honest opinion, and forthrightness, which are at the heart of my consulting practice. EDITOR: What was your first exposure to loss prevention? DILONARDO: I had my first preview

of loss prevention in 1974. I had just started at Davison’s, which was the Macy’s division headquartered in Atlanta. I was meeting with each of my peers to get acquainted, and I had an interview with a guy named Joe Vaux, the security manager. His office was in the bowels of the headquarters store next to the boiler

INTERVIEW room. All he had in there was a table, his chair, and a seat for a visitor. He offered me a seat, but before he sat down, he pulled out his .38 and put it on the desk. Then he piled a stack of checks on the desk. After sitting down he said, “I’m not gonna keep you long, but I want to tell you what I do. You see these checks? These are bad checks. My job is to go collect them.” And that was my first exposure to loss prevention. It surprised me that the guy had to be macho enough to make a show like that. EDITOR: What role did you have at Davison’s? DILONARDO: I was the budget and

statistics manager in the controller’s division at the time reporting to the controller. About a year later, the CFO called me while I was on vacation and said, “When you get back, you’re going to be the head of internal audit because we’ve got some problems, and I think you can do a good job solving them.” That’s basically how I backed into loss prevention. I spent several years working in the controller’s division where I became expert in retail accounting, merchandise statistics, and inventory control. Later I switched into merchandising as a buyer in women’s and men’s wear, which I thoroughly enjoyed. I think that those skill sets made me the prototypical shortage control guy. EDITOR: Where did you go from there? DILONARDO: In 1978 Carter Hawley

Hale Stores recruited me to go to San Francisco to Emporium as their first director of shortage control. That’s where I met my friend, mentor, and idol Earl Welliver, who was the director of security. Earl showed me about a much more professional side of loss prevention. We worked on a number of cases, had a great time together, and always had each other’s back. Our corporate boss was the late Bascomb Shanks. Chuck Sennewald was Broadway’s director of security, and Carl Donnelly was on the corporate staff at the time. I had six solid years of experience in retail and loss prevention, mostly shortage control, before Earl and I were recruited to San Diego by a German

outfit called FedMart. To be kind, they didn’t know how to operate in the US retail environment and eventually closed the company. Based on that bad retail experience, I went to work for Sensormatic in 1980. EDITOR: What was it like going from retail shortage and inventory control to the vendor side? DILONARDO: At the time Sensormatic

was small, only selling about $25 million a year, but they were in a growth mode. The late Al Tate, western region vice president, was looking for sales guys with either military or sports backgrounds, and I had both. So they hired me as a bag-carrying salesman, one of only three in Southern California. That’s how small it was. My territory ranged from Tijuana west to Phoenix and north to Long Beach. The only product Sensormatic had at the time was a microwave-based system, the granddaddy of all EAS. Emporium had employed them in a couple of stores. By the way, you can still find some of them working famously in legacy Macy’s West or May Company stores. They have yet to be upgraded to newer technology. EDITOR: Did those use the old gator tag? DILONARDO: That’s right. Sensormatic

did not have a disposable label at the time, so we were renting gator tags and microwave systems to apparel stores. EDITOR: Back when you started with Sensormatic, what was the sales argument that you made with retail buyers? DILONARDO: I had never been a

salesperson before, and frankly, I was nervous about it. I performed poorly when it came to selling product features and functions, but I certainly knew my way around inventory shortage math, so I decided to try selling the economic benefits and the return on investment. I needed a compelling sales pitch, so I devised the financial logic to convince prospective customers that EAS should lower shortage and would be worth the investment. I took classes in Lotus 1-2-3 spreadsheet software and constructed my LP MAGAZINE | SEPTEMBER - OCTOBER 2015

I would describe myself as a professional student and practitioner of retail loss prevention and shortage control methods. I would also say that those who know me value my hard work, honest opinion, and forthrightness, which are at the heart of my consulting practice. first ROI model. Nobody was taking the same approach at the time. In 1982 I had the opportunity to call on the CFOs of two large Los Angeles department store chains—Robinsons and May Company. I ended up selling a major deal to Robinsons in LA, which got the attention of the Sensormatic hierarchy. They promoted me to national account manager with responsibility for large accounts like Sears Pacific Territory and all department stores in Southern California. I used the same approach but customized it for each client, and I was very successful. EDITOR: Over the years, you’ve gained quite a reputation for someone who really understands the ROI proposition and how to make that argument. You’ve done many writings on that subject, including for us. Did all of that come out of formulating the financial argument to support sales? DILONARDO: Yes, but it was a long

process. I credit my financial education for giving me the tools to construct the ROI logic. But it was my stint as a buyer that showed me that preserving inventory from theft would result in incremental sales. By 1983 the other Sensormatic salesmen got wind of what I was doing.

INTERVIEW

They were having trouble expanding EAS tests because the LP guys wanted proof that it “worked” before they would buy any more. None of them knew how to demonstrate that, aside from saying that “if your shortage went down, it must have worked.” Two salesmen who dealt with Montgomery Ward asked me to help them. They flew me from San Diego to Chicago to analyze Ward’s latest inventory results and help cost-justify EAS to management. I rented one of IBM’s new portable PCs for $400 and took it to Chicago. Wards gave me the inventory data on stacks of dot-matrix computer printouts, and I spent all night manually entering the data into the PC. I loaded my model, fed in the data, and out popped the results, which I presented to Ward’s management. They ended up expanding their test on that basis. That exercise convinced me that this was what I ought to be doing. From there, I did thirty to forty studies for various retailers proving

DiLonardo with former Sensormatic associates (left to right) Tim Gates, John Zambiasi, and Lance Weeden in 2007

BECAUSE SHOPLIFTING SUCKS. Need a Solution? Call (800) 466-4502 www.isscorpus.com

SEPTEMBER - OCTOBER 2015

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INTERVIEW

the ROI in the very same manner. I kept refining my logic and modifying the model. One of the satisfied customers was George Luciano, then vice president of loss prevention for a women’s specialty apparel chain called Hartfield-Zody’s. George was like a big brother and always encouraged me to work hard and use my expertise to cost-justify other products and services besides EAS. He remains one of my best friends in the industry. EDITOR: When did you leave Sensormatic and what did you do then? DILONARDO: I spent eight years at

Sensormatic the first time, and for the last half, I was at their headquarters in Florida where I essentially had a desk job. I quickly learned that I had a hard time dealing with corporate politics. I also learned that I would be better off in smaller companies, because I could have an impact and get things accomplished. When I finally got fed up

with the politics at Sensormatic, I quit in 1988 and went to work for Security Tag Systems, where I spent the next five years. EDITOR: Why Security Tag Systems? DILONARDO: I followed a couple of my

old Sensormatic buddies, John Zambiasi and Perry Garvis, who told me that Security Tag was doing ground-breaking stuff. They built the first EAS transceiver, which is a single EAS pedestal instead of a pair. The also had an RFID test in place with The New York Daily News, where they put tags on the delivery trucks and readers at the distribution centers to track how long a truck was inside and where it was parked. And of course, in 1989 we were the first to commercialize ink tags and benefit-denial devices in the US. Much to my dismay, Sensormatic bought Security Tag in 1993. After spending an unsatisfying year commuting to Sensormatic, I decided to start the consulting business. Retailers who were investigating EAS hired me to help them decide what systems

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

were the best for their environments, how much they should pay for them, and whether or not the project would be cost-justified. I’ve even negotiated contracts on their behalf. As time passed, I decided to apply the same principles for other security technology, like video, access control, and self-checkout. EDITOR: When a manufacturer or a vendor brings you in as a consultant, what are they asking you to provide? DILONARDO: I’ve taught their sales

executives the principles of selling financial benefits and have constructed proprietary ROI models that they use with their prospects and customers. Since my experience includes marketing management, I have done competitive analyses and have assisted in product development. I hold one patent and have helped on numerous other patented products. I also have worked as an expert witness in patent-infringement cases and have helped venture capitalists research potential acquisitions.

INTERVIEW EDITOR: How do you handle a situation where a company asks you to come in and do something for them when you’ve done something similar for one of their competitors? DILONARDO: I never accept a project

without insisting upon a mutual non-disclosure agreement between me and the client. I will never divulge confidential information entrusted to me. I’ve been fanatical about that my entire career. People have tested me on this and have found out that I’m a man of my word. My clients also know that I will provide them with the unvarnished truth about an issue, a trait that has, at times, been sorely lacking in various parts of the industry. EDITOR: As you look at the long history of EAS, what changes do you think were the most dramatic, in terms of product development, that have had the greatest impact on retail loss prevention? DILONARDO: It’s over forty years since

the big three EAS vendors commercialized their first products. In my view the most dramatic change has been the proliferation of source tagging, which was made possible by the development of inexpensive disposable labels capable of being affixed at high speeds in the manufacturing process. Disposable labels opened up the EAS market to packaged merchandise. They also provide the method by which apparel can be source tagged—either by affixing the label to a price ticket or embedding it in a fabric label. The second biggest impact was the advent of the ink tag, benefit-denial devices, and other item-level products like keepers, box wraps, and alarming tags. At the time of their inception, ink tags were successful because the EAS deterrent was flagging rapidly. In my judgment, the EAS market would have dried up quickly without these two phenomena. EDITOR: Apart from EAS, what other technologies have you observed that have been significantly impactful to the industry? DILONARDO: Video and data mining

come immediately to mind. When I

Typing his master’s thesis in 1973

started, CCTV cameras were bulky, were set in a fixed position, and the output could only be watched with a monitor and couldn’t be saved. These technologies have improved more drastically than EAS. In my opinion, the most important enhancements have been solid-state electronics, microprocessor controls, recording devices, and John Coutta’s tremendous invention of camera rotation along its longitudinal axis. Solid-state electronics allowed for smaller cameras. Microprocessors added “brains” and controlled switching, PTZ, and data collection. Recorders assisted in investigations and evidence keeping. And longitudinal rotation coupled with mirrors made domes the standard housing in the industry. SEPTEMBER - OCTOBER 2015

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Superimposing a POS transaction onto video really jump-started the data mining industry because we needed some type of software to help us identify transaction anomalies, instead of staring at videotape. Now the data mining industry is very sophisticated and has provided information that is essential to properly running all aspects of the business, including loss prevention. EDITOR: What changes have you seen in the retail LP executive over the years? DILONARDO: That goes back to that

story about Joe Vaux putting his pistol on the table. There were a lot of ex-military and ex-law enforcement in retail security when I first started, and many of them didn’t even have college degrees. So what

INTERVIEW

Hiring a consultant is a good investment. I hear people say, “I don’t want to spend money on a consultant.” I think that’s a mistake because it’s my job to know twice as much as you would need to know and to help you add value to your organization. The right consultant is worth his weight in gold when you’re looking at making multi-million dollar procurements. we have now—and the magazine gets some credit for this in my opinion—is a situation where the LP industry has decided as a group to train and nurture the professionals that they hire. With greater emphasis on college degrees and certification programs, retail security executives today are far better trained than the Joe Vauxes of yesteryear. And that’s not going to stop as long as we continue to pay forward our knowledge

and experience. It’s just going to continue to be essential to the betterment of the industry. EDITOR: What advice would you give an LP executive or somebody on their staff regarding how to be smart about evaluating the market and sourcing the right product? DILONARDO: I would give them the same

advice that I gave to myself when I started

as a consultant. Take the cue from your boss as to the direction he wants to take, and then immerse yourself in the product literature that’s out there. Go to trade shows, read the trade magazines, and ask your peers, “What are you doing? How does this work for you?” The other thing I would say is that hiring a consultant is a good investment. I hear people say, “I don’t want to spend money on a consultant.” I think that’s a mistake because it’s my job to know twice as much as you would need to know and to help you add value to your organization. There are other guys like me out there who have the knowledge and can really provide an important service. The right consultant is worth his weight in gold when you’re looking at making multi-million dollar procurements. EDITOR: Selfishly I want to turn the discussion to the magazine’s relationship with you over the last fourteen years. You have been one, if not the number one, contributing writer since our premier issue in 2001. We have been so

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INTERVIEW

It’s over forty years since the big three EAS vendors commercialized their first products. In my view the most dramatic change has been the proliferation of source tagging, which was made possible by the development of inexpensive disposable labels capable of being affixed at high speeds in the manufacturing process. pleased and proud to have had you as a part of the team. Thank you very much for all your articles and insights. Given you’ve done all this for not a penny, why did you? DILONARDO: Let me start by saying

I most certainly appreciate what you and Jack allowed me to do and what we all did together. I still remember Lee Pernice from Sensormatic asking me if I would be willing to write an article because “these two guys are trying to put out a magazine, and they are short one.” I said, “Hell, yeah!” That first article was about Federated’s source-tagging initiative and Tom Cole’s theory on “the total cost of shortage.” That became the first of over eighty Industry News columns. Setting aside the fact that you allowed me to keep my name in front of the industry, which I appreciate, this has always been a way for me to pay forward my experience. I wanted to give back to the industry in some way. Writing for the magazine always gave me the impetus to do the research to keep myself up-to-date.

DiLonardo with Earl Welliver (right) in 2011

I also want to say, and I’m saying this from the heart, what you two did back when you started was uncharted territory. There were other trade magazines, but there was nothing like LP Magazine. As far as I’m concerned, it is going to go down in history as the best periodical that we have ever had in our business. I’m just glad I played a part in its success. EDITOR: Thank you for that, Bob. Looking back over your career, would you change anything? DILONARDO: I know the standard

answer is no, but yes, I would. I ended up backing into a lot of jobs, like shortage control, which turned out fine. But I wish I would have taken a little bit more control of my career at the beginning. The thing I regret the most is what I SEPTEMBER - OCTOBER 2015

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mentioned earlier about my problem with politics. Anybody who works in an organization, even if it’s five people, has to be able to manage interpersonal relationships as well as possible. I struggled with that for a long time, and I know it cost me. In hindsight, my frustration with politics induced me to start my consulting business, which aside from my family has been the biggest joy I’ve experienced. It allowed me to make a good living working on very interesting projects whenever I wanted and however frequently I wanted. So it’s been fantastic. I’m going to miss it. EDITOR: Best of luck, Bob, and enjoy your well-earned retirement. DILONARDO: Thanks, and I still have

some thoughts on articles, so I might just submit something new down the road.

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CERTIFICATION Interview with Karla Hutchinson, LPC Karla Hutchinson, LPC, is the asset protection administration systems manager for Brookshire Grocery in Tyler, Texas. Her career started with the company thirty-two years ago as a cashier in one of its retail locations. Hutchinson worked in human resources for about ten years and had several different roles in safety, asset protection, and retail operations.

A New Perspective T

his is another in a series of interviews with working loss prevention professionals who have earned their LPQ or LPC certifications from the Loss Prevention Foundation (LPF) to hear in their own words why they pursued certification and how it has benefited their careers. Why did you decide to pursue certification? I had the opportunity to attend my first Food Marketing Institute conference in 2010, and during the conference I learned about the various certifications offered by the Loss Prevention Foundation. Fortunately, my name was drawn to receive the LPC scholarship as a door prize for stopping by their booth. Wanting to advance my career and enhance my experience with loss prevention, I seized the opportunity.

The certification provides you with a wide range of business knowledge and gives you real-life situations that put that knowledge in a context that you can relate to. It’s an awesome opportunity to learn from the many veterans in the industry who contributed to the development of the certification program. Was the course what you expected? The coursework provided much more than what I expected. As a newly promoted LP professional, I wanted to learn more about the LP side of business. My background was retail, education, and training. I came into our LP organization with little practical knowledge of the loss prevention. The courses gave me a great deal of knowledge of loss prevention, safety, and business concepts.

Tell us more about the process. The coursework provided up-to-date information about a large number of topics. I liked that you could read the information, take practice tests at the end of each section, and go back to review the materials if you liked. I would make note cards with the information and carried my notes with me to review wherever I went. This method helped me learn the information and gave me a great deal of confidence when I took the exam. Looking at your own personal development, what information within the course helped you the most? The program gave me a better foundation of how important it is to have department goals that are in line with the company’s strategic plans. My team works toward a common goal, and the course helped me with setting goals that will benefit the company. What benefits have you seen from taking the course? I believe that studying the coursework and receiving my certification has given me an extra layer of knowledge that has helped advance my career in this profession. I now approach my job with much more confidence knowing that I have a greater foundation of knowledge about loss prevention and look forward to learning something new from every experience that I am a part of. Would you recommend certification to others? Absolutely. The certification provides you with a wide range of business knowledge and gives you real-life situations that put that knowledge in a context that you can relate to. It’s an awesome opportunity to learn from the many veterans in the industry who contributed to the development of the certification program. If you could offer one key takeaway to someone currently considering getting certified, what would it be? Just do it! You will not only be better equipped with greater information to do your job, but you will also gain a personal sense of accomplishment. We are never going to grow professionally if we don’t continue to learn. The challenge is rewarding. Jump in and take the certification. You will learn so much and will show your colleagues the value and investment you have in your own career growth.

SEPTEMBER - OCTOBER 2015

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Newly Certified

Following are individuals who recently earned their certifications.

Recent LPC Recipients

Deborah Abood, LPC, Bed Bath & Beyond Glenn Alexander, LPC, Ahold USA Alex Almaraz, LPC, Lowe’s Vicki Burnette, LPC, MRCO Shawn Canfield, LPC, Ahold USA Gregory Dinneen, LPC, Ahold USA Aidan Duffy, LPC, The Sports Authority Thomas Elser, LPC, Ahold USA Hector Erazo, LPC, CFI, PI, Walmart Daytona Erkan, LPC, American Eagle Outfitters Dion Fessler, LPC, Ahold USA Justin Ford, LPC, Fred Meyer Nathan Frazier, LPC, Helzberg Diamonds Gerald Haliburton, LPC, Lowe’s Jeffrey Hess, LPC, Ahold USA Scott Hoffmeister, LPC, Giant Food Stores Douglas Johnson, Jr., LPC, Giant Food Stores Lisa Johnson, LPC, Lowe’s Joshua Lamond, LPC, Neiman Marcus Jeffrey Martin, LPC, Lowe’s Michael Murphy, LPC, Ahold USA Brian Nowlan, LPC, Goodwill Industries of Seattle Daniel Perron, LPC, Rite Aid Richard Rabuck, LPC, Weis Markets Brendan Rys, LPC, Ahold USA Hector Santos, LPC, Ahold USA

Donald Schleicher, LPC, The Mershimer Group Richard Shafer, LPC, Ahold USA Mark Stebbe, LPC, Burlington Coat Factory Lisa Sternbane, LPC, Delhaize America Nancy Tabeek, LPC, 7-Eleven Robert Thornton, LPC, Ahold USA Chuck Tyler, LPC CFI, Target Stores Paul Ullrich, LPC, Ahold USA Jason Vanne, LPC, Ahold USA John Vey, LPC, Ahold USA Calvin Watson, LPC, Lowe’s Bryan Wilson, LPC, Ahold USA Joseph Yannes, Jr., LPC, Ahold USA Carol Zielinski, LPC, Walgreens

Recent LPQ Recipients

Ronald Averette, LPQ, Publix Super Markets Daniel Bambas, LPQ, Walmart Stores Relana Brokmann, LPQ, PayPal Brian Casey, LPQ, American Military University Ryanne Jones, LPQ Robert Kolkebeck, LPQ Frank Maisch, LPQ, 7-Eleven William Muenzer, LPQ, Belk Elmelo Punongbayan, Jr., LPQ Bradley Schmidt, LPQ, Publix Super Markets Terrance Williams, LPQ, Billy Reid

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FEATURE

ENGAGING MERCHANTS IN THE PROTECTION OF ASSETS THE CHALLENGES AND OPPORTUNITIES FOR LOSS PREVENTION By Chris Trlica, Contributing Writer

ENGAGING MERCHANTS IN THE PROTECTION OF ASSETS

Merchant Decision Rights

he Retail Industry Leaders Association’s (RILA) Asset Protection Leaders Council commissioned a study to look at the relationship between retail buyers and the asset protection function. In the authors’ words, “This research identifies the various levers retail buyers have to influence retail loss and the obstacles asset protection groups have when seeking buyer engagement.” The research involved interviews with representatives of thirty-one retailers that together account for about 23 percent of US retail sales, a figure amounting to over $1 trillion. The study was performed and authored by Nicole DeHoratius, adjunct professor of operations management at the University of Chicago’s Booth School of Business, and Dragana Pajovic, PhD student at the University of Chicago’s Booth School of Business. Checkpoint and Ernst & Young underwrote the research.

Buyers and Loss

While the perception of shrink among the loss prevention industry has evolved from thinking about loss strictly in terms of theft to the consideration of all causes of inventory discrepancy, this change in approach hasn’t necessarily diffused into all of the other teams in a retail organization. Retail buyers are a prime example. Of the buyers surveyed in the study, only 32 percent “viewed the asset protection team as a partner in efforts to drive sales.” Further, “when asked whether asset protection was a factor they regularly took into account, less than 10 percent of [buyers] surveyed identified it as a key driver for their category performance. The categories where asset protection was mentioned repeatedly included electronics, cosmetics, and fashion accessories. Most other buyers considered asset protection to be an activity delegated to other parts of their organization over which they had little control or influence.” Buyers are often seen as the CEO of their product category. They oversee decisions within their category over which products to offer, how those products are packaged, how new items are set up and rolled out, and product

pricing, promotions, and planogram design as illustrated in the chart below. But the scope of these responsibilities is multiplied to staggering proportions when one considers that a typical buyer in the survey managed 13,000 SKUs and thirty-four different vendor relationships. “Not surprisingly,” say the study authors, “our interviews revealed that buyers are essentially pushed to their limits in just trying to fulfill the requirements of their existing role.” Given such herculean workloads, is there any room for a closer relationship between buyers and loss prevention? Of course, any initiative towards reevaluating that relationship should respect the workload pressure that buyers are already under. But there can be significant overlap between the goals, outcomes, and methods of buyers and LP. Just as product designers must consider supply-chain constraints in their design decisions, buyers’ choices have consequences reaching far beyond SEPTEMBER - OCTOBER 2015

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simply considering what assortment of products will best match their customers’ preferences. The loss prevention objective would be well-served by advocating for buyers to consider full supply-chain and operational execution in their choices, in addition to LP goals. For example, while conventional wisdom may view an increase in the variety of products on offer as an unambiguous positive, variety can actually reduce sales. Too much variety among a single product category can cause a customer to decide to make no purchase rather than decide among myriad similar alternatives. Variety can also cause chaos in inventory management processes like stocking and counting. A group of products whose packaging lacks clear visual differentiation can confuse both customers and stockers, leading to errors, wasted time, and frustration. “Research shows that lowering the level of product variety can result in lower levels of stock

ENGAGING MERCHANTS IN THE PROTECTION OF ASSETS discrepancy, however few buyers are aware of this link.” The study authors identify five key ways in which buyers can help reduce shrink: Manage Vendor Relationships—Since buyers are the primary company representatives who interact with vendors, if LP wants to change something like product packaging, buyers are invaluable, necessary intermediaries. Buyers may also be the first to hear of widespread issues in a particular product category or product line, and could tip off LP to a problem before it gains traction. Product Selection—When selecting products, buyers can identify those items that might need additional security tagging and can work with vendors to ensure these items are delivered as desired.

Merchandising Decisions—Buyers can select items to minimize the chance of discrepancies. And their decisions about the location of product placement can have significant impact on theft and operational losses. New Product Introduction and Resets—Introducing products correctly means that all of the data used to make management decisions about those products are accurate from the beginning. Determine Product Flow—Since buyers often are responsible for deciding how products move through the supply chain and how they are delivered, they can directly influence loss caused by complexity and mistakes. Based on the results of this study, there exists a clear need…and opportunity… across the retail industry to have buyers and loss prevention teams work more

together closely and better understand their mutually entwined goals. Winning over buyers’ hearts and minds would benefit the buyers, the loss prevention department, and the company as a whole.

The Language of Loss

How best for the loss prevention department to translate this identified need into a functional relationship? Reexamining how LP trains buyers could be a start, according to the study: “Of the retail buyers surveyed, 88 percent of them were unaware of any asset protection training being held within the buying organization. The remaining 12 percent who reported that training existed noted that it was infrequent (e.g. less than once a year). Given the two-year turnover in the buying function, many buyers will have never been educated about their potential continued on page 43

Based on the results of this study, there exists a clear need…and opportunity…across the retail industry to have buyers and loss prevention teams work more together closely and better understand their mutually entwined goals. Winning over buyers’ hearts and minds would benefit the buyers, the loss prevention department, and the company as a whole.

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

Costco Case Study A significant component of the RILA study was a series of three case studies looking at different aspects of excellence at three different companies. One of these companies, Costco, stood out among all of the companies represented in the survey. “Their buyers, without prodding, identified asset protection as a key element to their performance.” What set Costco apart from the rest was its culture, one that placed a premium value on operational excellence. And a significant part of that excellence was established by the incentive structure that buyers operate under. Costco buyers are allocated store space based on productivity targets. “Buyers must meet a minimum threshold of sales per week per warehouse per item in order to keep a select product in the assortment. Any stock loss due to damages, theft, or other factors means lower space productivity. As a result, buyers are very selective about what they put on the warehouse floor.” This incentive structure causes buyers to take into account warehouse labor expenses, which are minimized by collaborating with vendors to deliver product ready for the floor. This policy saves time and money by cutting out the need to unpack and shelve individual packages, and reduces the likelihood of damage or loss that comes with typical handling. But the focus on ready-to-sell pallets, an approach unavailable to most retailers, is just one policy among many that results in exceptional operational efficiency. Costco buyers minimize variety within product categories, localize product categories to only one part of the store, and work with vendors to ensure that packaging design minimizes damages and returns. And when calculating productivity targets for buyer incentives, it is not the price the buyer pays the vendor that is used as a basis, but the total cost of delivering a product to the customer. This ensures that the buyer considers the full supply chain when making decisions, including all avenues of loss, and incentivizes as efficient a flow of product as possible. While incentivizing consideration of process inefficiencies to minimize loss is a significant factor in Costco buyers’ awareness of and responsiveness to loss prevention, it’s not the only factor. Costco also focuses on hiring buyers that have had previous in-store operational experience. This means that the buyers they hire are already in tune with LP- and operations-related challenges when making buying and merchandising decisions. Costco buyers were the most in touch with LP issues among surveyed buyers. It’s no wonder that the Costco system is designed such that they think about loss prevention issues at every step of the way.

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ENGAGING MERCHANTS IN THE PROTECTION OF ASSETS continued from page 41

role as part of the asset protection solution. Moreover, this lack of longevity among buyers means the asset protection teams continually have to build new relationships with new buyers and explain why they should care.” The language used to define and discuss the loss prevention role may also require reexamination. “52 percent of the buyers surveyed feel that shrink is not clearly defined. This confusion only impedes any progress asset protection wants to make in engaging buyers effectively.” The historical association between shrink and theft means that even the continued use of the word “shrink” may be impeding progress. In fact, the study authors say that “the first and most important step is redefining the retail organization’s notion of shrink.” Focusing on how stock loss impacts many of the metrics in the buyer lexicon— profit, sales growth, product availability, customer satisfaction—can drive home how interlinked buyers’ methods and motives are with loss prevention’s. By deliberately focusing on word choice, and

Buyers are critical human components of any retail operation, but fewer than one in three buyers view LP as a partner to drive sales. Fewer than one in ten would say that LP was a key driver in their performance metrics. The potential for a closer, more productive partnership is evident. moving away from “shrink” and towards phrases like “profit protection,” “inventory discrepancies,” “data integrity,” and “product availability,” LP teams can help to redefine their role in a collaborative way that more closely aligns with shared goals across the company.

to the study, buyers think that LP isn’t doing enough: “Only 25 percent of buyers surveyed believed their asset protection teams conduct in-depth analytics to identify the drivers of high-shrink items and identify innovative solutions for the prevention of loss.” The majority of those surveyed thought instead that LP capabilities were limited to delivering lists of high-risk items for review. “Buyers perceive the lack of real-time information and analytics as well as the lack of root-cause analysis as two of the top three barriers to

Data Analytics

As the big-data focused paradigm continues to gain steam, data analytics remains a key capability when it comes to maximizing effectiveness, whether on the loss prevention side, the operations side, or the buyers’ side. But according

continued on page 46

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LP MAGAZINE | SEPTEMBER - OCTOBER 2015

ENGAGING MERCHANTS IN THE PROTECTION OF ASSETS

Cultural Shift

The Path to Industry Leadership in Asset Protection

Design for Execution Enhanced Analytics Shared Metrics

Education & Communication

Identifying Leading Asset Protection Strategies culture of operational excellence aggressive use of analytics common metrics across organizational silos solution-based approach with portable tools for use within stores and warehouses evidence-based approach to solutions (e.g., link solution to profit improvement or other key measures) product designed for effective execution

One of the outputs of this study was an assessment of the evolution of an asset protection organization from basic competency to one perceived as world class. The authors identified specific LP strategies common to organizations at three different stages of this evolution as listed here on the right. While individual organizations may have a mixture of these capabilities and the descriptions are not absolute, retailers may find it useful to benchmark their own organizations against these observations. To aid retailers in their efforts to move toward best-in-class, the authors developed a path to leadership diagram shown above that identifies significant incremental steps along the journey. The purpose of this part of the study was meant as encouragement and guidance to asset protection organizations. As noted by the authors, “Our aim is to ensure asset protection groups do not remain static, but rather find themselves on a journey towards improved collaboration and broader impact within their organizations.”

strong cross-functional coordination ability to promote broader set of merchandising solutions beyond theft prevention (e.g., reduced frequency of resets, accurate set-ups and paperwork, unidentified outs) close vendor partnerships purchase order accuracy and correct accounting loss prevention has a seat at the table for new line introductions conducts root cause analysis

focus primarily on prevention of theft solutions focused on tagging and security of merchandise works independently to implement prevention techniques limited funding to support loss prevention initiatives lack of real-time analytics asset protection team with traditional skillset

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ENGAGING MERCHANTS IN THE PROTECTION OF ASSETS continued from page 43

collaboration between merchandising and asset protection.” Buyers don’t have time to suss out the root cause that puts a particular item on a high-risk list. They want to interact with LP the way they are used to interacting with other teams. They want LP to identify the problem and the cause, and they want to be provided with a list of solutions to choose from. A major challenge, however, is that providing solutions to many of these problems requires coordination and collaboration between a number of different groups, which could include supply chain, buyers, vendors, operations, and others. This means that the question of ownership of a problem… and accountability for a solution… can be muddy and complex. “Any asset protection team seeking to offer long-term solutions needs to have deep ties to multiple organizational silos,” say the authors, “and has to be prepared to have to navigate a tremendous amount of social and political resistance.” One solution that could assist buyers as well as other retail teams involves an approach that many LP leaders have had a great interest in over recent years—data-driven analytics. The patterns that can be uncovered in the truly massive datasets being generated by modern retail systems can be invaluable in informing management decisions on the LP front, as well as with operational partners, and, yes, with buyers, too. Analytics tools can be used to uncover relatively simple relationships, like patterns of loss tied to certain times of day or certain days of the week. But they can also identify more complex commonalities across items that suffer from high shrink or high operational cost. They can test theories about what is driving shrink. They can evaluate the effectiveness of strategies implemented to test those theories. And they can predict which items might be troublesome in the future based on historical patterns, and plan how to address possible issues ahead of time. Buyers benefit from these analytics by having access to critical data to hone their business. And LP teams benefit from buyers’ use by providing them tools to

Buyers don’t have time to suss out the root cause that puts a particular item on a high-risk list. They want to interact with LP the way they are used to interacting with other teams. They want LP to identify the problem and the cause, and they want to be provided with a list of solutions to choose from.

make the best loss-minimizing decisions. Some companies even develop platforms deployable to mobile devices that keep up-to-date data at any user’s fingertips. One company developed a set of criteria that would identify merchandise problem categories in real-time, and provide a checklist to store operators to guide them through the actions that could be taken to remedy the issue. As the best LP teams already know, the results from good analytics can be game changing. By sharing these results, LP can help to sell closer collaboration with partners across the organization. “Better analytics can also help asset protection leaders build strong organizational coalitions and improve the perception of asset protection teams as leading problem solvers within the retail organization.” The loss prevention industry has made incredible strides in recent years, evolving into agile teams with sophisticated tools and continually evolving methods. But we can always be better. This study shines a light on another area where LP can stride forward. Buyers are critical human components of any retail operation, but fewer than one in three buyers view LP SEPTEMBER - OCTOBER 2015

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as a partner to drive sales. Fewer than one in ten would say that LP was a key driver in their performance metrics. The potential for a closer, more productive partnership is evident.

The Full Report

For further information, including access to the full study report, please visit the RILA website at rila.org. There will also be a webinar on October 9, 2015, with the study’s author Nicole DeHoratius along with Colin Peacock, strategic coordinator for ECR Europe Shrinkage and On-shelf Availability Group, and Libby Rabun, LPC, vice president of loss prevention for AutoZone. Look for information about the webinar on the RILA website. CHRIS TRLICA is a business and technology analyst based in North Carolina. He is a contributing writer to LP Magazine focusing on emerging technologies. Trlica can be reached at chris.trlica@gmail.com.

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DIGITAL DIALOGUE By Jacque Brittain, LPC Brittain is editorial director, digital, for LP Magazine. Formerly a director of learning design and certification, Brittain managed the development of the LPC and LPQ certification programs in collaboration with the Loss Prevention Foundation. Prior to that he was vice president of operations for the industry’s largest executive search and consulting firm. In his thirty-plus years in the LP industry, he has helped build and enhance many learning initiatives and provided career counseling for thousands of industry professionals. Brittain can be reached at jacb@lpportal.com or by phone at 704-246-3143.

And Our Survey Says... W

hat do you think about the top issues facing loss prevention professionals or the retail industry in general? If you could change one aspect of what we do in loss prevention, what would it be? Where do you think the industry should be focusing the most attention? If you could ask top leadership a question, what would it be? What is the best way to get results? What should we be talking about, and what do you have to say about it? Opinions are like noses—everybody has one. They may come in many different shapes, forms, and sizes, but whether we realize it or not, they do have an impact on our voices and the way that we are heard. Your voice is important, and sharing your opinions can make a difference. LP Magazine Online has recently introduced instant polls to provide a greater opportunity to actively interact with your peers, industry leadership, and the entire loss prevention community. Each week we have been asking you to answer questions and express your opinions on topics that you want to discuss. This isn’t a complicated or time-consuming process but is simply a multiple-choice format that is intended to provide you with an interactive means to share your views on the topic at hand. If you so choose, you can contact us directly to share a different or more in-depth perspective on the subject. Participation is confidential, encouraging candid and sincere responses. Once we receive your feedback from the polls, we then provide an article that offers a summary of the results, along with any comments or observations gathered as a result of the poll. Here are

Our goal is to touch on subjects that are relevant, educational, and informative. By the same respect, we want this to be a resource that reflects your ideas and participation. The polls are intended to provide a means to enhance interaction and share information while providing options on how and what information will be delivered. Your input is critical to finding meaningful results. 48

a few examples of the poll questions and the results that have been shared thus far. If you are not attending but were given the opportunity to participate in the NRF PROTECT Conference, would you choose to attend? Our survey indicated that an overwhelming 84 percent of respondents would choose to attend a conference if given the opportunity. Of the remaining respondents, 14 percent stated that they simply don’t know enough about the conference to make an informed decision one way or another. Based on these results, we decided to offer our readers a greater opportunity to learn more about the conference experience and get more involved in the conference itself. In addition to our daily recaps and related resources, we recognized that an important aspect of the conference experience is deciding which breakout sessions to attend. We then allowed readers to choose a session to attend in a follow-up poll and provided a summary and feedback on the session to help them share the experience. In general terms, what do you feel is the number one factor that holds back most loss prevention professionals from reaching their career goals? A plan for professional development and personal improvement should include a renewed understanding and focus on skills and strengths. But there are many different factors that come into play as we each put together our plans. In the process we should never underestimate the value and importance of developing our skills, improving our productivity, looking for new and creative ways to perform, and striving for professional excellence. Still, these are never the sole factors in building a career. Talent is never the lone driver in our quest to reach the pinnacle of our professional aspirations. Results showed that our respondents felt that all of these factors can have a direct bearing on our professional aspirations. As life unfolds, plans change. Priorities are revised to fit different needs and personal agendas. As we mature as individuals and as professionals,

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we will continue to make decisions that will have direct and lasting impacts on our personal and professional directions, and we each have to make choices that we feel are best for us. What’s most important is that we make informed decisions. Understanding our personal and professional hurdles can give us better perspectives, make us better at what we do, and help us make more informed decisions as we move forward. At which level of the loss prevention department should we be developing our technological talent? Respondents firmly believed that developing technological talents should begin early in the career of our loss prevention professionals. While some feel that we should focus our efforts on filling specialized positions and task forces comprised on subject matter experts, a robust 71 percent of respondents believe that we should be developing the technological talents of our teams at every level of the department. As stated by one industry leader, “The capacity for an LP professional to adapt to technology trends will define their career. Early adaptors will increase their value while laggards will struggle.” Awareness simply isn’t enough, and legitimate efforts must be supported by training and education. This will allow loss prevention professionals to become even more actively engaged in the success of the department and to impact the profitability of their organizations. Do you feel that your company and your department are doing enough to encourage diversity and inclusion in the workplace? Looking at our poll results at first glance, it would appear that our respondents believe that our companies are across the board in managing their diversity and inclusion practices. More than a third of respondents feel that their companies and their departments are doing a good job of managing diversity and inclusion, while others believe that their organizations are not doing nearly enough. However, there are also indications of a more consistent response. Our results indicate that the overwhelming majority of you (approximately 90 percent of respondents) feel that the subject has merit and is important, yet more than half (approximately 56 percent) believe that there is more that we can do to promote diversity and inclusion in the workplace. This only further underscores the need to modify our way of thinking in order to deal effectively with the issues of communication, tolerance, adaptability, variety, and change. Do you feel that the Confederate flag should be removed from the shelves and websites of our nation’s retailers? With the controversy that was sparked after a white gunman, who allegedly wanted to start a “race war,” shot and killed nine people

inside a historic African-American church in Charleston, South Carolina, Governor Nikki Haley called for South Carolina to remove the Confederate battle flag from its perch in front of the State House building in Columbia. Soon after, several retailers including Walmart, Amazon, eBay, and Sears announced bans on Confederate flag merchandise, with related products from the shelves and websites across the country. Approximately 27 percent of respondents agreed that the Confederate flag should be removed from retail shelves and websites. However, approximately 74 percent of respondents feel that the flag should not be removed from our retails shelves and websites. Of those participants, nearly two-thirds (62 percent) feel that this is an issue that involves freedom of speech. The remaining respondents see the flag as a sign of pride and solidarity in the South—and not a symbol of racism. The flag was eventually removed. This subject holds interest across retail channels as well as nationwide. It is a topic that many are passionate about and have an opinion on, and one that is relevant to the business of retail. The question was met with some conflicting opinions and active dialogue on social media. As might be expected, it also stirred many to participate in the survey. Not every subject that we face has a clear-cut answer or provides us with a simple or easy choice. Not every result will turn out as we want or expect. Our intent is to provide a platform for thought and discussion. We want to give the LP community a voice in a way that will give every individual an opportunity to respond and provide meaningful feedback. Whether a poll reinforces an opinion or leads us to an alternative perspective, there is still value when we share meaningful dialogue.

We Value Your Input

This is just a small sample of the polls that have been conducted, and you can review additional polls and results at lpportal.com. Thus far the results have been encouraging with strong participation and strong opinions covering a broad spectrum of topics. Our goal is to touch on subjects that are relevant, educational, and informative. By the same respect, we want this to be a resource that reflects your ideas and participation. The polls are intended to provide a means to enhance interaction and share information while providing options on how and what information will be delivered. Your input is critical to finding meaningful results. Moving forward we will look for additional opportunities for you to get involved and are very open to your thoughts and suggestions. We want the polls to be thought-provoking, informative, and educational, but we want to have some fun with it as well. If you have any thoughts on topics or questions, we would love to hear them. Your ideas and opinions can make a difference, and we want to provide any opportunity that we can to give you that voice. Every one of us has the ability to influence change and help shape the future of the industry. However, it’s still up to you to seize the opportunity and make sure that your voice is heard.

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PROFILE

RYDER

DRIVING THIRD-PARTY LOGISTICS SOLUTIONS By Jacque Brittain, LPC, Editorial Director, Digital

RYDER: DRIVING THIRD-PARTY LOGISTICS SOLUTIONS

hile often viewed as simply a project-specific and labor-intensive undertaking, the actual mission of the supply-chain network is vitally strategic and tactically calculated—coordinating the concurrent needs of the retail stores, our customers, our suppliers, buyers, inventory control, transportation systems, and other services and service providers as well as the specific needs of each facility in order to keep our product moving and our companies profitable. This is about product flow and speed to market. It’s about driving replenishment and maximizing sales. It’s about branding and customer service. And all of this must be accomplished while minimizing losses, damage, and theft of goods. Every function, every process, and every practice must be continually reviewed and reevaluated to help control costs and maximize efficiency. But managing costs and improving efficiencies also requires that we expand our way of thinking and look for alternative solutions that bolster our mission. In some situations retailers will also contract with third-party providers to help manage product as it flows through the supply-chain network. Third-party logistics, commonly referred to as 3PL, is an arrangement in which a company outsources part or all of its logistics management function to one or more specialized firms, or “third-party” providers. Depending on the negotiated agreement, a 3PL provider is responsible for managing all or some of the logistics requirements to include inbound and outbound freight, customs, warehousing,

order fulfillment, transportation, and distribution to meet the needs of the specific retail operation. The emergence of 3PL providers has brought significant diversification to the warehousing industry, providing core competencies that increase organizational effectiveness and enhance the company’s overall supply-management strategy. The ability to work with 3PL providers can offer additional flexibility to warehousing capabilities, distribution, and access. Satellite facilities used to complement existing distribution centers can improve availability and speed-to-market. Additional benefits can be realized in reduced lead times, shorter product lives, increased inventory turnover, expanded storage capacity, increased deliveries, technological flexibility, and shipping consolidation. Depending on the size of the company, the type of business, the products sold, and a variety of other factors, some companies will use third-party facilities exclusively to manage warehousing and distribution services, transportation management, and professional services such as procurement strategies, network design, and engineering.

Rolling with Ryder

Many are familiar with Ryder as a leading provider of commercial transportation and truck rental services. We rent their vehicles to help us move into a new home, deliver our sons and daughters off to college, or just about any other time we need a reliable means to transport our belongings from one place to another.

William “Bill” Anderson is the group director, global security for Ryder System, Inc. He is currently responsible for directing Ryder’s global security function and leading Ryder’s international safety, health, and security team. Anderson’s responsibilities include facility and cargo security, as well as managing Ryder’s participation in North American and European customs and cross-border security programs. He has been a speaker on relevant safety, health, and security topics at the National Safety Council’s Annual Congress and the NAEM’s Annual Environmental, Health and Safety Management Forum. He is a member of Ryder’s crisis management team and corporate compliance steering committee, as well as the American Industrial Hygiene Association, American Board of Industrial Hygiene, and American Society of Safety Engineers. Anderson can be reached at banderso@ryder.com.

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We may also be familiar with their fleet management and dedicated transportation solutions that provide vehicles and related services for retailers and other business operations. But there is much more to this company than simply providing us with moving vans and product delivery. Ryder System, Inc. is a $6.6 billion, Fortune 500 commercial fleet management, dedicated transportation, and supply-chain solutions company with operations in the US, Canada, Mexico, and the UK as well as parts of Asia. Founded in 1933, the company primarily operates behind the scenes, managing critical transportation and logistics functions for more than 50,000 customers, to include the retail industry. Employing more than 30,000 people, the company controls a fleet of 220,900 commercial vehicles and operates more than 200 warehouses covering over 35 million square feet of warehouse space.

RYDER: DRIVING THIRD-PARTY LOGISTICS SOLUTIONS

Third-party logistics, commonly referred to as 3PL, is an arrangement in which a company outsources part or all of its logistics management function to one or more specialized firms, or “third-party” providers. Depending on the negotiated agreement, a 3PL provider is responsible for managing all or some of the logistics requirements to include inbound and outbound freight, customs, warehousing, order fulfillment, transportation, and distribution to meet the needs of the specific retail operation. The company’s Supply Chain Solutions (SCS) division offers a broad range of logistics management services designed to optimize customers’ supply chains and address their key business

requirements. As a third-party logistics provider, these offerings are organized into three categories—distribution management, transportation management, and professional services LP MAGAZINE | SEPTEMBER - OCTOBER 2015

that can be implemented independently or as an integrated solution to optimize supply-chain effectiveness. There are a number of different retail operations that currently partner with Ryder as a 3PL provider to serve various supply chain needs. “We offer many different solutions based on the needs of the specific customer,” said Bill Anderson, group director of global security for Ryder. “This can include dedicated delivery and transportation needs or may involve full supply-chain management from purchasing and foreign consolidation, cross-dock solutions and warehousing—all the way to store delivery.” When most of us think about third-party provider solutions commonly provided along the supply-chain network, our minds often move to transportation needs. Fleets of vehicles are typically necessary to move product from one location to the next, and it often makes good business sense to contract these services to save costs and conserve any number of company resources. But those requirements can move well beyond transportation needs. In most retail organizations distribution centers are typically seen as the core of the supply-chain network, establishing a centralized location from which we can stock and distribute products to the retail stores or directly to customers. These complex operations can house volumes of merchandise, equipment, supplies, and employees in order to meet and maintain our fundamental business objectives. Companies may have one or numerous distribution center sites, some servicing hundreds of stores and covering well over a million square feet of floor space. However, depending on the size of the retailer, the type and volume of products sold, the business model utilized, the time of year, and any number of other considerations, many retailers will also contract with 3PL facilities—whether exclusively or to complement existing facilities—in order to help manage business operations. “We work with many different retailers to help manage different aspects of the supply-chain network, which would also incorporate warehousing facilities,”

RYDER: DRIVING THIRD-PARTY LOGISTICS SOLUTIONS

said Anderson. “Products can include food, clothing, pharmaceuticals, hardware and hard goods, automotive, cigarettes—anything from high-tech electronics to toilet paper. We work directly with our retail customers to provide facilities that best meet their particular business needs.” Many facilities have been designed and constructed with the specific needs of the customer in mind in order to maximize management, efficiencies, and implementation of the operation. The continuing growth of the 3PL industry provides additional opportunities and tactical advantages for retailers across the country.

Loss Prevention Considerations

In general, loss prevention requirements and subsequent operational controls in a 3PL operation are not significantly different than those of any other supply-chain facility. However, loss prevention considerations are an essential element when deciding upon and managing a third-party operation. Strategic planning and strong working relationships with our third-party business partners are an important aspect of the process. “To a large extent the customer dictates the limits and liabilities of our security solutions,” stated Anderson. “They may require CCTV systems, facility alarms, access control, security checkpoints at entrances, or other solutions based on their SEPTEMBER - OCTOBER 2015

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needs and the terms of the relationship. The customer’s input is extremely important in helping to implement and manage the best possible solutions.” Many of the primary concerns are similar to retailer-managed operations and often product-specific involving merchandise that is desirable and easily resold. Potential incidents can be well-planned and highly sophisticated. In the warehouse facilities this can involve intrusion incidents, such as cutting holes in roofs and doors to gain access. As it pertains to incidents in-transit, vehicle intrusions and hijacking operations are a principal issue, posing significant safety threats in addition to theft concerns. This is where communication and cooperation with the loss prevention teams can be essential. With Ryder’s knowledge and experience with transportation services, fleets, warehousing facilities, and security practices coupled with the subject-matter expertise that loss prevention professionals can offer regarding the products, the criminal networks, and related intelligence, many incidents can be mitigated or avoided altogether. Anderson believes that this is a key aspect of a successful working relationship. “Most of our engagement with the customer’s loss prevention teams is on the prevention side,” he said. “This might include input on policies and procedures, notification guidelines, standards for driver selection, the use of tools such as GPS tracking, and other methods of establishing and maintaining operational controls. But it may also entail root-cause analysis and other strategic planning to explore how and why incidents took place to help us determine the best ways to avoid incidents moving forward.” Communication, plan development, and the establishment of a sound working relationship between the service provider and the loss prevention team then sets the foundation for the development and implementation of a successful security strategy for the facility and the program.

Taking Security to Another Level

Losses as a result of theft, damage of goods, and related challenges are a

RYDER: DRIVING THIRD-PARTY LOGISTICS SOLUTIONS major concern to all parties involved in the logistics process, and the extent to which the 3PL provider can meet the demanding requirements of generally accepted loss prevention and security practices has the potential to reduce long-term expenses. Partnering with a 3PL provider experienced in achieving success in security and compliance standards can be a valuable asset. This also requires finding 3PL providers that are both willing and capable of adapting to the diverse and evolving needs and expectations of the retail industry. These growth variables will directly impact every aspect of the business, including the entire supply-chain network, and it is critical that these providers remain current with industry standards. This includes maintaining equipment, technology, and management standards. It requires knowledge and understanding of current trends and industry challenges. The program should be growing and improving to maintain acceptable performance standards.

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

RYDER: DRIVING THIRD-PARTY LOGISTICS SOLUTIONS

“Our security program has matured significantly,” stated Anderson. “We are taking a more direct role in hardening our facilities and improving our programs. This would include auditing, alarms and alarm response, access control, authorization and authentication, and other critical functions. “For example, in the past as business operations have expanded we’ve worked with many different providers to manage our security needs, looking for the best solutions for that particular facility. Often we worked with local companies to meet our equipment and service needs, but we’ve also worked with larger providers as well. However, as we’ve continued to grow this led to a multitude of different agreements, which ultimately resulted in facilities with different security providers, different equipment, and different technologies. We needed to find a solution that would help us to standardize our systems and bring additional clarity to the program.” In response Ryder recently partnered with Diebold Security to unify their security efforts, ease complexity, and increase efficiencies. A thorough analysis of the benefits convinced senior leaders

that a centralized security program was in order to bring the field into alignment with the company’s overarching security objectives. What followed was a large-scale implementation across the US and Canada, orchestrated by Diebold Security in partnership with Ryder, to bring the compliance, unified security, and program management necessary to create an efficient, uniform, and cost-effective solution. “We wanted a solution that would satisfy our functional needs, but would also address system and equipment compatibility,” said Anderson. “Programs were integrated, updated, enhanced, or replaced as necessary. It was quite an undertaking, but we believe that it will provide significant savings and make us more competitive as a long-term solution. We wanted a consistent level of intrusion detection and protection, maintenance, and auditing capabilities across the organization.” As a result of this collaboration with Diebold Security, Ryder has made great strides in centralizing their security program across the US and Canada, taking advantage of SEPTEMBER - OCTOBER 2015

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cost savings and bringing uniformity in security standards to their North America footprint.

Our Role in the Process

As the global market matures and expands, retailers are demanding new logistics capabilities and more complex solutions to meet their supply-chain needs. Factors such as economic growth, expansion into new markets, e-commerce, and a greater acceptance of demand-driven logistics practices introduce complexities into the supply chain and generate the need for contract logistics providers that are capable of delivering more specialized services. By the same respect, theft and other forms of criminal activity continue to reach into the supply-chain network, growing more creative and sophisticated with the progression of the industry. Other forms of loss can also grow exponentially more impactful with the growing costs of supply-chain management. In most 3PL contracts, merchandise is deemed the property of the client company, and ownership of the product does not shift to the 3PL provider continued on page 58

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RYDER: DRIVING THIRD-PARTY LOGISTICS SOLUTIONS

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while it is under the 3PL’s care, custody, and control. However, at the point that the third party takes possession of the product, they typically become more accountable, and the 3PL will assume liability of goods while in their control. Under these conditions, if losses occur while in control of the 3PL, the client retailer can file a claim. Contract language will usually include reimbursement for net shrinkage in excess of a certain agreed-upon dollar-value percentage. However, the complexities of product loss expand far beyond securing compensation for lost product, and our role as business partners must extend beyond an insurance claim. Customer service, replenishment issues, and lost sales are just a few of the more obvious effects of these losses. But what about the costs associated with getting the product as far as it got before it was stolen? What about shipping, customs, and transportation costs—all of which will have to be paid again to replenish lost merchandise? Product losses are everyone’s concern, which is why strong communication and effective controls are essential. As more companies turn to 3PLs to help manage supply-chain processes and ensure operational success, loss prevention involvement must continue to progress as well. 3PL operations can provide a very valuable and cost-effective solution for many retail operations, both in terms of meeting specialized needs or in managing the overall operation. However, loss prevention must provide effective oversight

in order to keep these operations effective and productive. Here are a few things to consider when building an effective relationship with the 3PL provider: Take the steps to ensure that you are ready for the relationship with the 3PL provider. Whether outsourced or managed internally, logistics is a core component of the business. Do you have a plan? Have you mapped out what needs to be accomplished and how to reach those objectives? How often will you communicate? When and who will be notified in the event of an issue or incident? There should be a proactive management plan in place that serves as the foundation of the partnership. Establish realistic expectations. What is most important? How can it be accomplished? How will performance be measured and evaluated? Trust, flexibility, and responsiveness are indispensable elements on both sides of the 3PL provider-user relationship. What will help with all of this is communication and relationship. Understand the value of subject-matter expertise on both sides. Retail LP professionals know and understand their products, business, capabilities, and role in the business. Communicate relevant information as necessary and appropriate to maximize the value of that expertise. Is the 3PL provider hiring sufficient talent? With companies competing for supply chain, logistics management, and security talent with other firms, explore the steps that are needed to hire those that will best meet the overall needs. SEPTEMBER - OCTOBER 2015

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How do they stand on your needs and metrics that matter most? Ask what they do best, and include your performance objectives. Learn the strengths and weaknesses of the provider’s program. Staffing, alarms, security equipment, and related resources should be identified and evaluated. But how is the security program executed and managed? Is there a loss prevention strategy or simply security resources? Is the 3PL prepared for disasters? Do they have an effective crisis-management plan? Supply-chain disruptions significantly affect a retailer’s bottom line, so make sure you know how your 3PL partner is positioned to deal with them on the logistics side. Is the 3PL provider adapting to the changing and evolving needs and expectations of the industry? Are they current with industry standards? What is their level of technological sophistication? Are they aware of current trends and industry challenges? Learn whether the 3PL’s performance is growing and improving. Take the steps to ensure that these security and loss prevention needs and expectations are considered during the selection process. Defining these expectations during the selection process establishes the foundation and helps set the tone for the partnership As retail operations continue to grow more complex, the ability to expand our field of vision and become more entrenched in all aspects of the business only becomes more critical to the success of the retail enterprise and the growth and development of the loss prevention profession. There are many doors that we have yet to open and many areas where our knowledge and expertise can be further applied to enhance company performance. Learning is an ongoing process that keeps us informed and engaged. How much do you know about your supply-chain network? Does your organization use third-party providers? If so, what services do they support? How can you make a difference? Sometimes we’ll find that our greatest opportunities to learn and grow can be found in our own back yard.

As a member of The Loss Prevention Foundation, you join an association founded by and for loss prevention professionals. With access to an elite network of fellow industry professionals, development tools tailored specifically to our industry to help you advance your career and other great member benefits such as exclusive access to elite savings and discounts on thousands of products and services nationwide. Your membership is not only a demonstration of industry leadership; it’s a commitment to the profession and to your own professional development. Elevating the Industry, One Leader at a Time. For more information, visit losspreventionfoundation.org or call (866)433-5545

EVIDENCE-BASED LP

Navigate the LP Highway with Good Data

by Read Hayes, PhD, CPP Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2015 Loss Prevention Research Council

or even statisticians, so certain expertise is needed to determine what data should be collected and in what formats in order to find actionable patterns or to test causal and protective hypotheses. Ability to Quickly Collect. Field personnel need to populate incident reports using drop-down boxes with a space for narratives, but remember that extracting needed information from narratives is extremely difficult. So the variables available

e have to see to drive down the road. And in heavy, constantly changing traffic, we really need to see clearly and predict what’s likely to happen to safely steer through the masses. Similarly, LP decision-makers need to see as clearly as possible what’s going on around and in their stores, distribution centers, and offices to make good decisions.

Data, Data, Data

This is the fifteenth year since the Loss Prevention Research Council (LPRC) was founded by ten LP vice presidents, and with twelve working groups and other projects constantly on the move, we have seen quite a bit in the way of data. Everything revolves around how we think things work (both problems and solutions) and collecting observations and evidence (data) around the issue to see if we’re correct or not. But our ongoing problem is this: it’s really difficult to get good data. And by good we mean (1) accurate, (2) the right information, and (3) in a usable (mostly numeric) format. And when I say difficult, I mean really hard to get. We’ve seen over and over that most retailers just don’t gather the data they really need to make great inferences and choices. Here are some thoughts on getting more actionable data. A lot of needed data just are not collected, and we strongly believe variables around at least three domains are critical: Offender Characteristics. We need to know as much as possible about offenders including age, criminal experience, gender, possible motives, size, or anything specifically meaningful for a given protective issue. Crime Event Characteristics. Record what, how, where, when, unsuccessful attempt versus successful, how many offenders, what was said and done, what was taken or attacked, what tools or weapons were used, and so forth. Crime Location Environment. At the time of the crime attempt, we want to know how many employees and customers were there, what anti-crime measures were in place and their functional deployment and status at the time, local and specific risk ratings, and other important characteristics such as what worked or didn’t work.

Current Barriers to Great Data

There are always hurdles to jump, and data collection is littered with them. Some examples include: Knowledge of What’s Needed. Very few analysts or even LP professionals are graduate-level criminologists, geographers,

So data analytics is our greatest need as we navigate a crowded highway or a dynamic retail environment. And we have a huge improvement opportunity with what we gather, how we actually collect data, and how we best analyze and use it. to field personnel should be easy to use and should generate numerically coded data. Other needed data come from IT, point of sale, supply chain, real estate, human resources, risk management, operations, and other sources requiring their acquisition and recoding for statistical use. Analytical Skills. Computer and even IT skills are valuable, but LP subject matter, criminological, and statistical expertise are also necessary to conduct meaningful analysis. We constantly hear about retailers struggling to make sense of data dredged up without using scientifically valid methods and relevant frameworks. So data analytics is our greatest need as we navigate a crowded highway or a dynamic retail environment. And we have a huge improvement opportunity with what we gather, how we actually collect data, and how we best analyze and use it.

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Impact Conference 2015

This year the LPRC Impact Conference will be bigger and better than ever. The Impact planning team started planning earlier and is striving to continue to improve the Impact experience and actionable takeaways. Join LP executives from Walmart, Target, eBay, Home Depot, CVS, Walgreens, Rite-Aid, Lowe’s, Publix, Big Lots, Best Buy, Verizon, Bloomingdale’s, Toys“R”Us, Macy’s, T-Mobile, REI, DICK’S Sporting Goods, and twenty-five other leading chains alongside solution partner engineers and scientists October 5–7 at the University of Florida. This year Impact will also feature a Texas State criminologist, brand new working group research project findings, the Monday golf outing, a Monday evening reception at the newly updated and loaded LPRC/UF Innovation Lab, and a Tuesday casino night and dinner on campus to provide multiple learning opportunities. Participant registration is out-pacing last year’s record attendance. I invite you to learn more about the 2015 Impact conference and consider joining us in Gainesville this fall by emailing jessi@lpresearch.org.

Recommended Reading

Rational Choice and Situational Crime Prevention, edited by Newman, Clarke, and Shoham, ties together theory on individual offending behavior and practical crime prevention measures designed to specifically address offender perceptions and choices. These are the theories our research team uses to develop and improve protective measure impact. As always, our University of Florida and LPRC teams are working to support you, so please let me know your thoughts and suggestions on LinkedIn or at rhayes@lpresearch.org.

John Doggette, LPC, director of LP merchandising/vendor shrink solutions and analytics, presenting at the 2014 Impact conference. This year’s conference will be October 5–7 on the University of Florida campus in Gainesville.

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

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SOLUTIONS SHOWCASE ALPHA

Do You Know Where Your Luxury Handbag Is Right Now?

t 1:42 p.m., the loss prevention manager for a luxury retail store received an alert on her smartphone. A $500 designer handbag was on the move. The notification on the screen clearly showed the item had left the designated handbag zone and was heading toward the emergency exit. The fact that the LP manager was able to monitor activity in real time and respond immediately kept the retailer from incurring a big hit to its bottom line. In fact, this particular retailer had been using Checkpoint’s S3i technology for several months and as a result had not seen a single loss of protected merchandise during that time. S3intelligent (S3i) is a scalable, wireless, real-time locationing system that provides retailers with valuable intelligence, including item-level asset locationing, security, and real-time event captures for high-value merchandise. Retailers are able to secure and openly display high-risk merchandise, such as luxury or designer handbags, apparel, and accessories, as well as electronics and more, improving the shopping experience and increasing sales. Several retailers are seeing extraordinary results as they use S3i to create zones around specific high-risk merchandise and around areas such as backrooms, fitting rooms, restrooms, and exits. They are now able to detect and deter shoplifting, organized retail crime events, and employee theft—in real time.

How Does S3i Work?

Alpha’s S3 solutions such as CableLoks®, hard tags, and Spider Wraps® are outfitted with S3i technology, securing the merchandise while also giving the ability to let retailers know exactly where their merchandise is and what is happening to that merchandise, exactly when it happens. Any attempt to remove the device or move the merchandise out of or into designated zones creates an immediate alert that allows store personnel to react immediately. These audible or visible alerts can be delivered to associates via smartphones, tablets, computer, radio headsets, or PA systems.

Intelligence You Can Use

Besides offering LP, corporate management, and store operations immediate visibility to all of the store’s

high-value merchandise protected with S3i devices, S3i provides detailed analytical reports that help retailers understand store and merchandise activity. Specific reports can be customized based on each retailer’s needs, and these informational dashboards are easily accessed on the S3i live portal via smartphone, tablet, or computer. According to Uwe Sydon, senior vice president of innovation at Checkpoint Systems, “We’re taking security to a whole new level, going beyond loss prevention to reduce out-of-stocks, improve the shopper experience, and put real-time intelligence in the hands of the retailer. With S3i, the ability to reduce theft of luxury or high-value merchandise while collecting actionable retail intelligence just got easier.”

Innovation That Never Stops

We are committed to solving challenges and providing innovative solutions that target shrink and out-of-stocks while improving merchandise availability and profits. For more information on S3intelligent or any of our other solutions, go to alphaworld.com or call 888-257-4272.

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

SOLUTIONS SHOWCASE DETEX

A Greater Level of Protection for Retail Applications

etex Corporation offers a new maximum-security, life-safety, door-hardware system designed for retail. Installed on doors that require higher levels of security, these extra-tough hardware systems are scalable to provide the level of security that matches a retailer’s specific needs. Certain maximum-security and retail applications require a combination of components, and Detex features a range of hardware designed specifically for the job. In addition, Detex provides complete systems that efficiently meet more complex application requirements. Retail customers can select the exact combination of components that suit their particular applications and know

Built to withstand the most aggressive attempts to break through rear doors, the ECL-230X-TDB maximum locking strength multi-point panic hardware is engineered with an extreme-duty, triple-bolt design that withstands 16,000 pounds of pull force. that the components will integrate easily with each other and function well as a system.

Withstands 16,000 Pounds of Pull Force

At the core of the system and built to withstand the most aggressive attempts to break through rear doors, the ECL-230X-TDB maximum locking strength multi-point panic hardware is engineered with an extreme-duty, triple-bolt design that withstands 16,000 pounds of pull force. Single- and double-bolt and weatherized models are available. Additional components include V50 and 20 Series Vertical Rod Exit Devices for dependably tough protection on double doors, as well as Detex Door Prop Alarms, battery-powered or

wired, designed to sound a warning when exterior doors are propped open by personnel. “Considering the configuration of your retail set-up, Detex can provide a choice of security hardware systems that are very powerful deterrents,” said Ken Kuehler, director of marketing and sales at Detex. “Once we talk to you about your requirements, we can help you tailor a combination of hardware that works together to function dependably in a panic situation, while raising your protection level in high-risk areas.”

US Made for More than a Century

For more than a century, Detex has earned the trust of architects and owners who rely on Detex products for the life safety and security of people and property. A US company, Detex designs, manufactures, markets, and ships products from New Braunfels, Texas. Detex is known internationally for life safety and security door hardware, loss prevention and architectural hardware, integrated door security systems, and guard tour verification. To learn more about our retail security systems, email marketing@detex.com or visit detex.com.

SEPTEMBER - OCTOBER 2015

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SOLUTIONS SHOWCASE BEST SECURITY INDUSTRIES

New vs. Certified Pre-owned EAS Systems Worth a Closer Look By John Gantenbein, President, BSI

s a former, long-time loss prevention executive, I have seen my fair share of technologies come and go and have worked with a number of solution providers throughout the years. Having more than thirty years of progressive loss prevention and retail security experience, I have held senior executive positions at Macy’s West, Marshall Field’s, Dayton’s, John Gantenbein and Hudson’s department stores. During this time, I was responsible for overseeing shortage programs, compliance audits, staffing, budget, apprehension policies, civil recovery, and major investigations among other things. In addition, one of my primary responsibilities was evaluating and making procurement decisions on various technologies to help the companies that I worked for effectively protect company assets. Today’s loss prevention executives have a wider and more robust array of technologies available to them. Along with the technology selections out there, the procurement process is changing at many retail chains. A recent survey conducted by LP Magazine found that while loss prevention executives remain the primary decision maker when it comes to LP-related purchases at 63 percent, procurement is emerging as a strong influencer. This dynamic introduces into the equation not only the quality and effectiveness of the technology, but the cost to deploy also plays a more prominent role. Taking into account some of these new dynamics, what are some considerations loss prevention executives should take into account when making technology decisions? For the first time in its 24-year history, the National Retail Security Survey conducted by the University of Florida found that external theft, which accounts for shoplifting and organized retail crime, outpaced internal theft. So let’s focus first on electronic article surveillance (EAS), a long-standing staple in many LP programs. This technology is proven to be effective in countering external theft when there is a solid set of processes and procedures established behind it and adhered to at the store level.

Future-Proofing Your EAS Investment

Retailers have spent millions of dollars over the years to build and maintain their EAS infrastructures. Most embarked on a very thorough vetting process before selecting the technology that worked best in their environment and best for their product mix before making a decision and deploying the systems, whether that be AM- or RF-based. Once the decision and investments were made, how do you ensure that you add some level of future proofing to that decision? That is when

you should ask yourself if buying new or pre-owned certified systems and components make the most sense. Both have their merits, and many times the answer is a combination of the two. Let’s take a look at a couple of different scenarios. You have invested in a chain-wide implementation of a certain brand and model of EAS when the original equipment manufacturer, for a variety of reasons, discontinues the model and subsequently the

Retailers have spent millions of dollars over the years to build and maintain their EAS infrastructure. Once the investments were made, how do you ensure that you add some level of future proofing to that decision? That is when you should ask yourself if buying new or pre-owned certified systems and components make the most sense.

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

SOLUTIONS SHOWCASE BEST SECURITY INDUSTRIES support of those systems. You could replace the infrastructure with newer technology that comes with a fairly significant capital expenditure, or you could look for an organization that provides pre-owned, certified systems that meet the original specifications to supplement your existing investment. An important factor behind this decision is to ensure that these systems come with a warranty of their own. While pre-owned systems typically do not fall under the capital investment category at most companies, they can deliver significant savings and/or leverage your equipment budget and extend your ROI to the organization. Another area where pre-owned, certified or repaired and refurbished components may make sense is in the area of accessories to the existing technology such as tags, deactivators, or detachers. Remember to look for a guarantee that these components will work with your current EAS systems with the same level of performance as new ones.

The Case for New Equipment

So what about the case for new equipment purchases and the factors behind those decisions? Obviously, the first question to ask is whether there is a capital budget approved for switching out the existing infrastructure for new technology? Some of the factors that may weigh into this option are the need for advanced features available in newer technologies to support your company’s strategic and tactical plans. Another option may be to implement a phased approach between new and certified, pre-owned systems. As new stores are opened or existing ones renovated, new models of EAS that are compatible with the existing infrastructure can be deployed as long as the other components of the EAS system are compatible as well, particularly as it relates to tags and labels.

Refurbished Equipment

Another option that is available to retailers and oftentimes overlooked is the ability to refurbish their existing inventory and warehouse it until needed at the next location. It is not uncommon for companies to close or relocate stores to remain competitive. BSI offers a unique service in the industry where we will uninstall your EAS systems; repair or refurbish your systems, tags, deactivators, or detachers; and hold them in inventory for you until you need them again. For those retailers who do not perceive the need to hold the used equipment in inventory, BSI will also offer to buy back the EAS inventory or trade it in for newer systems. BSI is always looking for used EAS technologies that it can purchase from retailers who no longer need the systems and components. This is just one more way that retailers can extend the investment they made years

While pre-owned systems typically do not fall under the capital investment category at most companies, they can deliver significant savings and/or leverage your equipment budget and extend your ROI to the organization. earlier and help the overall industry access legacy solutions that it may need to complement existing infrastructure.

Video Solutions

Many LP executives don’t realize that BSI also has a strong reputation for engineering highly effective video solutions across many of North America’s leading retailers. We partner with best-of-class product manufacturers to ensure each installed system is “fit-for-purpose” based on individual needs. Our specialty is in analog-to-IP phased upgrades as well as design and installation of new, high-end IP solutions. We also offer a full range of video analytics that can be used not only for fine tuning your loss prevention programs, but also to help with merchandising, staffing, customer intelligence, and a whole host of other applications.

The BSI Advantage

Our leadership team is comprised of seasoned former LP individuals from the retail and solutions provider industries who understand the requirements and challenges faced in the business. Our customers benefit from our experience helping to ensure their success. Here at BSI, we offer the broadest range of EAS tags, systems, and related product offerings in the retail marketplace by offering both certified pre-owned EAS and BSI private-label AM/RF EAS options. Our product and service portfolio also includes EAS installation, deinstallation, inventory and logistic depot support, equipment repair, equipment buy back and/or trade in, design consulting, and equipment leasing options along with our state-of-the-art video solutions. Today’s retail loss prevention executives have a number of options that were not available in the past, and all of them are worth a closer look before deciding which path best suits the retailer’s individual needs. So, isn’t it time to take a closer look at BSI?

SEPTEMBER - OCTOBER 2015

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SOLUTIONS SHOWCASE DIGILOCK

Lockup by Digilock Reduces Shrink and Contributes to Retail Profitability

s a manufacturer of electronic locks and lockers, Digilock® is thriving in the security solutions industry expanding beyond the traditional security markets into securing personal belongings. The evolution of Digilock’s product offerings is driven by the market demands for personal security. In 1992, the company was the first to introduce a keyless electronic lock for cabinets and lockers. Today, manufacturing electronic locks is one of the fastest-growing segments of the security and access-control marketplace. IHS, a global information company, forecasts that the global market for electronic locks will exceed $1 billion in 2015.

no form of property crime in America that adds up to $44 billion a year. Bank robberies, household burglary, auto theft, none of them. In fact, if you add all of those up, they don’t get close to $44 billion a year.” Another study, The Global Retail Theft Barometer™ report, was carried out in 2014 by Checkpoint Systems, which teamed up with The Smart Cube and Ernie Deyle, a retail loss prevention analyst. It was conducted in twenty-four countries among 222 retailers representing $744 billion in sales in 2013. The lowest shrink rates were recorded in Norway (0.83 percent of retail sales),

SOURCES OF SHRINKAGE IN RETAIL Sources of Shrink in Retail

Why Is Fighting Shrinkage Challenging?

The importance of loss prevention is a major topic of discussion across the retail industry these days. One of the latest retail security surveys stirred another round of magazine publications and social media posts regarding the reasons of the increase of the so-called “shrinkage.” According to the 2015 National Retail Security Survey, conducted by the National Retail Federation and the University of Florida, two main culprits are shoplifting and employee theft. As Oscar Wilde said, “I can resist anything but temptation.” “The average loss for internal theft is nearly five times that of shoplifting,” says Los Angeles Times editor Nick Shively in his article. Dr. Richard Hollinger, a criminology professor at the University of Florida, who leads this annual study, pointed out during a Q&A with Los Angeles Times reporter James F. Peltz, “There is

Unkown, 6.1% Vendor Fraud, 6.8% Shoplifting, 38.0%

Administrative Error, 16.5%

Employee Theft, 34.5%

Statistics from 2015 National Retail Security Survey

Digilock, committed to developing new products that are driven by customer demands, created a perfect loss prevention solution for retail environment—Lockup—to add to the holistic loss prevention strategy and to enforce the traditional loss prevention activities.

and the highest rates were recorded in Mexico (1.70 percent) and China (1.53 percent). The United States came in at 1.48 percent of retail sales. With the evolution of loss prevention techniques, retailers have been able to reduce shrink as a percent of sales; however, the actual dollar loss due to shrink continues to grow according to Alan Fanarof, retail practice head ANZ, Cognizant. To reclaim lost revenue, retailers are using different means to develop employee awareness about the vital importance of loss prevention. The most common way is to perform extensive new employee background and references checks and to communicate conduct guidelines during the new employee training, focusing on the severity of the employee theft issue and its consequences. Another approach is to continuously work on developing good relationships with employees. Companies with the lowest turnover rates have the lowest internal theft rates.

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

SOLUTIONS SHOWCASE DIGILOCK How Lockup Solution Works to Combat Shrink

Digilock’s patented technology and responsiveness to market demands is ensuring security simplified® with an out-of-the-box approach that allows a locker to be always available for each employee to secure belongings. Although most stores have a strategy in place to fight shrinkage, the statistical research shows that, despite all the retailers’ efforts, the industry has hit a plateau in the fight against shrink. According to FBI reports, employees’ theft is the fastest-growing crime in America. Now the dilemma emerges—how to stay ahead of the curve and prevent shrink in stores, while providing secure storage for employee belongings. As the saying goes, “Where there’s a will, there’s a way.”

Employee merchandise theft that does not involve a cash register is difficult to identify because you have to catch it in the act. It is much easier to proactively prevent this kind of theft than to deal with it after it has already happened. What proven methods empower stores to dramatically curb retail shrink? Digilock’s patented technology and responsiveness to market demands is ensuring security simplified® with an out-of-the-box approach that allows a locker to be always available for each employee to secure belongings. Options include a clear polycarbonate door giving store managers the ability to see the contents inside the employee lockers, contributing to internal theft prevention. The procedure is simple: store employees gain access to their lockers with the entry of a four-digit keypad code, and the store management controls and audits the lockers by using an electronic manager key. Lockup® delivers a top-of-the-line employee locker complete with the security of a shared-use keypad lock. The locker is manufactured from heavy-gauge powder-coated metal to withstand heavy use in demanding environments. It is delivered ready-to-use, fully assembled with pre-programmed electronic keypad lock. Lockup locks are designed specifically for retail employee use, where multiple shifts are scheduled throughout the day. This shared-use technology allows employees to occupy one locker during their shift, and once vacated, the locker is available for another user. The electronic manager key permits locker audits and provides external power for locks. Lockup offers retailers a cost-competitive solution for secure personal storage and a shrink-reduction plan. Digilock, committed to developing new products that are driven by customer demands, created a perfect loss prevention solution for retail environment—Lockup—to add to the holistic loss prevention strategy and to enforce the traditional loss prevention activities. Lockers enable store management to take proactive steps to ensure merchandise is not lost. Contact us at 707-766-6000 or sales@digilock.com for a free demo locker and learn why Lockup is the preferred employee locker choice among retailers. Or visit us online at lockup.com for more information.

SEPTEMBER - OCTOBER 2015

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SOLUTIONS SHOWCASE USS

Analog-to-IP Migration Solved the Most Logical Way By Gerald Becker

ow do you solve a major problem for a whole industry? By listening. Most LP teams around the country are either considering or actively trying to implement an enterprise IP video system. But the two persistent problems that keep popping up for everyone are cost and complexity. In talking to retail LP teams, this is what we typically heard: “For new stores we are going with full IP, but we still have a lot of old stores that are on analog. We don’t want to rip out those systems because they work. So how do we incorporate them into this new enterprise IP system without going through a whole retrofit?”

Until just a few months ago, there were only two ways of doing it. One was by deploying a proprietary hybrid system, and the other one was by incorporating encoders and switches. A stand-alone hybrid solution relies on a device that can process and record both analog and IP in one unit. The biggest advantage is that these devices are plug-and-play. The biggest disadvantage is that they always use proprietary technology, so you become locked into that manufacturer’s ecosystem of products. You cannot uninstall their video management software (VMS) to try a new one, and you can only choose from a limited number of compatible hardware devices. The second way to migrate to IP was to use encoders, which was more typical. These are devices that digitize analog signals. You connect your existing analog cameras to an encoder; the encoder connects to a switch; and the switch then connects to your server and your network. The biggest benefit of this approach is that you are not tied to a proprietary solution. The disadvantages—you now have to manage multiple pieces of equipment; you have multiple points of failure; and you will incur higher labor costs.

A Real-World Case

Here is a real-world case. One of our retail partners has eight analog cameras per store. Going IP for them involves using two four-channel encoders, which they tell us take up to an hour

each to install. The switch is installed next, taking another thirty minutes, and then the server, adding thirty minutes more. The total installation is three hours, sometimes four, and they have to use higher-paid computer networking technicians instead of regular installers they used for basic analog. With our new platform, NDVision, we set out to solve all these common problems and deliver a simple, cost-effective solution. One Unit. First, we eliminated unnecessary hardware. The NDVision appliance encapsulates all of the encoding and switching technology in just one unit. This eliminates multiple points of failure and greatly simplifies the management of the system. Open Architecture. Second, we built it on open architecture so that retailers can chose from different VMS options. If your organization has already picked a particular video management software, we can load it onto the NDVision appliance, so you can grow your video system the way you want. If you wish to change the VMS in the future, there’s no problem. You can simply uninstall the old one and install the new one without purchasing any new hardware. Plug-and-Play. Third, we made NDVision literally plug-and-play. Everything is preconfigured and automatically loads when you fire it up. The encoder within the device automatically initiates when Windows starts up; it automatically sees the analog cameras connected to it; and the pre-loaded software automatically sees the encoder and starts recording. This brought the installation time from between three and four hours down to only fifteen to thirty minutes. And because it is so simple, NDVision does not require specialized technicians to install it, which translates into lower labor costs.

An Elegant Solution

What NDVision now delivers is what LP teams have been looking for all along—the functionality of an enterprise IP system using the analog equipment that’s already in place. Budgets are protected. The useful life of legacy equipment is extended. And the system is actually easy to deploy and manage. That’s what happens when a partner listens. And solves. And delivers.

Gerald Becker is Chief Product Officer at USS. He is known industry-wide for his expertise in deploying digital video management solutions on a large scale in both the private and public sector. Becker holds multiple patents for physical security innovations he developed. He earned an MBA in information systems from the University of Redlands and a Bachelor of Science degree in technical management from DeVry University.

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

SOLUTIONS SHOWCASE TURNING POINT JUSTICE

Partnering on a Community Action Plan for Shoplifting

ne of the most intriguing features of the Turning Point Justice (TPJ) partnership with the National Association for Shoplifting Prevention (NASP) is NASP’s consistent, even stalwart, focus on its mission as a non-profit organization to reduce shoplifting in our nation. Two of the key components of that mission—to “raise public awareness about shoplifting” and “deliver needed programs and services to reduce its occurrence”—are clearly evident in NASP’s long advocacy of the idea of a community action plan for shoplifting. Based on its work in the criminal and juvenile justice system dating back to 1977, NASP is a staunch advocate of the need for “coordinated community action” against shoplifting. NASP contends, and TPJ agrees, that confronting and addressing shoplifting at every level—from retailers to the courts and at every touch point in between—serves retail, law enforcement, and criminal justice by holding more offenders accountable using consequences that are immediate, consistently applied, and proportionate to the offense. But the best promise of this plan lies in ensuring that stakeholders—including the offender—invest resources and reap benefits in equal measure. The result of our partnership is the Crime Accountability Program (CAP) for shoplifting, which is a technology-facilitated collaboration between retailers and criminal-justice agencies designed to save both private and public resources and help stakeholders act in concert to address their individual and collective pain points with shoplifting. As a result, CAP consistently reduces calls to police, collects increased restitution for retailers, saves loss prevention team time and resources, holds offenders accountable for their actions, and provides the offense-specific education needed to ultimately reduce repeat offenses. CAP has reduced calls to police by 55 percent on average and increased overall restitution collection for retailers up to 60 percent or more.

How the Crime Accountability Program Works

CAP is a one-time opportunity for offenders to participate in an alternative program rather than follow the traditional path to court. Through TPJ’s cloud-justice technology, detainees are screened based on eligibility and qualification factors set jointly by the retailer and police. The technology also screens for and tracks repeat offenders, organized retail crime professionals, and other known offenders across jurisdictions. CAP is wholly offender-funded. However, to ensure that no offender is denied access to the program based on their ability to pay, CAP provides an option for indigent offenders. Initially

funded by a grant from TPJ, the CAP Indigence Fund is managed by NASP and perpetuated by participating retailers’ voluntary pledges of a portion of CAP restitution. Upon apprehension, the technology guides agents through the reporting process step-by-step, maintaining consistency and focus on building prosecution-worthy and liability-resistant incident reports at the time of apprehension. This detailed reporting is a critical first step in maximizing program benefits both at apprehension and throughout the downstream process. CAP case report preparation is more comprehensive than many case management systems, giving the retailer the opportunity to provide greater value to the local police and prosecutors. The investment in a single, complete, accurate, shareable, and prosecutable report is designed to: Reduce calls to police and improve police and community relations, Minimize detention time and standardize both offender interaction and reporting, Reduce downstream HR costs associated with preparing and filing reports, delivering evidence, filing affidavits, providing additional witness statements, and making court appearances, and Reduce retailer liability from offenders seeking to exploit loopholes in case reports and in the system.

Managing Services for Retailers

CAP education, case management, and restitution collection services are provided by NASP, a 501(c)(3) educational organization that provides the same services to courts in forty-nine states nationwide. NASP employs the same offense-specific programs and proprietary techniques it uses to manage cases for the court system on behalf of retailers. NASP’s offender services help: Maximize collection of retailer restitution and CAP fees, Promote education program compliance by participants to minimize repeat offenders for retailers, Provide student, parent, and family support services needed to reduce liability, and Ensure proper understanding of the retailer’s program offer for participants and their advisers. For more information on TPJ, NASP, and the Crime Accountability Program, visit turningpointjustice.com or shopliftingprevention.org.

SEPTEMBER - OCTOBER 2015

LPPORTAL.COM

INDUSTRY NEWS

LPRC Members Converge on Seattle to Tour Amazon and Microsoft

contingent of twenty-five members of the Loss Prevention Research Council (LPRC), representing fifteen different retailers, spent two days in early August touring one of Amazon’s fulfillment centers and Microsoft’s Retail Experience Center. The trip was headed by the LPRC’s research director, Dr. Read Hayes, and Tom Meehan, corporate manager of data, systems, and central investigations for Bloomingdale’s and chair of the LPRC’s Future of LP working group. LPRC member Checkpoint facilitated the tours.

The Tours

The tour at Amazon provided the group with a start-to-finish look at the company’s fulfillment process. Starting with receipt and inventory of incoming merchandise to picking orders to boxing and shipping, the use of technology was evident. Product is scanned either by hand or automatically at multiple points to ensure inventory accuracy and correct routing of orders. Throughout the operation, various robotic technologies were in use primarily moving merchandise in and out of storage as needed for customer orders. The Amazon facility was tightly controlled for both security and safety, with cell phones and cameras not permitted. Multiple metal detectors were used for both visitors and employees entering or exiting the building. Safety vests were worn by the tour members.

Vests, eye protection, gloves, and other safety equipment were used by employees throughout the facility. Amazon’s loss prevention team coordinated the tour. At Microsoft’s Retail Experience Center, housed in a nondescript office building without signage, the company has essentially built a retail mall inside the facility. Marty Ramos, CTO, worldwide retail, consumer products, and services for Microsoft, provided the visitors with a lively, energetic tour highlighting numerous technologies currently in use by retailers worldwide. The demo center featured full-size retail stores and kiosks representing multiple retail environments from coffee shops to electronics stores to apparel, cosmetics, and even convenience stores. Dozens of technologies were in use for customer service, merchandising, retail operations, as well as loss prevention, including Bluetooth and audio beacons, WiFi location tracking, RFID EAS gates, virtual mirrors, mobile POS, facial recognition, and many more.

Future of LP Working Group

In addition to the tours, the group spent a half day at the headquarters of Outerwall, the company behind Red Box® movie and video rental kiosks, Coinstar® coin-counting kiosks, and ecoATM® device-recycling kiosks. The time was spent primarily by the Future of LP working group members discussing the deliverables they wanted to achieve.

The LPRC’s Future of LP working group is developing research topics to help address challenges associated with the rapidly changing retail environment such as RFID, e-commerce fraud, and omnichannel retailing. 72

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The discussion centered on a wide range of topics, including: Partnering with delivery service providers such as UPS, FedEx, and the US Postal Service to investigate claims Issues around labelling privacy and security tape or other identifiers of high-value shipments The value of RFID and the skill sets necessary to analyze data The rise in e-commerce fraud and data breaches and how to protect information and investigate events Omnichannel best practices from ordering, fulfillment, delivery, and returns For more information about the LPRC, its various research projects and working groups, and membership, visit LPresearch.org. The LPRC’s annual Impact conference scheduled for October 5–7 at the University of Florida in Gainesville is open to a limited number of non-member retailers. Information is also available on the website or by contacting jessi@lpresearch.org.

LP Foundation’s Diversity Committee Solicits Industry Input The Loss Prevention Foundation’s Diversity Committee took a major step forward recently when professionals from across the country participated in a telephone conference to discuss needs within the loss prevention community and objectives of the committee. “Attaining a more diverse and inclusive environment in the loss prevention industry is paramount,” said Paul Jones, LPC, senior director of global asset protection for eBay and chairman of the Diversity Committee. “Our mission is to create an environment that supports and represents the communities where we work and live.”

Loss prevention leadership recognizes that both diversity and inclusion are critical assets of a successful program. This involves the ability to recognize the differences, characteristics, and ideologies that make all of us unique as individuals; accepting and respecting those differences that are a part of all of us; and finding positive channels to understand and support one another in real ways for the benefit of all. Increasing awareness regarding diversity and inclusion covers a broad spectrum of potential topics. And while diversity may refer to all of the ways that we may differ, inclusion involves bringing all of those differences together and putting diversity into action. This should be a message and an objective that we all share—creating a culture and setting a tone that is productive and supportive. With nearly seventy LP professionals taking part in the conversation, the interest and the value of this message was clearly underscored. All of us want to see our efforts progress into positive results, and your support is important. The goal is to create content and dialogue to enhance discussions around diversity in LP. This requires both group support and individual

“Attaining a more diverse and inclusive environment in the loss prevention industry is paramount,” said Paul Jones, LPC, senior director of global asset protection for eBay and chairman of the Diversity Committee. participation to build learning experiences that are positive and meaningful. In the process, the hope is to create nuggets of informative content—calling on industry knowledge, experiences, and perspectives to create a truly exceptional result. If there is an opinion or perspective that anyone in the industry would like to share, LP Magazine has agreed to provide a forum for comments and further articles. As a means to provide further support and incentive, eBay has generously offered five LPC certified scholarships that will be awarded to select individuals that will be determined through a drawing based on content submissions, with every submission awarded an entry into the drawing. The ultimate goal is the content and dialogue can then be used to help build a training course that will assist retailers

in delivering on the objectives of the Diversity Committee. “I’m excited about the energy and commitment we have from the LP community as it relates to the LPF Diversity Committee,” said Jones. “We will make a difference in shaping our industry.” Do you have an opinion that you would like to share or a topic that you’d like to discuss? You have a real chance to make a difference, but only if you’re willing to share your voice. Submissions can appear as anonymous if you prefer, and we are willing to work with you to most effectively express your thoughts and opinions. If you would like to learn more, please send your comments to diversity@LPportal.com. Inquiries will be kept confidential unless otherwise indicated.

Innovative GPS Tracking Solutions for Financial, Retail, Transport and Law Enforcement Protects all types of valuable assets Automatically and silently notifies law enforcement when a theft occurs 24/7 customer support center The ONLY tracking system partnered with over 5000 Law Enforcement Agencies

info@3siecurity.com | 3sisecurity.com

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

PEOPLE ON THE MOVE

Danielle Butler was promoted to District LP Manager for Beall’s. Laura Brown, CFI and Jeremy Cross were made Area LP Managers for Bed Bath & Beyond. Craig Gage, CPP was appointed Director of LP for Brown’s Super Stores (Shoprite).

Tracy Little was appointed US National Sales Manager, East Region, for Milestone Systems. Jennifer Underwood is now a District LP Manager for Napa Auto Parts. Paul Votto was made a District LP Manager for Ocean State Job Lot.

CALENDAR

September 9 – 10, 2015 International Supply Chain Protection Organization 2015 Conference The Fossil Group headquarters Richardson, TX iscpo.org

Stan Berger was appointed Regional LP Manager for Rack Room Shoes.

September 16, 2015 Retail Council of Canada Loss Prevention 2015 International Centre, Mississauga, ON rcclpconference.ca

Darren Martel, CFI was appointed Regional Director of Operations, and Luke Jenkins is now Regional AP Manager for Regis Corporation.

September 17, 2015 New England Retailers Association ORC Symposium & Trade Show DCU Center, Worcester, MA orc.retailersma.org

Andy Palomino is now a Regional LP Manager for Carter’s/OshKosh B’gosh.

Clark Craddock was named Senior Manager of Internal Investigations for Rite Aid.

Jamie Bailey, CFI is now a Regional LP Manager for The Children’s Place.

Eric Rode, CORCI, CFI, LPC is now Regional LP Manager for rue21.

September 18, 2015 Cyber Security Summit New York Millennium Broadway Hotel, NYC cybersummitusa.com

Jim Nelson is now Director of Safety, and Mark McDermott is now Market Investigator Program Manager for CVS Health.

Ernie Deyle was appointed Senior Director of Safety & Enterprise Resiliency, and Brian Quast, CFI was made National Manager of Asset Profit and Protection Learning and Development for Sears Holdings.

Imran Qazi, LPQ is an Area Manager of Asset & Profit Protection for Burberry. Bill Wagner, CFI was appointed Regional VP for Burlington Coat Factory.

Amelia Kennedy was appointed Director of Corporate AP for Dollar General. Colin Gubernick is now Senior Investigator/Risk Management at Eickhoff Supermarkets NJ. Genesco announced that Allison Ernst, LPQ and Rachael Prieto, LPQ were promoted to LP Analysts, and Julian Kolarchick, Amber Waterman, and Scott McCormick were promoted to LP Managers at Genesco. Melissa Nacht is now an Investigations Manager, Corporate and Retail for GUCCI/KERING Luxury Brands. Leo Dominguez and Denton Edwards were made Territory Operations Manager for The Home Depot. Carolyn Doran was named Regional LP Manager, and Gerard Fredo was appointed Senior Regional LP Manager for Microsoft.

Brian Pollack is now Regional LP Manager for T-Mobile. Tim Baker, CFI is a Regional Business Partner, LP for Total Wine and More. Jeremy Carr, LPQ was recently promoted to AP Field Investigator for Walmart Stores.

To stay up-to-date on the latest career moves as they happen, sign up for LP Insider, the magazine’s weekly e-newsletter, or visit the People on the Move page on the magazine’s website, LPportal.com. Information for People on the Move is provided by the Loss Prevention Foundation, Loss Prevention Recruiters, Jennings Executive Recruiting, and readers like you. To inform us of a promotion or new hire, email us at peopleonthemove@LPportal.com.

September 28 – October 1, 2015 ASIS International 61st Annual Seminar and Exhibits Anaheim (CA) Convention Center asisonline.org October 5 – 7, 2015 Consumer Returns Reducing Returns, Unleashing Profitability Westin Galleria, Dallas, TX consumerreturns.wbresearch.com October 5 – 7, 2015 Loss Prevention Research Council (LPRC) 11th Annual Impact Conference University of Florida, Gainesville lpresearch.org October 12 – 15, 2015 Coalition of Law Enforcement and Retail (CLEAR) 6th Annual Training Conference Marriott Inner Harbor, Baltimore, MD clearusa.org October 13, 2015 Florida Retail Federation 2nd Annual Loss Prevention Conference Hilton Tampa (FL) Downtown frf.org October 20 – 21, 2015 National Insurance Crime Bureau National Cargo Theft Summit Memphis (TN) Cook Convention Center nicb.org October 21, 2015 Cyber Security Summit Boston Back Bay Events Center, Boston, MA cybersummitusa.com

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

ADVERTISERS 3SI Security Systems. ......................................73 3sisecurity.com Avigilon ...............................................................13 avigilon.com/7k Axis Communications.......................................35 axis.com/lovehate Best Security Industries ..................................71 bsi-eas.com Cambridge Security ..........................................42 cambridgesecurityservices.com Checkpoint .........................................................19 checkpointsystems.com ClickIt Inc. ............................................................9 clickitinc.com Contact, Inc........................................................62 contactinc.com Detex ...................................................................57 detex.com Diebold Security................................................47 dieboldsecurity.com Digilock ...............................................................49 lockup.com FireKing Security Group...................................25 fireking.com Guardian Protection Services ........................23 guardianprotection.com/lossprevention Industrial Security Solutions...........................30 isscorpus.com InstaKey Security Systems .............................61 instakey.com International Assoc. of Interviewers .............74 certifiedinterviewer.com Loss Prevention Foundation............................59 losspreventionfoundation.org LP Software .......................................................31 lpguys.com Milestone Systems .............................................7 milestonesys.com/xprotectlpr Nedap....................................................................2 nedapretail-americas.com Palmer, Reifler and Associates ......................38 palmerreiflerlaw.com Protos Security....................................................3 protossecurity.com The Retail Equation.............................................5 theretailequation.com/success Salient Systems.................................................55 salientsys.com Securitech ..........................................................45 securitech.com/simplythebest Security Resources ..........................................79 securityresources.net Southern Imperial .............................................43 intelligentlossprevention.com Sysrepublic ........................................................21 sysrepublic.com Turning Point Justice .......................................33 turningpointjustice.com Tyco Integrated Security .................................80 tycois.com/retail USS ........................................................................1 ndvision.com Verisk Retail .......................................................37 veriskretail.com

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Security Resources, Inc. Patricia M. Rusak Director of Sales

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Axis Communication Hedgie Bartol Business Development Manager, Retail Best Security Systems (BSI) John Gantenbein President CAP Index Stephen B. Longo Vice President, Strategic Initiatives Checkpoint Carlos Perez Senior Director, Global Marketing

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InstaKey Security Systems Cita Doyle, LPQ Director of Sales & Marketing

LP MAGAZINE | SEPTEMBER - OCTOBER 2015

PARTING WORDS

Enough Is Enough. I’m Retiring Y

es, that is my headline for this column. Sometimes things happen to make you want to shift gears, get out of Dodge, and kick back. I had such an experience recently. I know everyone has difficulties when traveling, but I have been doing it a long time, and it piles up on you. Here is what happened to force my thoughts of retirement. My business associate, Kat Houston, and I finished our meeting in Dallas at 11:00 a.m. Although my flight was not until early evening, the weather forecast was bad, so we decided to head to the airport to try to get on an earlier flight home. I first had to drive Kat to Love Field before heading to DFW. I dropped off the car, grabbed the first bus to the terminal, and stood in line at the US Airways desk to put my name on standby. I was feeling really good that I was going to beat the bad weather and get out of Dallas early. Unfortunately, I found out that I was actually on an American flight to Charlotte, so I had to rush to get on the tram to the American terminal to make a 1:00 p.m. flight. I did not get on the 1:00 flight. I ended up four back as apparently others had the same idea of getting to Charlotte early. I ended up on standby for the 2:30 flight. With a little breathing room, I decided to get a double cheeseburger at McDonald’s. It really tasted good, but it’s not exactly great for my diet. I was last person called for the 2:30 flight. Just before I boarded the plane, a woman ran up to the gate to bump me out. Oh, so close. The next chance was my originally scheduled flight at 6:45. I found the American club where I could watch some golf on TV to wait out the four hours. It was a very nice, large club, my guess to handle all those late flights and weary travelers. I found a good seat, had a tasty bowl of vegetable soup that is on my diet, and convinced myself it was not so bad. There’s no need to be upset; things like this happen at airports. Plus, I had originally booked the 6:45 flight to save some money...smart guy. About 5:45 I sauntered back to the gate and waited for the plane to show up. Then came the dreaded announcement. Due to the bad weather in the Dallas area, my plane was diverted to San Antonio. The estimated time of departure

Jim Lee, LPC Executive Editor

was now moved to 9:00. I was no longer chilled out and relaxing. I bought a bottle of water and plopped down. About 8:00 they announced that they had a new plane for us, but it was at gate C33. I was at C7. That’s a long walk with a bad knee and bad attitude. We boarded the plane at 8:45. Although I did not get upgraded to first class, I at least had the first bulk head row after on the aisle. Good, I’ll have leg room and will try to sleep on the flight home. A very nice young couple with a five-month-old infant sat next to me. The young man apologized to me, saying it was the first flight for the beautiful young baby. Okay, no problem. I’ve been through this before and will manage. I smiled and told them I had experience with two daughters years ago. Oh really? Did I say we boarded at 8:45? We didn’t take off until 10:00; that’s 11:00 East Coast time. Fifteen minutes into the flight the poor child was struggling. They had been at the airport for five hours themselves. After ten minutes of the noise with the parents having no luck, I suggested that they lightly rub the baby’s forehead while making soothing sounds. In a few minutes the baby was asleep. I was not. The flight was bumpy, so they did not do a drink service. We made good time and landed at 12:45 a.m. The nice couple thanked me for the sleep technique and told me they were relocating to Charlotte from Dallas. I walked to the parking garage. I had parked in C area since I had flown out on US Airways, but my American flight came in on the A Concourse. It was a long walk at 1:00 in the morning. I was happy to finally get home around 1:30, but found myself wide awake. I grabbed a cigar and coke, sat on the back porch, and thought about what my life would be like if I announced my retirement, wished everyone good luck, and watched the grass grow at the golf course. By 2:00 a.m. I had talked myself out of it. Instead of retirement, I decided to just not pay any attention to anything or anybody for a few days. Besides, think of all the frequent flyer miles I would miss.

SEPTEMBER - OCTOBER 2015

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EVOLVE-STORE

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Las ventas online están aumentando, lo que convierte a los ratios de conversión en un factor de vital importancia. ¿Cómo puedo maximizar el potencial de los sistemas EAS y tener, al mismo tiempo, a los empleados focalizados en atender a los clientes? EAS funciona, no hay duda de ello, pero con el fin de proporcionar a los detallistas el mayor retorno de su inversión, se tiene que poder integrar fácilmente en las operaciones detallistas. EVOLVE-Store es la última innovación de Checkpoint Systems, implicando una app a tiempo real. La aplicación proporciona información a tiempo real mediante un smartphone o tablet proporcionando visibilidad e implicación con su sistema EAS de prevención de pérdidas. EVOLVE-Store app le ayudará a mejorar sus ratios de conversión de cliente mediante la visibilidad del número de clientes que visitan su establecimiento y a medir su política de cumplimiento gestionando los tiempos de respuesta cuando se produce un evento de alarma. Controlando, midiendo y gestionando un programa EAS, podrá impedir los hurtos ocasionales y la actividad de la delincuencia organizada, reduciendo el hurto e incrementando la disponibilidad de los artículos en tienda, con el consiguiente aumento de las ventas y de los beneficios. Esto implica, a su vez, una mayor implicación y confianza de los empleados en los Sistemas EAS, asegurando un rápido retorno de la inversión.

APP A TIEMPO REAL

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HABILITA AL PERSONAL DE TIENDA para tomar decisiones inteligentes a tiempo real

FOCALIZACIÓN EN LA MERMA sin impactar las ventas

Nota: No se deben producir cargos por datos al utilizar esta aplicación.

Para más información sobre EVOLVE-Store, llamar al: 55 5022 1080 o info-mx@checkpt.net

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