NOVEMBER–DECEMBER 2019 | V18.6 LOSSPREVENTIONMEDIA.COM
LOSS PREVENTION MAGAZINE THE AUTHORITY ON ALL THINGS ASSET PROTECTION
TOTAL RETAIL LOSS 2.0 MOVING BEYOND THE THEORY THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT THE FUTURE IS NOW: RETAIL’S REVOLUTION AND RAMIFICATIONS FOR LP 2020 PRODUCT SHOWCASE AND RESOURCE GUIDE
TABLE OF CONTENTS
6 EDITOR’S LETTER
A Wealth of Great Reading By Jack Trlica
10 RETAIL SPONSORS 12 INTERVIEWING Liars, Lying, and Lies
By David E. Zulawski, CFI, CFE, and Shane G. Sturman, CFI, CPP
Total Retail Loss 2.0
Fulfilling Your Role in the Industry Interview with Isabelle Devereux, LPC, John Lewis (UK)
Moving beyond the theory
24 LPM EXCELLENCE
By Emeritus Professor Adrian Beck
LPM Magpie Award: Applauding Excellence
Featuring Melissa Allgood, CFI, NBC/Universal Studios-Hollywood, and Joan Luttmer Sparks, Sensormatic
The Dynamic, Challenging, Innovative World of Risk Management
34 SUPPLY CHAIN
Maximizing the Use of Demand Signal Management in Supply Chain Asset Protection By Maurizio P. Scrofani, CCSP, LPC
36 FUTURE OF LP
A conversation with Kurt Leisure of The Cheesecake Factory By James Lee, LPC,
Your #1 Tool for Deterring Thieves: Why Physical Security Hygiene Matters By Tom Meehan, CFI
LPM Executive Editor
48 EVIDENCE-BASED LP
To Detain or Not to Detain By Read Hayes, PhD, CPP
50 ASK THE EXPERT
Six Considerations to Help Gain Approval for New or Upgraded Technology
Interview with Hedgie Bartol, LPQ, Axis Communications
The Future Is Now
63 SOLUTIONS SHOWCASE
Retail’s revolution and the ramifications for loss prevention
- AFA Protective Services - 7PSolutions - CONTROLTEK - Protos
By Garett Sievold, LPM Senior Writer
Product Showcase and Resource Guide
73 CALENDAR 76 ADVERTISERS 76 SUBSCRIPTION FORM 77 VENDOR SPONSORS 78 PARTING WORDS
The Holiday Season
Products and services from leading LP industry solutions providers NOVEMBER–DECEMBER 2019
71 ANNUAL INDEX 74 PEOPLE ON THE MOVE
2020 Product Showcase and Resource Guide 4
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By Jim Lee, LPC
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A Wealth of Great Reading T
his edition of the magazine has several significant and interesting articles. Here’s a guide to what you will find inside.
Total Retail Loss 2.0 Our cover feature on page 15 is authored by prominent UK researcher Professor Adrian Beck. The article summarizes his recent research into the implementation of the Total Retail Loss (TRL) theoretical concept first introduced to retailers in 2016. As you might recall, Beck has spent a great deal of time over the past decade seeking a more comprehensive understanding of “shrinkage.” With the support of the Retail Industry Leaders Association (RILA), the Total Retail Loss typology has been adopted by multiple retailers globally over the past three years. The newly published research surveyed those retailers who have implemented the TRL concept to one degree or another to determine what successes, barriers, concerns, and challenges they have experienced to further refine the typology. This must-read article provides a good overview but also provides a link where you can download the entire report. The link can also be found on the online version of the article on our website.
The World of Risk Management When you think about The Cheesecake Factory, it’s likely more about their huge menu of mouth-watering entrees and desserts, not safety and risk management. But,
of course, every business has challenges and risks that must be managed not just for the success of the company but also for the safety of consumers and employees. Our Executive Editor Jim Lee, LPC, sat down with Kurt Leisure, vice president of risk services for the highly successful restaurant, to hear his personal story as well as get an in-depth look at the company. His is a most interesting professional journey that will provide insights into what we’ve headlined as “The Dynamic, Challenging, Innovative World of Risk Management.” The information is not only pertinent for others with risk management responsibility, but also for any asset protection professional wanting to have a better understanding of the topic and how thinking in risk management terms could make you a better LP professional.
The Evolution of Retail Much has been written and discussed in the general media about the “death” of retail. If one did not know better, one might see truth in the perception that traditional brick-and-mortar stores are going the way of the dinosaur as e-commerce rapidly expands. But a closer look at the statistics reveals retail is far from dead and actually expanding both at the mall and online. “The Future Is Now: Retail’s Revolution and Ramifications for LP” on page 39 written by Senior Writer Garett Seivold closely examines this evolution with Tony D’Onofrio, a former global marketing executive
with Sensormatic. D’Onofrio is an expert observer of retail and has put together an enlightening presentation on the subject using ample statistics, videos, and examples from across the globe. We were fortunate to have him present at the magazine’s annual editorial board meeting (see page 69) in October to roughly 150 retail and loss prevention executives aligned with the magazine, the Loss Prevention Foundation, and RILA. The article also features comments from multiple retail asset protection executives on how they see this evolution impacting loss prevention professionals and their programs. It’s an interesting look at what’s happening today and where retail is going tomorrow.
2020 Product Showcase and Resource Guide Our annual guide to products and services provided by the many solutions providers who support the industry starts on page 51. Please take a few minutes to look through the ads and follow up with these vendor partners when you are in need of solutions in your organization. All these feature articles, the resource guide, and our many great columns make for a wealth of knowledge that will benefit you in your role. Thank you as always for your ongoing support of the magazine.
Jack Trlica Managing Editor
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EDITORIAL BOARD Charles Bernard Group Vice President, Asset Protection and Comprehensive Loss, Walgreens Erik Buttlar Vice President, Asset Protection, Best Buy Ray Cloud Senior Vice President, Loss Prevention, Ross Stores Francis D’Addario, CPP, CFE Emeritus Faculty Member, Strategic Influence and Innovation, Security Executive Council Charles Delgado, LPC Regional Vice President, Store Operations, Academy Sports Scott Draher, LPC Vice President, Loss Prevention, Safety, and Operations, Lowe’s Scott Glenn, JD, LPC Vice President, Asset Protection, The Home Depot Barry Grant Chief Operating Officer, Photos Unlimited Bill Heine Senior Director, Global Security, Brinker International Robert Holm Director, Global Safety & Security McDonald’s Frank Johns, LPC Chairman, The Loss Prevention Foundation Mike Lamb, LPC Vice President, Asset Protection, The Kroger Co. Michael Limauro, LPC Executive Leader, Asset Protection Whole Foods Market
David Lund, LPC Vice President, Loss Prevention, DICK’S Sporting Goods John Matas, CFE, CFCI Vice President, Asset Protection, Investigations, Fraud, & ORC, Macy’s Randy Meadows Senior Vice President, Loss Prevention, Kohl’s Melissa Mitchell, CFI Director, Asset Protection and Retail Supply Chain, LifeWay Christian Stores Dan Moren Senior Manager Starbucks
Joe Schrauder Vice President, Asset Protection, Walmart Stores Tina Sellers, LPC Vice President, Loss Prevention, Family Dollar Hank Siemers, CFI Vice President, Global Retail Security, Tiffany & Co.
EDITORIAL DIRECTOR Jacque Brittain, LPC JacB@LPportal.com RETAIL TECHNOLOGY EDITOR Tom Meehan, CFI TomM@LPportal.com
CONTRIBUTING WRITERS Read Hayes, PhD, CPP Walter Palmer, CFI, CFE Maurizio P. Scrofani, CCSP, LPC Shane G. Sturman, CFI, CPP Bill Turner, LPC David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF DIGITAL OPERATIONS John Selevitch JohnS@LPportal.com SPECIAL PROJECTS MANAGERS Justin Kemp, LPQ Karen Rondeau
Mark Stinde, MBA, LPC Senior Vice President, Asset Protection, JCPenney Paul Stone, CFE, LPC VP Security, Goodwill Industries of SE Wisconsin
DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com CREATIVE DIRECTOR Larry Preslar ADVERTISING MANAGER Ben Skidmore 972-587-9064 office, 972-692-8138 fax BenS@LPportal.com
Pamela Velose Vice President, Asset Protection, Belk Keith White, LPC Executive Vice President, Loss Prevention and Global Sustainability, Gap Inc.
MANAGING EDITOR Jack Trlica JackT@LPportal.com
SENIOR WRITER Garett Seivold GarettS@LPportal.com
Richard Peck, LPC Senior Vice President, Loss Prevention The TJX Companies
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EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com
Loss Prevention, LP Magazine, LP Magazine Europe, LPM, and LPM Online are service marks owned by the publishers and their use is restricted. All editorial content is copyrighted. No article may be reproduced by any means without expressed, written permission from the publisher. Reprints or PDF versions of articles are available by contacting the publisher. Statements of fact or opinion are the responsibility of the authors and do not necessarily represent the opinion of the publishers. Advertising in the publication does not imply endorsement by the publishers. The editor reserves the right to accept or reject any article or advertisement.
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INTERVIEWING by David E. Zulawski, CFI, CFE and Shane G. Sturman, CFI, CPP
Liars, Lying, and Lies T
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 firstname.lastname@example.org and email@example.com.
he first thing we should consider when examining lying is the differing cognitive aspects of the liar and truth teller. The truthful person knows they didn’t do the crime, while the liar knows they did and must hide that information from others. It is also likely the liar has mentally thought about ways to commit the incident, effectively mentally practicing before committing the crime. In these practice rounds, the liar likely considered the possible results of their actions ranging from success to being caught. Thinking about the worst outcomes brought them to consider the ways they might successfully commit the act and engage their accusers if necessary. What excuses, alibis, or explanations might work if things go badly?
© 2019 Wicklander-Zulawski & Associates, Inc.
this is in a chronological fashion starting at the beginning and working toward its conclusion. This table of contents view of the story lacks details, making it a stripped-down version but at least giving it a structure. The problem for the liar is in details of their outline. The general chronological structure makes retelling the story in a consistent manner less difficult but requires the deceiver to invent details to probing questions they had not known they would need. This is where the story will require the liar to handle the increased cognitive load and resulting emotions as they create, evaluate, and discard possible answers. Each of these details must be evaluated against what has been said and what was going to be said. This requires time.
Omission To protect themselves, the liar must give away as little information as possible since they can only guess at what facts the interviewer may possess. The truth is then a useful strategy, omitting the awkward facts linking them to the crime while including things that actually happened. For example, someone might say, “My wife came home for dinner and then headed back to work. I never heard from her after that.” They omitted that they killed her right after dinner, which is why they never heard from her again. Omission is the most common and easiest lie to use since it relies on the truth that is easily remembered and filled with details that don’t have to be created. Fabrication on the other hand is problematic because it must stand up to investigation. For example, “My mother gave me a check for that amount.” An examination of Mom’s checking account reveals that there was no check written, and the deposit made by the fabricator into their account was not made by check, but the exact cash denominations missing from the safe. It is much easier to take a previously experienced event and use that to cover a missing time span. “I was watching TV at the time. It was an on-demand episodes of [blank].” Since the person had seen the episodes at some point, they know the content, unlike a film never seen. One is safe to use, while the other is not.
Omission is the most common and easiest lie to use since it relies on the truth that is easily remembered and filled with details that don’t have to be created. Fabrication on the other hand is problematic because it must stand up to investigation. In general, the truthful person retrieves this information from their memory with little effort and appears spontaneous and engaged, while the liar often delays, seeming distant as they tell their story. If the information is contained in their table of contents, the liar may also appear spontaneous as well, but as the investigator drills down into the story, the difficulties start. The truthful story will generally contain a wealth of details. Some of these details may not impact the story to any great degree but are simply part of their memory. “I got about halfway across the parking lot and dropped my keys in a puddle.” These details could also include unforeseen interruptions or complications that interrupt the actual narrative and are likely to be included in a liar’s story. The truth teller may also talk about their feelings as the event was unfolding. These feelings are an integral part of the truth
Details The prudent liar must at some point consider their story, construct an alibi, or create explanations for their actions and prepare them, at least in some form, in advance of being questioned. Depending on the events surrounding the incident, the liar may have some inkling of possible evidence or difficulties they may face. In our experience, liars most often develop a “table of contents” version of their story—an outline if you will—that forms the structure of what they will say. The easiest way to do
continued on page 14 |
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People telling the truth offer stories that are generally logical and plausible. In the first several tellings of the story, truthful people may jump around as they remember details they had omitted. It is only after a number of tellings that their story becomes chronological, including the details that they had been asked previously about in their proper order. This type of narrative is extremely difficult for the liar to tell since there is no real memory associations, and it would be unlikely that it would be found in a fabricated story. The liar has often developed a prepared narrative that was constructed from beginning to end, so the linkage between details was prepared in only one direction, making it difficult should the interviewer break the narrative and ask the individual to go forward or backward from a particular point. In addition, the liar’s story may also sound illogical, making the listener reflect on the plausibility of the narrative.
continued from page 12
teller’s memory and are generally lacking in a liar’s narrative of the events.
The Surprise Interview The table of contents script doesn’t usually exist for spontaneous interviews since the liar didn’t know they were going to need to lie. Field interview situations are a perfect example since the officer literally dropped out of the tree in front of the subject. This surprise interview likely triggered a massive physiological and psychological explosion internally that overwhelms the rational mind’s search for plausible answers while making any attempt to control their physical behavior more difficult. In addition, there may be evidence readily available that makes any explanation implausible, such as a gun sitting in the passenger seat. The field interview is the highest stakes emotionally in part because of the surprise, but also because there is a lack of preparation for questioning. The liar is going along with no thought to being stopped and questioned when the unthinkable happens—they are going to be questioned. There may be drug or alcohol impairment, which further complicates things for the subject. Then add an increased fear of detection, having to think hard of something plausible with no time to prepare, and the body running at ten thousand RPM in a fight or flight response, all of which contribute to an untenable situation for the liar. People often appear nervous when they are uncertain about the outcome of an encounter. The body language is likely to look unnatural, magnified by nervousness and the fight or flight response. Plus, there may be movements appearing to conceal contraband that don’t fit the actions of most people encountered, thus triggering the suspicion of the investigating officer. Most people appear nervous at the outset of a field interview. Those who are hiding contraband, have warrants, or drugs stay nervous until the evidence is uncovered. For a simple traffic offender, they only want to avoid a ticket for speeding and once the officer says he is issuing a ticket, there is nothing left to hide and the nervousness ceases. However, with the hidden issue of contraband or warrant still outstanding, there is no relief for the offender since there is still something they must conceal.
The liar has often developed a prepared narrative that was constructed from beginning to end, so the linkage between details was prepared in only one direction, making it difficult should the interviewer break the narrative and ask the individual to go forward or backwards from a particular point. People telling the truth tend to sound much more certain about the story than the deceiver who uses pauses and repeated words during its telling. The more people talk about the incident and expand the narrative, the more obvious the differences between the liar and truth teller will likely be. People who are offering lies are reluctant to admit that they may have forgotten something or were incorrect in some statement that they made. On the other hand, truth tellers often correct themselves when they have made a mistake or when they realize something they said was not quite right. In the same way, truth tellers readily admit when they can’t remember the answer to something, while the liar is more reluctant to do so. It should be noted that sometimes the liar will have independent recollection of everything before and after the incident but not be able to answer questions about what went on during the event. When describing conversations in their narrative, the truth teller will use a back-and-forth dialogue giving the conversation of both parties. These conversations will generally follow the words and vocabulary used by the parties. The liar will generally be vague about the dialogue simply saying, “He yelled at me, and we talked.” The liar must deal with and control their emotions especially in high-stakes situations. This control of emotions may result in the liar’s body appearing stiff with a lack of movements, gestures, and smiles that appear forced and unnatural. Liars in a high-stake situation also generally make less eye contact than a truth teller, possibly as a result of their uncertainty and discomfort with the situation.
Liars versus Truth Tellers Truth tellers tend to seem more engaged in their stories while deceivers seems flat, distant, and removed from emotions in the telling. Liars also may appear more tense, less cooperative, and negative than those telling the truth. While it is the intent of both the liar and the truth teller to be believed, the truth teller seems more natural except when they fear that they may not be believed. In general, individuals who are attempting to lie do much less talking than truth tellers when offering a narrative or general responses to questions being asked. There is likely to be a difference between the facts offered by a deceiver versus someone telling the truth. The facts are much more likely to be verifiable in a truthful statement than those offered by a deceiver. A liar might say, “I got it from some guy over on Fifth Street. I don’t know his name, but I think I heard someone call him Slim.” On the other hand, the truth tellers statement offers verifiable information. “I got it from my next-door neighbor, Fred. You can ask him; he’ll tell you.”
TOTAL RETAIL LOSS 2.0 MOVING BEYOND THE THEORY By Emeritus Professor Adrian Beck
TOTAL RETAIL LOSS 2.0
n October 2016, the Retail Industry Leaders Association (RILA) published the Beyond Shrinkage: Introducing Total Retail Loss report, the culmination of years of research work focused on helping the retail industry to develop a more overarching and fit-for-purpose definition and typology of the full range of losses that it experiences. Since then, the total retail loss (TRL) concept has received critical acclaim across the globe, not only for the way it has encouraged a broader more wide-ranging debate about what constitutes retail “loss,” but also its review of what the future role and responsibilities of the loss prevention function might or should be. As a theoretical idea, it has received considerable academic and industry support, and in many respects, it is difficult not to agree with the underlying premise—that the existing definition of loss, focused almost exclusively upon “shrinkage,” a loose and ill-defined term generally only covering unknown forms of stock loss, does not adequately capture the complexity of modern retailing nor the fundamentally different risk landscape it has created. In addition, while the world of retail loss was once characterized as a data desert, which drove rather myopic approaches to its conceptualization and control, the range of data sources now available provide new opportunities (and challenges) to both understand and measure a much broader palette of retail losses. This is particularly the case when it comes to an area such as e-commerce, which has seen remarkable growth in some retail sectors. This form of retailing presents a whole new range of loss prevention challenges, not least how losses associated with it will be measured, but also how subsequent control interventions might be assessed for their effectiveness. However, while theoretically appealing, TRL can also be seen as a highly disruptive and organizationally
ToTal ReTail loss 2.0 From Theory To PracTice Adrian Beck Emeritus Professor University of Leicester, UK
• Adoption • review •
challenging concept to adopt, potentially requiring a fundamental reevaluation of how retail businesses organize themselves and prioritize their activities. Because it can require a cross-organizational assessment of not only how losses are defined and measured but also how they are collected, it can be difficult in the first instance to define lines of responsibility. And even when a retail business has populated the TRL typology with calculations of the monetary value of the various types of losses it proposes, developing a business strategy to then focus upon those areas of loss likely to reap the greatest rewards can be equally challenging. With the TRL typology spanning across losses occurring in physical stores, supply chains, e-commerce activities, and central business functions, achieving agreement on who is responsible for coordinating the business response may not be easy. Over very many years of retail organizational development, boundaries of responsibility have been developed, ring-fencing budgets, resources, approaches, and priorities. The loss prevention team deals with shrinkage, store operations deals with out-of-stocks, supply chain looks after losses in product movement, the risk team deals with health and safety issues, and so on. TRL promotes a much more holistic and cross-functional dialogue to take
place, potentially exposing vested interests, questioning areas of responsibility, and perhaps requiring a commitment to reorganize. In some respects, it might often be much easier to maintain the status quo, particularly at a time of considerable sectoral instability and flux. However, as the original RILA report strongly argues, the benefits of adopting TRL could be profound, not least by unlocking a considerable amount of lost profits at a time when retailing is struggling to maintain currently levels of profitability. It offers a persuasive case at a time of sectoral dislocation. Indeed, a number of retail companies around the globe have begun to adopt TRL (or versions of it) while many others would appear to be in the process of assessing how they might go about doing this. Certainly, references to total retail loss as a concept at international retail loss prevention conferences and workshops is becoming much more common, suggesting that it may well be getting more and more traction amongst the loss prevention retail community. What is not clear though is how and in what ways adopters have gone about using the TRL concept, nor is it clear the extent to which they have adapted the TRL typology to fit their particular circumstances. Do the thirty-three categories of loss outlined in the original typology actually make sense for retailers? Are they all relevant, or are some missing? Equally, it is not clear how any given company responded to the introduction of TRL. Did any reorganization take place, and if so how? For those considering but as yet not deciding to implement TRL, what are the barriers and what information and help do they require to drive their adoption forward? Since the RILA report’s publication, the global retail loss prevention community has had the opportunity to reflect upon this different way of thinking about the management of loss. Does it make
TOTAL RETAIL LOSS 2.0 sense, is it manageable, and above all is there any real value in adopting this type of approach? The purpose of this new study is to offer reflections on how TRL has fared moving from an essentially theoretical proposition to the practical realities of the real retail world. In particular, the research was interested in considering five factors: ■■ Awareness—do retailers know of its existence? ■■ Adoption—to what extent have they begun to use it? ■■ Review—is the original typology and concept fit for purpose? ■■ Development—how should it change to meet the current retail context? ■■ Implementation—what advice should be given to those thinking about adopting it? The research was based upon an online survey aimed at major retailers in the US, Europe, and Australasia and in-depth interviews with senior loss prevention executives.
Awareness of TRL The research found that almost nine in ten of those that participated in the online survey were aware of the TRL concept. While it should be noted that the sample was predominately skewed toward larger retailers operating primarily in the US and the UK, where the original research report has been widely disseminated and reviewed, the data does suggest a relatively high level of awareness of the concept. Perhaps more importantly, almost two-thirds of those who are aware of it suggested that it was having an impact on the way in which their businesses responded to retail loss.
Adoption of TRL Of those that were aware, it is equally encouraging that over one-half stated that they had either fully embraced the concept or had adopted some of its elements. In addition, for those yet to adopt it, nearly 50 percent were of the view
Levels of Adoption of Total Loss
Thinking about using it
No plans in place to adopt
10% Fully embraced the concept
Adopted some elements
that they were likely to make use of it in the next twelve months. It seems that the TRL concept is gaining some traction in the industry.
Rationale for Engaging with Total Retail Loss The survey results point to a number of key reasons why adoption was taking place (respondents could select more than one option), the most frequently selected being that the concept provided a better framework to capture all the losses that businesses were now experiencing (78%). The
second most popular response related to the way in which the model offered greater opportunities to make a positive impact on business profitability (67%). This was then followed by its capacity to help organizations target their resources more effectively (58%). The least chosen reason for adopting TRL was that the business now had the data to enable it to be utilized (50%). In addition, in-depth interviews with loss prevention leaders also revealed that the concept offered a way to ensure that the loss prevention function continued to be
Resons for Adopting Total Retail Loss It provides a better framework to capture all forms of loss we now experience
It provides an opprotunity to positively impact on business profitability It enables us to target our resources more effectively We now have the data to measure resources more broadly in the business LP MAGAZINE
67% 58% 50% 17
TOTAL RETAIL LOSS 2.0 viewed by the rest of the business as both relevant and of value. As one interviewee put it: “Most companies are getting toward historical lows for shrinkage. We are now thinking, ‘OK, we have taken care of shrink; now what is next?’ All of us in the industry need to be thinking [about] what is next. It has got to go beyond just merchandise and cash loss. How does loss prevention remain relevant in a retail world, which is changing so much?”
Managing retail complexity better ■■ Generating greater transparency and accountability ■■ Creating new opportunities to reduce retail losses ■■ Maximizing the potential of the loss prevention team ■■ Utilizing organizational resources more effectively ■■ Enabling the business to better understand retail losses ■■
Barriers, Concerns, and Challenges to Adopting Total Retail Loss
Rationale for Engaging with Total Retail Loss Respondents to the study identified a number of key benefits to adopting a more TRL-oriented approach to their work, focused particularly upon:
Use of the term “shrinkage” to summarize various types of retail loss stretches back over 150 years, and it has undoubtedly been the dominant driver of retail loss management ever since. The research was therefore interested in understanding what
Perceived Barriers or Challenges to Utilizing Total Retail Loss
Data spread across business
Do not have the necessary data
Current organizational structure
Lack of C-level support or enthusiasm
23% 14% 9%
Resource to calculate TRL
No precived need
challenges retailers face when thinking about introducing TRL into their businesses. As can be seen in the chart to the left, challenges relating to data occupy the top two categories: data being spread across the business (44%) and not having the necessary data (23%). This is then followed by issues relating to the current organizational structure (14%). Other issues were much less prevalent. Less than one in ten felt that a lack of senior management support was a barrier (9%) while a lack of resource or perceived need or desire to embark on a TRL journey were not considered to be key concerns. While data was undoubtedly the main concern for most respondents, some also identified the problems that organizational inertia and competing priorities can present. As one respondent put it: “Be aware of organizational inertia that has built up over time. There are hundreds of years of legacy to deal with. That’s why you need a change management input to help manage this transition.” For those now delivering e-commerce platforms, its complexity and cross-functional nature also presented real challenges when thinking about TRL. As one respondent put it: “The trick and the challenge is getting to a point where the business is able to measure these losses accurately and manageably. It is a challenge because e-commerce has often been built incrementally with tentacles stretching out across the business, making it difficult to pull the data together.” As can be seen on the following page, addressing the issue of how e-commerce-related losses should be defined and measured is a key part of the new version of the TRL typology.
Review of TRL No organizational desire
As detailed in the original report, the TRL typology, while based upon detailed research with the retail community, was very much a
2% NOVEMBER–DECEMBER 2019
TOTAL RETAIL LOSS 2.0
Measurability of Know and Unknown Loss Data by Centers of Loss Store
Known losses Supply Chain
theoretical model, advocating a set of loss categories based upon their perceived meaningfulness to the industry and their capacity to be manageably measurable. Structured around four key centers—the physical retail store, the retail supply chain, e-commerce activities, and corporate-based losses—the original typology was based upon thirty-three categories of loss ranging from customer theft through to losses due to regulatory fines. Detailed feedback from respondents to this research suggests that not only are those original thirty-three categories a good representation of the main areas of loss, but also, for the most part, many retailers routinely measure and monitor them somewhere within their businesses.
Development: Total Retail Loss 2.0 Where the original typology lacked specificity was in relation to the area of e-commerce-related losses. Back in 2015 and 2016 when the research was first undertaken, few
Unknown losses Known losses Known losses Known losses
retailers taking part had much verifiable data on the range and extent of losses they were experiencing through their e-commerce activities. As such, TRL typology 1.0 had only two categories of loss to cover e-commerce losses. Since then, many retailers offering e-commerce platforms have begun to more accurately understand and quantify the types of losses that they experience through this type of retailing. It has therefore been possible, through the latest research, to update the TRL typology to take account of these developments. Version 2.0 now contains forty-two categories of loss, with e-commerce covered by eleven types. Given the evolutionary nature of retail risk and changes in the capacity to measure it, there is little doubt that future iterations of the TRL typology will be adapted to take account of these changes.
Implementation of TRL While the research found that levels of awareness and rates of adoption of the TRL concept are LP MAGAZINE
86% 70% 84% 91% 93%
encouraging, a common concern for many would-be users has been the lack of guidance on how they might embark on introducing it into their businesses. The final piece of the study was therefore aimed at bringing together the experience and advice from those that had begun to use aspects of TRL in their organizations. The research identified twelve factors to consider: ■■ Get the C-suite on board. Like most significant change initiatives, senior management support is key. Generating urgency, facilitating financial support, and ensuring compliance—all are important in making a TRL-based strategy a success. ■■ Develop a business case focused on the size of the prize. Making use of the available data and the organization’s appetite for change. Build a strong business case that focuses on the financial benefits that might accrue from adopting a TRL-based approach. ■■ Adopt an incrementalistic approach to TRL. The TRL
TOTAL RETAIL LOSS 2.0
typology should be viewed as a palette of possibilities that can tailored to any given organizational context. Start small and build gradually. It is very easy to take on more than is realistically manageable in the first instance. ■■ Identify quick wins first. At the beginning, only focus on those areas of loss that are likely to generate successful outcomes and are readily deliverable. Do not attempt too much too soon. ■■ Organize for utilizing TRL. Think about who will be accountable for delivering a TRL-driven approach, what resources might be required (particularly analytical), and how to leverage support from across the business. ■■ Advocate for TRL; act as agents of change. Pooling responsibility for managing all areas of loss covered in TRL is less than
desirable. Ensure that those driving TRL act as “agents of change,” collecting the data, prioritizing the work, and then recommending ameliorative actions to those best placed to deliver them. ■■ Review reporting structures for TRL. While there is little standardization on lines of reporting across the loss prevention industry, given the breadth and scope of TRL, a number of respondents to this research argued strongly that the finance function is best placed to provide overall coordination. ■■ Prepare for organizational antagonism. The way in which TRL often cuts across a wide range of organizational responsibilities can cause the potential for functional disquiet based upon a perceived “land grab” by those driving the TRL agenda. It is
important, therefore, that an assessment of the likely reaction of those impacted by a TRL initiative is undertaken, with a view to taking preemptive actions to explain, reassure, and support. ■■ Think about the “right” name for your TRL. While the phrase “total retail loss” has become relatively well known in the global loss prevention community, it is important that individual organizations develop their own label for their TRL-inspired initiative, based upon their particular circumstances and context. For a number of respondents, moving to “profit protection” was regarded as a useful moniker that accurately described what the TRL-inspired initiative was aiming to achieve. ■■ Avoid terminological confusion. It is important that as a business
TOTAL RETAIL LOSS 2.0
embarks on a TRL-oriented journey, the language that is used is clear and focused. By all means continue to use the term “shrinkage” as a proxy for unknown stock loss, but ensure that there is a clear distinction made between that and the broader loss picture that you are aiming to develop. ■■ Use TRL as an analytical lens. As well as providing a broad ranging and overarching framework for assessing and managing retail losses, the TRL concept can also be used in a much more focused way to evaluate the likely impact of any planned innovation and change by a business. By stimulating a more comprehensive assessment of the likely impact across a broad palette of losses, the TRL model can enable a more realistic and balanced ROI to be calculated for any given innovation or retail change. ■■ Remember that timing is key. Finally, like most decisions in life and work, timing can play a huge factor in dictating the success (or not) of any given initiative. Reflect upon the current organizational climate and whether it is likely to be broadly receptive (or not) to the introduction of a TRL-based approach. Where the head winds are deemed to be too strong and other priorities too dominant, then delay may well be the right approach.
As General Eric Shinseki rather elegantly put it, “If you dislike change, you’re going to dislike irrelevance even more.” And this may certainly be the case for those in the loss prevention industry who regard their only responsibility as dealing with unknown loss (shrink). While for some parts of the retail sector it remains a dominant form of loss to focus upon, for others it is increasingly but one piece in a broader and more complex picture charting the erosion of retail profits by a range of types of losses. It is hoped that both this new research and the original work developing the TRL concept will enable the retail industry to strive toward a more coherent, integrated, and progressive approach to the management of losses and ultimately the protection of profits.
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ToTal ReTail loss 2.0 From Theory To PracTice Adrian Beck Emeritus Professor University of Leicester, UK
• Adoption • review •
Emeritus Professor ADRIAN BECK spent his academic career in the criminology department at the University of Leicester in the UK where he focused on retail crime and shrinkage issues. He currently is an academic advisor and researcher for organization’s like the ECR Community’s Shrinkage and On-shelf Availability Group and the Retail Industry Leaders Association. Beck is a frequent speaker at conferences worldwide and a contributor to both LP Magazine’s US and Europe publications. He can be reached at firstname.lastname@example.org. LP MAGAZINE
info.instakey.com/remotelock-lpm 1-800-316-5397 | email@example.com
CERTIFICATION Interview with Isabelle Devereux, LPC
Fulfilling Your Role in the Industry
With five years of profit protection experience, Isabelle Devereux currently works as a regional profit protection manager and oversees the security operations center for British retailer John Lewis. She first worked at the local branch level and has been in her current role for the past two years.
Why did you decide to pursue your LPC certification? I am lucky enough that John Lewis really invests in partner development. Our Head of Profit Protection Mark Crowley identified the LPC certification as an accreditation that would enable us to be a truly professional and qualified loss prevention team. I wanted a professional certification and believed the LPC was key to enable me to fulfill my role with as much industry knowledge as possible, expanding upon areas for personal growth.
management section really helped me widen my view on the types of crises I could be managing from this location. I have taken the opportunity to update our response plans to enhance our process and prepare for scenarios after completing this section. What benefits have you seen from taking the course? The main benefit I have gained from taking the course is that I am more confident in my knowledge of loss prevention and therefore apply that knowledge more in my everyday role. I now feel I have the theoretical knowledge to back up my experiences.
Was the coursework what you expected? I was pleasantly surprised at the length of detail and the varying topics contained within the coursework. The coursework involved all aspects of loss prevention, which is great for my role as we take a total loss approach to shrinkage at John Lewis. I won’t skirt around the fact that the coursework involves a lot of reading, and if that is not your preferred learning style, it could be a bit daunting. However, I would suggest just taking one subject at a time, reading a bit, and reading often to get through the content. Technology advancements may allow you to have the content read to you, and more information can be provided on how to accomplish this by the Loss Prevention Foundation.
If you could offer one key takeaway to someone considering getting certified, what would it be? Take the course at your own pace to ensure that you take in all the information. You have a year to complete the course, which is plenty of time if you invest regular time in completing your qualification. I have been able to develop better and more productive business relationships with the knowledge offered to work with the sites to build an effective program, to improve all our key performance indicators, and for everyone to be equally invested in them.
Talk about the process of going through the coursework and taking the exam. I took the “one subject at a time” approach and spent a couple of hours a week reading and taking the quizzes at the end of each section. Before sitting for the exam, I did the practice exam quite a few times and reread any of the sections where I got questions wrong. It was nerve-wracking taking the exam, as I haven’t taken any formal exams since university. However, due to my prep work, I felt as prepared as I could.
How has certification changed your expectations of LP as a career, for yourself and for others? It has shown me that loss prevention can be such a varied role. At John Lewis, we take a total loss approach to shrinkage, so I am aware of most aspects of loss prevention. However, there were still parts of the course that were new to me, showing me that I could diversify my career into other areas of loss prevention.
Looking at your own background and knowledge, what information in the course helped you the most? The section in the course that helped me the most were the on leadership and business principles. Finding ways to promote loss prevention and make it relevant for commercial leadership teams will always be a fundamental principle. These sections really helped me to consider how I should set up my regional strategy and how best to get others engaged to support our programs and initiatives.
Would you recommend certification to others? Yes! Whether you are new to a LP career or established in a role, there is plenty the LPC will teach you, and you will be a better professional for it. Invest the time to benefit both yourself and your organization.
Following are individuals who recently earned their certifications. What was the most eye-opening information that was part of the curriculum? The most eye-opening part for me was the crisis management section. As part of my role, I manage our newly built security operations centre, which has centralized access to the majority of our estate’s CCTV, intruder alarms, and access control. The crisis
Recent LPC Recipients Andres Acevedo, LPC, Amazon Eric Basista, LPC, Lowe’s Kristi Bolduc, LPC, TJX Bradford Cole, LPC, Diogenes |
David Dennis, LPC, TJX James Doss, LPC, Lowe’s Melissa Everett, LPC, Lowe’s Colton Finney, LPC, Amazon Mathew Glazier, LPC, Office Depot Thomas Griffiths, LPC, Lowe’s Veronica Harden, LPC, Gabe’s/Rugged Wearhouse Jeffrey Hedges, LPQ, LPC, Murphy Oil USA Adam Lecy, LPC, Lowe’s Jordan Levasseur, LPC, TJX Julie McLean, LPC, Amazon Melissa Mitchell, LPC, CFI, LifeWay Christian Stores Damien Needham, LPC, Beall’s Phillip Nichols, LPC, Weis Markets Joshua Olsen, LPC, Amazon Patricio Ramirez, LPC, Amazon Brigham Roberts, LPC, Michaels Stores Joshua Starner, LPQ, LPC, Wireless Experience Christy Thomas, LPC, TJX Denise Watson, LPC, Lowe’s Michael Wiehe, LPC, Home Depot
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Professional development is key to a fulfilling career. Visit www.LossPreventionFoundation.org to find out more. SM
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LPM Magpie Awards: Applauding Excellence
The LPM “Magpie” Awards offer a means to celebrate industry accomplishments on an ongoing basis, recognizing the loss prevention professionals, teams, solution providers, law enforcement partners, and others that demonstrate a stellar contribution to the profession. The ability to influence change is a product of drive, creativity, and determination, but it also requires a unique ability to create a shared vision that others will understand, respect, support, and pursue. Each of the following recipients reflects that standard of excellence, representing the quality and spirit of leadership that makes a difference in our lives, our people, and our programs. Please join us in celebrating the accomplishments of our latest honorees.
Excellence in Leadership
Excellence in Partnerships
“This industry has changed so much in the last thirty years, mostly for the better in my opinion. But we still have so much more we can do,” said Allgood, who holds a diverse background in loss prevention, having served in a variety of different retail environments. After getting her start working for Mervyn’s catching shoplifters, she went on to work with Best Products, Robinson-May, Bullock’s, Ralph’s Grocery, Broadway Department Stores, TJX, Blockbuster Video, and Rent-A-Center before becoming director of loss prevention for the theme park Universal Studios Hollywood. This diversity has served her well in her current role, operating five verticals for the organization, including surveillance operations, loss preventions operations, e-commerce fraud, support operations, and audit compliance and training. “I have stakeholder status in many projects that impact our business operationally, financially, and technologically, and there is still so much more to learn,” she said. “My team is phenomenal, and they are the real reason for our success. We work well together and often work on large-scale or highly sensitive cases. I look forward to continuing my career here and growing with the company. I wouldn’t trade one day of it for the world. “I feel my greatest accomplishment is building a team that embodies the culture and philosophy of loss prevention, providing objective findings and results to the organization that are a positive financial impact to the bottom line,” she said. “But to be a true leader in the industry, you have to be honest with yourself, understanding that you don’t know everything. Ask questions, find a mentor, listen, ask for help when you need it, and learn every day. Then take the next step and hire people to improve the department beyond your expectation or even your ability to do so.”
“When building business partnerships, it’s most important to demonstrate true interest in the retailer’s situations, needs, and goals,” said Sparks. “Solution providers must find meaningful ways to give back to the retail and loss prevention industry. We should ensure personal interactions are focused on people at all levels, not just those who can provide you with a sale. Go the extra mile, and invite others to do the same.” After graduating from the University of Notre Dame, Sparks became an art director serving various advertising agencies working on creative and catalogs for different retail accounts. “It was here that I fell in love with purchase data and insights,” she said. “This new experience with store data broadened my perspective and career opportunities.” After holding senior marketing positions at LexisNexis Risk, Southeast Toyota Finance, and Office Depot, she joined Sensormatic Solutions as director of marketing where she’s responsible for all commercial marketing in North and South America, handling events, advertising, and sponsorships. Sparks feels that young leaders should never stop learning and reading, and should participate in industry associations such as the LP Foundation, RILA, NRF, and LPRC. “These organizations are where you learn and will open many career doors for you.” She also speaks of the importance of giving back. “In addition to serving on the RILA asset protection steering committee and the board of the South Florida Interactive Marketing Association, I also volunteer in high schools as part of the ‘Take Stock in Children’ program. These organizations have introduced me to the most outstanding people both in our industry and the community. These experiences have helped energize me and helped me to clearly recognize the many opportunities and advantages I have received throughout my journey.”
Melissa Allgood, CFI, Director Loss Prevention, NBC/Universal Studios Hollywood
Joan Luttmer Sparks, Director of Marketing, Americas, Sensormatic Solutions
Nominate Your Peers at Excellence@LPportal.com 24
THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT A CONVERSATION WITH KURT LEISURE OF THE CHEESECAKE FACTORY By James Lee, LPC, Executive Editor LP MAGAZINE
THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT EDITOR’S NOTE: Kurt Leisure is vice president of risk services for The Cheesecake Factory Incorporated where he is responsible for risk management, insurance claims, safety, and loss prevention. EDITOR: Thank you for the opportunity to learn about The Cheesecake Factory and a little bit about you as well. Let’s start with telling our readers the wonderful story about The Cheesecake Factory that most people may not know. LEISURE: The Cheesecake Factory story began in Detroit, Michigan, in the 1940s. Evelyn Overton found a recipe in the local newspaper that would inspire her “original” cheesecake. Everyone loved her recipe so much that she decided to open a small cheesecake shop, but she eventually gave up her dream of owning her own business in order to raise her two small children. She moved her baking equipment to a kitchen in her basement and continued to supply cakes to several of the best restaurants in town while raising her family. In 1972, with their children grown, the Overtons decided to pack up all of their belongings and move to Los Angeles to make one last attempt at owning their own business. With the last of their savings, they opened The Cheesecake Factory Bakery and began selling cheesecakes to restaurants throughout Los Angeles. Through hard work and determination, their business grew to a modest size, and Evelyn was soon baking more than twenty varieties of cheesecakes and other desserts. With great foresight and intuition, their son David decided to open a restaurant to showcase his mother’s selection of cheesecakes. It was 1978, and he opened the first The Cheesecake Factory restaurant in Beverly Hills, California. The restaurant was an immediate success, and today there are more than 200 Cheesecake Factory restaurants around the world that share the Overton’s commitment to quality and spirit of innovation and hard work. Most restaurant operators think that running a restaurant concept with more than 250 menu items made from scratch
every day is impossible. It’s sort of the funny part about our business. We really don’t have direct competitors because of the way we make our food and the many, many menus items we have; it is impossible, but we do it every day. Not only did the restaurant take off, but so did the bakery business. We have the capacity to make 50,000 cheesecakes a day, and they are shipped all over the world. EDITOR: And you have two distribution bakeries? LEISURE: We do. We have one in Calabasas Hills, California. The other one is in Battleboro, North Carolina. EDITOR: So from that small restaurant in Beverly Hills grew what we know as The Cheesecake Factory, and Mr. Overton is currently the CEO? LEISURE: David is the founder, chairman of the board, and CEO. He is an actively working CEO and the one and only person, really, who decides what goes on the menu. He has restaurant blueprints on his desk, I’m sure, right now. We have a design department, but he is actively involved with the lighting, sconces, tables, and the look and feel of every restaurant, every menu item, every site selection around the world. EDITOR: One of the things a bit unique about your business is that there are no franchises, correct? They are all company owned. LEISURE: Within the US, they’re all company owned. We have one restaurant in Toronto that’s extremely successful for us that we own and operate, and one in Puerto Rico as well. And the rest of our international restaurants are what we call “licensed partners.” We support almost everything, including the site and design. Initially, our management team was trained and sent to our international locations to preserve the culture of the concept. We don’t like to call it a franchise model because of our level of engagement with our business partners.
EDITOR: How did you first get into the restaurant business? LEISURE: When I graduated from the University of Oregon as an economics major, I had no idea what I wanted to do. I went to work for an insurance company selling life and disability insurance, calling a hundred people a day, which to say the least I didn’t love. So I engaged a recruiter and said, “Look, there are five companies in the Irvine, California, area that I would consider working for. Find me a job at one of these companies.” They called the next day and said, “We have a temporary position at El Torito Restaurants working in their benefits department. Go in there and see if you like it.” I tried it and stayed. I worked my way up the risk management corporate structure and jumped from that company over to The Cheesecake Factory because I was a loyal guest and wanted to be a part of the Cheesecake culture; the rest is history. EDITOR: How did the opportunity at The Cheesecake Factory come about? LEISURE: While I was working at El Torito Restaurants’ parent company, they owned and operated up to thirty different brands. They had some small concepts and some very large restaurants like Chi-Chi’s. Most were full-service, casual dining, some breakfast houses, with a heavy concentration on the West Coast. The company’s model was to purchase a struggling restaurant concept, improve the financial and operational model, and then sell them. For me it was an unusual relationship because I was the risk manager for so many different concepts. I had to build the risk management program, then turn it over to the new owner. Every concept had its own spin based upon its unique culture. A risk and safety program is not a one-size-fits-all approach. We were always analyzing other restaurant concepts, one of which was, at the time, a little restaurant company called The Cheesecake Factory. The restaurants were running two-hour waits with no marketing, no social media, no radio or television support, only word of mouth from prior guests. Everything
at The Cheesecake Factory was made from scratch, and they consistently had two-hour waits at every restaurant almost all the time. The Cheesecake Factory had a heavy emphasis on dessert sales, while most other restaurant companies viewed dessert as an afterthought. We could not understand how this little restaurant company could operate so successfully under this model. Well, the more we studied it, the more excited I got about The Cheesecake Factory, so in 1995 I bought CAKE stock thinking it was going to be a great investment. As a stockholder, I watched the stock and my investment grow. The next year I sent Mr. Overton a letter with my resume not really expecting a response due to their small size; they only had a dozen or so restaurants at this point. I said, “You don’t need me today. But at some point, you are going to grow to the point of needing a risk manager because of how phenomenal you’re doing. The significant growth in multistate restaurants and all the complexities that come with casual-dining restaurants will someday drive the need for a formal risk management department.” For the next few years, I kept in touch with The Cheesecake Factory executive team until they called me and said, “OK, we’re ready. Come join us.” In reality, it was a three-year interview, so to speak, mostly due to their size at the time I initially approached them. They needed to grow a bit bigger to justify having one person launch their risk management program. EDITOR: That is a fascinating story. How long ago was that? LEISURE: That was in 1999, I have been a part of their amazing team for twenty years now. EDITOR: Now you have a mature risk services program. What are your responsibilities as the vice president of risk services? LEISURE: The company right now has over 200 restaurants and close to 40,000 staff members. I have an incredible team, and we are responsible for about twenty different insurance procurements.
Supannee Hickman / Shutterstock.com
THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT
It was 1978, and he opened the first The Cheesecake Factory restaurant in Beverly Hills, California. The restaurant was an immediate success, and today there are more than 200 Cheesecake Factory restaurants around the world that share the Overton’s commitment to quality and spirit of innovation and hard work. We have to understand what the risk is, attempt to engineer out risk, and purchase insurance coverage to protect the company from catastrophic issues, such as the wildfires that threatened our corporate support center and West Coast bakery last November. Our focus is always on accident avoidance, but when something does not go as planned, we take an active approach to resolving claims, which are a natural part of running a growing, upscale, casual-dining restaurant company. Most of our general liability claims are resolved by our corporate liability team. Our philosophy is that a guest continues to be our valued guest, even if something does not go as expected and a claim is filed against our company. We also work very closely to ensure that our injured LP MAGAZINE
staff return to work quickly and receive the appropriate medical care they need to recover quickly. As a result of our hands-on approach, our litigation rate is very low. We also have a fleet of over 300 BMWs, so there is exposure with the fleet as well. Our restaurant general managers appreciate the benefits of our BMW program and drive these vehicles accordingly; it is a very nice program that we offer to them. I also have the honor of supporting our enterprise risk management program and our business continuity program. My favorite part of my job is engaging with every aspect of our business and the unique potential risks that are inherent in so many areas that people don’t think of on a daily basis. Our business is dynamic,
THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT
4kclips / Shutterstock.com
management of the back door. If something goes wrong, the system is used as an investigation tool. It’s a robust system. We like it, but we keep improving it as technology continues to improve.
Our focus is always on accident avoidance, but when something does not go as planned, we take an active approach to resolving claims, which are a natural part of running a growing, upscale, casual-dining restaurant company. and new emerging risks are being identified almost every day, including food-delivery programs. EDITOR: Really? How so? LEISURE: We had a campaign with one of our delivery services that created a huge one-day demand for food through this service. The drivers were literally lined up down the block to pick up orders, and in one location, police were called to manage the crowds. EDITOR: I would imagine that supply chain is a major risk. LEISURE: With the ingredients that we have for both our cakes and restaurant menu items in the restaurants, supply chain is a huge risk for us. We source from only respected food suppliers that meet our stringent criteria. If we can’t get product within our specifications, we risk impacting our guests’ dining experience. We absolutely will not compromise with
inferior-quality products, so we have to carefully monitor the food supply chain and variances in inventory and quality. Weather changes can have a significant change on produce quality, supply, and pricing; it is imperative that we stay ahead of these potential issues. EDITOR: Does loss prevention fall under risk services? LEISURE: It absolutely does. There were no surveillance systems in place when I came on board. So we put a fairly aggressive surveillance system in place, being cognizant of the fact that our guests might be uncomfortable with cameras all over the dining areas. So we’re clever about where we put our cameras out of respect for our guests. While they are not invasive, they are effective, and we use them for multiple things. Operationally, we use the system to understand the flow of guest traffic, efficiency on the cook and prep line, delivery of products by our suppliers, and
EDITOR: What other asset protection responsibilities do you have? LEISURE: My team is also responsible for anything having to do with theft, cash-handling issues, gift-card fraud, and security within the walls of our restaurants. Technology has come a long way in protecting some of the exposures I have seen over the past thirty years. “Smart safes” are incredibly effective at reducing the amount of exposed cash in our business. Being in casual dining, most of our transactions are by credit card. We were one of the first companies to implement end-to-end encryption. We now never actually have a guest’s credit card number. It’s all encrypted. The risk of compromising a credit card has basically been eliminated with this technological advancement. Full-service restaurants are one of the remaining places where guests still give their credit card to someone who takes it away from the table to run the transaction. Although the swipe at our point-of-sale system is encrypted, until the industry moves to pay-at-the-table, there remains a potential risk that a credit card number could be captured by a server. Credit card companies monitor transactions for unusual activity and are quick to question or shut down a credit card that may have been used without being swiped or where a PIN number has not been used. I am honestly not seeing a lot of credit card fraud, unlike what was seen several years ago. The risk is at an all-time low, again, due to technological advancements. EDITOR: What are the issues internally that are challenging to make that progression from the way you’re currently handling credit card payments to moving to pay-at-the-table? LEISURE: We’ve been looking at the technology for a long time. There are a couple components. One is the service
THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT component, where we feel it’s still a bit cumbersome to hand somebody a device that they then swipe at the table. It lacks that attention-to-detail service that The Cheesecake Factory is known for. We actually have pay-at-the-table in our Toronto, Canada, restaurant, and it’s working out well, but it is also the industry standard outside of the United States. We’re learning from that and will likely adopt this process at some point. We’re waiting for the technology to improve, so it is a smoother process without the possibility of cyber attacks. As mentioned previously, the risk of credit card compromise is very low due to the banks’ efforts to closely monitor unusual transactions. EDITOR: Are individual restaurant managers held accountable for losses that occur in their stores, be it theft, accidents, or other losses? LEISURE: Yes. On the risk side, we have what we call a claims-allocation
report. Once a month, I pool all the claims that were reported in workers’ comp and general liability over the last thirty days. I have an initial allocation that can be as high as $10,000. It has to be robust enough that it impacts the restaurant’s P&L. Within that same timeframe, I’m giving credits off that $10,000 for efforts that the management team has done to mitigate the cost of the claim. That can include reporting the claim within twenty-four hours, sending the injured worker to the correct medical center, holding safety meetings and inspections at the restaurant, participating in our company-endorsed shoe program, and managing the injured worker’s return-to-work effort. Every one of those has a credit that’s applied to it if the manager hits our threshold. That may mean, for example, that initial $10,000 allocation now becomes a $4,500 allocation. Our goal is to keep the manager focused on prevention but not give up once an injury
happens, to keep them engaged in that claim until it’s closed. It has been a highly effective program. While it takes a lot of work every month from an analytical perspective, it is the single most effective tool I have to motivate our operators to think about risk management. On the LP side, we do hold them accountable for cash over/shorts in the safe. But that amount of cash flow variance on a month-to-month basis is minimal because of our volume of credit card transactions and the smart safes that we put in place. EDITOR: I would imagine that when it comes to employee theft, for example, that the stealing of food probably is a bigger issue than stealing money. LEISURE: I tell this story because it sends the message that we want our staff members to understand. Several years ago I was talking to a staff member when the conversation turned to the amazing iced tea served in our
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THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT drill in to understand where that theft is happening. EDITOR: Have you developed education programs for new restaurant employees that include work safety habits and how to maintain an honest working environment? LEISURE: We do have orientation videos that speak to our safety culture and proactivity. We have learned that almost 97 percent of all injuries are behavioral based and not due to design flaws within the restaurant. We have worked really hard to engineer out almost all the risks in our restaurants. You can see much of this as a guest walking through a restaurant. If there
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restaurants. She said, “I absolutely love our iced tea. In fact, I take an iced tea bag home with me every night.” Obviously, she thought that the company would not care because it was just one little tea bag. But as I explained to her, if you do the math—40,000 employees times 364 days a year of operation, that tea bag starts to add up to a significant amount of money. I think it’s few and far between that people walk away with bottles of liquor, bags of shrimp, or things like that. We do a weekly inventory of all our food; everything is measured. It’s a tight system. If we see something that’s outside our parameters, we go back and look at our metrics and
With the ingredients that we have for both our cakes and restaurant menu items in the restaurants, supply chain is a huge risk for us. We source from only respected food suppliers that meet our stringent criteria. If we can’t get product within our specifications, we risk impacting our guests’ dining experience 30
is a short stairwell, for example, we change the color of the stone flooring toward the top of the stair to draw your eye down to the change in elevation. We also use big, bold railings. We do everything we can do to draw your eye down to the fact that there’s a change in elevation approaching. To address the behavior aspects of accidents, we focus our training on communication and knowledge of hazards, and ask that staff not cut corners when executing a task. They are also encouraged to ask for help from their peers. As most companies do, we have an 800 anonymous-reporting line. If there’s suspicion of drug use, theft, or managers asking people to do things that are not consistent with our culture, we ask that they pick up the phone, call us anonymously, report it, and let us investigate it. I think it’s an effective program. People these days feel very empowered to speak up, and we encourage it. Our staff members feel like they can speak up without retaliation. We get quite a bit of feedback, and we are better operators because of it. We don’t sweep things under the rug, and we address things quickly. We have an amazing staff relations team that jumps on issues that are reported and solves any issues that might arise. We are proud to be the only restaurant company on the Fortune “100 Best Companies to Work For” list. We have made the list for the past six years and continue to move up the rankings. We were number 25 this year. EDITOR: You’ve touched on many things that are very progressive and proactive in terms of reducing risk. Let me ask you a more general question. What makes one risk department better than another? Are there two or three things that a risk services executive must have to make his or her program stronger than other companies? LEISURE: There are two key components that I have top of mind all the time. One is I cannot do my job from behind a desk. I have to be out in
THE DYNAMIC, CHALLENGING, INNOVATIVE WORLD OF RISK MANAGEMENT operations. I have to be talking to the management teams and every server, dishwasher, and prep cook. I need to know every component of the business to truly understand what risks they are seeing on a day-to-day basis. I think a lot of risk managers don’t do that. They try to do their jobs from behind a desk. And that’s not, in my mind, the way to be successful. EDITOR: You mean not just managing by the numbers. LEISURE: Right. It takes energy to be on the road all the time, but I have to maintain that connectivity. Our business is dynamic. It moves. The guests move. The food changes, and I’m not going to pick up on that from behind my desk. The second thing is innovation. I am not complacent. I push my team to innovate. One of my workers’ comp managers was interviewed recently and said, referring to me, “My manager pushes us all the time to continue to innovate. To be cutting
edge. To push those parameters. We’re never complacent.” A great example is telemedicine, which is just now evolving. This is one of those concepts that, to me, even in the early stages of development, made perfect sense for our operations. I wanted to be the first out the door with telemedicine for workers’ compensation. It had been tested in the group insurance arena but never really as a workers’ comp medical solution. We’ve made our telemedicine program better by pushing back on certain components that others hadn’t thought of—our staff benefits, our management benefits. It creates a win all the way around. Of course, not everything I try to pioneer is a success. But I’m not afraid to take risks on things that make sense to our business and for the benefit of our staff. I don’t mind going out on a limb and pushing the limits to see what happens. Fortunately, I’m with an organization that lets me do that. As a result we’re
recognized as a fairly progressive risk management department. EDITOR: Talk about how you maintain relationships with your peers at other restaurant chains. LEISURE: I’m very active in a number of organizations. One is the Food Industry Risk Management Association or FIRMA. I was one of the founders, and it’s a strong organization. Another group I spend time with is called NRRDA, the National Retail Restaurant Defense Association. It’s a very progressive group that gets peers together to talk about what’s keeping us up at night and what we’re doing to respond to issues. I’m also the chairman of the group called the California Coalition of Workers’ Compensation that lobbies to change workers’ comp and reform workers’ compensation laws for the benefit of injured workers. We’re trying to take a balanced approach between making sure that the workers’ comp system is fair to employers while still
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EDITOR: The laws in California in workers’ comp are somewhat different than other states, correct? LEISURE: Yes. The scales are tipped more in favor of the injured worker. There is a lot of litigation in the system, and there are a lot of frictional costs that make it just very expensive for the employer. Unfortunately, a large amount of what the employer pays into their workers’ comp program does not directly go back to the injured employee. That’s what we’re trying to fix. We’re trying to get out all the frictional costs and reduce the litigation, so more of what the employer is paying goes toward their direct medical care and back to the injured employee so that they can get back to work. EDITOR: Are you a member of the Restaurant Loss Prevention and Safety Association? LEISURE: I’ve been involved in RLPSA for about five years. I would say it is my number one loss prevention networking group. I’ve learned almost everything I know from an LP standpoint through my affiliation with RLPSA. What I’m really pleased with is that they are now broadening their scope through their national conference and their regional networking events to encompass more risk management. The reason I believe that is beneficial is that more and more risk managers are also overseeing loss prevention and vice versa. The head of LP is now covering risk management. More and
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paying appropriate benefits to injured employees. The catalyst behind this organization came from my CFO. Our workers’ comp rates were going up, and he asked me what I was doing about it. I looked at him and thought, “It’s workers’ comp. It’s just the cost of doing business. What am I supposed to do?” His question got me thinking that there was more I could do. I could prevent the claims, and I could help reform the laws to reduce friction within the system. So I took an active position in doing that, and it’s a fantastic organization.
People these days feel very empowered to speak up, and we encourage it. Our staff members feel like they can speak up without retaliation. We get quite a bit of feedback, and we are better operators because of it. We don’t sweep things under the rug, and we address things quickly. more companies are asking their people to do more with fewer resources, so risk management and loss prevention are starting to blur. EDITOR: It sounds like managing risk and loss prevention in restaurants is evolving like it is in traditional retail. LEISURE: Yes, risk management and LP are changing very quickly—what we’re asked to do, the changing behavior of our guests, the fact that everything is now recorded either on a mobile device or on our own security systems, the expectations of food quality and people’s preferences on what they’re consuming, whether it’s vegan or gluten free or allergies. People are just very, very aware of what’s going on around them, which is changing that risk management mindset.
Think about data security. We never talked about cyber risk ten years ago, and now it’s one of the top topics. We’re managing the unwanted and the disruptive guest; how do you do that in a way that is respectful to that guest but also removing that risk issue from your restaurant? It takes a very delicate approach. That’s why I am very excited about my job. Every day, something different is going on. It’s a very dynamic position, and I love it. It’s not for everybody. Some people prefer to do the same thing every day—don’t disrupt my world. But the risk management industry is all about change, being dynamic, being innovative, and thinking things through in a different perspective every single day. It’s extremely rewarding, while very challenging twenty-four hours a day, seven days a week.
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SUPPLY CHAIN By Maurizio P. Scrofani, CCSP, LPC
Maximizing the Use of Demand Signal Management in Supply Chain Asset Protection
Scrofani is an LPM contributing writer and well-known supply chain asset protection professional with over twenty-five years of experience in retail and manufacturing, including leadership roles with Macy’s, Bloomingdale’s, Delonghi, and Toys“R”Us. He was cofounder and president of CargoNet, a supply chain theft prevention and recovery network solution of Verisk Analytics. He can be reached at firstname.lastname@example.org..
how do we apply some of the supply chain alerts or alarms on product flow to work within asset protection?
upply chain management is the procedure of the movement of product and enterprises and incorporates all methods that change rough materials into specific items. It incorporates the dynamic streamlining of a business’ stock side activities to intensify customer worth and include a high ground in the aggressive market. Supply chain is extremely helpful for any business as it gives approaches to advance your business in a successful, auspicious, and efficient method, yet there are likewise a few dangers that are engaged with this procedure. When we consider that every single piece of item ought to be moved through the supply chain method, it’s definitely not hard to see the need to align compliance and secure the pipeline as products go through the multiple networks. The asset protection efforts that do or need to take place inside the supply chain network have grown amazingly and continue to mature over time. The progress in advancement, the developments in online business, and the mounting innovation of retail crimes and cargo theft will continue propelling those asset protection efforts through the supply chain areas. This must be seen as an essential segment of our general program, and not just as a movement of assignments that occur in a remote structure or structures outside of the overall general public eye. Supply chain management wraps the coordination of the various activities drawn in with sourcing, procurement, change, and coordination for a business. It incorporates orchestrating and getting the orders ready, dealing with moving and taking care of the products, and managing the supply of items in an organized manner. The basic objective of supply chain management is to fulfill business demands through the most profitable usage of resources. The purpose of supply chain risk management (SCRM) is clear. It’s the way by which we help to recognize risk and administer supply chain asset protection adequately. In any case, getting some answers concerning supply chain risks is fairly a wild supposition. In any occasion, something evidently fundamental can be messy, for instance, where supply chain starts. When are things created? When plans are drawn? At development stage? What’s certain is that the risks are unavoidable at every instance along a product’s way from genesis to a store’s rack. So
Demand Signal Management
This where demand signaling comes into play. Demand signal management is a technique that gathers data from various sources, developments, and methods to deal with that data, so it is simpler to administer and report off the data. Demand signal management isn’t only a detailing medium; it is furthermore not only a database stacked with demand-level or reason-for-offer data. It encompasses the entire arc where data is consolidated, organized, displayed, and provided. It is what we call the golden chalice of data storage. At the broadest level, outside supply chain risks include: ■■ Demand risks realized by erratic or misjudged customer demand. ■■ Supply risks realized by any obstruction to the movement of the products, paying little mind to material or parts, inside an association’s supply chain. ■■ Ecological risks from outside the supply chain, for instance financial, social, administrative, and environmental factors, including the danger of fear-based oppression, worldwide crisis and downturn, and political change. ■■ Business risks brought about by elements, such as a supplier’s cash related or the official’s insufficiency, or purchasing and clearance of supplier organizations. ■■ Physical plant dangers realized by the condition of a supplier’s physical facility and administrative consistency. The target of demand signal management is to give quicker access to more information, improve retailer associations, increase ROI, streamline inside efficiencies, improve execution at all stages of the stock system, give a foundation to carry out investigation, and encourage various workplaces and groups. Demand signal management strategies should streamline and modernize the purposes of offering information. Efficiencies should be obvious from various perspectives. The demand signal organization should provide the fastest platform for streamlining the data gathering process. Furthermore, collection of the data and mechanizing the gathering techniques will save endless hours spent discovering data errors. The entire method should provide purging, cross-referencing, synchronization, stacking of the data, reportage, and prepared warnings. A real demand data management mechanism would moreover allow the reason for offering data to be incorporated and arranged with inside and
outside data to help the customer necessities of various divisions and groups. Alerts and reports should be electronic and versatile in each group and customer requirements. The following arrangements can be embraced in such manner: ■■ Understanding the business, the customer, and customer needs, and changing the supply chain to serve those necessities and the system in the most capable and strong way. The goal is to tailor the structure to find the adjustment that intensifies advantage by maximizing the use of our asset protection teams. ■■ Modifying the coordination framework to meet the organizational necessities of various markets. This may affect the size, number, zone, ownership, structure, and vital stockroom workplaces. It requires solid organizing and support to supervise travel through scattering and time-fragile approaches to manage the transportation framework to incorporate transportation courses and strategies for transportation. ■■ Tuning in to advertise flags and changing methodology as necessary to ensure consistent supply checks and perfect resource partitions. Like each and every stable arrangement and exercises of orchestrating, this method sees the necessities and goals of each particular group. ■■ Building up a development method that supports various degrees of essential authority all through the supply chain and gives a sensible point of view on the movement of things, organizations, and information.
The Renaissance of Supply Chain Asset Protection
A well-managed supply chain—one that mitigates threats—is fundamental to a productive business. In the present worldwide assembling conditions, where stock moves abroad or through different cities and countries before appearing at a store, the risks of incident or damage from cargo theft, atmosphere, work stoppage, and even work-area blunders requires innovative and intensive supply chain risk management solutions for supervising successfully. Exactly when we consider that every single piece of item sold anyplace experiences the supply chain, it is not hard to see the need to complete appropriate controls and secure our tendencies against an obviously erratic universe of dangers. The key in supply chain asset protection will be the continued assimilation of creating an environment where we have supply chain professionals with a well-rounded expertise in asset protection. As we continue to study a potential event, we will move upstream with greater speed and appetite. Once we finalize the evolution within the supply chain asset protection arena to embrace the demand signals, we will be far more proactive and finally arrive at our final renaissance where we can prescribe the proper risk mitigation solutions and comfortably speak about prescriptive analytics. Watching and assisting in the development of this much-needed transition is quite a bit of fun. I am sure that it will never end as our mutual supply chains are designed to evolve indefinitely. LP MAGAZINE
FUTURE OF LP By Tom Meehan, CFI
Your 1 Tool for Deterring Thieves #
Meehan is retail technology editor for LP Magazine as well as chief strategy officer and chief information security officer for CONTROLTEK. Previously, Meehan was director of technology and investigations with Bloomingdale’s, where he was responsible for physical security, internal investigations, systems, and data analytics. He currently serves as the chair of the Loss Prevention Research Council’s (LPRC) innovations working group. Meehan recently published is first book titled Evolution of Retail Asset Protection: Protecting Your Profit in a Digital Age. He can be reached at TomM@LPportal.com.
Why Physical Security Hygiene Matters
In a previous article, I discussed the illusion of security theater, which offers security measures to make people feel more confident about their security while doing little or nothing to actually achieve true security. Security theater is meant to deter threats without offering actual additional safety. Physical security hygiene is similar in that the goal is to deter potential thieves by showing them you are paying attention to what they are doing. The major difference is that physical security hygiene takes this one step further by emphasizing the importance of security maintenance and smart investing.
n trying to deter thieves, it helps to put yourself in their shoes and see the store environment as they do. Are burned-out lights in the parking lot? Are the cameras hanging by a wire or facing the ground? If so, it’s like hanging up a welcome sign for thieves. By contrast, imagine walking into an environment that’s clean and well lit, with signs that illuminate as you approach and cameras that pan, tilt, and zoom in on your face. Would you feel inclined to attempt a theft in those conditions? Few people would. By making sure all your physical security components are up to date and kept in good working order, you can achieve good physical security hygiene. “Physical security hygiene” is a term I created to refer to the best demonstrated practices and other activities that security professionals can undertake to improve and/or maintain their physical security standards. In my previous role in loss prevention, we caught a shoplifter who actually gave us some really helpful advice about our security issues. He told us that he chose a specific fitting room to
Maintaining Your Physical Security
We are all familiar with the traditional examples of physical security: metal fences, folding security gates for your entrances, motion-activated lights, security cameras, signs, locks, and security guards. These are all common, accessible, and effective ways of protecting your store from potential thieves. But the issue with physical security is not whether it works but rather that it requires regular upkeep to continue being effective. As I mentioned earlier, the lower perceived risk for thieves is the greatest danger that poor physical security hygiene creates. If someone sees a barbed wire fence with holes in it, they might think that either no one cares about maintaining this fence or even that no one is around to see that the fence has been damaged. If someone is walking through a parking lot or past a store entrance and sees that the lights are flickering or completely burned out, they could come to the conclusion that no one is interested in making sure that the area is well lit in order to see who is coming and going. If your store has security monitors connected to your security cameras, but these monitors are turned off or look like they are not working, then they might imagine that the cameras do not work or that they are just for show. All these instances of poor physical security hygiene, whether they exist independently or in combination with one another, create a lower perceived risk for thieves being caught. And when thieves think they won’t be caught, they’re more likely to target you. Good physical security hygiene depends on the regular upkeep of your physical security measures. This is the
“Physical security hygiene” is a term I created to refer to the best demonstrated practices and other activities that security professionals can undertake to improve and/or maintain their physical security standards. defeat tags because in his visits to our store, he saw there was dried ink on the fitting room walls from other previously defeated tags. Because we had not been taking the right steps to maintain our fitting rooms, we created a lower perceived risk of being caught for shoplifters, which led this man to take advantage of our poor physical security hygiene.
continued on page 38 |
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physical security hygiene than a retailer who has an artificial intelligence-enabled security system that clearly hasn’t been updated in a while because they just do not have the budget for it. If you do not take care of the physical security methods you put in place, they are simply not going to work. Physical security hygiene is about choosing the security solutions that work best for you, not ones that will end up working against you if you can’t maintain them.
continued from page 36
most effective way for you to deter opportunistic thieves, who are usually cautious and apprehensive. These thieves shoplift when they see little to no risk, so if they see an alert security guard or a motion-activated security camera or light, they are a lot less likely to attempt to steal something.
Making Smart Investments
With the latest and greatest technological innovations, it is now possible for you to install almost any kind of physical security you can imagine. If you want a motion-activated security camera that also highlights someone’s face in a connected security monitor and plays a warning over a nearby speaker, you can have it. But with so many options available for your loss prevention team, it can be easy to get caught up in buying the coolest, newest gadgets without thinking
Three Simple Steps for Good Physical Security Hygiene
So how do you make sure that your physical security is doing the job you need it to do? Here are a few best practices for physical security hygiene. Choose physical security solutions that work for you. Like many loss prevention solutions, physical security can be a big investment. That’s why you should create a strategy that solves your unique problems instead of buying the new big thing in LP. If sturdy gates and reliable lights have worked for you in the past, then it’s better for you to continue investing in them, along with one or two newer solutions, than to eliminate these security measures entirely so that you can try a whole new security system. Create a physical security budget that includes maintenance costs. As I mentioned earlier, you also need to consider the cost of upkeep for your security, whether it’s replacing light bulbs, updating signage, or repairing damaged locks or gates. When it’s time for you to review your annual budget, make sure you account for the costs of updating, repairing, or replacing your existing security measures, so you continue to show potential thieves that they will be caught if they attempt to shoplift. Work with your team to enforce good physical security hygiene. Your physical security isn’t just about having the right tools; it’s also about making sure your team of store associates and LP professionals works together to keep things running smoothly and in apparent good working order. What do you think when you walk into a store and see a security guard on his cell phone? Physical security hygiene has as much to do with appearance as functionality. This could include training your guards to remain alert while on shift, implementing security tactics like confronting loiterers and creating a schedule for your team to periodically check on the status of your security measures and report if anything is broken or needs maintenance. Though retail loss prevention has changed a lot in recent years, it is important to remember the basics of physical security, and that starts with maintaining good physical security hygiene. If you work with your LP professionals to create a smart physical security strategy, you can stretch your LP budget even further than you might originally think.
If you invest in physical security but you do not have a good practice of physical security hygiene, you won’t ever get the ROI you expect. It’s like getting a home security system and never turning it on. That is why it is essential that you consider the cost of maintaining your physical security measures when planning your loss prevention strategy. about how these solutions are supposed to help you. Because when that motion-activated security camera needs system maintenance because the motion sensor has stopped working, that costs money. And if you have dozens of these security cameras, monitors, and speakers in your stores, those costs will add up. If you invest in physical security but you do not have a good practice of physical security hygiene, you won’t ever get the ROI you expect. It’s like getting a home security system and never turning it on. That is why it is essential that you consider the cost of maintaining your physical security measures when planning your loss prevention strategy. A retailer with good exterior lighting, a few security cameras, and regular maintenance presents a much stronger image of good
THE FUTURE IS NOW
RETAILâ€™S REVOLUTION AND RAMIFICATIONS FOR LP By Garett Sievold, LPM Senior Writer
THE FUTURE IS NOW
eople are drawn to visions of the future. What’s next? Who will win? How will it end? It’s why pundits and prognosticators can fill hour after hour of broadcast time—and why comeuppance for inaccuracy is rare. A sport analyst’s vehement prediction that a team will lose the championship game will evaporate before the locker room champagne stops spraying, subsumed by the next prediction that the team surely will—or won’t—repeat next season. All of the above is to say that making predictions is kind of easy. We know; we’ve made a few in the “Coming to a Store Near You?” sidebar on page 46. But when getting the future right is a matter of real consequence, when it has the power to steer one’s industry, department, and career down the right or wrong path, clickbait forecasting feels insufficient. A deeper perspective on the power dynamics that are driving change, and on the foundation upon which changes will emerge, seems a better guide. Tony D’Onofrio has been thinking a lot about these underpinnings of retail’s revolution and the ramifications for LP. Formerly chief customer officer for Sensormatic, Tony D’Onofrio D’Onofrio spent much of his time speaking with retailers on what’s working and what’s not. He is now CEO of TD Insights, a consultancy focused on working with private equity companies, boards of directors, industry groups, and advanced technology companies. As a top industry influencer, his take on retail’s future carries substantial weight—and he has an optimistic message. “Retail is not dying,” he told LP Magazine. “There has been a lot of hype and opining that we can write the obituary of retail, but the opposite is true. It is a vibrant industry.” There are soft spots to be sure, said D’Onofrio. His research suggests department stores and specialty apparel stores face headwinds, for example. Forever 21’s bankruptcy
protection filing and its plan to close 178 US stores is probably not the last announcement of its kind. But trouble for select retailers has mistakenly given rise to a doom-and-gloom narrative for the entire industry. “Most stores are doing well, but the few areas of trouble have led to all the hype about the death of retail,” he said. “Payless, Gymboree—there are some closing stores and shutting down, but a lot are opening new stores.” In fact, for every company closing a store in the US, 5.2
“Retail is not dying. There has been a lot of hype and opining that we can write the obituary of retail, but the opposite is true. It is a vibrant industry.” – Tony D’Onofrio, TD Insights chains are opening stores, according to data compiled by D’Onofrio. The future also seems secure. One recent survey indicates that although young shoppers are certainly tied to their devices, they also enjoy the store experience. The survey, by global management consulting firm A.T. Kearney, found that 81 percent of shoppers age fourteen to twenty-four prefer shopping in stores; 73 percent enjoy discovering new things during shopping trips; and nearly 60 percent of Gen Z respondents said stores are a positive break from the digital world. The industry’s health is also reflected in the trend of online sellers opening physical stores, like Warby Parker, Casper, and others. To truly make an impression on the retail
landscape, a physical presence still seems important. What’s feeding the false narrative? Partly, it’s because “online” provides such an easy scapegoat. “But the argument that it is all going to go online is not true,” said D’Onofrio. “It will be a blend between online and physical stores.” Return data collected by Appriss Retail, a provider of data and analytics solutions for retail organizations, reflects the comingled world we’re moving toward. Its data, collected from ten major retailers, shows that “buy-online, return-in-store” has increased more than 28 percent over two years ago. David Speights, PhD, chief data scientist for Appriss, suggested these types of innovations will help brick-and-mortars persist successfully into the future. “It’s an opportunity for retailers to compete with strictly online retailers that can’t offer that convenience to consumers. It creates opportunities.” And while the picture of the US retail industry is brighter than media headlines might suggest, it’s even more encouraging when widening to a global perspective, said D’Onofrio. The global retail market will continue to grow, he said, from 20 trillion worldwide to 23 trillion two years from now. Asia has several large and dynamic markets, and while the trade war has pushed back the timeline, China will soon surpass the US in total retail sales. “Globally, the picture for retail is even healthier than in the US,” said D’Onofrio. “The industry is going to continue to grow. Grow and change.” Yes, change. The health of the retail industry at large means little to a retailer worried it might soon be shuttering stores. It’s inescapable that there will be both winners and losers—but what divides the two? “It’s those without a strong brand, without a clear strategy of what they’re trying to do with their brand, and who lack consumer loyalty who are at most risk,” said D’Onofrio. He believes the shakeout bodes well for premier brands, such as Gucci, which have a clear brand definition and a connection to their customers.
THE FUTURE IS NOW Premium brands like Apple are in this category. “These stores will continue to grow,” he said. But price-focused brands are also doing well, he noted, citing the segment’s 37 percent growth over the last five years. Stores like TJMaxx and Walmart, which have managed to effectively recalibrate and evolve, are primed to continue to thrive. “It’s the ones in the middle that are more at risk,” D’Onofrio said. “What that means is that you need to focus on the value of your brand and to continuously enhance it.” For a retailer to build a sustainable brand, one that can evolve with its customers, it’s necessary for it to recognize and respond to a major shift that has brought us to today’s retail landscape, namely, how the control of information has shifted hands. “First, it was manufacturers dictating to the store,” explained D’Onofrio. Then, with the barcode in the late seventies and early eighties, retailers took the lead with super-efficient logistics, with Walmart being a prime example. “Now it was stores that could tell suppliers exactly what they wanted. That moved the power of the shopping experience from the manufacturer to the retailer.” With the advent of the ubiquitous smartphone, he believes the balance of power has shifted yet again. “It’s now consumers who are in charge of the shopping journey. This is how retail has fundamentally changed,” said D’Onofrio. “They determine what happens, and they are forcing changes and demands on the brand.” Retailers that accept this new power dynamic and listen to and focus on those demands are in the best position to maneuver successfully through a complicated retail environment. Stubbornness is not a recipe for success. D’Onofrio said Nike is an example of a company that is doing a good job of responding to this demand to create a connection with their audience and of how the consumer is now in control of their shopping experience, as opposed to manufacturers or retailers. Formerly, the company focused on selling through third parties and being an all-sports brand to all
How Has Your World of LP Changed?
e asked a cross- section of LP leaders how work has changed for them during the last year, what they’re spending time on now that didn’t consume the same bandwidth when 2019 was just getting underway. We got a variety of responses. For some, new work stems from playing catch-up to changes in store operations, like buy-online, pick-up-in-store. For a few, like Carlos Garcia, director of loss prevention for Goodwill Industries of South Texas, new technology has been driving a new Carlos Garcia workload. “We made an investment with the purchase of a new POS system. Now we can track inventory and transactions more closely. I’m currently gathering data for our LP dashboard to assist in tracking vital LP data,” he explained. For many, however, it is the changing retail risk landscape that Hank Siemers has given rise to changes in work activities, such as for Hank Siemers, CFI, vice president for global retail security at Tiffany & Co. He said, “We have been spending an inordinate amount of time dealing with the Hong Kong protests since late June when the mainland tried to implement the extradition bill. Despite what has been portrayed in
the US media, the personal security and safety risks for individuals remains low. Even so, there can be an escalation at any time, especially with planned celebrations for China’s seventieth anniversary. “Most major protest activity has occurred over the weekends and usually publicized in advance, rendering protest areas/activities readily avoidable. Most violent ‘skirmishes’ between police and protesters and protesters (black shirts) and anti-protesters (white shirts) have been localized and of short duration, usually occurring late at night and over the weekend. No Westerners or business travelers have been targeted as of this date. “Here are some of the principal interests or concerns that we are currently monitoring in Hong Kong (HK): changes in military/PSB posture by China; US Department of State messaging; social media; industry peers; evacuation of US government personnel and their families based in HK; key dates and anniversaries in HK; and official visits. “We have two scenarios that we will react to if the mainland has had enough: (1) monitoring shows an imminent escalation and (2) no-warning crackdown. We have response continued on page 42
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THE FUTURE IS NOW
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mechanisms for either scenario and have briefed both our executive committee and local leadership.” External pressures have also been driving changes for Debbie Maples. Formerly an LP executive with Gap Inc., Debbie Maples she recently became VP of global LP and corporate security for Williams-Sonoma. “The hot topics today within our environment are gun laws and legislation opportunities. Specifically, how do we support anti-gun store environments? How do we shape how we will engage customers who have guns within open carry states? How will we continue to support our associates with how to feel safe in a very volatile time within North America. What can the industry do to shape gun legislation? We are engaging RILA and our government affairs team to understand how we can get involved. “The other topics continue to be active threat and how it is disrupting business. We will need to stay vigilant with training and awareness. The same goes for social engineering scams targeting our stores—the bad guys are continuing to be creative and relentless. And lastly, homelessness continues to increase in many of our urban environments, and remaining active with local government and law enforcement to be able to keep our customers and employees feeling supported and safe is the priority.” Mike Lamb, LPC, vice president for asset protection at the Kroger Company, also said he’s been dealing more with safety and security related to the
active-shooter threat, workplace violence, and threats against customers and associates. “As asset protection and loss prevention executives, we are challenged every day to ensure we complement a profitable business Mike Lamb through shrink reduction and overall asset protection to support the notion of ‘selling more and losing less.’ As we all know and would agree, the world of LP is rapidly evolving and ever-changing as the notion of anything, anytime, anywhere is the ambition for most retailers. The one area within our industry that perhaps represents the largest risk to the very brand core of the retailer is associate and customer safety, particularly in the face of the ever-growing incidents related to active shooter and workplace violence where guns are involved. This is an area where we as an industry can benefit from the collective best thinking of all leaders to effectively mitigate this risk. We need to come together on this issue sooner versus later in my opinion.” Like Maples, the leader of organized retail crime (ORC) investigations for a major retailer said social engineering scams are requiring a greater percentage of his time and energy. “Merchandise theft is still a thing, but the complexity of ORC in retail has evolved tremendously. When you start talking actual dollar losses, the expenses for the company are much more in the fraud space. It’s e-commerce, the gift- card space. “We’re dealing a lot with victim-assisted fraud, whether it’s an employee being defrauded or a customer or guest falling victim to
impersonation scams, like IRS scams where elderly shoppers will come into the store thinking they have to pay the IRS [in the form] of a gift card. And headquarter impersonation scams are something we’re spending a lot of time on to secure federal indictments, and we’re being successful. These teams do their research. They go to LinkedIn and figure out the right names to drop, and they’ll call and say they represent a group VP or a leader in IT, and they dupe employees to do a “register upgrade” with software and to reboot the register and provide gift card data where it is redeemed in minutes. Not a lot of these retailers want to admit that they’re being hit by this, but they are. “Part of the importance of fighting back is reputation management, not wanting to be the preferred type of retailer for that type of fraud. It’s also about national security, because of the transnational crime driving these scams, and taking actions that are for the greater good of the country and making it a better place to live, and not only worrying about your own bottom line. “For investigations, it means we’re having to do a lot more work in cross-functional teams, with cyber, with info security, and leveraging different parts of the organization—other teams that are outside the traditional ORC-type space. You can get the word from gift-card operations, ‘Hey we’re seeing a 300 percent increase in the Chicago market; what are you seeing?’ There is a tremendous amount of intelligence to be found internally. Instead of going out and working to find work, there is plenty in the organization on different teams to investigate. It means less field work and working with cyber teams as they start to investigate and validating what they’re seeing from their perspective.”
THE FUTURE IS NOW continued from page 41
people. But sitting on shelves alongside competing brands wasn’t helping Nike to tell their own story to their customers. “That’s how Nike came to begin its focus on their own stores, and telling their own brand story, and to launch their own app, which allowed them to engage with their customers directly.” Nike has opened several new flagship stores recently, including one in New York City. “Customers can directly engage with the store through their smartphones. In real-time, they tell you what they like and don’t about their shopping experiences.” The implication? If senior LP executives want to divine how their world will change, they should start by considering who is now in charge.
LP has always been on the leading edge of retail’s evolution, often as early adopters of technology that
would become critical and central to the entire industry. “There is a deep history there,” said D’Onofrio. “Technology has been a major force in LP forever, and we will continue to be a source of retail technologies. LP has always been peeking into the future of what retail will look like.” Video and RFID are obvious historical examples, and facial recognition and data analysis technologies are examples today. “It will all increase with [artificial intelligence] and the ability to make sense of pictures in terms of data—that is the future,” he said. And D’Onofrio would like to see LP manage it better than the past, when it ceded control of certain technologies to others even though they were born in LP’s domain. Technologies have often shifted from LP to operational control as they’ve been exploited for productivity more generally, “when LP could have led the work,” said D’Onofrio.
To prevent a repeat, asset protection may need to start thinking differently about the data it now has at its fingertips, suggested Guy Yehiav, general manager of Zebra Guy Yehiav Analytics, a leading prescriptive analytics provider for the retail industry. Speaking at the company’s PACT 2019 conference in Orlando several weeks ago, Yehiav encouraged LP leaders to think about the software’s power—and the power of AP—beyond narrow confines of shrink and loss and more broadly about plan-to-performance. “When I hear about how people are enhancing the tool, I hear some people question about where the boundary is. It can tell you if inventory is underperforming, but isn’t that my planning and allocation people? It can optimize store employee allocation, but isn’t that HR?”
THE FUTURE IS NOW But Yehiav doesn’t think LP needs to remove itself from those issues, nor operational ones like whether stores are executing at the prices they’ve set, or whether policies are being followed. Loss prevention and asset protection can fill that void. “AP is the one with all the data, and with the tools to analyze and identify actionable opportunities,” said Yehiav. “We are the ones who can close the loop. This is where AP will go—to overseeing execution of plans.” It’s a novel and insightful call to action for the industry—LP practitioner as execution executive, leading the way for a retail organization to maximize potential in every aspect of its performance. Of course, the problem of theft isn’t going anywhere either. D’Onofrio thinks available technology provides LP with a good foundation to combat it but suggests that the industry’s strategic nimbleness will be tested. “LP today is at a crossroads. It will need to respond to the newly empowered customer,” he said. “A consumer walks in today with a smartphone, and they are highly digitally empowered. They can take that smartphone and use it to walk out and never talk to a soul if they don’t want to. Stores are creating apps for self-checkout that allow consumers to directly engage with store—but how do you do things in this new world like verify scans and purchases?” The problem for the traditional LP mission, says D’Onofrio, is that a more powerful consumer creates new opportunities for theft and lawsuits. Read Hayes, “There is a crash between a digitally empowered consumer and LP—and LP is trying to catch up to that,” he said. “What is the next generation of LP tools going to look like in that new environment, where the consumer will rely less on the store and be in charge?” One challenge to which the LP industry must rise is to implement effective strategies across today’s numerous store types, said D’Onofrio.
Another is to service a mobile-connected consumer who demands a frictionless shopping experience when security is a friction. “And how does LP work in an environment when you’re free-form shopping? How do you secure the store?” He sees a shrinking role for solutions that might be thought to detract from
One recent survey indicates that although young shoppers are certainly tied to their devices, they also enjoy the store experience. The survey, by global management consulting firm A.T. Kearney, found that 81 percent of shoppers age fourteen to twenty-four prefer shopping in stores; 73 percent enjoy discovering new things during shopping trips; and nearly 60 percent of Gen Z respondents said stores are a positive break from the digital world. a product’s brand, like Spider Wraps and cases. “From an aesthetic point of view, that is a problem,” he said. “I do think there has to be a transition to LP solutions that support the product and not detract from it, to build security into the product rather than add on.” Strategically, LP must craft solutions while maintaining sensitivity to the customer experience. To maintain the same results LP has achieved in recent years, D’Onofrio
thinks physical security will need to evolve and rely on more advanced technology—and his research suggests it’s coming. “I’m seeing more and more of those tools, such as with face recognition, where there is awareness of who people are and thus who the risks are, and different ways that retailers can maintain the same prevention through using more advanced technology,” he said. D’Onofrio also sees a valuable strategic approach being advanced out of the Loss Prevention Research Council (LPRC), specifically the concept that retailers must influence theft long before potential thieves are within reach of their merchandise targets. Read Hayes, PhD, CPP, director of the LPRC, identifies five zones of influence where it is possible to apply treatment to impede retail theft. The shelf point/product asset, for example, is the first zone that can be influenced to deter crime. But it expands out from there, into zones 2 through 4: the category area, the interior, and then into the parking lot. The model identifies a final “zone 5” as the public sphere, where retail has historically had limited influence and inroads are needed. “The main idea is that by the time they get to the product, they need to feel security,” said D’Onofrio. “They need to feel like they’re being watched, and you know them. You need to deter them along the way.” There is benefit beyond theft prevention to taking a more comprehensive “five zones” approach to retail security. By including parking lots within the framework, for example, shoppers are both safer and feel safer—a basic prerequisite for shopping in a physical store when online shopping from home is an option. In an interview with LP Magazine earlier this year, Hayes said LPRC research has found that potential shoppers can feel uneasy from an array of factors, and that can have a detrimental business impact. “Intimidation comes in many forms, and it can be a killer to a retail company’s business,” said Hayes. “People want to work in safe places and shop in safe places, so not only is there a life-safety issue and a moral imperative to protect
THE FUTURE IS NOW workers and customers, but also there is a strategic tie-in.” We may be in the early stages of a new, consumer-based retail age, but it is clearly coming at retailers fast. “I do think LP has some catching up to do to keep up with the many ways there are to complete a sale,” said D’Onofrio. So what should LP executives be doing to prime themselves to manage it? “For LP to get to the higher level they need to get to, they need to become more data oriented in their approaches than they are, and able to demonstrate concrete results, and use technologies that help consumers buy more, not less,” said D’Onofrio. “They should be focused on even more data and using video and data analytics and emerging solutions to help LP take security to next level.” Stores most likely to thrive in the future will be able to meet the demands of empowered consumers to shop how and when they want—and provide seamless services across physical stores and online. LP professionals need to match that diversification, D’Onofrio advises. “They need to be more involved in cyber, for example. The more progressive LP leaders are expanding their roles because they understand that as consumers cross over, LP needs to follow them,” he said, “to gain that one view of that consumer or potential shoplifter, whether they are shopping online or in-store, which calls for more holistic approach. The more an LP leader can do on that front, the more they will add value to their companies.” He sees LP leaders increasingly responding to the challenge: taking a data-driven approach to LP; engaging in groups like the LPRC to test ideas and more quickly optimize ones that pan out; attaining certification; and creating internal alliances to stay in sync with where the company is going. “The
Coming to a Store Near You?
rom trending news stories, 2019 conference presentations, and interviews with industry thought leaders, a picture of the future becomes—if not clear—perhaps a little sharper in focus. Here are ten trends expected to impact retail and LP in the next few years. Buy online, pick up in store (BOPIS) is poised to grow. Several LP leaders we spoke with are newly contending with BOPIS, and all signs indicate the trend will expand. In the UK, for example, some 68 percent of shoppers surveyed said they now take advantage of click-and-collect programs. And it’s clear why stores will advance the trend: 85 percent of customers that pick up online orders in a store buy additional merchandise while there, according to Barclaycard data. Since Kohl’s began accepting Amazon returns at its stores, Kohl’s CEO Michelle Gass reports that 80 percent of those customers stick around to shop. Omni-channel strives to be omnipresent. Industry leaders are noting the trend of products integrating services—toward a new goal of “omnipresence”—and increasing interactions between brand and consumer. The goal? For a brand to always be in the right context at the right time. One decades-old shelf staple provides an example: Tide is no longer just laundry detergent. You can now download an app, go to a Tide locker with dry cleaning or laundry, drop it off, and pick it up when a text tells you it’s ready. We haven’t reached peak data. At the Madrid meeting of the ECR Community Shrink & OSA Group, visions offered on the subject of LP in 2025 make it clear that data management and analysis is both the present and the future. Even more information is heading LP teams’ way, and our effectiveness will hinge upon making sense of it all. Specifically, “to identify how it can be combined and integrated into a single platform to enable statistical tools to be used to rapidly seek out and visualize previously unseen insights on the causes of retail loss,” according to a
report from the meeting. Data analytics will be the foundation of LP for years to come, and the ability to squeeze value from it will determine how much of an asset LP is able to be to their organizations. Technology is allowing for increasingly smart pattern detection in retail transactions—it’s up to LP to take advantage and to use improved data analysis to make effective decisions The definition of “retail security” will continue to expand, destined to grow as wide as the imagination of marketers. Helzberg Diamonds, for example, recently had this gem of an idea: let’s offer wedding ceremonies at our 216 stores for customers who buy wedding rings. That concept, and many marketing ideas like it, have security ramifications. So it seems certain that LP will continue to be pressed into managing security risks arising from new operations. Retailers are being told they need to be nimble, and LP will need to minimize risks as stores pursue that goal without unnecessarily tapping the brakes on innovation. From examining a background check process of a third-party in-home delivery service to writing a plan to minimize safety risks from new “store experiences,” LP will continue to be pressed into action to maintain the safety of our employees and guests. LP must protect brands as well as products. Similar to the point made above, industry thought leaders have been suggesting that, as retail becomes more about experiences, preventing loss becomes as much about preventing interruption to those experiences as it is about protecting the products you sell from theft. Better store security equals better customer experiences. And in 2020 and beyond, that will increasingly equate with a successful retail operation. Social media monitoring is important in a divisive society. It’s continued on page 46
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THE FUTURE IS NOW continued from page 45 continued from page 45 getting more difficult for retailers to avoid being swept into polarizing political debates. After El Paso, for example, CVS Health and Walgreens asked customers to stop openly carrying firearms in stores, and Walmart announced an end to select ammunition sales. Some retailers may wish to avoid taking positions on culturally divisive issues, but others may make a point of doing so to connect with their customers. Picking sides on hot button issues—or even appearing to pick sides—makes retailers more likely targets of protest groups and can spur individuals to conduct politically motivated cyber attacks. These attacks are particularly difficult to defend against because the aim isn’t theft but to cause headaches and embarrassment. In addition to technical safeguards, corporate security teams should consider proactive monitoring for what is being said about them online. Collaboration for LP must be the new normal. The effectiveness of LP—as both a department and an industry—will increasingly depend on engaging and cooperating with others. IT and online divisions are obvious examples but just some of many cross-functional partners with which LP will need to engage to provide value to retail enterprises, say industry leaders. In the latest NRF Protect survey, nearly nine in ten respondents said there is increasingly overlap between LP and cyber, but many retailers haven’t aligned them yet. Delivery wars are only just beginning. Kroger piloted a thirty-minute delivery service called Kroger Rush at two stores near its Cincinnati headquarters. Macy’s plans to offer free same- day delivery. Walgreens teamed up with Google’s Wing Aviation to test drone delivery in a small town in Virginia. All are examples of the growing effort by stores to compete with online sellers. As the battle continues, experts say it’s important for loss prevention to be part of planning as retailers innovate, whether they embrace
ship from store, pick up in store, and into futuristic scenarios like autonomous delivery. Social engineering scams will continue to grow in sophistication. In the sidebar on page 44, we note how one ORC investigator is fighting external scams targeting employees in which individuals pose as a company manager or other higher-ups to facilitate fraud. These scams are fueled by greater access to information—and posing as someone else is poised to get even easier. The Washington Post recently reported that a French insurance company said one of its clients was victimized by thieves who used artificial-intelligence-driven voice-mimicking software to imitate a company executive’s speech and scam a managing director into transferring $240,000 into their bank account. The employee said he thought the request was odd but that the voice was so accurate he felt he had to comply. “This is a technology that would have sounded exotic in the extreme ten years ago, now being well within the range of any lay criminal who’s got creativity to spare,” Andrew Grotto of Stanford University’s Cyber Policy Center, told the Post. Retail organizations need to improve natural disaster preparedness to limit business disruption. In 2018, the US experienced $14 billion-plus natural disasters, which caused approximately $90.9 billion in losses, according to the latest US Household Disaster Giving report. Once-a-century type storms now seem to happen all the time, and climate experts generally agree that the trend will persist. Disruption from civil unrest and political instability also seems poised to increase, warn experts in risk management. In today’s evolving retail environment, effectively mitigating the business impact from these events can make the difference between winning and losing in the global marketplace. LP’s expertise is vital to enabling businesses to manage both predictable and catastrophic challenges and forge greater resiliency.
most important relationships are with operations and online and cyber—and IT in general,” he said. “You have to be totally connected to the direction of the company from an IT and operational point of view.” D’Onofrio also suggests looking outside one’s own operations. “Finding and engaging with mentors, who have
“For LP to get to the higher level they need to get to, they need to become more data oriented in their approaches than they are, and able to demonstrate concrete results, and use technologies that help consumers buy more, not less. They should be focused on even more data and using video and data analytics and emerging solutions to help LP take security to next level.” – Tony D’Onofrio, TD Insights been down the road of combining offline and online, is important to understand the critical components of that journey.” Even more broadly, D’Onofrio says LP needs to understand broad developments impacting retail, like those highlighted in the sidebar on industry trends. “To evolve LP in the right way, you need to get educated about where the rest of the retail world is going,” he said.
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EVIDENCE-BASED LP 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 firstname.lastname@example.org.
To Detain or Not to Detain
© 2019 Loss Prevention Research Council
measures, resist lawful detention, and injure themselves and/or others. With these dynamics in mind, retail crime victims should make more science-informed, crime-suppression choices, especially due to the plethora of crime’s possible safety, financial, and social effects. The Loss Prevention Research Council (LPRC) recommends that retailers carefully study the effects of technological and tactical protective measures and dosing options of those measures, including offender detainment for asset recovery and deterrence. For too long, decisions and aftermaths have been largely influenced by opinion and personal injury lawyers rather than rigorous research evidence.
eing a crime victim is tough. And every single retailer, every single store, is a year-round crime victim. When we’re victimized, we have no good choices. We have only the best of some not-so-great options. We’re playing defense. Criminals are taking the initiative, and only they know where, when, and how they’re going to victimize others. Because criminals choose to attack us, retailers are forced to defend and, in doing so, must make expensive, protective choices that may or may not work. And because offenders may choose to struggle or otherwise injure themselves or others, retailers can even be dragged into the aftermath of a criminal’s lawbreaking attempt. Criminal offenders freely and personally choose to victimize retail businesses and their customers. So the victimized places deploy an array of deterrent technologies and tactics. But some offenders continue to attack despite layered protective measures. What countermeasures work well enough to deter offender crime attempts? What disruptive tactics are needed to reduce offender rewards for those refusing to be deterred, who instead choose to continue their theft, fraud, or violent actions? To prepare for and improve anti-crime outcomes, victimized executives strive to look at both specific crime event dynamics and overall aggregated protective efforts and resulting behavioral effects. Like policing agencies, crime control teams must then weigh whether to detain or not to detain thieves who ignore deterrent programs and are in the process of stealing the company’s assets. Or if they do detain active criminal offenders per state statutes, should they immediately stop detention efforts of offenders who choose to resist lawful detention? Apprehension may or may not generate general and specific deterrence with some people. Detention can shame the offender or at least convince them or others who know about the apprehension not to try that crime again. Non-detention or immediate release of resistors risks sending the message to those thieves, and others aware of the policy via social media and word of mouth, that the store will not physically resist ongoing theft efforts. This hands-off policy may reduce unwanted confrontation without theft increases. Or it could possibly increase risk for store employees and shoppers if theft activity then increases due to offenders deciding to more frequently steal because of lack of personal downside risk. Increased theft activity may also increase violent theft events and risk exposure. Continuing to detain high-rate, high-impact thieves, even those deciding to resist apprehension, risks the offender injuring himself or others, creating other issues and concerns. Offenders make most of the harmful choices, such as become a criminal, initiate a crime, continue a crime despite protective
Logic and Evidence
The take-home for this discussion and most of your loss prevention and asset protection work is to first read whatever relevant research you can get your eyes on. Next is to thoughtfully construct a logic model. Use a white board and draw up how
Close looks at specific places and overall analyses help dial solution sets in for maximum and cost-effective effects. As you scale up your testing sample size, you can assess impact and indicated adjustments. you suspect a given technology or tactic (such as detention) might work to dissuade an offender, to overall reduce a problem. Does the treatment deter by convincing a would-be offender they shouldn’t launch or continue a crime attempt because they fear they’ll be caught, inhibited, or denied crime benefits? Does a given tactic better deter certain offender types? How should you deploy the countermeasure in the real world, and does this vary by environment? Where would you put it? What should it look and sound like? Offenders must perceive, recognize, and respect any crime prevention effort we make in order to reduce victimization. Next, start testing and improvement. Not much works well right out of the box. How you do things is always more important than what you do. Getting good individual and aggregated crime reduction responses is key, especially while minimizing negative side effects. After you have two to three seemingly workable protective process treatments ready, explore execution and |
effectiveness differences. What seems to be working and why or why not? Close looks at specific places and overall analyses help dial solution sets in for maximum and cost-effective effects. As you scale up your testing sample size, you can assess impact and indicated adjustments. This is the process I suggest when approaching life safety, brand protection, and theft and fraud prevention programs. You might find surprising results, or you may observe mild effects, or nothing may happen. But you owe your people and your enterprise better crime and loss suppression, and a more thoughtful, research-supported program should do just that.
together a dataset of retail-located mass shootings. Finally, our team is continuing to update our sophisticated SocLab to run table-top exercises and wargames. IMPACT conferences also provide one of two LPRC Board of Advisors meeting opportunities, where over thirty major retail and restaurant chains, plus industry leaders, solution partners, and product manufacturers, come together to help plan and inform LPRC strategy and activities. A highlight is bestowing fellowship status on two to four LPRC members demonstrating sustained active support of LPRC focus and projects.
2019 LPRC IMPACT
I’ve been to more than a hundred conferences over the years, but while I’m admittedly biased, this year’s IMPACT was beyond amazing in so many ways. We had our latest record participant numbers with almost 440 executives. LP Foundation held a University of Florida Learning Day with over 100 attendees. The Food Marketing Institute held an LP meeting. The Restaurant Loss Prevention and Security Association was well represented as was the ASIS Retail committee. The Retail Industry Leaders Association and National Retail Federation committee members were there in force. University of Florida faculty and students were everywhere, and law enforcement investigative partners
The conference enabled over thirty senior LP leaders to think how they might develop comprehensive protection strategies to support corporate objectives. Finally, all participants spent quality time in the IMPACT Solution Experience Center providing more intimate problem-solving interactions and toured the Research Lab and the brand new LPRC INNOVATE NextRetail Research Center ideation and simulation spaces. The LPRC IMPACT planning committee estimates capacity is 500 participants, and we’re almost there. Please plan now to join us October 4–6, 2020, at the University of Florida for another exciting evidence-based LP experience.
Over 430 LP executives and partners break out into the seven year-round working groups to set 2020 priorities.
were as well. All this means the LPRC, a research and results community, is coming together every year to push the science and practice of enabling retail enterprise success in increasing numbers and to interact with more and more researched content. IMPACT also affords the eleven LPRC working groups the opportunity to meet in person to review the past year’s work products and to plan their 2020 research and development priorities and processes. All working groups meet monthly throughout the year using new Nureva Span team-effort software to enable incredible interaction and concept building. Three of the groups—Violent Crime Working Group, Product Protection Working Group, and the Supply Chain Protection Working Group—also create their own in-person summits hosted by member retailers. All eleven Learning Lab breakouts featured evidence-based solution testing of anti-theft, anti-fraud, and anti-violence events, while general sessions featured recent internal offenders and scared customers for lessons learned, and active-assailant research combined with deconstructing three recent active-shooter events. LPRC will be working this critical issue. We’re also putting LP MAGAZINE
Kroger Senior Director of AP Tom Arigi is awarded the LPRC Fellow designation.
LPRC INNOVATE Innovation Manager Jordan Burchell (facing camera) describes LPRC’s new cutting-edge R&D capabilities.
You might recall the LPRC INNOVATE NextRetail Research Center features elite, independent, problem-solving people and design-thinking spaces bridged to field-test locations that enable cross-functional retailer teams to grow their businesses and people. Cutting-edge research and development spaces have also been established to leverage the design-thinking process to brainstorm and test more focused and impactful options.
ASK THE EXPERT
Six Considerations to Help Gain Approval for New or Upgraded Technology
Interview with Hedgie Bartol, LPQ Bartol is retail business development manager for Axis Communications. He has been in the loss prevention industry as a solutions provider since 2004 holding positions with Diebold and Milestone Systems prior to joining Axis in 2011. Bartol received the LPM Magpie Award for Excellence in Partnerships in September 2017.
line-queueing analytic that will trigger special advertising or a notification to a loyalty app.
sset protection teams often take the lead in building a business case and pushing for new or upgraded technology solutions inside the retail enterprise. Numerous things should be considered in order to successfully navigate the corporate capital funding process. We asked one technology solutions provider for his point of view.
How can IT and LP or security teams benefit from working together? If you had asked me that ten years ago, I would’ve told you that they cannot work together. That is changing and is a very interesting synergy that I am seeing now. The issue is that both disciplines are very strategic in their thinking, even though many folks who do not come from LP would never know that asset protection professionals think that way. Most people assume that they are typical “security guys,” when in fact, they have to be very strategic in their function. How do you protect and secure that which has to be readily available and easily accessible? It is all handled through people, process, and procedure.
A loss prevention team needs room in the budget to upgrade their systems. How should they begin that journey? The key here is to start the journey with the destination in mind, realizing that our technologies of old are going to the wayside, making room for technologies that can possibly fulfill our dreams from the past. Remember when you were a kid and would dream about how awesome it would be if you could watch television during that four-hour family car ride? I can even remember how great it would be, when satellite radio first hit the scene, if I could stream that through my computer. The future is here, and in that same regard, it is moving quickly. So the idea is to start the process with the idea of “if you dream it, you can do it.” With the ability to leverage network technology (also known as the Internet of Things), you can streamline your operations and bring your various disparate systems together to perform for you beyond just loss prevention and security.
Is there any value to the marketing teams when harnessing these systems? The answer to this is, there can be. Once again, the integration and implementation of technology in retail must be done across all business units. If you are looking at any technology through your own lens and no other, then you are missing out on the big picture of what can be accomplished and the value that your solutions can bring to the entire organization. How can operations and marketing get involved? Reach out across the aisle. All parties must remember that we are all fighting the same battle, which is the continued profitability of our organizations. Reaching out and identifying where the needs of each organization intersect in the “vin diagram” will allow you to establish that path forward and growth. It will allow you to establish the roadmap for pathways that have not been built yet.
What are integrated systems in this space, and how can they help a business? That is a bit of a loaded question. I suppose integrated systems can be defined a couple of different ways, but in this arena when we refer to integrated systems, I believe it starts with the technology in the stores and at the edge—leveraging systems to work together so that the sum of the parts is greater than the whole. Essentially, a surveillance camera is just taking images, but when you couple it with analytics and various inputs and outputs, it can become a tool that provides security, business intelligence, as well as proactive measures to enhance overall operations and sales. In fact, the asset protection professional is as engaged and concerned with sales and operations as they are about shrink and loss. By leveraging their in-store technologies and working across business units, you can provide solutions such as a dwell analytics that will send an alert directly to a hand-held radio when someone is waiting in an aisle for longer that a normal purchasing time frame. Perhaps the same camera that is watching the checkout area is also utilizing a
How do loss prevention professionals get a seat at the table? Asset protection and loss prevention have had a seat at the table for some time now. But the time is now to make their voices heard and get creative. They have a bottom-line, financial responsibility to the organization generally referred to as shrink. Because they have this bottom-line responsibility, it essentially puts them at a C-level of sorts. When you couple that with a focus on driving sales and operations from that same function, there is significant opportunity to impact the organization.
Showcase and Resource Guide
Table Of Contents
Access Control. . . . . . . . . . . . . . . . . . . . 2 Alarm Monitoring . . . . . . . . . . . . . . . . . 2 Analytics. . . . . . . . . . . . . . . . . . . . . . . . . 3 Auditing. . . . . . . . . . . . . . . . . . . . . . . . . . 3 Awareness/Training. . . . . . . . . . . . . . . . 4 Case Management . . . . . . . . . . . . . . . . 4 Education/Certification. . . . . . . . . . . . . . 5 Employment/Recruiters. . . . . . . . . . . . . 5 Exception Reporting. . . . . . . . . . . . . . . . 6
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Fire & Safety Systems. . . . . . . . . . . . . . 6 Guards/Protective Services. . . . . . . . . . 6 Investigations. . . . . . . . . . . . . . . . . . . . . 6 Personnel Outsourcing . . . . . . . . . . . . . 7 Physical Security . . . . . . . . . . . . . . . . . . 7
Product Protection. . . . . . . . . . . . . . . . . 8 RFID. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Security Systems. . . . . . . . . . . . . . . . . . 9 Supply Chain Security. . . . . . . . . . . . . 11 Video Surveillance. . . . . . . . . . . . . . . . 10
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We turned EAS into EASY. Now offering RF systems, Sensormatic has the EAS option right for you. It used to be about the technology – RF vs AM vs RFID. Now Sensormatic provides solutions in all three technologies. With a variety of install options such as overhead, concealed, door mount and traditional pedestal, Sensormatic has it all. Sensormatic is your one-stop destination for everything EAS including detachers, deactivators, and a broad selection of labels and tags, such as the popular InFuzion tag. With more than 50 years of industry experience and innovation, Sensormatic experts can help you select the system with the best ROI today, and connectivity and expansion for tomorrow. One company, everything you need – easy.
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SOLUTIONS SHOWCASE AFA PROTECTIVE SYSTEMS
Do You Need to Upgrade Your Fire Alarm Service Provider?
ire alarm and security is a critical component of the operation of any facility. The effectiveness of your systems is influenced by the company you trust to service your equipment. To get the most from your fire alarm and security provider, you need to determine if you receive great response time, competent and experienced employees, access to advanced technologies, turn-key service and competitive pricing. These are the qualities that customers of AFA Protective Systems, Inc. have grown to expect for their fire alarm and security services.
Do You Receive Great Response Time?
When it comes to life safety and protecting your property, can you really afford to wait? AFA has developed a culture of responsiveness that starts in our company owned central stations. When prompt response times matter, AFA is available 24/7 by phone, website or email. AFA’s sense of urgency also applies to the technicians who will work efficiently to repair your systems. Fully stocked warehouses located at each responding branch office ensures timely access to parts when needed. Time is not only money; with life safety and property protection it means a lot more.
Do You Use Advanced Technology?
In today’s world, technology helps drive success. Fire alarm and security systems are no different. AFA installs, inspects, maintains and monitors a wide variety of non-proprietary equipment for its customers. Customers can manage their central station account, receive custom reports and request service online. AFA’s technicians are equipped with information including a system’s event history ensuring a knowledgeable and prepared response to troubleshoot and repair any system issues.
experience. AFA’s hiring and training programs are focused on developing technicians’ competency in all areas of system installation, programming, inspection and maintenance. AFA employees go above and beyond by participating in national code writing committees and keep up to date with changes to ensure services are compliant with current standards.
Does Your Vendor Offer a One-Stop Solution?
AFA offers its customers turnkey fire alarm and security solutions. We own and operate our own UL Listed, FM Approved and FDNY approved central stations. We can clear violations and letters of defect with our in-house expeditors. We can design, budget and build your system with our in-house engineers. When it comes to fire alarm and security systems, AFA is your one-stop service solution.
After the Sale, It's the Service That Counts!
Let’s face it; the bottom line is the bottom line. AFA’s experience and resources provide for a better service. AFA’s representatives will work with you to provide the most cost-effective, high-quality service solution for the inspection, maintenance and monitoring of your fire alarm and security systems. Period.
Does Your Vendor Provide Competent and Experienced Employees?
Over 145 years of providing fire alarm and security service means AFA stands alone when it comes to LP MAGAZINE
SOLUTIONS SHOWCASE 7PSOLUTONS
Are You Getting the Most from Your GPS Loss Prevention Program? Local, Regional, Global—Intelligence Enhances Asset Protection By Jeff Clark, Founder & CEO of 7PSolutions, LLC
s we are into peak season, retailers, e-commerce, and transportation companies are working overtime to ensure that retailers’ shelves are stocked and packages are delivered to our front doors without delay. Also busy are porch pirates who are watching for packages to be delivered and quickly removing them for their own personal gain. It is estimated that one in twelve Americans will be affected by thieves helping themselves to packages left on their front porch. With the help of covert 7PSolutions GPS devices with a real-time GPS tracking platform—RouteWatch—postal inspectors and local police departments are making arrests almost daily, fighting against porch piracy across the US and Canada. At the same time, distribution centers began to have an overflow of loaded trailers, and the use of staging areas sometimes becomes inevitable. Ocean containers fill the ports and railheads while air shipments wait at terminals as cargo space tightens. These scenarios play out year after year and go beyond the normal day-to-day operations of loss prevention professionals. It is during these times that having the proper GPS program throughout the year will help ease the pains that can accompany this fabulous time of year—peak season.
Since 2010, 7PSolutions has been at the forefront of innovation by introducing a single platform for the management of real-time GPS technologies all centered on loss prevention and supply chain. your GPS LP program. The 70 percent that is not utilized affects the performance, accuracy, and behavior of a GPS device. 7PSolutions’ team of over thirty technical team members and software developers have the expertise and experience to ensure that any GPS device operating on our RouteWatch platform is fully utilized. Our success is based on our ability to provide our customers with the proper devices for the task at hand, and in many cases this involves different devices to ensure goals are achieved. What are your pain points? Where are your areas of shrinkage? What are your supply chain blind spots? Whether your program is local, regional, or global, when you have the proper tools in your toolbox, the answers to these questions are easily solved. 7PSolutions is taking care of customers today while continuing to develop for the future.
What’s in Your Toolbox?
In addition to the traditional covert GPS tracking devices used to monitor shipments moving from vendors to distribution centers and distribution centers to stores, loss prevention teams must also understand technologies and methods to fight organized retail crime, internal loss, as well as the growing challenges of e-commerce, cyber security, and global supply chains. The individual challenges that each of these brings to the LP world require that we first understand the different technologies that are available to us and then properly vet those providers offering GPS services. Since 2010, 7PSolutions has been at the forefront of innovation by introducing a single platform for the management of real-time GPS technologies all centered on loss prevention and supply chain. We designed and manufactured the first disposable GPS device and integrated EDI transaction sets into our RouteWatch platform—all tools to improve visibility and intelligence to loss prevention teams. During the recent MWC19 Los Angeles innovation conference, I learned that the majority of GPS service providers utilize less than 30 percent of GPS devices’ capabilities. This is important information to understand when reviewing possible providers to
SOLUTIONS SHOWCASE CONTROLTEK
It’s Not a Process; It’s a Mindset Design Thinking as a Strategy for Innovation in LP/AP
xperienced loss prevention professionals are used to a certain process of developing solutions to mitigate loss—we look at the tools we already have and try to come up with new ways to use them. However, this is not the future of innovation anywhere, let alone for the rapidly evolving landscape of retail. Loss prevention and asset protection are complex fields that require a nuanced understanding of clients’ problems in order to develop effective solutions. This is why CONTROLTEK uses a human-centered design thinking approach to develop solutions for our clients. Design thinking is a process that starts with the people we are designing for and ends with new solutions tailor-made to help solve their problem. Design thinking differs from traditional loss prevention solution development because it emphasizes understanding the user, challenging preconceived notions, and redefining problems in order to come up with different strategies that might not have been obvious at first.
Design Thinking in Loss Prevention and Asset Protection The most important feature of the design thinking process is that it is iterative and nonlinear. This means that instead of following a step-by-step guide with little room for adaptation, we often find ourselves going back to
certain stages of the process to reevaluate what we thought we already knew. Unlike the more traditional method of critical thinking, which focuses on breaking down a problem, design thinking looks at building ideas up. This is because a design mindset is not problem-focused—it is solution-focused and action-oriented. “Our engineers, designers, and technology experts use the CONTROLTEK method of design thinking to partner with our clients to develop unique solutions for their specific challenges,” explained Tom Meehan, CFI, chief strategy officer at CONTROLTEK. “By testing and refining our ideas, we don’t miss an out-of-the-box idea that could be the perfect solution.” Shifting gears like this can be a challenging exercise for those in LP and AP who are used to attacking the problem instead of imagining the solution. However, the design thinking process is actually quite simple and most likely very familiar to you already.
The CONTROLTEK Method of Design Thinking Design thinking begins with understanding the problem, so we can gain insight about the client and define the problem. In this stage, we gather information and set aside our own assumptions about our client’s challenges in order to truly understand their unique situation and needs.
Though our method of design thinking has been described in a straightforward way, we approach the process with flexibility and aopen minds.
The second stage of the design thinking process is ideating to generate as many ideas as possible. The CONTROLTEK method encourages us and our clients to think outside the box and challenge each other to view the problem in different ways, inspiring true innovation. In the ideation phase, we come up with anything from little suggestions to unusual brainstorms that we can prototype in the following stage. The third stage is rapid prototyping. We take what we learned from the ideation stage and quickly develop a prototype that our client can test in their stores as soon as possible. By speeding up the prototyping process, we can get results more quickly and implement that feedback into a new prototype the client can test again, so we can get a better idea of the problem and its solution. The final stage is implementing the solution. Since design thinking is iterative, we often find ourselves using the results from the implementation stage to learn more about our clients, redefine the problem, or create new ideas and prototypes.
continued collaboration of these ideas that will help to innovate and move our industry forward.” At CONTROLTEK we also believe that collaboration is the best way to move the industry forward while keeping up with the latest developments in technology. That’s why designing for people, Jason Dixon with people, is at the forefront of our minds. Earlier this year, CONTROLTEK invested in a new Innovation Experience Center, located at our headquarters in Bridgewater, NJ, that was designed as a collaborative space to give clients the opportunity to view and test our latest security solutions and connect directly with our experts. Just as you know the challenges facing your organization, we know how to collaborate with our clients to find the best solutions to help them. “We don’t believe in one-size-fits-all solutions,” said Rod Diplock, chief executive officer at CONTROLTEK. “We take the time to partner directly with our clients and understand their shrink problems in order to develop new solutions to the ever-evolving threats of shrink.” The design thinking method is not Rod Diplock about following a linear process—it asks you to change how you approach a shrink problem so that you can think up new ideas for LP and AP solutions. By approaching your challenges with shrink via expanding your focus to multiple solutions, you can find yourself producing many more different ideas that can result in the best solution for your problem, leading to innovation for yourselves and for our industry.
Design Thinking in Practice: Unique Solutions for Unique Retailers Recently, Tom Meehan and Kim Scott, director of marketing at CONTROLTEK, facilitated a workshop with Sally Beauty’s asset protection team through our method of design thinking in LP and AP. By using our design thinking approach and brainstorming with their team, we were able to push them out of their comfort Tom Meehan zone and dive deeper into some of their challenges with shrink. The workshop was designed for their team to learn the understanding and ideating phases of design thinking, so they could come up with as many ideas as possible and start rapid prototyping solutions for their loss prevention needs. “The reverse brainstorm exercise really pushed our team out of our comfort zone to come up with new ideas,” said Jim Mires, vice president of loss prevention and safety at Sally Beauty. “At first we kept going back to the solutions we were already familiar with, but this exercise helped Jim Mires us to identify two areas where we can really focus our attention and think of new solutions.” “I couldn’t be more pleased about what the workshop is going to do for our department in the future. Our team was pushed to think differently by going outside of the box and looking at the big picture,” said Jason Dixon, senior loss prevention manager at Sally Beauty. “It is the sharing and
SOLUTIONS SHOWCASE PROTOS
Protos and Security Resources Coming Together to Build a World-Class Guarding Company
n September, we learned that Protos Security and Security Resources Inc. (SRI) had joined forces and are now one company. With that news came much excitement, as well as many questions from clients and guarding subcontractors alike. What would change as these two industry leaders combined, and how would it affect clients, vendors, and the industry overall?
“This is an exciting time for us and for our customers,” said Patrick Henderson, co-CEO and cofounder of Protos Security. “Now, instead of spending our energy competing with each other, we can focus that energy to continue to evolve our offerings and processes to bring our customers the easiest, most innovative guard management experience in the industry.”
Why Protos and SRI Are Coming Together
Integration: Moving Forward Together
Individually, Protos and SRI were already known Protos and SRI come into the new entity with similar leaders in the loss prevention space, with nearly forty values and customer relationships. Both are highly years of combined experience and many national retail committed to customer success and easing the burden customers. In fact, retailers often considered both Protos associated with managing a security guard program. Both and SRI for their outsourced guarding services. After all, provide nationwide coverage combined with a personal both companies specialized in nationwide armed and touch around the clock. These values and this approach unarmed security guard management contracts to protect won’t change with the integration. people, property, and reputation. Both worked with retail loss prevention and facility security clients throughout the United States, Canada, and Puerto Rico. Both offered around-the-clock client support, as well as emergency or last-minute guarding services, to ease the burden of a guarding program. While their overall offerings were similar, the way in which each company delivered those guarding services differed. SRI focused on national guarding with a hometown feel, while Protos focused on state-of-the-art technology. As a result, clients were forced to choose between the visibility that came from Protos technology versus SRI’s direct guarding capabilities and personal approach. Now that Protos and SRI are coming together, customers will no longer have to make that choice; they can have the best of both worlds. Technology and direct guarding expertise will not only coexist in one company but also make each other better. By combining real-world expertise and real-time data, clients get even more visibility and peace of mind that their outsourced guarding Moving Forward Together: (left to right) Chris Copenhaver, services are working for them. Joe Malone, Patrick Henderson, and Bob Bond LP MAGAZINE
SOLUTIONS SHOWCASE A Full Range of Services for Clients
“We’ve built our business on our personal guarding expertise and strong relationships with customers,” said Joseph Malone, SRI cofounder. “From an operational standpoint, that isn’t changing. Clients will still work with the same people, and we’ll still offer direct guarding and bring that guarding expertise to customers.”
Security that never stops with around-the-clock support client account managers, dispatch teams and call centers ■■ Guarding expertise that comes from managing both direct and vetted guard services ■■ Industry-leading guarding technology that streamlines the security guard request, management, and virtual check-in process ■■ The largest, best-trained guarding network in the industry ■■
Today, Protos and SRI are in the early stages of bringing the company together. They have already started to offer the direct guarding services from SRI to some accounts that were in managed guarding in the past and will begin offering the Protos technology to all clients early next year. For Protos and SRI, their shared commitment actually makes the integration more seamless for customers, vendors, and team members alike. They believe that their similar size, values, and goals—along with their commitment to communicate at every stage of the integration—will make the transition seamless for customers. “There have been a number of acquisitions in the guarding space, so we know some customers have been lost in the shuffle when their guarding company changed ownership,” remarked Bob Bond, SRI cofounder. “That can happen if a smaller company has to conform to new processes and goals. This is different. We’re bringing together two companies that are both leaders in the industry—companies that come in with similar approaches but individually bring different capabilities. So we can retain what customers love about each of us and just add on those new capabilities.” Of course, the integration of Protos and SRI won’t be the end of their story. They will continue to expand their capabilities, expose new industries to their offering, and grow their direct guard service footprint in the US through acquisitions of best-in-class service providers who share their philosophy of elevating security service expectations to better serve customers. “By coming together, we are now able to leverage the strengths and capabilities of both companies to give our clients the best security guards and the best guard management technology in the industry,” summarized Copenhaver. “That helps the loss prevention and other security professionals streamline their guarding programs, reduce costs, capture valuable data, and improve the accountability and performance of their security officers.”
What will change is the breadth of services and processes that customers can leverage. Rather than having to choose between technology and direct guarding expertise, customers will now be able to get both. That means that clients that have been working with SRI will gain Protos state-of-the-art technology, the first and only system that streamlines the security guard request process, provides uniform timekeeping, incident reporting, budgeting, and data analytics, and is accessible at your desk and on the go through their web app. This reduces the day-to-day management of security guard programs, facilitates budget preparation, and assists in determining the need for security guards in specific locations. SRI customers will also be able to leverage Protos guarding network: the industry’s largest network of screened and vetted security guard vendors and personal client account managers. “From the beginning, we believed there was a better way to reduce program costs, capture valuable data from officers, and improve the accountability of guarding teams,” noted Chris Copenhaver, co-CEO and cofounder of Protos. “Our goal was to deliver innovative technologies to the loss prevention industry that do just that. Now, we’re excited to bring that visibility and control to a whole new set of guarding clients.” Meanwhile, customers that have been working with Protos will benefit from SRI’s more than twenty-five years of on-the-ground experience, on-staff guards, and vast industry knowledge that comes from having run both direct guarding and managed guarding teams. This experience—combined with a highly personalized, family-like approach that starts with listening to customer needs—allows the combined company to innovate, improve, and tailor security programs to the specific needs of each client.
By Loss Prevention Media Staff
From Hilton Head to Bad Bosses to Dishonest Employees
Hilton Head Island Hosts this Year’s Loss Prevention Leadership Trifecta Event By Jacque Brittain, LPC
The beaches of Hilton Head Island were hit with a wave of loss prevention professionals as the annual back-to-back-to-back asset protection leadership meetings took place at the Westin Resort in Port Royal Plantation to support the Retail Industry Leaders Association (RILA), LP Magazine (LPM), and the Loss Prevention Foundation (LPF). High expectations were equaled by the energy and enthusiasm of the attendees over the annual multiday event that boasted the strongest attendance to date. With great weather and great attitudes, loss prevention leadership and solution providers from across the industry were on hand to provide their advice, ideas, expertise, and feedback as the three organizations evaluated 2019 performance, celebrated strategic partnerships, and reviewed new and exciting prospects moving forward into 2020. LP Magazine The LPM vendor advisory board (the VAB represents the magazine’s major advertisers) meeting was held Thursday morning, followed by the editorial board meeting Thursday afternoon. During these meetings, the magazine team discussed the various improvements and accomplishments over the past year, including the ongoing growth of both the print and digital offerings as well as some of the opportunities that readers can look forward to in the coming year. LP MAGAZINE
The magazine website, LossPreventionMedia.com, offers readers daily breaking news, industry surveys, videos, press releases, case studies, and original articles from LPM writers and loss prevention contributors. The website is updated daily with the latest information included in our daily e-newsletter. Sign up at LossPreventionMedia.com/subscribe for free to add your email address to receive our newsletter and other digital offerings. This column highlights some of the content readers will find on the magazine website and newsletter.
A tremendous agenda of keynote speakers discussed some of today’s most compelling trends and topics: ■■ An uplifting presentation with Tony D’Onofrio, CEO of TD Insights, on “The Disruptive Future of Retail.” ■■ A thought-provoking and perspective-bending conversation with John Clark, principal and founder of Cannabis Compliance Company on “Retail’s New Frontier in Cannabis.” ■■ A call for action and unity with our law enforcement partners and community growth and change with David Lake, founder at Center on Shadow Economics, on “The Shadow Economy of Retail Crime.” ■■ Mobilization of the National Retail Shoplifting Prevention Coalition with Mike Lamb, vice president of asset protection with The Kroger Company, and Rhett Asher, vice president of strategy with ThinkLP. There was also a fun and uplifting conversation with motivational speaker Dr. Dale Henry following dinner. The Loss Prevention Foundation The Loss Prevention Foundation (LPF) took center stage on Friday morning. Following a board-only session to begin the day, guests were invited to attend the rest of the meeting where presenters reviewed committee reports and specific discussion points regarding the progress of the LPF, the continuing growth of the certification programs, and exciting updates on the latest offerings from LPF. The LPC and LPQ certifications continue to show an upward trend in course participation and certified members with companies across the country showing a strong and growing commitment to the certification process. However, the certification programs are also considered to be living documents that require continuing updates and review to ensure the content remains most relevant to the loss prevention community. As part of the high-quality expectations established by the LPF, three new chapters on grocery, restaurants/food service, and convenience stores have been added to the LPCertified coursework. There was also discussion on the two latest industry-specific programs on addressing disruptive behaviors and organized retail crime developed with exceptional input from leading subject-matter experts across the industry.
The Good Bosses Tough as nails, but always fair. The best boss I ever had was the epitome of this trait. I learned more from him than any boss I ever had—kind of like a strict parent. They are tough on you, but you know they love you. The defender. This boss stands up straight and accepts responsibility for things that may not have gone so well. They may council you in private, but publicly, they never throw their people under the bus. The fighter. This is the boss who, in a good way, fights for better budgets, better raises for their people, and even better people. The expert. This boss is a master of their trade, is universally recognized as such, and is willing to share their knowledge with all who work with them and around them. The truster. This is the boss who realizes they are not an expert in your job but trust you enough to let you run your business as you know best. The great communicator. No, I am not talking about Ronald Reagan here. I am referring to the boss who is clear, concise, and extremely articulate. They are easy to work for because you are always very clear about direction, expectations, opportunities, and consequences. Mr. or Ms. Congeniality. This boss is very capable but sometimes not as tough or direct as he could have been. But he was a very nice guy and well liked by everyone. He often got things done just because of that. The converted. This is the boss who, originally, is not interested in your department. But they are very good at listening and learning. Often, they end up being one of your biggest supporters. Cool, calm, and collected. This is the boss who is always calm and supportive under any circumstance. They never yell or show anger. If they are not happy about something you did, they discuss it with you and talk alternatives. The professor. This boss loves what they do and loves to teach and nurture those who work for them. Young people, just starting out, are fortunate to have this type of boss.
Professor Adrian Beck presents the findings of RILA’s Total Retail Loss 2.0 research to the Asset Protection Leaders Council]
RILA’s Asset Protection Leaders Council Looks at Escalating Violence and Total Retail Loss 2.0 By Lisa LaBruno
RILA’s Asset Protection Leaders Council—comprised of AP functional heads from RILA member retailers along with its strategic partners Intel and Zebra/Profitect—kicked off the three-day annual meeting event October 23–25 at the Westin Resort in Hilton Head Island collocated with industry partners LP Magazine and the Loss Prevention Foundation. As is always the case when this group of industry leaders gets together, the content was compelling, timely, and actionable. Escalating violence on store property has been a pressing concern over the past year. With the industry’s asset protection leaders in one room, there was no better time to discuss emerging trends, priority challenges, and sustainable solutions. Legal experts dissected several recent high-profile lawsuits against retailers arising out of active-shooter incidents and parking lot crime and shared practical tips for mitigating risk. The group examined related topics like active-shooter training, open carry of firearms in stores, and incident management systems. Plus, attendees had the chance to experience cutting-edge solutions in the active-shooter space, including training, firearm detection, alert systems, and protection, in a first-ever “themed” innovation showcase featuring five start-up technology companies. The group shifted gears on the second day, focusing on operational strategies to maximize profit. Attendees were the first to hear the findings from the Total Retail Loss 2.0 research, a build on the ground-breaking Total Retail Loss research commissioned by RILA in partnership with Emeritus Professor Adrian Beck of the University of Leicester (UK) that has gained broad industry adoption. [See the feature article in this print edition on page 15.]
The Not-So-Good Bosses Clueless. This was the dominant trait of probably the worst boss I ever had. A political appointment, he was a nice person but had absolutely no idea what he was doing. Face to the boss, ass to the cast. Employees at Disney are referred to as cast members. This phrase was often used to refer to one particular type of poor leader who was once quoted as saying, “I find out who my boss likes, and then I like them too.” They are always looking up. But when you look up, guess what you see? continued on page 72
Good Boss or Bad Boss: Which One Are You or Will You Become? By Bill Turner, LPC
I started working at the age of sixteen and officially retired at sixty-five. Over those forty-nine years, I had twenty-nine bosses. All bosses are a mix of some good and some not-so-good traits. But I learned something from all of them. The following list includes the personal traits I observed in the good ones and the bad ones over the years.
ANNUAL INDEX January–February 2019 Shoplifting Response, Reaction, and Recourse by Walter Palmer, CFI, CFE, EPIC Integrated Risk Solutions, and Jacque Brittian, LPC, LPM Editorial Director (p. 15) Bumps in the Road: Progress in Supply Chain Security Will Be Tested by Garett Seivold, LPM Senior Writer (p. 39) Unexpected Loss in the Bagging Area: Understanding and Managing Losses Associated with Self-Checkout Technologies by Emeritus Professor Adrian Beck (p. 51) March–April 2019 Making a World of Difference: Top LP Teams Enable Global Operations by Tackling a Wide Range of International Challenges by Garett Seivold, LPM Senior Writer (p. 15) The Improbably History of the Ink Tag by Bob DiLonardo, Consultant (p. 43) Why We’re All Millenials Now by Bruce Tulgan, RainmakerThinking (p. 55) May–June 2019 Punch Back Against Violence: Tools and Training Help LP Teams Address Violence in Stores by Garett Seivold, LPM Senior Writer (p. 15) The New Generation of LP: An Industry Survey Examines if Field and Corporate LP Professionals Are on the Same Page by Jacque Brittian, LPC, LPM Editorial Director (p. 43) LP Challenges in a “Secure” Environment: A Look Inside Airport Retail and Restaurants by Chris Rathgeb, Paradies Lagardere (p. 55) July–August 2019 Analytics Is Not Just a Numbers Game in Investigations by Garett Seivold, LPM Senior Writer (p. 15) Unraveling the Mystery of the Dark Web by Tom Meehan, CFI, LPM Retail Technology Editor (p. 41) Biometrics: Retail’s Best Kept Secret by Gene Smith, LPC (p. 51) September–October 2019 CLEAR Comes of Age: Ten Years on the Crime Fighting Partnership Hits Its Stride by Garett Seivold, LPM Senior Writer (p. 15) Leadership Response to the 2019 Loss Prevention Survey by Jacque Brittian, LPC, LPM Editorial Director (p. 39) Shaping the Future of Loss Prevention: ECR Working Group Answers Where LP See Itself in 20125 by Colin Peacock, ECR Community (p. 51) November–December 2019 Total Retail Loss 2.0: Moving Beyond the Theory by Emeritus Professor Adrian Beck (p. 15) The Future Is Now: Retail’s Revolution and Ramifications for LP by Garett Sievold, LPM Senior Writer (p. 39) 2020 Product Showcase and Resource Guide (p. 51) Interviews by James Lee, LPC, LPM Executive Editor The Evolution of LP to Supply Chain Omnichannel Experts with Maurizio Scrofani, CCSP, LPC (Jan/Feb 2019 p. 27) Combining Operations and AP in Total Retail Loss with Paul Jaeckle, Meijer Stores (Mar/Apr 2019 p. 29) Partnering with Retailers: Five Executives Discuss What Makes Vendors Successful Solutions Providers (May/Jun 2019 p. 31) Learnings in the Quick-Service Restaurant Segment excerpts from interviews with executives from McDonald’s, Dunkin’ Brands, CKE Restaurant Holdings, Papa John’s, and Wendy’s (Jul/Aug 2019 p. 29) Powered by Walmart: Building Continuity among Strong Local Businesses around the World with Jay Mealing, Walmart (p. 27) The Dynamic, Challenging, Innovative World of Risk Management with Kurt Leisure, The Cheesecake Factory (p. 25) Ask the Expert Alexa Needs You with Steve Sell, CONTROLTEK (Mar/Apr 2019 p. 50) All Hands of Deck with Kevin O’Brien,
DTiQ (May/Jun 2019 p. 67) Seen and Unseen LP Strategies with Mike Isch, STANLEY Security (May/Jun 2019 p. 68) Things to Consider When Adding GPS to Your Security Arsenal with Mary Pifer, 3SI (Jul/Aug 2019 p. 48) BORIS, BOPIS, and Risk with Nathan Smith, Appriss Retail (Sep/Oct 2019 p. 38) Six Considerations to Help Gain Approval for New or Upgraded Technology with Hedgie Bartol, LPQ, Axis (Nov/Dec 2019 p. 50) Case Study New Solution Protects Today’s “New Jewelry Store” by Garett Seivold (May/Jun 2019 p. 70) The Impact of Implicit Bias in Professional Investigations by Mike Bower, CFI, Northgate Gonzalez Markets (Jul/Aug 2019 p. 24) Certification Meet the Director of Operations for the LP Foundation with Mat Schriver, LPC (Jan/Feb 2019 p. 37) Broaden Your Understanding with Rick Snook, LPQ, Axis (Mar/Apr 2019 p. 26) Fascinating and Challenging with Jake Gillette, LPC, DICK’s Sporting Goods (May/Jun 2019 p. 28) College-Level Education with Sarah Torrez, CFI, LPC, Aero OpCo LLC (Jul/Aug 2019 p. 26) Don’t Think Twice. Just Do It! with Kelly Johnson, LPC, Bed Bath & Beyond (Sep/Oct 2019 p. 36) Fulfilling Your Role in the Industry with Isabelle Devereux, LPC, John Lewis (Nov/Dec 2019 p. 22) Diversity & Inclusion When Building Retail Teams, Experiences Are as Important as Experience by Brian Dodge, RILA (Sep/Oct 2019 p. 24) Editor’s Letter by Jack Trlica, LPM Managing Editor Why Supply Chain? (Jan/Feb 2019 p. 6) LP Must Partner with Supply Chain (Mar/Apr 2019 p. 6) A New Digital Platform (May/Jun 2019 p. 6) From Analytics to QSR and the Dark Web to Biometrics (Jul/Aug 2019 p. 6) Advancing Your Career (Sep/Oct 2019 p. 6) A Wealth of Great Reading (Nov/Dec 2019 p. 6) Evidence-Based LP by Read Hayes, PhD, CPP Opportunity Makes the Crime (Jan/Feb 2019 p. 48) Crime-Place Networks (Mar/Apr 2019 p. 40) Protective Sign Research (May/Jun 2019 p. 62) Developing Prioritized Protective Strategies (Jul/Aug 2019 p. 60) Chronic versus Acute (Sep/Oct 2019 p. 48) To Detain or Not to Detain (Nov/Dec 2019 p. 48) Future of LP by Tom Meehan, CFI Security Theater: Feeling Safe at the Airport Does Not Make You Safe (Jan/Feb 2019 p. 57) Cyber Security Starts with Physical Security (Mar/Apr 2019 p. 42) Using Artificial Intelligence to Catch Shoplifters in the Act (May/Jun 2019 p. 42) New Book on the Evolution of Retail Asset Protection (Jul/Aug 2019 p. 50) Standardization to Bring Greater Transparency and Efficiency in Cash Logistics and Visibility (Sep/Oct 2019 p. 64) Your #1 Tool for Deterring Thieves: Why Physical Security Hygiene Matters (Nov/Dec 2019 p. 36) Interviewing by David Zulawski, CFI, CFE, and Shane Sturman, CFI, CFE Evaluating Memory: I Remember It This Way, Part 2 (Jan/Feb 2019 p. 12) Thought and Gesture: Part 1 (Mar/Apr 2019 p. 12) Thought and Gesture: Part 2 (May/Jun 2019 p. 12) Thought and Gesture: Part 3 (Jul/Aug 2019 p. 12) Nonverbal Deception (Sep/Oct 2019 p. 12) Liars, Lying, and Lies (Nov/Dec 2019 p. 12) LPM Digital by Kelsey Seidler, LPM Digital Editor In the Minds of Offenders (Jan/Feb 2019 p. 64) Heralding a New Era (Mar/Apr 2019 p. 66) Bad News, Good News, and Some Terrific Content (May/Jun 2019 p. 72) Two Surveys Report US Shrink Increase (Jul/Aug 2019 p. 66) LP MAGAZINE
Two August Conferences of Note (Sep/Oct 2019 p. 66) Hilton Head to Bad Bosses to Dishonest Employees (Nov/Dec 2019 p. 69) LPM Excellence Recognizing the Best in LP Melissa Wacha, Walmart and Tom Rittman, Appriss Retail (Jan/Feb 2019 p. 50) Shannon Hunter, Office Depot, and Stuart Rosenthal, Checkpoint (Mar/Apr 2019 p. 28) John Voytilla, Party City, and John Tabor, National Retail Systems (May/Jun 2019 p. 30) Kathleen Smith, Safeway, and Bill Titus, Sears Holdings (retired) (Jul/Aug 2019 p. 28) Sean Sportun, Circle K, and Ed Tonkon, Zebra Retail Solutions (Sep/Oct 2019 p. 26) Melissa Allgood, CFI, NBC/Universal Studies Hollywood, and Joan Luttmer Sparks, Sensormatic (Nov/Dec 2019 p. 24) Parting Words by Jim Lee, LPC, LPM Executive Editor I Got Spirit. How ‘bout You? (Jan/Feb 2019 p. 74) Potpourri: A Miscellaneous Collection of Thoughts (Mar/Apr 2019 p. 74) D-Day: A Planned Success (May/Jun 2019 p. 82) I Am on Vacation (Jul/Aug 2019 p. 74) Lucky Me (Sep/Oct 2019 p. 74) The Holiday Season (Nov/Dec 2019 p. 78) Perspectives The Year Ahead in LP with Hedgie Bartol, Axis; Tom Batterbury, Auror; and Dan Reynolds, 3SI (Jan/Feb 2019 p. 60) Solution Provider Sales Strategies with David Ewton, Bosch; Mike Isch, STANLEY Security; and Rob Northrup, saffron (Mar/Apr 2019 p. 62) Negotiating with Procurement with Robert Kleinman, AFA; Thomas Nimblett, TIAA; and Terry Sullivan, LPC, Loss Prevention Foundation (May/Jun 2019 p. 28) Solutions Showcase Wi-Fi Smart Lock Solves Challenges to Lost Keys While Improving PCI Compliance InstaKey (Jan/Feb 2019 p. 65) Have Your Case and Analytics Too ThinkLP (May/Jun 2019 p. 64) Delivering Cloud-Based Controls for Mechanical Keys with a Human Touch InstaKey (May/Jun 2019 p. 65) Is Your Back Door Protected? Detex (Jul/Aug 2019 p. 62) Which EAS Technology Is Your Best Defense against Shrink? AM, RF, or RFID? Sensormatic (Jul/Aug 2019 p. 63) Power Tools? Yes, They Steal These Too 3SI (Sep/Oct 2019 p. 59) More Results and Less Complexity: Your First Steps onto an AI-Powered Platform Appriss Retail (Sep/Oct 2019 p. 61) Are You Getting the Most from Your GPS Loss Prevention Program? 7PSolutions (Nov/Dec 2019 p. 64) Do You Need to Upgrade Your Fire Alarm Service Provider? AFA Protective Systems (Nov/Dec 2019 p. 63) It’s Not a Process, It’s a Mindset: Design Thinking as a Strategy for Innovation in LP/ AP CONTROLTEK (Nov/Dec 2019 p. 65) Protos and Security Resources: Coming Together to Build a World-Class Guarding Company (Nov/Dec 2019 p. 67) Strategies Using Analytics to Maximize On-shelf Availability and Supply Chain Processes with Guy Yehiav, Profitect (Jan/Feb 2019 p. 58) Supply Chain The End-to-End Logistics Provider by Glenn Master, ISCPO (Jan/Feb 2019 p. 24) Modern-Day Pirates Pillage Different Seas by Maurizio Scrofani, CCSP, LPC (Mar/Apr 2019 p. 52) Supply Chain Continues to Change by Rod Felenwider, D&L Protective Services (May/Jun 2019 p. 40) Top Global Supply Chain Themes for 2019 (Jul/Aug 2019 p. 38) Maximizing the Use of Demand Signal Management in Supply Chain Asset Protection by Maurizio Scrofani, CCSP, LPC (Nov/Dec 2019 p. 34)
continued from page 70
average case lasts over two years and causes loss in excess of $350,000. The latest survey didn’t slice the data by industry, but previous years’ studies showed that while retailers are less likely to be a victim of insider embezzlement than companies in many other industries, retailer suffer financial harm nearly double the overall average. The Hiscox survey report provided an example: “An employee of a high-end New York department store recruited other sales associates to make purchases on store computers using stolen credit card information. They then sold the designer goods on the black market. The group got away with $430,000 in fraudulent purchases before the scheme was discovered.” The next disturbing news item was a survey in August of workplace behavior conducted at the Blackhat USA 2019 conference. Gurucul, a behavior-based security and fraud analytics technology company, surveyed 476 IT security professionals at the show and learned: ■■ 24% would take company information to help apply for a role at a competitor. ■■ 44% spend at least one hour per day on non-work web sites, including 32% of those in retail. The studies underscore the risk from dishonest insiders, with which LP leaders are well acquainted. To maximize efforts to combat cheating employees, however, it’s worth considering an important discovery by social scientists who have examined insider schemes and unethical workplace behaviors—the “two-person rule” isn’t always enough. A “two-person rule” calls for two authorized persons to be present and in a position from which they can positively detect incorrect or unauthorized behavior with respect to a task or operation being performed. So, for example, a security policy might require two persons to be present when uncontrolled access to funds could provide opportunity for diversion by falsification of accounts, or when uncontrolled delivery or receipt for materials could provide opportunity for pilferage through “short” deliveries and false receipts. Having two people present in such cases certainly helps prevent dishonest behavior, but the basic premise—that two dishonest employees are less likely than just one—isn’t ironclad. (See “Cheating More When the Spoils are Split” in Organizational Behavior and Human Decision Processes.) It’s not uncommon that an individual’s dishonest behavior might benefit others. Athletes who cheat by using performance-enhancing drugs boost their careers, certainly, but they probably also help their teams’ performance. And remember Bernie Madoff? His Ponzi scheme ultimately caused harm, but—for a time—he could ease his guilt by telling himself that others were getting rich off the scheme as well. The question the research study asked was this: how do these third-party benefits of cheating influence whether an individual is likely to cheat? One experiment examined whether participants cheat more to gain money when the additional money is split between themselves and another person than when they alone enjoy the spoils. Another tested how incidence of cheating might change depending on how spoils are divided. The results of the experiments don’t repudiate the value of the two-person rule, but they do offer LP executives a good reminder that unethical behavior is a complicated psychological
The Ice Man cometh. I quit a very good and high-paying position because of this one. No emotion, no relationship, no feedback, no fun—I quit! The White Rabbit. “I’m late, I’m late, for a very important date.” And that date is rarely you. This boss has little time and interest in you, your issues, or your career. They’re too busy! He or she who plays favorites. This boss is tough to work for if you don’t happen to be in the favorite category. Not only will you or your department get little or no recognition or support, but also the great raises and other perks will go to (you guessed it) their favorites. The victim. This is the boss who has been promoted to the level of their incompetency and is in way over their head. They are truly a victim, but working for them is difficult. Grumpy. This boss may be grumpy for a reason, but they are hard to work for. I once had a boss that decided he had made a mistake; he didn’t like his job and eventually didn’t like the company. We got along pretty well, and I told him, “Then quit, already.” He did. The ghost. Similar to the White Rabbit, this boss is very busy. You almost never see them, get little feedback, and almost zero support. And when you do get an appointment to see them, it is usually postponed or cancelled. The glory hog. This boss is an expert at taking all the credit for successes. Conversely, they are very quick to place blame for things that didn’t go so well. The Cowardly Lion. This boss shies away from the truth because sometimes it hurts. It may hurt, but unless a boss is willing to give tough feedback or constructive criticism, their reports suffer. He or she who surprises. This boss doesn’t communicate well and rarely gives feedback. Then, at review time—surprise! Up jumps the devil. This person is someone you have known and worked with for a long time, but you have never really liked each other. And now, guess what, they’re your new boss! The lesson here is be careful how you treat people in business because you never know.
Cheater, Cheater: Dishonest Workplace Behavior Is a Complicated Phenomenon By Garett Seivold
For those charged with protecting company assets, a couple of recent news items raised red flags about dishonest insiders. First were results from the latest Hiscox Embezzlement Study, “An Insider’s View of Employee Theft,” which found the
issue, something that can’t be eradicated with simple oversight. “Self-interest clearly motivates people to behave unethically,” said the researchers. “However, the studies here indicate that people may actually be more likely to behave unethically when they do not capture all of the benefits that the unethical behavior yields.” The reasoning is straightforward. Most people have a need to see themselves as moral, which places a limit in how unethically people behave in order to maintain that view. “When we can rationalize that our unethical behavior benefits others as well, we may be able to simultaneously act unethically and preserve our positive view of ourselves.” The above study is not the only one to observe the phenomenon. In recent experiments with college and graduate students, researchers discovered similar results. (See “Self-serving Altruism? The Lure of Unethical Actions That Benefit Others” in the Journal of Economic Behavior & Organization.) “The results show that whenever cheating benefits other people, dishonesty increases, and that this increase is influenced by the number of people who stand to benefit from one’s own unethical actions. The more people can benefit from an individual’s unethical actions, the greater the cheating. This result is consistent with our predictions and suggests that
the presence of other beneficiaries facilitates dishonest behavior.” The lesson is not only relevant to insider theft. Indeed, research suggests that “minor” unethical behavior—such as cheating customers to improve sales and boost the company’s bottom line—is the most likely to be influenced by a justification of “benefiting others.” Not recording security lapses, failure to report safety violations, and inflated job performance evaluations are other examples. Broadly speaking, the results suggest that security directors concerned with ethical staff behavior should examine dishonesty not only at the individual level but also at the group level, where employees can influence one another through both their ethical and unethical behavior. Finally, an additional set of experiments suggests that cheating, lying, and stealing should be of greatest concern in competitive workplace environments. (See “Sloppy Work, Lies, and Theft: A Novel Experimental Design to Study Counterproductive Behavior” in the Journal of Economic Behavior & Organization.) Productivity is highest under competition, but so too are counterproductive workplace behaviors (CWBs), said researchers. CWBs are voluntary acts that are detrimental to the organization, such as employee theft, lies, slow and sloppy performance, sabotage, tardiness, and absenteeism.
Statement of Ownership Publication title: LossPrevention. Filing date: 10/1/19. Issue frequency: bi-monthly. No. of issues annually: 6. Mailing address of office of publication: 700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105. Mailing address of headquarters: same. Name and address of publisher, editor, and managing editor: Jack Trlica, same address as above. Corporate owner: Loss Prevention Magazine, Inc., 1700 Matthews Mint Hill Rd, Ste C, Matthews, NC 28105. Stockholders: Jim Lee, 10433 Pullengreen Dr., Charlotte, NC 28277; Jack Trlica, 7436 Leharne Dr., Charlotte, NC 28270. Publication title: Loss Prevention aka LP Magazine. Issue date of circulation data below: July-August 2018. Avg. No. Copies No. Copies of Single Each Issue During Issue Published Preceding 12 Months Nearest to Filing Date Total no. of copies 15,167 15,600 Outside county paid/requested subscriptions 11,741 11,998 In-county paid/requested subscriptions 0 0 Other paid/requested distribution outside USPS 1,946 1,973 Requested copies distributed by other mail classes through USPS 0 0 Total paid and/or requested circulation 13,687 13,969 Outside county nonrequested copies 0 0 In-county nonrequested copies 0 0 Nonrequested copies distributed by other mail classes through USPS 0 0 Nonrequested copies distributed outside the mail 1,118 1,360 Total nonrequested distribution 1,118 1,360 Total distribution 14,805 15,329 Copies not distributed 362 271 Total 15,167 15,600 Percent paid and/or requested circulation 92.4% 91.1% Electronic copies requested 12,622 12,725 Total print and electronic requested 26,309 26,694 Total distribution print and electronic 27,427 28,054 Percent paid and/or requested both print and electronic 95.9% 95.2% Name and title of publisher: Jack Trlica, Editor and Publisher Date: 10/1/2019 LP MAGAZINE
CALENDAR December 5, 2019 Cyber Security Summit: Los Angeles The Beverly Hills (CA) Hilton cybersummitusa.com January 11–14, 2020 NRF 2020 Vision Retail's Big Show Jacob Javits Convention Center New York City nrfbigshow.nrf.com February 5, 2020 Cyber Security Summit: Atlanta Grand Hyatt Atlanta (GA) in Buckhead cybersummitusa.com February 12–13, 2020 California Organized Retail Crimes Assocition CAL-ORCA 2020 Conference South San Francisco Conference Center calorca2020.com February 23–26, 2020 Retail Industry Leaders Association LINK 2020 Retail Supply Chain Conference Gaylord Texan Resort & Convention Center Grapevine, TX linkretailsupplychain.rila.org February 24–26, 2020 INNOVISION 2020 Pointe Hilton Squaw Peak Resort Phoenix, AZ innovisionconference.com/registration March 3–5, 2020 International Supply Chain Protection Organization Global Supply Chain Security Conference 7-Eleven Store Support Center, Irving, TX iscpo.org/conference March 16–19, 2020 Merchant Risk Council MRC Vegas 2020 Aria Resort and Casino Las Vegas, NV merchantriskcouncil.org March 20, 2020 Cyber Security Summit: Tampa Hilton Tampa (FL) Downtown cybersummitusa.com
PEOPLE ON THE MOVE Jeremy Ramey was
promoted to manager of innovation and operations integration at 7-Eleven.
promoted to VP of global business development at 7PSolutions.
Ron Nyberg is now national
account manager, and
Benjamin Lockhart, CFE, CFI
is now national accounts retail sales at ADT. Paul Menzer, CFI was
promoted to director of AP supply chain at Advance Auto Parts. Nakhshab “Nash” Arshad, LPQ is now a security
analyst II with ALDI.
Matt W. Lincoln, CFI is
now LP national leader of specialty retail stores, Christian Huenke was promoted to head of investigations and threat management (Amazon Studios), Ruby Secrist was promoted to technical program manager, Megan Simkus was promoted to senior risk manager VCS, Joe Bingeman, LPC was promoted to regional LP manager, Mark Miller, CFI was promoted to regional LP manager III, Ivana Kaiserová was promoted to logistics regional LP manager (reverse logistics), Aaron Dobson was promoted to area manager (Amazon Logistics), Hannah Barton was promoted to business analyst LP strategy, Phil
Marshall, PgDip, APCIP, MSyl
was promoted to director of LP and security (UK, Middle East, & Turkey), and Robert Harkort, CFI is now a cluster manager of security and LP (Germany) at Amazon.
Patrick Parris, LPC is now a
James McLemore, CFI
was promoted to LP field director, Joseph Womack III, CFI, LPC was promoted to LP corporate analyst, Justin MacIntyre, CFI, LPC was promoted to senior zone LP manager, and Darryl Keister, CFI and William Savage were promoted to zone LP managers at Bealls.
a regional LP manager at Designer Brands.
Brandon Cummings, CFI was promoted to
director of corporate AP at Dollar General.
Tonia Rees Willett and Juan C. Escruceria
are now regional AP managers at Dollar Tree Stores.
Raymond Lastner was recently promoted to ORC manager, and Jennifer Siebenaler was promoted to senior fraud risk specialist at Best Buy.
Kevin Turnbull, LPQ, CFE was promoted to
Deanna Bonachea, CFI is
regional LP manager at The Exchange.
Joshua Smith, LPC was
Tim Dorcey is now data center site security manager at Facebook.
now a market AP leader at Big Lots Stores. promoted to senior district LP manager at Blain’s Farm & Fleet.
Afornia Hawthorne has
been named associate director for the False Alarm Reduction Association’s (FARA) Mid-Atlantic Chapter.
Jordon Peters was promoted to AP manager of central investigations at Bloomingdales.
Dale Sucherman is now a zone AP director, Ben Mathis Jr. was promoted
Brian Lair was recently
promoted to VP of AP at Brookshire Brothers.
to regional LP manager, and Lewis Tillman is now a market auditor/investigator at Family Dollar.
Temia Balogun was promoted to territory LP director, Elizabeth Bolton was promoted to regional LP manager, and Deborah Hufford, MBA, Arkadiusz Mosakowski, and Michael Mazze, LPC are now district LP managers at Burlington Stores.
Karvis Jernigan, CFI , CFE
is now a regional LP manager at Finish Line. Ryan Merkel is now
corporate AP coordinator at Five Below.
Timothy Rout, LPC is now a regional LP manager at Goodwill of Central & Southern Indiana.
Jimmy Greene is now an ORC investigator at Carters. Jennifer Sleeter, LPC, CFE, CFI is now a market
Kim Gillespie was
Alice Haynes, Tech IOSH is now national
regional LP manager, and David Manasco was promoted to senior LP analyst at AutoZone.
April Burke Doyle is now
Sonia Hernández is now an area profit protection manager at Bed Bath & Beyond.
manager at Circle K.
Michael Potvin is now a
Victoria To-Dowd, CFI
was promoted to senior manager of AP, Howard Weisel is now a multidistrict AP leader, and William Foust is now a district AP leader at CVS Health.
security manager at BASF.
regional AP investigations auditor at American Freight Furniture & Mattress. promoted to LP project manager at American Golf (UK).
Vic DeBlassi is now an area
Michael Wolfson is now senior manager corporate security at Gucci. Jonn Essig is now an area LP manager at Harbor Freight Tools.
investigations manager, and Liam Greensmith, APCIP is now profit protection analyst at Compass Group (UK).
Ben Thomas was promoted to senior area LP manager, and Daniel Cano was promoted to area LP manager at H-E-B.
Rubin Press was named VP of global sales at CONTROLTEK USA.
Sam Ross is now a regional
LP manager at Hermès.
Gary Francis was promoted
to regional operations manager at Heron Foods.
Russell Barnett was
promoted to senior LP manager at Hermes (UK).
Marcelo Lopez was recently
named national LP manager at Holt Renfrew.
Damon Ferguson is now an
ORC investigator-south Atlantic region, and Rob Pope was promoted to senior manager supply chain AP at The Home Depot.
Andrew Castillo is now an
investigations specialist with HS Brands Global.
Martella Moore Jr. is now risk and compliance leader at IKEA Group. Emily Kuhn has been named association manager with the International Association of Interviewers. Chris Lodge was recently
named director of LP at Janie and Jack.
Mark Hibbs, LPC was
promoted to director of investigations, global security, and training, Harry Freed was promoted to director of operations for AP, Dmitri Luppov was promoted to central investigations manager of internal investigations, Jim Pringle, LPQ was promoted to central investigations manager, and Adam Krzyzanowski is now an area AP manager at JCPenney. Tom Arigi has been
named director of AP at the Kroger Company.
Larry Marioth was promoted to senior manager of capital resources–AP at L Brands. Lewis Jones is now senior manager of global security, Jennifer Byford was promoted to ORC manager, and Randy Vickers, LPC and Ben Fredbloom are now a district AP manager at Lowe’s Companies.
Anthony Clark is now a district manager of investigations at Macy’s. Mark Thorndycraft is now
senior profit protection manager at Merlin Entertainments plc (UK).
Scott Tranum, CPP, CFI, LPC was promoted to
senior director of global investigations and NC campus AP operations,
Cente van der Wende, CFI
promoted to LP retail project manager at Morrisons (UK).
Sherry Wagoner is now
Christopher Sant was
Edward Young was
a regional AP manager at Murphy USA.
Davion Mitchell is now a regional LP manager, and Brandon Stuart is now a district LP manager at NAPA Auto Parts. Zuhal Weber is now a
regional LP investigator at National Stores. Rodd Wilson, CFI is
now a district LP and safety manager at Navy Exchange Service Command (NEXCOM). Frank Dara, LPC was promoted to global investigator at Nike. James O’Brien was promoted to national service and experience program manager, Alex Collins was promoted to LP program manager, Jessica Bello was promoted to project manager, and Josue Velasquez was promoted to area LP manager at Nordstrom. Lauren Denman is now LP
promoted to regional director of AP, and Jake Harris, CFI was promoted to senior leader of investigations at Rite Aid. Ray Cloud was promoted
to group senior VP, LP, organizational safety, and security, Efran Ali was promoted to associate LP director, Christopher McGee, CPP, CISSP, PSP was promoted to senior director of LP technology, Christina White was promoted to manager of LP operations, Anthony Ortega, Geoffrey Styles, Sidney Scarborough, CFI, and Jami Lacoste, CPI were promoted to senior area LP managers, and Patrick Turner was promoted to area LP manager at Ross Stores. Brad King was named VP of LP at RTW Retailwinds. Agustin Jaramillo was
promoted to district AP manager at Safeway.
Harriet Richardson was
promoted to category loss expert at Sainsbury’s (UK).
Chris Frey is now senior
director of safety, security, and LP at Peloton Interactive.
Michael Fitzgerald was promoted to technology center operations senior manager, and Alisha Crosier is now an AP area manager at Sam’s Club.
Victoria Wilkes was
Mason Keller was
promoted to head of security at Primark (Ireland).
promoted to VP of AP at Schnuck Markets.
Yazmine Ramos is now
Bill Schuh was promoted to national operations manager at Sears Holdings.
lead at OSL Retail Services.
a regional LP manager at Rainbow Apparel.
Jen Paladino is now a district LP manager at TJX Canada/Winners Merchants.
Brian Peacock, CCIP
Julia Ringham is now a regional LP manager (UK), Michael Jones was promoted to European investigations manager, Andrew Newton was promoted to European investigations specialist, and Scott Barnfield was promoted to European security operations centre specialist at TJX Europe.
appointed as COO at Securitas Electronic Security.
was promoted to director, global corporate security and AP (EMEA), Georges David was promoted to district manager global corporate security and AP (France), and Rob Banziger was promoted to regional manager, global corporate security and AP (central Europe) at Ralph Lauren.
is now a regional AP manager at Mobilelink.
Kevin Engelhardt has been
was promoted to VP of global innovation at Sennco Solutions.
Jenny Deyhle is now
a district LP manager at Sephora.
Don Wuchter, CFI was promoted to international director of LP, Bryan Hajek, CFE, CFI was promoted to corporate director of north American LP, PCG, CBG & GSC, and Michael Hagenbush, CFI, CFE was promoted to director of enterprise risk management and compliance at Sherwin-Williams. Jacob Soha, CFI is now a fraud prevention and detection analyst at SoFi. David Arena is now a
regional LP manager at Spencer’s. Brad Hayes is now a
regional LP manager at Sports Direct (UK).
Michael St. Clair, CFI, LPC is now manager of field AP, and Kimberly Schmit is now a field LP
manager at Staples.
Brian Friedman CFE, CFI
was promoted to director, AP, global supply chain, and logistics, and David Crowther was promoted to senior manager of national investigations center at Target. Julie Lawson was promoted to global account executive at ThinkLP. Krystal Buchanan was
promoted to global investigations and safety LP manager, Damon Burger and Brandy Parrish, LPC are now district LP managers, Nick Hanlon was promoted to associate LP investigator, and Andy Luna is now distribution center LP manager of 3PLs at The TJX Companies.
Stephen Kerr, Dip.CSMP, AMBCI was promoted
to operations, LP and security manager at Topshop Topman (UK).
Deborah Beene is now
LP operations manager at Tuesday Morning.
Monica Serna and Craig Jackson, CFI are now
area LP managers at Ulta Beauty.
Jeff Svoboda is now
management analyst, internal audit & compliance department at Veterans Canteen Service.
Marty Andrews, CFI was
promoted to VP of LP at VF Corporation.
Kevin Fitzgerald is now an AP investigator at Victoria’s Secret. Perry Resnick is now an
account executive at VOLO.
Jesse Berry was promoted to director, safety and security, and Kristine Post and Robert May are now market AP managers at Walmart. Jonathon Burris, LPC and Randy Hall are now regional
AP and safety managers at Whole Foods Market.
Debbie (Gaxiola) Maples
is now VP of global LP and corporate security at Williams-Sonoma.
James Ishum is now
corporate security manager at XPO Logistics.
To stay up-to-date on the latest career moves as they happen, sign up for LP Insider, the magazine’s daily e-newsletter, or visit the Professional Development page on the magazine’s website, LossPreventionMedia.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.
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VENDOR ADVISORY BOARD 3SI Security Systems Dan Reynolds Vice President, Retail Sales
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The Holiday Season
Jim Lee, LPC Executive Editor
something nice to you. I had a boss in retail who made me promise I would observe the “three-one rule” in managing people. That is three pats on the back to every one kick in the rear. So a big thank you and hugs to all of you who support the magazine. We could not do this without you. Our compliments for being there for the industry. How about Roots Day. Are you interested in your ancestry? If you have a famous forefather—or even an infamous one—you likely are a student of your family tree. I find it fascinating. My family has passed down root stories for generations. I can trace my family tree back to 1786 or 233 years. The stories about some of the characters are special. Lots of information is online these days to help with these family studies. Here’s an idea: trace your AP ancestry—who you have worked for and who they have worked for and so on. If you can go back far enough, you might find a handful of people and only three or four companies that spawned this industry. Well, those are just a few other special days to observe. Whoops; not done yet. I did not mention my favorite day. How about Veterans Day. Likely should have put this in with Hanukkah, Thanksgiving, and Christmas. This is always a very emotional day for me as I come from a somewhat military-oriented family. My brother, father, uncles, aunt, and grandfathers all served in the military. My brother and stepfather served in Vietnam during 1968–69. The war was very hot during that time. By the grace of God, both returned safely. We do a great job of remembering and honoring our Veterans today. I wished we had done so well for the returning soldiers from Vietnam. We are fortunate in AP to have so many veterans. Always a good time to say, “Thank you for your service.” Now, there you have it—the holiday season. A time for celebration and remembering. Happy Hanukkah, Happy Thanksgiving, Merry Christmas, and Happy New Year. Here’s wishing you a great and safe selling season to all retailers and asset protection professionals. And to all, a goodnight!
his is the holiday season. When someone mentions that to you, do you think of Thanksgiving, Hanukkah, Christmas, or New Year’s? I think those are the most observed and celebrated holidays in the US. These are spiritual days filled with big meals, lots of shopping, drinking, and time with family and friends. For retailers and asset protection professionals, it is an important, busy, and often difficult time. For all these days, I say “happy” and “merry.” But they are not the only days some of us celebrate. There are others. In fact, just about every day has something that is celebrated. Here are just a few you may not have remembered. How about Hugging Day. Now here is a day that deserves some attention. Hugs make us feel happy and reduce stress. Hugs can be a form of respect and care for the other person. Hugs improve our game. A study was conducted that determined that teams who hug more win more. This is a great holiday. I have observed that AP folks hug a lot. When they see each other and when they say goodbye. In my opinion there is a special bond between those who work in AP. How nice is that? How about Red Apple Day. Yes, there is a special day for the red apple. Name a fruit that gets as much press as the apple. “An apple a day keeps the doctor away.” I average an apple a day. Dating back to when as a kid, I would go next door and eat them off the neighbor’s tree. I don’t know about that doctor thing as I suffer from diabetes. Maybe it is the coconut cake, and the apple is doing all it can. Ask around how many people have an apple a day. Overrated? Perhaps. How about National Humbug Day. This is a day that allows us to express our frustrations or displeasure of another. Ebenezer Scrooge, the character created by Charles Dickens, gets a lot of credit for the word “humbug”. Curiosity caused me to check the definition. A humbug is a person who behaves in a deceptive or dishonest way. Fits right in with the busy holiday season that AP people confront, doesn’t it? How about Compliment Day. This should be an everyday occurrence, don’t you think? We should not have to go out of our way to give a compliment to someone else. It makes anyone feel good when someone says
TEXT HEADLINE From our family to yours, may you have peace, joy and prosperity this holiday season. Protos Security and Security Resources thank you for your continued trust. We look forward to providing for your security guard needs now and for years to come.
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Total Retail Loss 2.0 moves beyond theory. An interview with The Cheesecake Factory's risk management executive Kurt Leisure. A look at the...
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