January - February 2016 by Loss Prevention Magazine

January–February 2016 | V15.1 LOSSPREVENTIONMEDIA.COM

LOSS PREVENTION MAGAZINE THE AUTHORITY ON ALL THINGS ASSET PROTECTION

THE STATE OF

VIDEO

WHERE WE ARE TODAY, WHERE WE ARE HEADED, AND HOW WE GET THERE WALMART’S NEIGHBORHOOD MARKET GROCERY BUSINESS Retail Challenges and Technology Solutions The Soft Skills Gap and Generation Z

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Table of Contents 6

EDITOR’S LETTER Magazine Expands its Industry Support By Jack Trlica

The State of Video

8 ON THE WEB 10 RETAIL SPONSORS 12 INTERVIEWING

Where we are today, where we are headed, and how we get there

“I Don’t Remember.”

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

By Rob Borsch, Skyview Insights, and Colin Peacock, ECR Europe

UTURE OF LP F What Is Big Data? By Tom Meehan, CFI

Walmart’s Neighborhood Market Grocery Business

26 PARTNERING WITH RETAILERS How eBay Works with Law Enforcement By Dave DiSilva

36 EVIDENCE-BASED LP Loss Prevention Leaders Must Win

An interview with Senior Director of Asset Protection Gary Smith

By Read Hayes, PhD, CPP

By James Lee, LPC, Executive Editor

46 CERTIFICATION

Adding Certification to a Master’s Degree With Jennifer Schaefer, MA, LPC, McDonald’s

The Top Challenges Retailers Face

48 SUPPLY CHAIN

Cargo Theft and Its Impact on the Retail Community By Maurizio P. Scrofani, CCSP, LPC

A look at the current technologies that deliver solutions

60 DIGITAL DIALOGUE

How Will Retail Respond to a New Wave of Cyber Crime?

By Jumbi Edulbehram, Oncam Grandeye

By Jacque Brittain, LPC

63 PEOPLE ON THE MOVE 63 CALENDAR 64 ADVERTISER DIRECTORY 65 VENDOR SPONSORS 66 PARTING WORDS

The Soft Skills Gap and Generation Z

Fifteen Years of Growth and Change

Teaching the missing basics to today’s young talent

By Jim Lee, LPC

By Bruce Tulgan, RainmakerThinking

January–February 2016

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Editor’s Letter

LOSS PREVENTION MAGAZINE

Magazine Expands Its Industry Support

ntering our fifteenth year of publication, we trust that we have established ourselves as the primary information and education publication for LP, asset protection, and other retail security, risk, and safety professionals. For the past several months the magazine’s marketing, communications, and loss prevention experts have added capabilities to further assist retail organizations with internal communications, training, and consulting services. Starting in 2016, all the magazine’s offerings for both industry and custom publishing services will be delivered under the new LPM Media Group banner.

Industry Publishing

Loss Prevention magazine started in 2001 as a print-only publication, establishing itself as the premier voice of the LP industry, winning wide-spread retail support and several publishing awards along the way. In recent years, multiple digital channels have been added to the communications mix, including a smartphone app, podcasts, EyeOnLP videos, webinars, and a digital version of the print magazine, culminating in the launch in fourth quarter 2015 of a comprehensive new digital platform at LossPreventionMedia.com. The new technology platform supports all the existing options, plus daily newsletters, a new digital magazine format, product directory, special reports, an expanded industry calendar of events, education and career resources, as well as multiple social network groups.

Custom Publishing

In addition to communications and marketing expertise, the expanded LPM staff has decades of retail LP, crisis management, and operations experience. Responding to requests from retail executives, the team has provided

extensive consulting services to individuals, retail LP teams, and vendor organizations. Part of this support includes custom publishing services for internal training and awareness through traditional print programs and more recently, with customized digital magazines that are distributed over internal corporate networks. The digital services also include e-learning programs using animation and video for scenario-based learning that teaches through interactive visual examples and a new online awareness center, with supporting mobile apps designed to deliver critical training and messaging to retail associates on demand.

LPM Media Group

While the LPM Media Group banner may be new, the management, staff, and innovative industry support for the past fifteen years remain the same—only enhanced with a growing team and new services. You can continue to turn to Loss Prevention magazine for the information and education you’ve always expected. Now, you can also turn to LPM for loss prevention consulting, unique internal corporate communications programs, marketing support for vendors bringing products and services to the retail industry, and much more. We are excited that we can continue to make a mark in the retail industry and look forward to the next fifteen years. For more information about our industry and custom publishing services, go to LPMmediagroup.com.

Jack Trlica Managing Editor

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

January–February 2016

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700 Matthews Mint Hill Rd, Ste C Matthews, NC 28105 704-365-5226 office, 704-365-1026 fax MANAGING EDITOR Jack Trlica JackT@LPportal.com EXECUTIVE EDITOR James Lee, LPC JimL@LPportal.com EDITORIAL DIRECTOR, DIGITAL Jacque Brittain, LPC JacB@LPportal.com MANAGING EDITOR, DIGITAL Kelsey Seidler KelseyS@LPportal.com CONTRIBUTORS Dave DiSilva Read Hayes, PhD, CPP Richard C. Hollinger, PhD Walter Palmer, CFI, CPP, CFE Gene Smith, LPC Shane G. Sturman, CFI, CPP Bill Turner, LPC David E. Zulawski, CFI, CFE CHIEF OPERATING OFFICER Kevin McMenimen, LPC KevinM@LPportal.com DIRECTOR OF MARKETING Merek Bigelow MerekB@LPportal.com DIRECTOR OF DIGITAL OPERATIONS John Selevitch JohnS@LPportal.com SPECIAL PROJECTS MANAGERS Kat Houston, LPQ Justin Kemp, LPQ Karen Rondeau DESIGN & PRODUCTION SPARK Publications info@SPARKpublications.com CREATIVE DIRECTOR Larry Preslar ADVERTISING MANAGER Ben Skidmore 972-587-9064 office, 972-692-8138 fax BenS@LPportal.com EAST COAST AD REP Kristie Thymes 972-782-9841 office, 972-692-8138 fax KristieT@LPportal.com S UB S C R I P T I O N S E R V I C E S

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

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On The Web

Editorial Board

Daily NewslettersSpecial Reports Careers EyeOnLP Videos News Education Industry Events Article Archives Webinars SDR Monthly Product Directory

Careers

Daily Newsletters Webinars EyeOnLP Videos Industry Events Education Special Reports Article Archives SDR Monthly Product Directory News

LossPreventionMedia.com

NEW MAGAZINE WEBSITE

January–February 2016

Bob MacLea Senior Vice President, Loss Prevention, TJX

Shawn Blankenship Vice President of Asset Protection, The Home Depot

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

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

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

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

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

Charles Delgado, LPC Vice President, Asset Protection, Meijer Scott Glenn Chief Security Officer, Sears Holdings Tim Gorman Divisional Vice President, Loss Prevention, Asset Protection, and Business Continuity, Walgreens Barry Grant Chief Operating Officer, Canadian Images Bill Heine Senior Director, Global Security, Brinker International

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

Frank Johns, LPC Chairman, The Loss Prevention Foundation

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

Gary Johnson Vice President, Loss Prevention, The Vitamin Shoppe

Robert Vranek Vice President, Loss Prevention Belk

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

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

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

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

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January–February 2016

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Join these great companies as an LP Magazine corporate sponsor. Email JackT@LPportal.com for more information. LP Magazine | January–February 2016

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

“I Don’t Remember.” I

forgot my keys somewhere. I know I had them just a few minutes ago, and I’m sure they were right here in my pocket. I locked the door and then—I’m sure they were in my pocket. It wouldn’t be so bad, but the spare key was on the ring because I meant to buy another key ring, but I guess I forgot. Or it might have been… The mail was in my hand because my wife told me to get it to the mailbox because bills were due. I just looked at my hand, and the mail isn’t there. I’m pretty sure I mailed them because I always listen to my wife, and she told me to mail them. I don’t remember mailing them, but I must have done it because I can’t remember doing anything else with them. I guess I’ll know if I mailed them in a month when the bills come in. I really hope I mailed them. Or it might have been… This morning in the shower I was thinking about the day and all I had to do. Then I wondered if I had shampooed my hair yet. I always shampoo my hair after I wash and before I shave. The soap is wet, so I must have washed—unless it is just wet from the shower spray. But I haven’t shaved yet. The bottle says shampoo twice, so it really doesn’t matter if I shampoo…again?

“I don’t remember” happens to us all. And as we grow older, it becomes much scarier because we wonder if this is the beginning of Alzheimer’s or just one of those things that gets misplaced in our memories. I prefer to think of it as saving space for the more important things in life. You know—letting the details spill out of the glass while I keep the important stuff inside.

The Memory Hook

The “important stuff” in the examples provided here only become important once we can’t remember. Why couldn’t we remember? With apologies to the memory professors who study and do research on memory, we think that there is not a memory hook to retain the moment. Years ago, 1981 to be exact, there was a movie called The Four Seasons starring Alan Alda and Carol Burnett as one of three couples followed through the four seasons of the year. Alan Alda provides the memory hook for the couples while they are floating on a lake in the springtime drinking wine and eating bread. He stands in the boat after talking about how he wants everyone to remember this day. Alda says, “I do this for you, so you will remember,” and then leaps into the water. The other husbands join him with shrieks of laughter. The memory hook has been set. Alda has given new importance to the day with a crazy spontaneous leap into the water. We can all look back into our lives and recall a moment remembered because of emotions attached to the event. It might have been laughter, happiness, sadness, anger, or another emotion that links us to a memory. I can remember where I was and who I was with July 1, 1989. Why? A memory hook. Mike, George, and I were driving in Orlando, Florida, in the early morning hours when a drunk driver rammed our car and totaled it. Where I was the rest of the month is long lost, but not that day. Clearly, the fear of the crash and the emotions of survival help us remember things like that.

In situations where a subject reverts to “I don’t remember,” it is generally a means of defending himself without having to admit to participation in a particular act. For example in a Senate hearing, if the person under oath denied committing the act, he will have committed perjury. However, if the “I don’t remember” response is used, it enables the subject to respond without committing perjury. 12

January–February 2016

Zulawski and Sturman are executives in the investigative and training firm of Wicklander-Zulawski & Associates (w-z.com). Zulawski is a senior partner, and Sturman is president. Sturman is also a member of ASIS International’s Retail Loss Prevention Council. They can be reached at 800-222-7789 or via email at dzulawski@w-z.com and ssturman@w-z.com.

Convenient Amnesia

Now put yourself into the mind of the criminal and the emotions at play when deciding to commit a crime. There must be uncertainty relating to fear wondering if he continued on page 14

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remember” or “I don’t recall” responses. His full testimony can be found by searching YouTube. In the second example, the chief financial officer of Global Entertainment Holdings/Equities, Inc., is in a deposition being questioned about debts incurred by the company. Watching even a few minutes, it’s clear that this man is either lying or totally incapable of remembering anything about his job or life. I don’t think too many large publicly traded companies would select a person with this type of memory. While this video only gives us a limited view of the deposition, it is clear that the attorney in this case, who is doing the questioning, had not anticipated this type of response to each of his questions.

continued from page 12

will succeed or be discovered—the adrenalin rush as the body enters the fight or flight mode revving up the body’s defenses for what could happen. This fear of detection has to imprint the memory of the act making it impossible not to remember the event. That being said, there may be a muting of these feelings as repetitive successful acts of dishonesty diminish the fear of detection as the criminal behavior escalates. For example, if an employee uses fraudulent refunds to commit a fraud, they certainly remember that they used the documents to steal money from the organization. However, they may not have an independent recollection of the pattern of behavior

Countering “I Don’t Know”

One legitimate way to prepare for this type of response is to encourage the subject to talk about his job, its processes, and his responsibilities. Using what we would call a participatory interview allows the questioner to have the subject commit to a series of events before the questioning focuses on the target of the inquiry. This sets up a difficult situation for the subject where he has to defend his ability to remember in one area but then later have no recollection of almost anything in another. In an interview with a dishonest employee, switching to a participatory questioning style moves the subject from areas of general inquiry toward the target area. Because the subject has been detailed in his responses, it is difficult for him to turn to the “I don’t remember” response. Since he has been responsive up to this point, it would be awkward to so abruptly shift gears. In this type of pathway, it is much more likely that the subject will use the failure-to-recall response when asked to develop the admission. He will initially offer some examples substantiating his dishonesty but then be somewhat reluctant to expand on the admission. When faced with this type of a response, the interviewer should return to the use of showing understanding and empathy to support the subject’s self-image. Another possible use of “I don’t remember” is in response to assumptive questions. For example, “What’s the most amount of money that you ever took at any one time from the register?” “I don’t remember.” The interviewer should recognize that this is actually an admission of guilt. The subject at this point does not want to commit himself to a direct lie, so he couches his statement with a lack of memory. Here the interviewer returns to showing understanding and empathy to support the subject’s self-image. This might include a rationalization revolving around a person who has done so much that they truly can’t remember each time or the person who wishes to forget what they’ve done. We all forget small details. We forget those things that aren’t tied to the emotions or are particularly important in our day-to-day lives. When questioning a subject, look to determine how the events unfolded and examine the emotions that may have been in play when the situation happened. But above all, evaluate the “I don’t remember” in the context of what is being asked. “Did you steal the missing deposit from the safe?” “I don’t remember.”

We all forget small details. We forget those things that aren’t tied to the emotions or are particularly important in our day-to-day lives. When questioning a subject, look to determine how the events unfolded and examine the emotions that may have been in play when the situation happened. occurring over a long period of time. The suspect can accurately estimate the frequency of behavior, but the actual admission may be beyond the ability of a person to accurately recall. For example, a person certainly knows whether they ate at a particular fast food restaurant during the last twelve months. In fact, they probably can estimate how many times they’ve eaten there by reconstructing their typical eating behaviors. At the very least, they are capable of saying that they had been there. In situations where a subject reverts to “I don’t remember,” it is generally a means of defending himself without having to admit to participation in a particular act. For example in a Senate hearing, if the person under oath denied committing the act, he will have committed perjury. However, if the “I don’t remember” response is used, it enables the subject to respond without committing perjury. If you have a moment, you might want to take a look at a couple of YouTube videos where individuals are responding to questions during a hearing: youtu.be/gIgbJSrIvWc and youtu.be/pNy2A4lDgHc. In the first example, Senator Arlen Specter and others are questioning US Attorney General Alberto Gonzales about his participation in the decision to terminate US attorneys. This video shows how many times he resorted to “I don’t

January–February 2016

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COVER FEATURE

THE STATE OF

VIDEO

WHERE WE ARE TODAY, WHERE WE ARE HEADED, AND HOW WE GET THERE By Rob Borsch and Colin Peacock

The State of Video

or the last two to three decades, video has been a critical tool in guarding shoppers, associates, and assets in retail stores. With the advance of digital IP camera technology, bandwidth, and compression technology to support the creation of central, remote monitoring hubs, increased computer power to enable smart video analytics, and the ever-improving image and pattern recognition technology, video in retail is changing shape significantly…or is it? This article will share the findings and learnings from a recent video benchmark survey and outline three steps all loss prevention leaders could take to shape a future strategy for video for their entire enterprises as well as offer some thoughts on how loss prevention leaders themselves may need to change so as to effectively lead their organizations’ transformation efforts.

Benchmark Survey Results

Undertaken in September 2015, the survey goals were to understand the current and future usage of video in retail stores. An online survey was sent to all members of the Retail Industry Leaders Association (RILA) Asset Protection Leaders Council. In total, there were nineteen completed responses, representing a total universe of 37,810 stores. All the major retail channels were represented including department stores, apparel, supermarkets, warehouse clubs, discounters, sporting goods, home improvement, and drug. Following are the headline findings from the study. Analog Remains the Dominant Camera Technology. In this sample 65 percent of the stores with video were using analog cameras with just 9 percent installed with IP technology.

Some 6 percent of the stores did not have cameras. When compared to the research of forty-nine retailers in 2010 by the Loss Prevention Research Council (LPRC), this finding suggests that there has not been a huge switch away from analog. Back in 2010, the LPRC research showed that 67 percent of the stores installed with video were using analog. DVRs Remain the Dominant Video Management System (VMS). In this sample 83 percent of stores used DVR for managing video, and only 7 percent were using an open IP VMS software. While the trend in the video technology industry has seen a significant increase in VMS options, the retail industry has not appeared to join that trend. The Average Store Will Monitor and Review Its Video/CCTV System for 4.5 Hours per Week.

January–February 2016

In this sample high-risk stores were monitoring their video twice as much as the average with 9.1 hours spent monitoring. If we assume all the time spent monitoring the store in real time, then stores could possibly “watch” around 5 to 10 percent of the total trading hours. Remote Monitoring Is Coming of Age. Of the organizations surveyed, 89 percent had the ability to monitor and view stores remotely through a device, compared to 79 percent in the 2010 LPRC survey. Of those organizations that had remote access, 63 percent had invested in a central monitoring station, compared to 6 percent in the 2010 LPRC survey. Of those that have central stations, however, 80 percent of the organizations are only actively monitoring less than 25 percent of their stores. Integration Is Still a Ways Off. The survey asked about the extent to which video was being integrated with different systems. Integration with intrusion alarms was the most integrated with 22 percent of the organizations integrating this technology. The next most popular were point-of-sale (POS) and high-shrink shelves/locations with 17 percent of the organizations integrating these technologies. Two organizations had integrated EAS and lighting and access control with one organization integrating license plate recognition readers. This should be no surprise as IP VMS solutions focus on such integrations, and the retailers have not yet fully adopted VMS software. Video Is Most Often Used by Asset Protection (AP) for Investigative Purposes. When asked about the frequency of video for different AP use cases, investigations of theft and POS incidents were identified as the most frequent use cases. Use Cases beyond Asset Protection Are Still a White Space. The survey asked whether other parts of the organization were using video. The extent of usage was found to be low. The most frequently use cases by half of the organizations were

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the state of video

Video technology can be a real change catalyst for the asset protection organization. It not only can enhance operations and improves results, but also can create an avenue for asset protection to better partner with the rest of the retail organization. Asset protection always seeks to enhance its influence in the organization. What better way to create credibility and partnership than to offer others access to a technology that many would benefit from? virtual store visits and compliance checks. The less used cases included heat maps, traffic flows, dwell times, line measurement, and operations improvements. This suggests that the high level of interest and desire in using video beyond AP has not yet been fully realized. There Is a Mixed Level of Interest in Video Analytics. The organizations were asked their level of interest

in video analytics. Fifty percent of organizations expressed a high or very high interest in video analytics that could assist with counting customers (people) and traffic flow maps for labor planning. Next most popular were video analytics that could help understand shopper conversion rates—38 percent of the organizations had high or very high levels of interest. Next most popular, with 31 percent

of organizations stating high or very high interest, were video analytics on heat maps and line management. The least popular was video analytics for POS, with 24 percent expressing a high or very high level of interest. This may be explained by the nature of the sample, with some retail formats such as department stores not well suited to this technology approach. These are AP views. To understand

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LP Magazine | January–February 2016

The State of Video

SWOT ANALYSIS

Primary Factors

Strengths ■ Every store installed

Weaknesses ■ Hard to use and operate—not used ■ Unclear and not a proven return

■ Positive staff feedback

on investment

■ Positive feedback and high

■ Only being used by asset protection

usage with law enforcement

■ Current camera locations becoming less

relevant as other tender methods grow ■ Retrofit of existing locations costly ■ Openness to change

Opportunities ■ Technology is getting better,

less expensive

■ Straight replacement for existing

technology is disappearing ■ Changing external expectations, as

■ Improved compression technology

other retailers upgrade, will there be a negative reaction if our technology is so out of date?

enables improved remote viewing ■ New video functionalities

such as image recognition

the true potential, feedback should be gathered from other functions of the organization, such as marketing for example. Video Has a High Profile with the CEO. In 65 percent of the organizations in the sample, the CEO had been taken through a review of the video strategy within the last twelve months. Just 18 percent of the retailers had not had a review of video with the CEO. Asset Protection Is Still the Major User and Budget Owner. Organizations were asked to identify the relative contribution and value to the business of the use cases for the asset protection team relative to those in store operations, compliance, marketing, and category management, such as heat maps, traffic flows, and so forth. Their answers suggest that 83 percent of the “value” rests with the use of the technology by the asset

Threats

protection team, with operations seen as the next most valuable with 13 percent of the value, and finally, marketing at 4 percent. Given this, it is not surprising that in 88 percent of the organizations surveyed, the accountability for recommendations on strategy and technology rests with the asset protection team. If these are the findings and could be considered representative of the industry, the three key takeaways would be: ■ The adoption of modern video capabilities has been low despite the significantly lower costs of ownership of a vastly improved technology. ■W hile the number of retailers with central monitoring stations has increased in the last five years, in 60 percent of those retailers, they are actively monitoring less than 10 percent of their stores. ■F inally, and despite the industry buzz, video today in retail still remains

January–February 2016

predominantly a tool to guard assets and people, where the accountability for strategy predominantly rests with the asset protection team. For some, these learnings represent business as it should be. But for many, these learnings confirm their own frustrations and feelings of being trapped in an analog legacy, with the inherent limitations of this dated camera technology. So how do you as a frustrated asset protection leader move your organization forward and more fully realize the benefits of advanced video technology? Or put another way, how can asset protection be in a better position to take advantage of such technology to enhance its position within the organization as a modern, forward-thinking business unit? Based on our experience at leading change, we propose three next steps that you could undertake—steps that could be the building blocks for a new strategy.

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the state of video

Step 1

Complete a Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis The SWOT tool is possibly the tool most often used by management the world over in the development of new strategies. To use it correctly, the strengths and weaknesses should be those that are internal to the organization. Opportunities and threats should refer to the trends, changes, and events happening outside of your organization that will impact your strategy. Before any SWOT exercise is undertaken, two things need to happen. The first is a period of data collection, and the second is identifying and then inviting all the most relevant stakeholders to participate in the SWOT exercise, potentially as part of an offsite meeting. In terms of data collection, here would be some good data to collect prior to undertaking the SWOT exercise.

audit—Find out what video equipment is in what stores, in what working order, and so forth. ■T otal cost of ownership—Identify all the current costs of video, capital, depreciation, maintenance, new-for-old replacement, hours in store spent monitoring, and so forth. ■I nternal perceptions—Leverage free online survey tools such as surveymonkey.com to complete an organization-wide survey. Create a set of questions to understand the current perceptions of video amongst all the stakeholders, their perception of the benefits of its use today, and their interest in different use cases for video. ■E xternal benchmarking—Leverage industry surveys such as the RILA survey just summarized and the generosity of your peers who have embarked on a new video strategy to become better informed on how others outside of your organization are responding to the video opportunity. ■T echnology

■T echnology

now and then—Learn from the vendor community, academics, and industry experts about their current and future visions of video technology in retail and the implications for your potential strategies. With regard to stakeholders, involving all the relevant stakeholders from the very start of the process will do more to deliver change than possibly anything else you can or will ever do. The failure to include and involve the right stakeholders at the very beginning of a large change project—and this qualifies as such—has been the downfall of many a fine and elegant strategy. A stakeholder should be defined as anyone inside and outside the organization who will be impacted by change and/or will be required to act to enable successful change. In the case of retail, the internal stakeholders beyond asset protection would include but are not limited to store operations, buildings maintenance, store design,

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LP Magazine | January–February 2016

The State of Video merchandising, information technology, marketing, legal, and finance. Outside stakeholders would include but are not limited to the current video providers, third-party security guard companies, and consumer privacy groups. Clearly, discretion and judgement would be needed on how and when to involve the different external stakeholders, but for the internal groups where the degree of possible change and acceptance of the strategy will be critical to the success, they should be invited to participate in the SWOT exercise. For the timing of the exercise, you should plan for at least a day, with the first part of the day dedicated to providing the group a full grounding on all the data collected, possibly with an external speaker to bring the outside in and to act as a benchmark. In the afternoon, smaller cross-functional groups of three to four people should create their own SWOTs. Each group would then report back, and one consolidated SWOT would be created to represent the combined wisdom of the entire group. By going off site, you signal that a degree of importance has been placed to this opportunity for change while also having the benefit of ensuring that you get everyone’s full attention with no distractions. With the SWOT completed, the actions should be identified to leverage strengths, address weaknesses, exploit external opportunities, and mitigate any external risks. These will form the substance of your strategy. Perhaps the most important part of a good SWOT analysis is honest and candid input and feedback. If the SWOT is performed by stakeholders who only share what they think upper management wants to hear, the purpose of the exercise is defeated. Only honest, and sometimes blunt, feedback will help move the organization forward.

Step 2

Align the Organization to a Five-Year End-State Vision When you are building something new, advisors suggest that you start with the end in mind, and so it should

be with your video strategy. The deeper, richer, and more specific you can be about your end state, the easier it will be for your organization to align to it and get behind it. The creation of the end-state vision can be a natural follow-on exercise from the SWOT exercise, and the involvement of all stakeholders in its creation will greatly help the eventual adoption across the organization. To create the vision, stakeholders will need to have access to data on current costs, installations, user surveys, benchmarking, and future technology choices. The clearer a vision is, the easier it will be for people to want to support it. Clarity can be gained by using direct statements and visuals that may help support those statements. Avoid using jargon, buzzwords, or phrases like “optimize the value proposition for the enterprise” as it will cloud your vision. Just as important as creating a clear vision is ensuring that the vision articulates why video is important. By just stating what video does, the organization may not truly believe or understand why it is important. This statement shouldn’t be as simple as “video is used to watch bad guys,” but rather something that catches the attention of a manager because it is profound and clearly matters. Below are some example statements for your video strategy, which could all start with “In 2021 our video capability will…”: ■ Transform how we operate by leveraging video as a force multiplier. ■ Allow for the safest environments possible for our shoppers and associates. ■ Create unique insights that help us grow sales, reduce costs, and simplify our operations. ■ Deliver a more efficient staffing model by leveraging central stations and remote viewing. ■ Be viewed as a technology for the entire company, instead of just for asset protection. ■ Generate $10 of new profit for every $1 invested.

January–February 2016

These are example statements that will need further detail and belief if they are to withstand the curiosity and the questioning of senior executives. How will video make stores safer and more secure? How will video in the future increase sales? Be ready to articulate those responses with clarity and confidence.

Step 3

Develop Meaningful Pilots to Prove the Business Case It can be tempting to take up offers from vendors to trial the latest video technology in a store or two at near-zero cost. But this misses the real point about video or indeed any other technology, which is to understand how technology could help existing tasks be better, faster, simpler, and less expensive. Or how could technology enable new work processes that could deliver new, new to the world, business benefits? By way of example, we know that video can be set up to alert those in the store, via mobile devices, of unusual activity in the locations of products targeted by organized retail thieves. How would we set up a meaningful pilot to prove the business case? Here are some thoughts. First, and this may seem a bit back-to-front to many, but before any technology is thrown at the problem, the activity system, the work process, and the behaviors and new skills that need to be put in place should be defined. Only when these are defined can you start to know the specifications and functionalities required of the technology. But more importantly, it is only when you can know the whats, hows, whens, and by whoms, can you get a sense of the likelihood of this use case being a success. Second, and after all the above detail has been thrashed out, the organized retail crime (ORC) event monitoring activity system and the alerting capability technology choices should be tested for reliability, accuracy, and applicability. Do the alerts always signal ORC activity? Are these ORC events

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the state of video

BEFORE

AFTER

CONTROL

ORC Events Monitored / No Alerts

TEST GROUP 1

ORC Events Monitored / No Alerts

ORC Events Monitored / Alerts sent / No Thief Communication

TEST GROUP 2

ORC Events Monitored / No Alerts

ORC Events Monitored / Alerts sent / Thief Communication

communicated to those in the store in a way that can help them act on them at the right time? Are store associates comfortable with approaching potential ORC thieves? Third, and once confidence in this ORC use case has been established, then an experiment should be designed to test the actual impact of these ORC alerts by setting up some stores to receive the ORC alerts and others, even though the ORC alerts would be created by the system, not to receive the ORC alerts.

At this stage consideration could be given as to whether communication would be placed in the stores to alert would-be thieves to the new capability. If this is of interest, then potentially the impact could be measured by adding a second set of test stores. With this completed test design, the changes in the number of ORC events in the test store before and after the intervention, and relative to the control stores, could be measured. If a meaningful difference is found in the change in the number of ORC

events in the test stores with and without communication, then because you have isolated the impact of the communication, you could potentially learn the extent that collusion is impacting ORC. For store selection, the test and control stores should be matched in terms of risk and shopper profiles to ensure that the results have credibility with management. So if the intervention is only planned for the highest-risk stores, then only select high-risk control and test stores. If there is an idea for a

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The State of Video chain-wide deployment, then choose a cross section of stores across the risk spectrum. Choosing the right hot product category to test the capability will be important. Your choices should consider the extent to which you believe organized thieves are targeting the product, the location of that category in the store, and proximity to staff. Finally, you may want to consider the potential impact on sales of a better theft deterrent intervention such as real-time alerts. Would the presence of better intervention help the store feel more confident to place items on open sales and thus increase sales? Good examples of possible hot product categories could be spirits, infant formula, or family planning, all of which are frequently locked up in stores or only have a minimal presence of product on display leading to shelf out of stocks. Finally, you need to define the hard and soft metrics for the test. The hard business measures could be sales, shrink, and on-shelf availability. The softer measures could be store manager and associate interviews and shopper intercepts. While this use case is one that benefits the asset protection team and the merchant responsible for the chosen category, other use cases worth considering for pilots could include: ■V irtual video visits supplementing in-person visits, ■E AS alarm/video integration creating video bookmarks for each alarm, ■L ighting/video integration saving energy expense by checking on overnight lighting,

■T ime

studies using remote video to measure processes instead of onsite people, ■S hopper insights to measure traffic, dwell time, and conversion rates through video.

Now, Your Leadership Is Required

Video technology can be a real change catalyst for the asset protection organization. It not only can enhance operations and improves results, but also can create an avenue for asset protection to better partner with the rest of the retail organization. Asset protection always seeks to enhance its influence in the organization and is always looking to have a seat at the table when it comes to making big decisions. What better way to create credibility and partnership than to offer others access to a technology that many would benefit from? This requires you as a leader to become an evangelist of video technology. Others normally embrace video with curiosity because it is visual, often tells a story, and is widely used in today’s social media world. Take advantage of that trend. It can be scary, however, for some asset protection leaders to be transparent and allow the rest of the organization to peek behind the curtain. In a business era where transparency and collaboration are becoming the norm, this is necessary for survival. The most important part of influencing change in an organization normally comes down to leadership. It is human nature to not want to change

processes, technology, or routines. People are comfortable in what they know, even if the time has come to move on. Strong leadership can help not only overcome those natural fears of change, but also create a clear and compelling vision of why the change is important, necessary, and exciting. Leadership author and blogger Seth Godin writes in his book titled Tribes that “hope without a strategy doesn’t generate leadership. Leadership comes when your hope and your optimism are matched with a concrete vision of the future and a way to get there. People won’t follow you if they don’t believe you can get to where you say you’re going.” It could be argued that creating the vision of the future is the easiest part of the strategy, made easy by harnessing the combined wisdom of your stakeholders to create a SWOT and future vision statement and to deliver meaningful field experiments that prove the value of the use cases. The hardest parts are getting crystal clear in your own mind on what the journey plan looks like and enrolling and aligning the whole organization to that journey plan with passion and optimism. Our aim in this article has been to stimulate debate and to share our thoughts based on our experience of managing change. You as asset protection leaders can become more relevant and indispensable to more parts of the organization by leveraging the technology revolution playing out in front of us on a daily basis to create a better video strategy.

ROB BORSCH is the managing director of Skyview Insights and brings twenty years of experience from the retail industry. He has held leadership roles in finance, information technology, marketing, asset protection, and corporate security. Among his most recent roles in retail he led the technology and design team at Target Stores where he was responsible for technology program delivery and developing business tools and solutions for the assets protection and corporate security departments. He has shared his expertise in presentations with RILA, the US Department of Justice, the University of Oxford, and various user conferences. He earned his MBA in IT management and finance from the Carlson School of Business at the University of Minnesota and has a bachelor’s degree from St. Cloud State University. Borsch can be reached at robborsch@icloud.com. COLIN PEACOCK is a visiting fellow at the University of Leicester and strategic coordinator for both the ECR Europe Shrinkage and On-shelf Availability Group and RILA’s Asset Protection Leaders Council in the US. Prior to these appointments, Peacock had a thirty-year career at Gillette and Procter & Gamble where he was responsible for leading their on-shelf availability, brand protection, and shrink prevention capability. In this role he was responsible for delivering new thief, counterfeiter, shopper, and store manager insights; an innovation pipeline of new solutions, including RFID; and the oversight and delivery of successful collaborative projects with customers and distributors around the world. Peacock has published articles on loss in the Harvard Business Review and LP Magazine. With Professor Adrian Beck, he co-authored New Loss Prevention: Redefining Shrinkage Management, published in 2009. Peacock can be contacted at colinmpeacock@hotmail.co.uk.

January–February 2016

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What Is Big Data?

By Tom Meehan, CFI Meehan is the corporate manager of data, systems, and central investigations with Bloomingdale’s where he is responsible for physical security, internal investigations, LP systems, and data analytics. Meehan specializes in new technology deployments, business intelligence, industrial intelligence, and systems implementation and design. Meehan brings nineteen years of expertise in retail LP, information technology, and process improvement, the last eleven years with Bloomingdale’s and eight years prior to that with Home Depot. Meehan is also chair of the LPRC’s future of LP working group and co-chair of the fraud working group. He can be reached at tom.meehan@bloomingdales.com.

ig data is a very large amount of complex data that can be structured, semi-structured, and unstructured. This can be a collection of traditional data sources, digital data sources from both inside and outside of your organization, social media, or public records, just to name a few. The reality is big data could be all of your data and any data that is available. The data generally is owned by several different departments within your organization. Big data is a bit of a buzzword and in some cases isn’t that big at all. It really depends on what your organization’s big data strategy is and where the loss prevention department fits in. It’s really not about the amount of data; it’s what you plan to do with it. Big data can help develop predictive models for risk, shrink reduction, fraud prevention, or refund management; provide process improvement information to the field; help identify dishonest activity; and provide better overall insights into the business. Possibilities at times can feel limitless and often overwhelming.

data and are attempting to find patterns or specific aberrations. Another example would be descriptive analytics related to audits or shrink results where you take data, create a summary, and visualize the material. Big data on the other hand will involve multiple data sources (structured, semi-structured, and unstructured) shared from multiple business partners both inside and outside of the organization. At times this will include other non-traditional data sources such as social media, Google search results, news, weather, and public record data. An example of big data analytics would be looking into omni-channel data to help identify process-improvement opportunities. You can be looking at what happens to the shipment when it leaves the store to go to a customer, the impact on the store inventory, ship speed, customer contact, defect rate, non-deliveries, weather, staffing, customer settlement, and fraud risk. Looking at all of the data sets from multiple sources will assist you in developing a prescriptive analytic. Prescriptive analytics takes traditional descriptive and predictive analytics and automatically synthesizes the big data. It makes predictions and then can generally make several recommendations for options to take advantage of those predictions. So in essence, it’s taking that descriptive analysis, which still counts for the majority of business analytics today, and answers the questions of what happened, why it happened, and how it can improve. It also looks for reasons for past failures and successes and then provides options, in addition to showing the implications of those options. All of this information helps improve the customer experience and allows process improvement and shrink reductions. Now that you have better understand of the difference between descriptive or traditional analytics and big data analytics, let’s move onto a plan.

Big data is a bit of a buzzword and in some cases isn’t that big at all. It really depends on what your organization’s big data strategy is and where the loss prevention department fits in. It’s really not about the amount of data; it’s what you plan to do with it. In my last article, we talked about social media monitoring. We’ll talk about this a little bit, but this article is about what you can do with all of the data available. I’ll be defining some of the big data terms and talking about strategies and plans to handle this wealth of information.

Planning Your Big Data Strategy

Here are some key points to keep in mind when planning your big data strategy. One important thing to remember about big data is it’s not just about loss prevention because it requires a lot of IT and other department support, including marketing, operations, finance, omni-channel, and other business stakeholders. It has to be about the organization’s profitability protection, early warning or risk, and process improvement. This isn’t your traditional “let’s stop the shoplifter” or “catch the

Descriptive and Predictive Analytics versus Prescriptive Analytics

The first step is to understand the difference between big data and traditional data analytics. Data analytics generally consist of smaller data sets from fewer sources with structured or normalized data. In the LP world, exception-based reporting would be a type of traditional analytics where you have structured or normalized

January–February 2016

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bad guy” strategy; as the business evolves, so do we. When you improve the process, the shrink reduction is a byproduct. Next up, a big question in big data is whether you will do it within your LP department or use a business intelligence team within your organization. Does it make sense to outsource it in part or totally? If you’re taking an in-house, in-LP route, you need to take a look at what your staffing looks like and your team overall. If you’d asked me three years ago if I ever thought I would hire a data scientist, statistician, or an actual IT developer to work in an LP role, I’m not sure that I would’ve said yes. Today, more than ever, LP teams need experts to handle the amount of data collected. The experts are either data scientists or statisticians. You can teach a data scientist or statistician LP, but it’s not so easy to do it the other way around. This changes the philosophy and is difficult for some of us. I know personally I want high-potential loss prevention people and to move them to the best role as the business evolves.

Key Steps

Let’s talk about some key steps. I T partnership is crucial. Having a strong understanding of the organization’s big data program is imperative. What does the company’s data warehousing look like? You don’t need to be the expert or hire an expert in this area, you just need to understand how you’re going to get all the data. You will have to work with IT to ensure your software works with theirs. Your data scientist or statistician will know what to do with the data once it’s available. ■ W e need to understand the business before we start solving problems outside of traditional LP. We need to understand what customer-level detail is available or what business strategies are going on in-store or online. Are you answering a question, solving a problem, or just reacting to a trend? Get to the root cause with your data. Also know what the questions are before you start. ■ B reak down the silos—think bigger. Work directly with the partners that you haven’t before, constantly keep engaged with business partners to ensure that everyone is looking at the same KPIs. This doesn’t mean work on the same thing. It’s about having a common vision and goal. ■ P ut together data narratives that speak everyone’s language. It’s not just about loss prevention; it’s about the process improvement, customer service, and profit protection. ■ H ave a dynamic plan and make sure that there’s constant visibility with the business stakeholders and understanding on how to proceed. ■ C hoose the right software. ■ M ake sure that you have a plan to visualize, model, data mine, and present. Always remember that you must have a plan.

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LP Magazine | January–February 2016

Partnering with Retailers By Dave DiSilva

How eBay Works with Law Enforcement

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

3. Feedback profile reflects comments made by other users regarding prior transactions. 4. Create your own favorite searches.

ith the beginning of a new year, I thought it appropriate to provide some basic information for how retailers and law enforcement should interface with eBay’s Global Asset Protection Team (GAPT) to collaborate in apprehending and prosecuting criminals who attempt to use our platform for ill gain. Most of these guidelines can be found in the Security Center of the eBay corporate website at pages.ebay.com/securitycenter.

LeadsOnline

The LeadsOnline First Responder Service (leadsonline.com) is available 24/7/365. Our partnership with LeadsOnline makes it possible for law enforcement personnel to locate possible stolen merchandise that has been listed for sale or sold on eBay. LeadsOnline can assist with the following searches: ■ Locate seller ID information for property listed on eBay. ■ Locate seller listings and sales history for property listed on eBay.

Law Enforcement Resources

Law enforcement agencies in North America seeking assistance and records for investigations relating to eBay should use the following resources: ■ Search eBay listings and obtain eBay records in real time using the LeadsOnline First Responder Service at leadsonline.com. ■ Submit a request to one of our investigators via our Law Enforcement eRequest System (LERS) site. Please note that we will not respond to requests received by mail, email, or fax, but only official requests submitted via the LERS site. ■ Email us at stopfraud@ebay.com for questions on how to accurately request records. This service is dedicated to law enforcement officers only, and inquiries from customers won’t be processed. ■ Members or the general public who would like to report a problem to eBay should visit our Reporting Fraud or Stolen Goods to the Police section.

Partnering with Retailers Offensively Against Crime and Theft

Retail loss prevention departments in North America seeking assistance with an investigation relating to eBay may contact eBay’s PROACT team for assistance. The PROACT program features among other benefits: ■ A way to report evidence of theft to eBay for investigation. ■ A dedicated email address to facilitate quick communication with eBay about retail theft investigations. If you are a retailer whose company is not yet enrolled in the PROACT program, please contact us at PROACT@ebay.com for additional information.

Save Time in Your Investigation

The following tips are for law enforcement agencies to assist in your investigation. Note that eBay listings remain visible on the site for about ninety days after closing and are searchable by specific item number. 1. Search for active listings using a search string or specific item number. You can search by nearest zip code using search options on the left-hand column of the advance search function. 2. Search by seller ID for all active/completed sales dating back thirty days. This generally provides you with the seller’s state of residence.

January–February 2016

eBay’s Privacy Policy and Law Enforcement Disclosure

We care deeply about the privacy of the eBay community and will protect the privacy of our members even while working closely with law enforcement to prevent criminal activity. If you are unsure about our privacy practices, please visit eBay’s privacy page for more information at pages.ebay.com/help/policies/privacy-policy html.

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interview

Walmart’s Neighborhood Market Grocery Business With Senior Director of Asset Protection Gary Smith By James Lee, LPC, Executive Editor

INTERVIEW EDITOR’S NOTE: Gary Smith, LPC, is senior director of asset protection for Walmart’s Neighborhood Market line of smaller scale, grocery-focused retail stores. He has held several positions in asset protection, operations, and logistics in his nine years with Walmart. Smith served three years as an officer in the US Air Force after graduating from Delta State University in 2003 with a finance degree. EDITOR: What are the Walmart Neighborhood Markets? How many stores are there? SMITH: We are primarily a

grocery business for the Walmart small-format group. Neighborhood Market stores are typically around the 40,000-square-feet footprint, so we operate on a much smaller scale than our Supercenter format. We have approximately 750 stores as of the end of 2015. We expect customers to go to the Walmart Supercenters for their big stock-up trips, but for the customer like me that needs to pick up something for dinner on the way home from work, the Neighborhood Market offers a close and quick shopping option. EDITOR: When you started with Walmart, was it specifically to run the Neighborhood Markets? SMITH: It was not. I’ve been

with the Neighborhood Market team since November of 2014, which was when we separated our Neighborhood Market business from the Supercenter business in order to focus on the refinement and growth of the Neighborhood Market format. EDITOR: When did you start working with Walmart? SMITH: I was an officer in

the United States Air Force for three-and-a-half years before I joined Walmart. I grew up in a very small town in Louisiana where Walmart was a big part of our community. My mom has worked at Walmart since I was in high school, and some of my family members are long-term Walmart associates. I started in the asset protection world spending my first few years in logistics before transitioning into the retail side in a few different roles. I was a market asset protection manager, then a

Most of our shrink is driven around process execution. Our focus has been much more in tune with how we manage inventory growth and how we dispose of damaged inventory and returns. Much of our shrink dollars are driven by the grocery division, and we’ve had to do some things to address that specifically. We also carry a large health-and-beauty merchandise selection that we have to manage for shrink risk.

January–February 2016

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INTERVIEW regional asset protection manager. I spent a little time outside of AP in the health-and-wellness division, and then came back as a divisional AP director. In my current role, I serve as the AP senior director for the Neighborhood Market business. I’ve been with Walmart for nine years now, which seems like a blink of an eye when you’re doing so many things. But it’s been a good ride for me. EDITOR: Having worked on the Supercenter side previously, what differences do you see now that you’re in grocery? SMITH: The difference is really

the composition of where shrink occurs. Most of our shrink is driven around process execution. Our focus has been much more in tune with how we manage inventory growth and how we dispose of damaged inventory and returns. Much of our shrink dollars are

driven by the grocery division, and we’ve had to do some things to address that specifically. We also carry a large health-and-beauty merchandise selection that we have to manage for shrink risk. EDITOR: What are some of the programs you have in place to help manage those processes? Is it auditing, or is it something else? SMITH: It’s a combination. We’ve

rolled out quite a few audit-based programs, and because I don’t have AP resources in each of these smaller stores, it’s more focused on the operators being very engaged in the shrink aspect of the business. We have weekly checklists for shrink with a few different categories. We have to execute general controls from the back door to the front door. We have to manage our inventory and ensure we’re carrying productive levels. We have to execute processes for merchandise returns

and damages. We have some really robust programs that we’ve tried to make pretty much plug and play. EDITOR: How often do you take inventory? SMITH: We inventory once a year,

though we’ve done some preliminary inventories just to gauge if some of the programs and processes that we’ve put in place are working. We did a few back in our first and second quarter last year. We saw some wins, but also identified some opportunities we’ve been able to address, especially those tied to opening up new stores. We’ve seen a lot of traction with the key performance indicators that typically tell us that shrink is moving in the right direction. EDITOR: Have you established any special interest type of programs for those stores that are tracking higher in inventory losses?

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LP Magazine | January–February 2016

INTERVIEW SMITH: We do have some

specialized audits—we call them interventions—for those stores that reach a certain threshold of high shrink. I have a specialized group that does key work around investigations for those stores. We’ll send them into those stores, complete

a very comprehensive audit, and make sure that we have a good plan for that store to course correct. We also have a corporate shrink training class. Once a quarter, we bring everyone to a central location to teach those store managers, market managers, and AP leaders the basic

tenants around shrink. We try to keep it aligned with the programs we already have going, because typically when we have a struggling store, it’s not about deciding if we need to run a different play; it’s about making sure they are clear on how to execute what’s already in place. EDITOR: You mentioned key performance indicators. What are the components of your KPI program and how do you use them? SMITH: The key components are

around inventory. But the biggest correlator for us when it comes to overall retail shrink performance has been inventory growth. Another KPI that we focused a lot on in the recent quarter has been customer availability. It’s a bit more sophisticated than some hard numbers that you can just pull from a financial and profitability index. It gives us a ratio of which items in the store are not maximizing sales throughout the trended time frames, which helps to understand why those items are not generating the sales they should be. Then obviously there is the theft aspect, for both internal and external cases. EDITOR: How do you sense the balances between internal and external issues? SMITH: It’s really regionalized

Another KPI that we focused a lot on in the recent quarter has been customer availability. It’s a bit more sophisticated than some hard numbers that you can just pull from a financial and PI. It gives us a ratio of which items in the store are not maximizing sales throughout the trended time frames, which helps to understand why those items are not generating the sales they should be. 30

January–February 2016

to tell you the truth. If I’m in a more rural area, just like any other industry, I tend to have less external and more internal. If I’m in a more metro or urbanized environment, it’s more external versus internal. So we tier our stores based on their shrink performance, based on their crime-index scores, and based on some of those historic case data points. Then as we open new stores, we can predict which of them are going to be our opportunity stores, and we make sure we align our resources around those stores. When we launched a dedicated AP team for Neighborhood Markets, our internal cases grew exponentially.

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INTERVIEW We’ve since seen it start to taper down as we drive controls, programs, and more aligned store leadership that create a deterrence factor. EDITOR: Which types of product do you tend to have the most problems with from a shoplifting point of view? SMITH: Meat has been a big

opportunity for us and one that was surprising to me coming from outside grocery. We see large cart push-outs of meat—not just one or two units. We’ve also had a lot of issues in beauty. We’ve seen issues with the Tide pods in chemicals. We’ve had your traditional razor cartridges. Our key areas have been mixed in higher than I would have expected coming into this business. EDITOR: What types of technology do you utilize to help you better understand losses?

SMITH: We do have EAS in

our stores. We also have CCTV systems, and we’re graduating to more sophisticated 360-degree cameras and digital cameras to make sure that we’re getting a better return on investment. We’ve also been using an exception-based system for POS to identify internal and external case activity. I have a group of specialists who work only with our exception system to determine if we’re seeing a process training issue or an integrity issue. Then my field team can either follow up and work the case or partner with the operators to get the opportunities addressed. Right now we have an expanded pilot of some technology dealing with returns re-engineering and getting more data analytics around how we accept returns in our stores. I think that program will have a big impact on organized retail crime (ORC), which has been quite active for

us as we see some individuals and groups abusing the system, especially theft from a Supercenter that ends up returned to a Neighborhood Market. We want to be able to offer returns in a way that provides great customer service while ensuring our programs aren’t abused. I feel the new returns program will make some great improvements there. EDITOR: If product is stolen from a Supercenter and returned to you, can you identify that product as not being from the Neighborhood Markets? SMITH: It’s typically items that

we don’t carry. We carry about 30,000 SKUs in the Neighborhood Markets, while a Supercenter carries about 100,000 SKUs. So when we end up with merchandise we don’t carry, all we know is they didn’t get it from a Neighborhood Market store. I think as we roll out the returns

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INTERVIEW re-engineering, and we continue to use analytics to see who’s returning what and tie together those different methods of returns and payment, we’re going to be able to curb much of the abuse. EDITOR: Do you have any special product protection? SMITH: We have merchandise

protection—traditional Alpha Keepers, things like that. We also utilize in-line, public-view monitors for specific categories. That’s something that we’ve really pushed this past year, specifically in our beauty department and some of the other key categories throughout the store. And it’s been very impactful. We piloted about 200 stores last year, focusing on key areas that we knew were opportunities for us, and we saw some big shifts in shrink in those stores compared to the fleet. So we’re going to expand upon that program this year. EDITOR: How is your LP team organized? SMITH: I’m one of nine senior

directors who report to Mike Lamb, our vice president of asset protection and safety. In our Neighborhood Market business, we have six regions, and I have a total of six regional senior managers who report to me. We built a three-pronged approach for supporting the operators. I support the executive vice president and also two of the senior vice presidents of operations. So I have to be in a lot of different places at the same time. EDITOR: Do you also have people in-store to help you? SMITH: I do. We have a

framework for market asset protection managers, though their markets are somewhat larger than the Supercenters. I also have a core group of asset protection managers, who each cover multiple stores. And I also have a subset of

We also utilize in-line, public-view monitors for specific categories. That’s something that we’ve really pushed this past year, specifically in our beauty department and some of the other key categories throughout the store. And it’s been very impactful. We piloted about 200 stores last year, focusing on key areas that we knew were opportunities for us, and we saw some big shifts in shrink in those stores compared to the fleet. January–February 2016

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store asset protection associates who catch shoplifters in some of the tougher environments where we have stores. Two-Way Business Radios

EDITOR: Do the Neighborhood Markets have pharmacies as well? SMITH: We do have pharmacies. That’s a primary driver

of our business overall and a key component of our business model. EDITOR: Does managing pharmacy losses fall under your responsibility? SMITH: Behind the pharmacy counter, loss is mostly

managed by our pharmacy division, but when you look at over-the-counter (OTC) merchandise, that is our responsibility. We do see some ORC opportunity in the OTC pharmacy business. Another process opportunity that we’re working to mitigate even more has to do with how we fill prescriptions with over-the-counter merchandise and how that merchandise transfer happens from the financial perspective. There are some exposure opportunities for us with those processes that we’re working to address now. EDITOR: Is safety a responsibility of your asset protection team? SMITH: Yes, we are responsible for the safety program. I

have a safety department senior manager who is assigned to my business as well. They’re primarily involved in ensuring our corporate programs from other parts of the organization are considering safety. They also assist with weekly reporting, tracking, and identifying concern areas. But my team is the primary day-to-day driver of the safety program. That includes weekly safety team meetings, making sure that we’re facilitating appropriate reporting around accidents, and promoting a positive message and culture around safety. Even with the store growth that we’ve had—we’ve doubled our fleet since this time last year—our accident rate has actually gone down several percentage points, so to me that’s success since you’d think that typically new stores would bring a bigger opportunity. EDITOR: What types of training programs have you developed for in-store associates and operators? SMITH: We’ve used what we call “centers of learning”

to really drive a center point for being able to train our new stores out in the field in order to conduct specifically process-driven tasks. So as we open new stores or as we need to retrain stores, we can send our associates through that center of learning for them to get brought up to speed on the process. EDITOR: Do you have any ongoing awareness-focused programs specifically designed for operators to understand what to do if there’s a shoplifter or what the right processes are to reduce operational shrink? continued on page 34

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INTERVIEW continued from page 33

a picture, submit it to our distribution center via an app, and within a few minutes they’d know whether they’re going to be credited for it. My AP team doesn’t usually get involved in the day-to-day claims process for spoilage, but we do facilitate the process once it

SMITH: Yes, we do have training

programs around shoplifting to ensure our associates know their role and what must occur before an apprehension can be made for associates authorized to do so. On a quarterly basis, I require our market asset protection manager teams to go through and do organized training with those authorized associates within a market. We’ve also developed an awareness program around the top shrink items in the stores. On a weekly basis we focus on a specific item, so our associates know how much in shrink per store that item has caused for us over the past year. That program really helps to drive awareness around those items as well as awareness of shrink in general. EDITOR: Is spoilage a process issue that you pay attention to? SMITH: Definitely. As I meet and

engage with my peers in other retail environments, I see that for them just as for us, the fresh departments are a very critical department for the grocery business. At the Supercenters we focus more on the retail shrink side, but from the perspective of the Neighborhood Markets, profit is really driven by being as efficient as possible in the fresh departments. So we’re partnering with our teams that drive the fresh business to try to optimize our role around the fresh inventory process. You have to know what you have first, and then you have to know what spoilage is happening versus where the shrink is happening.

happens. If we need to reach out to the logistics team or to any of our vendors, we do just that. The other logistics piece right now involves how we get freight to our stores. It works basically the same as how get freight to our Supercenters. That might need to evolve somewhat, since typically we can’t fill a truck with one Neighborhood Market, so we have multiple stops. So we have to understand trailer seal control, making sure that people are pulling the right pallet at the right store from the right truck. Those types of obstacles are critical for us, so we do a lot of training and awareness building related to that.

EDITOR: When you talk about spoilage, is there also spoilage associated with your deliveries? SMITH: There definitely is. If we end

up with a pallet that falls over and have to incur that loss at the store, it could be a big drain on the profit and loss. So we’re looking to automate that process now. We are piloting a program that allows our store managers to file a spoilage claim via their mobile devices. They would take

Right now we have an expanded pilot of some technology dealing with returns re-engineering and getting more data analytics around how we accept returns in our stores.

EDITOR: Do you have specific delivery controls around vendors bringing items in through the back door? SMITH: We have several controls.

We require our DSD (direct store delivery) vendors to sign in and out. We assign them a badge at the back door. Those individuals who come through the front door are required to sign in at the back door before they come in. No one is allowed to January–February 2016

bring in merchandise through the front door. And we make sure that we’re getting our credits taken care of before we accept deliveries, that we’re counting the merchandise ourselves, that we’re validating the invoice to the merchandise. That’s really the nuts and bolts of our program, and it’s been very successful for us this year. Our DSD shrink is down versus last year pretty significantly, but we’re going to continue to drive that since we do have quite a few DSD vendors in the Neighborhood Markets. EDITOR: Will you or anyone on your asset protection team be attending the Food Marketing Institute asset protection conference in Tucson in March? SMITH: I’m on the FMI council,

so I do plan to be there and spend time with my peers in the grocery segment. I’ll also have one of my senior managers there with me this year. EDITOR: Is anybody on your team making a presentation at FMI? SMITH: Right now we’re slated to

be a part of a crisis management presentation around rioting and store disruption. Unfortunately, we’ve had a lot of experience with some of the recent events around the country. I’m coordinating between our global security team, our emergency operations group, and some of the field team members to be a part of the panel at FMI. EDITOR: Thank you, Gary, for spending time to help us understand Walmart’s Neighborhood Market business better. As a media sponsor of the FMI conference, we’ll look forward to seeing you in Tucson.

EDITOR’S NOTE: The FMI asset protection conference is scheduled for March 14–17, 2016, at the Westin La Paloma Resort & Spa in Tucson, Arizona. For more information about the event, see page 45 or visit the Events link on the magazine website at LossPreventionMedia.com/events.

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Loss Prevention Leaders Must Win

egardless of what your company sells, where you sell it, or your total store count, you as a loss prevention or asset protection professional must win. Life safety, frightened customers and team members, dangerously low margins, and liability are some of your business’s risks. Violence, theft, fraud, and even poor process design and execution are killing retailers across the globe.

You’re the Resident Expert

Your retail organization needs you to be the resident retail security and loss control expert. You are expected to know how your total retail enterprise operates and, most importantly, how it’s actually operating in various changing environments across the nation and globe. You’re looking for weak and leak points, crime and loss patterns, bad process design, challenging market areas, and ineffective, disgruntled, or dishonest employees. You’re the one who is expected to best understand the factors behind crime and loss and how to cost-effectively control those dynamics. And it is in this critical and complex context that you assess your LP program and performance wins and gaps. This is your first step. You’re looking to cost-effectively support corporate goals and operations. You’re trying to protect people, your brand, and company assets. You’re working to make it all happen, which means you have got to win.

Your Strategy

To win, you need an operating model or strategy. It needs to be carefully designed, but simple in concept and operation. Its impact should be quantifiable and readily explained above and below you—by you and your team. And it should be designed to work. At the LPRC and the University of Florida, we don’t just focus on individual deterrent measures; we also work on overall loss prevention operating models and strategies. Our members need and demand this. Working with LPRC members, we typically look to lay out the context and strategy at each level. An LP or AP organization should be designed and operate to support the retail enterprise, and all of its people and initiatives should support corporate objectives. Those levels can look something like the descending action points below: ■ Fully understand and map out all corporate goals and supporting processes. ■ Align and map LP goals to support each relevant corporate goal and program. ■ Set up the LP strategy, process, technologies, and team structure to support these LP goals.

January–February 2016

Dr. Hayes is director of the Loss Prevention Research Council and coordinator of the Loss Prevention Research Team at the University of Florida. He can be reached at 321-303-6193 or via email at rhayes@lpresearch.org. © 2016 Loss Prevention Research Council

I dentify and develop overall LP team knowledge, skills, abilities, and other characteristics to support the LP strategy and programs. ■ Identify and develop individual LP team member knowledge, skills, abilities, and other characteristics to support your focused LP teams and programs. Always remember that outside market conditions and other dynamics will be changing, so corporate and LP goals and process will need to be able to detect this and quickly adapt. In future columns we’ll discuss more details around strategy and process. I would encourage you to think more about this very important topic while also sharing your ideas and experience with me at rhayes@lpresearch.org. ■

2016 holds the promise of many critical issues to deal with including what appears to be growing violence, theft, and fraud, lowered respect for authority, cyber risks of all kinds, and more possible terrorist threats. By working together to conduct year-long focused collaboration, research, testing, and learning, LP organizations can make even more positive impact inside their companies. Coming Attractions

Like any organization, the Loss Prevention Research Council and the University of Florida’s Crime Prevention Research Team continue to grow and adapt. Our team, our board of advisors, and our membership invested heavily last year into driving the eleven cooperative working groups, and the result was almost twenty new research projects and findings—a huge success for LOSSPREVENTIONMEDIA.COM

all. Plus, the 2015 Impact Conference in Gainesville grew to over 200 executives, with even higher participant ratings. This success has us fired up to build on these accomplishments: ■ The LPRC has now conducted over 175 research projects, and those results and others are being compiled into a new LPRC Knowledge Center. This online center will have hundreds of LP-related, keyword-searchable, PDF-formatted reports in a Google-type interface. ■ The LPRC will conduct multiple webinars exploring internal, external, and cyber threats and research. ■ All eleven LPRC working groups have added new members and built their leadership. Each group holds monthly calls, webinars, or field trips, and each group pledges to deliver at least three research reports annually. Working groups include multiple retailers and typically solution partners, law enforcement, or other experts. ■ Look for the Spring Cyber Security Summit at the University of Florida; group field trips to DCs, high-crime areas, and California R&D sites; and new technology innovation demonstrations. ■ The LPRC website is brand new (LPresearch.org), and new components will be added throughout the year. ■ The LPRC board of advisors has designated sub-teams and is instituting new performance metrics to provide even more strategic guidance for the entire LPRC team. ■ The October Impact Conference promises to be better and is adding new interactive exercises for top LP executives as well as corporate and field LP staff participants.

he LPRC Innovation Lab has been greatly updated and is T focused to support research and development to increase situational awareness and protective impact in the five concentric zones of influence. ■ The LPRC team is also booking high-level retailer LP meetings in the Innovation Lab. We already have several top retailers committed to visit and use the lab and nearby “innovation” stores as a key part of their 2016 planning and improvement efforts. Due to demand, please let us know at operations@lpresearch.org as soon as possible if your team is interested. ■ The University of Florida team is working across campus with engineers, business faculty, and other departments and graduate students on multiple crime prevention initiatives, and the online UF LP certificate course is almost ready to launch. So 2016 holds the promise of many critical issues to deal with including what appears to be growing violence, theft, and fraud, lowered respect for authority, cyber risks of all kinds, and more possible terrorist threats. By working together to conduct year-long focused collaboration, research, testing, and learning, LP organizations can make even more positive impact inside their companies. ■

Recommended Reading

Intelligence-Led Policing: Leadership, Strategies and Tactics by Thomas E. Baker features ten chapters describing how to gain situational awareness of high-impact offenders, places, and problems in order to more precisely develop and deliver prevention and protection.

LP Magazine | January–February 2016

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FEATURE

TheTop Challenges Retailers Face

ANDTHE RetailTechnologies That Deliver Solutions By Jumbi Edulbehram

Technologies that deliver solutions comprehensive security solutions can often help address or mitigate threats, which can be a win for both loss prevention executives and the C-suite.

Data and Data Management

oday’s retailers must cope with a broader range of threats than ever before, and these challenges go well beyond preventing loss and increasing sales. More than ever, retailers face threats such as identity theft, organized crime, workplace violence, changing buyer behaviors, as well as the ongoing challenge of reducing shrink. However, addressing these issues isn’t always easy, which is why retailers are turning toward new technology advances to help address threats and build solutions that can not only protect employees and assets, but also enhance business intelligence and augment business continuity. ineffective pre-employment screening, less employee supervision, and the easy sale of Loss: An Uphill Battle stolen merchandise. According to the latest Global Retail Theft Barometer (GRTB), an annual Technology, however, is making strides industry survey that looks at shrink trends against loss and theft. According to the in countries throughout the world, missing National Retail Security Survey (NRSS) goods from shoplifting and other causes conducted by Dr. Richard Hollinger of cost US retailers approximately $42 billion the University of Florida in partnership per year. And it’s consumers who pay the with the National Retail Federation, price for the theft—roughly $403 annually shrinkage percentage is down in the US per US household, according to the GRTB. for the first time in twenty-four years. The study also showed that employee This can be largely attributed to the theft accounts for 43 percent of lost leveraging of video surveillance and other revenue in the United States. Some of the loss prevention technologies. But other key reasons for these numbers include challenges exist for retailers, and deploying

January–February 2016

Target, Adobe, AOL, eBay—all of these companies have been victims of significant security breaches over the last year. At big box retailer Target, more than 70 million credit card numbers were compromised that took months to address, resulting in profit loss and public distrust. The company’s stock took a dive, and its bottom line was affected as well as its brand integrity. The threat of data breaches is a real risk for retailers and the mitigation of such threats begins with a comprehensive plan that incorporates facility security, IT security, and risk management. Starting from the ground-up, a comprehensive and in-depth security strategy is key, and this effort begins with the engagement of all levels of the company—from employees working the register to top executives in the C-suite. Using the latest technology offerings, retailers must secure network points that include point-of-sale (POS) terminals, e-commerce websites, third-party vendor web links, employee access points, and Internet of Things (IoT) devices, such as security cameras and printers. Today’s security integrators and solution manufacturers must take into account all of the points at which breaches may occur, and think about ways in which the data security of their own organizations can be protected. In some cases, significant investments must be made that strengthen the network from hackers and other threats. Any network-based device is at risk. Last year, hackers broadcasted hundreds of thousands of video streams from security cameras on a public website, inciting widespread public panic about the security of camera networks. As it stands today, not many IP cameras and camera networks are very secure—both in terms of penetrability and data integrity—but more camera manufacturers are incorporating greater amounts of network security into products.

LOSSPREVENTIONMEDIA.COM

Technologies that deliver solutions This includes virus protection and denial of service, as well as encryption of video and data in transit and storage.

Comprehensive Video Surveillance Solutions

Thwarting theft, vandalism, and organized crime is paramount to protecting the integrity of today’s retailers and ensuring long-term profitability. One way retail organizations are mitigating these risks is by deploying comprehensive video surveillance solutions; that is, not only installing cameras within retail spaces, but integrating these cameras with video management systems (VMS) that are tied to access control solutions, emergency management systems, POS transaction data, and much more. The video surveillance networks include IP cameras, network infrastructure, storage solutions, and software for managing the incoming feeds. Traditional VMS systems connect the cameras through a network, and then the video is stored either on a centralized server or on the cameras

Today’s retailers must cope with a broader range of threats than ever before, and these challenges go well beyond preventing loss and increasing sales. More than ever, retailers face threats such as identity theft, organized crime, workplace violence, changing buyer behaviors, as well as the ongoing challenge of reducing shrink. themselves. A web browser can be used to view live video from the camera, but the VMS records and saves the video data. Today, IP cameras with the capability to internally manage video management functions have the ability to deliver the same powerful features found in traditional VMS systems. These advanced cameras

LP Magazine | January–February 2016

have robust intelligence and built-in performance that allows users to view live and recorded video in real time, making it easier to streamline security efforts and allow security officials to achieve maximum mobility during the course of a security event. Additionally, mobile applications allow loss prevention

Technologies that deliver solutions personnel to utilize dewarping abilities for 360-degree surveillance cameras on a mobile device, allowing them instant access to video from any part of the store. Surveillance video delivers new levels of data that, when combined with other network or business systems, allow users to experience the correlation of multiple data points into one interface. Networked-enabled video surveillance

camera feed and analyzes those images to be turned from data into actionable information. This combined solution delivers surveillance coverage while simultaneously delivering business intelligence that includes high-accuracy people counting, queue management, heat mapping of shopper’s movements, dwell information per fixture, and customer demographics.

Using the latest technology offerings, retailers must secure network points that include point-of-sale (POS) terminals, e-commerce websites, third-party vendor web links, employee access points, and Internet of Things (IoT) devices, such as security cameras and printers. can be integrated with access control, alarms, and intelligent video applications such as video analytics, emergency response software, and other systems. Bringing these technologies together serves the retailer by bringing safety and security to the forefront and streamlining business operations by mitigating risk.

Traffic Patterns and the Role of Analytics

As the focus shifts to optimizing sales, operations, marketing, loss prevention, and security in today’s retail organizations, retailers seek new ways to maximize security investments to deliver new levels of return on investment (ROI). Today’s retailers are changing, and more organizations face a dramatic shift in profit from brick-and-mortar stores to online shopping. To combat this issue, retailers seek to secure investments in solutions that will not only protect a store’s assets, but also build profit by identifying new ways to collect data. Advanced surveillance devices incorporate video analytics, or video intelligence, capabilities directly on the camera, which collects images from the

Using analytics, retailers can track the traffic patterns of customers to determine how they shop, what displays attract most attention, and other customer-centric information. Using such analytics, video captured for security purposes becomes valuable data that can be used by other departments, such as merchandising, marketing, and customer service, to better market new products, control the flow of traffic through a store, gear more people toward a specific spot in the store, and other tactics to enhance the customer experience. With so much of the physical store’s retail capabilities based on hunches and assumptions, video analytics finally delivers answers to questions that retailers have always asked—how effective are marketing campaigns? Can the store’s layout help drive sales?

Analytics and Customer-Driven Service

It’s no secret that the most important part of a retailer’s focus is on customer service, but short of hovering over employees’ shoulders and listening to every interaction, it can be difficult to “see” what is driving customer interactions

January–February 2016

and interests. Built-in video analytics can help address some customer service issues on the sales floor through an intelligent algorithm, termed “people counting.” People counting is a fundamental metric, as it enables retailers to calculate their customer conversion rate (number of people in the store vs. the number of purchases). Additionally, with this analytic, managers are better able to staff the store based on the average number of people in a specific time period or area of the store. For example, if a manager in the shoe department has ten customers and only one employee, and the children’s department has two employees and no customers, the manager can redirect under-utilized employees to ensure customer engagement is maximized. Similarly, video analytics can be used in checkout lines, alerting managers when there is a backup at the front queue. Without having some way to notify managers about an area that is understaffed, customers can become impatient and walk away, which can lead to a loss in sales as well as a poor customer experience. Heat mapping is another interesting way to analyze in-store customer traffic patterns. This tool tracks how long people gather or stop at an end cap or sales display, helping marketing departments determine how and where certain types of merchandise should be placed throughout the store to garner the most customer interest.

Loss Prevention and the C-Suite

Today, the roles of LP and retail security teams are being viewed in a new light. Retailers face unique challenges—the shift from high-traffic at brick-and-mortar stores to rapid online shopping, staff shortages, and high customer expectations. To combat these issues, LP professionals are engaging the C-suite to secure investment in solutions that will both protect a store’s assets and build profits through utilizing data gathered in new and innovative ways. Historically, security investments have been viewed as a necessary purchase by the C-suite, but now more and more

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continued on page 44

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departments are able to utilize video data to advance sales goals and streamline business operations, spreading the investment out over several departments. Additionally, advanced video surveillance tools can help LP partner with other departments to help drive sales. This internal “convergence” allows multiple departments to combine efforts and investments to collaboratively invest in the future of the overall business. Intelligence is growing on all fronts. This includes the increased integration of different technologies and systems to address security concerns, including upgrading POS terminals to deal with the migration to contactless technology such as Apple Pay, installing advanced asset tracking devices to mitigate organized retail crime rings, and implementing data security technology to fend off threats from cyberspace.

Implementing 360-degree Surveillance Technology To achieve the kind of video data that can support analytics and deliver superior

views for investigations, many retailers are turning toward omni-directional cameras, such as those with 360-degree views. As the technology of these cameras improves, these devices are becoming more affordable. In fact, 360-degree cameras are becoming more cost-effective because the solutions can provide a much larger coverage than narrow field-of-view (traditional) surveillance cameras. Single-lens fisheye cameras get a full 360-degree image that needs to be “dewarped.” Multi-lens 360-degree cameras contain multiple lenses in one unit, and images are stitched together to create a full, inclusive image. With higher resolutions and more efficient dewarping or stitching technologies, these omni-directional cameras will soon replace pan-tilt-zoom (PTZ) cameras, which are widely used in the retail space today. Higher-resolution sensors allow these multi-directional cameras to deliver superior images and deliver more value to customers. With current PTZ technology, the video being stored is only what the camera sees. But with 360-degree cameras, multiple areas are monitored at the same time for

full situational awareness. Even if the operator only is interested in a particular area, the stored video includes the full 360-degree view, which can be accessed later for investigations.

Loss Prevention Revisited

Today, the role of LP teams is being viewed in a new light. With solution providers breaking down the siloed departments that exist within retail, LP teams and other key business units are working together and leveraging the same technology across multiple functions to meet various needs. Not only does this result in greater ROI across multiple business segments, it drives new levels of data capture that allows for new levels of customer engagement. Retailers are only beginning to realize the potential of video technology and multi-department collaboration. The future is full of greater opportunity, resulting from new levels of data and insight previously unavailable to retailers. All of these will eventually lead to more ideas on how technology can make organizations more dynamic, efficient, and successful.

JUMBI EDULBEHRAM is president, Americas for Oncam Grandeye where he is responsible for all sales, marketing, and business development activities in the Americas. Edulbehram has long partnered with retailers as a technology expert with various industry solutions providers, including Samsung Techwin, Next Level Security Systems, Axis Communications, and IntelliVid. He has also worked as a management consultant at BCG and as a chip design engineer at Intel Corp. Edulbehram can be reached at jedulbehram@oncamgrandeye.com.

January–February 2016

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Interview with Jennifer Schaefer, MA, LPC Jennifer Schaefer, MA, LPC, has been in the loss prevention industry for over seventeen years. She began her career in the public sector and then moved into LP at Target Stores and Caribou Coffee before joining McDonald’s as a regional security manager based in Minneapolis. Schaefer holds a master’s degree in criminal justice leadership. She is the first-ever recipient of the RLPSA’s Salute to Excellence award. Schaefer was also a 2014 recipient of the McDonald’s Presidents Award (top 1 percent in the company), Midwest Region’s Director’s Leadership Award, Exceptional Woman of Ohio Award, and US Operations STAR Award. In her spare time, Schaefer volunteers at the Ronald McDonald House.

Was the course what you expected? The LPC course not only met my expectations, but also exceeded them. I think LPF did a fantastic job of laying out the structure for the certification. Once you are in the process of reviewing the coursework, it is a plethora of engaging levels of all academic curriculums. The online program offers flexibility, adaptability, and general awareness. The courses in my graduate program were online, so the online operating system was familiar. The LPC is truly an individual study course since it does not have an actual instructor or networking peer group. This aspect accelerated my motivation, determination, and overall interest in completing the LPC course.

his is another in a series of interviews with working LP professionals who have earned their LPQ or LPC certifications from the Loss Prevention Foundation (LPF) to hear in their own words why they pursued certification and how it benefited their careers.

What influenced you to pursue certification? After graduate school, I cross compared and analyzed the next education chapter in my professional journey. I always knew the Loss Prevention Foundation had certifications that could be incorporated into my career path and portfolio. I reviewed the LPC and found it was the additional layering and concentration I needed for my current industry. Since I believe in the value of continued education, it was an easy choice.

Tell us more about the process of going through the coursework and taking the exam. The certification process was definitely a personal journey. I thought the certification would be a great place for me to spread my wings and fly. Once I began the coursework, I found the material well written and full of depth and detail. The online material is available for a year, so I recommend utilizing your time wisely as I found “life happens” and before you know it the time has come to an end. Once I completed the coursework, I utilized all of my Gopher Notes throughout the readings as a means to apply and prepare for the final exam. I prepared by taking each sectional quiz, multiple final exams, reading my notes, and preparing notecards on certain aspects of the material. I also recommend timing your practice final exams, as this will come in handy based on the timed final exam. I utilized one of my vacation weeks to sharpen my knowledge and study for the final exam. I scheduled my exam for Black Friday and looked forward to the opportunity when I arrived at the testing center. The recommendations and guidance provided by the LPF was spot on regarding the preparation, date of exam, testing center, and the actual exam. The exam utilized the coursework in a practical and applicable sense.

After graduate school, I cross compared and analyzed the next education chapter in my professional journey. I always knew the Loss Prevention Foundation had certifications that could be incorporated into my career path and portfolio. I reviewed the LPC and found it was the additional layering and concentration I needed for my current industry. Since I believe in the value of continued education, it was an easy choice. 46

January–February 2016

What benefits have you seen from taking the course? There are multiple benefits. First was the individual gratification received when passing the exam. I cannot tell |

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the readers what it feels like unless it’s an experience they have felt on their own. Knowing your time, effort, and energy have been placed into a certification, which allows for the betterment of an individual, carries an unspoken value. A second benefit was becoming a member of the LPF as well as reviewing opportunities within the foundation where I could contribute and give back as a career professional. Third, I have the distinguished opportunity of serving as a member of the LPC content review subcommittee, which affords me the ability to review content and provide feedback. I have already had a number of individuals internally and externally inquire about the LPC designation. I cannot speak highly enough of the certification and what it means to an individual. Each of us has our own career path, and the less traveled path may offer the most excitement.

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If you could offer one key takeaway to someone currently considering getting certified, what would it be? Utilize the tools and resources available throughout the coursework. The course offers a great application for taking notes called Gopher Notes. Throughout the material each category is broken down into subcategories. There is a significant amount of reading and application material. Use of the Gopher Notes is a great means to capture specific areas to highlight and ensure immediate comprehension. You can always change, add, or modify the notes section of each course. Once completed you can print the notes and utilize them as a study guide.

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LP Magazine | January–February 2016

Supply Chain

Cargo Theft and Its Impact on the Retail Community C

By Maurizio P. Scrofani, CCSP, LPC Maurizio is a well-known supply-chain asset protection professional with over twenty years’ experience in retail. He currently works for a well-known national department store chain. The views and information in this column are his own and do not necessarily reflect the views of his current employer. Maurizio can be reached at maurizio@mpsconsultants.com or via LinkedIn.

therefore, its effect on the economy cannot be underestimated. Jared Palmer explained in his article in Inbound Logistics magazine, when companies report cases of trucks being hijacked, insurance premiums are raised the following year because the trucking company may not cover the entire loss even with coverage based on their deductible. Getting a similar shipment for the retailers affected may not be possible, which can negatively affect the retailer’s target of meeting their customers’ demands and vendors’ “first to market” commitments.

argo theft often is thought of as a silent and victimless crime despite the fact that it accounts for losses of billions of dollars annually in the United States. The most common incidences of cargo theft involve gangs who steal high-value commodities from loaded trailers. Substantial loses can also occur from facility burglaries. Cargo theft has a great impact to the economy of the US, which carries the world’s largest national economy making roughly 17 to 22 percent of the world’s gross domestic product (GDP) according to EconomyWatch.com. An insight into the impact of cargo theft on the retail community is crucial in determination of its economic significance to the US at large. In any business the mechanics of its supply chain helps the various management groups in keeping track of the flow of goods from one point to another. Therefore, if the supply chain loses control or has a substantial disruption, a chain of instability is created. This disruption influences not only the business areas, but also indirectly large portions of the economy. Cargo theft has notable downstream costs that exceed the value of the goods stolen. While it is difficult to quantify these costs, they are estimated through varied methods that are passed to the consumer through increased registration prices. The most dominant impact may be in a revision of EOQ (economic order quantity), which can “pull” or “push” mutual supply chains between raw material suppliers and end shippers. In addition, as astutely noted by Dan Burgess in his book Cargo Theft, Loss, Prevention, and Supply Chain Security, “Loss of market share presents multiple issues for manufacturers, including the loss of customers, increased sales for competitors, and additional costs to the manufacturer to win back customer loyalty.” When such cases occur, the prices for goods increase, and the extra amount that each consumer has to pay to get the product accounts for the loss caused by theft.

Cargo theft may have been perceived in the past as a trucking industry problem or one that resides at the desk of an insurance claim adjuster. But clearly today in the retail industry, it is an “us” problem that needs all hands on deck and all stakeholders to be “all in.” If a truck transporting goods has been hijacked, for example, the trucking company pays for the stolen products and the loss. Covering the entire loss could be impossible because of the deductible policy. Rates for future shipments for the same product will be raised to cover the loss incurred, and other additional costs passed to the retailers (shippers) who will pass them to their customers. Both the manufacturing company and the retailers will have to pay an extra amount to cover the loss incurred by the shipment company to obtain a similar product. In inflicting financial damages to shippers, consumers, manufacturers, and carriers, cargo theft has had the highest impact. The most critical impact to any company is its image, awareness, and other relationships. When cases of theft happen, the stolen product is reintroduced traditionally via

Impact on Insurance and Brand

Insurance companies are highly motivated stakeholders in the retail industry and play a major role in cargo security. Cargo theft is often perceived as an insurance problem;

January–February 2016

continued on page 50 |

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gray markets to the supply chain through illegal means that are out of control for the brand owner. These criminals tamper with the goods, change their prices, and the impact is felt by both the end-using customer and channel partners. To avoid such potential exposure, minimalism is best when using company names, corporate logos, or any other information that may be shared on the shipment content. All of those pertinent elements can be noted on the interior packaging. The traditional “brown box” is becoming less interesting for the curious or impulse criminal. There will always be the marketing and sales demand to promote the brand, but there needs to be a healthy balance between risk and reward. There are companies that continue to not share their loss and not report such cases to avoid negative perceptions of the public. Moving a commodity or novelty item from origin to destination is seriously impacted by the cargo theft. In today’s mutual supply chains that include multiple stakeholders, including the carriers, brokers, drivers, retailers, and manufacturers, there is always an expense created to rebuild the order and shipment to meet the original demand or revised demand based on time lapse or new consumer appetite since the loss. This is attempted to be executed while managing the cost of lost or stolen goods.

When a theft occurs, too often victims rely solely on local law enforcement agencies to recover their freight. However, if the agencies do not have all of the needed information about the supply-chain enterprise criminals, it begins to lose its window of opportunity for recovery. A notable rule of thumb used in the industry is that once four hours have passed from theft to communication, the recovery opportunity may drop by as much as 60 percent success rate on average.

January–February 2016

In cargo theft the most common scenario is where a gang of thieves target mainly trailers loaded with high-value goods when they are left unattended. However, methods vary depending on how execution of goods is done and how sophisticated the supply-chain enterprise criminals are. Mostly this occurs in stopping points for trucks or parking areas that are not secured, where they mainly target unsecured trailers. These criminals are always informed and are rather deep in their knowledge base on the trucking vertical along with impressive understanding of the available technology to use for their crimes as well as counter intelligence. After identifying a target trailer, these criminals access the truck and drive off with the goods to a predetermined location where they quickly hook up the stolen trailer to a recently stolen tractor and move it to a more secure location. Another common type of cargo theft is where thieves break into an unattended trailer and offload the cargo into their getaway trailer. This theft is also known as “leakage.” They then repack and relabel the products before reintroducing them into the supply chain. This lowers the probability that law enforcement will locate and recover the stolen goods.

Security Measures and Prevention Strategies

Security measures can be taken by companies to improve their vehicle and facility security. Implementation of technologies and security devices to create security practices with common sense can be the first step that can help in mitigating and preventing losses associated with cargo theft. For example, use of a GPS tool can help the company track and locate lost commodities. Other preventive tactics include employee screening and training whereby the drivers—also known as our “knights of the highway”—would be empowered to be at the forefront in fighting against cargo theft crimes. It is important for cargo transporters to know and understand the supply chains of the goods they are transporting as well as determine a robust security plan across the chain in collaboration with the shipper. This will help in determining the company’s theft risks. The product type determines the ability of it being sold in the black market. Prompt response to every alarm is another important action that should not be ignored. Real-time, information-sharing practices will allow for our law enforcement professionals and other security stakeholders to plan, forecast, and react to matters that require a multi-prong effort and approach. Lastly, the continued commitment to technology, not from an acquisition or procurement perspective only, but from a forward-thinking demand in noting where it will move to and how quickly one is willing to pivot to invest in the required changes to people, process, or technology investments in order to mitigate risk. Cargo theft may have been perceived in the past as a trucking industry problem or one that resides at the desk of an insurance claim adjuster. But clearly today in the retail industry, it is an “us” problem that needs all hands on deck and all stakeholders to be “all in.”

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FEATURE

The Soft Skills Gap and Generation Z Teaching the Missing Basics to Today's Young Talent By Bruce Tulgan

THE soft skills gap

f you are like most managers with employees in their late teens and twenties, then you no doubt have first-hand experience with a very serious management challenge that has been growing especially fast in recent years: an ever-widening “soft skills gap” in the workforce, especially among the newest young workforce. I use the term “soft skills” because most people understand the term is used to encompass a wide range of non-technical skills ranging from self-awareness to people skills to problem solving to teamwork—in contrast to “hard skills,” which are technical. These skills may be less tangible and harder to define and measure than many of the hard skills, but they are absolutely critical to the success or failure of any individual in the workplace. The problem is that these old-fashioned basics—professionalism, critical thinking, and followership—are out of fashion, so they are too rarely spoken of nowadays. Today’s young talent is not being indoctrinated in these old-fashioned basics either at home or in school. Usually, by the time they get to the workplace, employers figure it is too late to focus on them. Certainly most managers figure it is neither their place, nor do they have the time or resources or knowhow to deal with the soft skills gap in their newest youngest employees. So the soft skills gap continues to grow, hiding in plain sight, despite the fact that it costs organizations a fortune every day. I’ve asked tens of thousands of managers, “How much do these so-called ‘soft skills’ matter?” The answer is nearly universal: soft skills matter a lot. The cliché is that people get hired because of their hard skills but fired because of their soft skills. When employees have significant gaps in their soft skills, there are significant negative consequences. Potentially good hires are overlooked. Good hires go bad. Bad hires go worse. Misunderstandings

abound. People get distracted. Productivity goes down. Mistakes are made. Customer service suffers. Workplace conflicts occur more frequently. Good people leave when they might have otherwise stayed longer. It robs so many young employees of greater success and causes so many managers so much aggravation and so many unnecessary costs. The soft skills gap is not a household term like the technical skill gap, but it should be because its impact is monumental. Like the technical skill gap, the soft skills gap in the workforce has been developing slowly for decades. But the soft skills gap runs across the entire workforce—among workers with technical skills that are in great demand every bit as much as workers without technical skills. What is more, the soft skills gap has gotten much worse in recent years.

January–February 2016

Are today’s young employees really so much worse when it comes to soft skills than those of previous generations?

The Soft Skills Gap: Growing Steadily from Gen X to Gen Y to Gen Z

Since 1993, I’ve been tracking generational change in the workplace and its impact on organizations, especially the impact on supervisory relationships. I started out as a frustrated young lawyer seeking to understand why the older, more experienced lawyers were so annoyed by those of my generation, Generation X (born 1965–77). I quickly realized that it wasn’t just the older, more experienced people at my firm who were annoyed with Gen Xers. It was nearly everybody older and more experienced in workplaces of all shapes and sizes.

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The soft skills gap That’s when I started conducting in-depth interviews with young people and their managers, the original research that led to my first book Managing Generation X. I formed a company to continue that research, and we’ve been conducting that interview research for decades now, ever tracking the ever-emerging ever-“newer” new young workforce. By the late 1990s, we started tracking the first wave of the great Millennial cohort, what we refer to as Generation Y (born 1978–89). At this point, we’ve been tracking the second-wave Millennials, whom we call Generation Z (born 1990–99), for nearly a decade now, since they first entered the workforce as teenagers in part-time jobs. Gen Zers are the newest “new dogs” arriving in your workplace, part of the global youth tide rising now and for the foreseeable future. Since the mid-1990s, I’ve had a front-row seat, on the front lines, and behind the scenes in organizations of all shapes and sizes. I’ve interviewed tens of thousands of young workers, and they’re

New young employees are, by definition, always younger and less experienced and, therefore, lacking in the corresponding maturity and patience. As they step into the adult world with youthful energy and enthusiasm, young workers often clash with their older colleagues. That’s always part of the story. But there is something much bigger going on here. in just about every industry—health care, professional services, restaurants, retail, research, finance, aerospace, software, manufacturing, the public sector, and even nonprofits. You name it. Based on two decades of research, I can report that the overwhelming data points to a steady

LP Magazine | January–February 2016

diminution in the soft skills of young people in the workplace from Gen X to Gen Y to Gen Z. Today’s young workers are increasingly likely to have significant notable weaknesses in one or several key soft skills. Why is that?

THE soft skills gap

Something Much Larger Is Going on Here: The Post-Boomer Generational Shift

Of course, the older, more experienced people are always more or less annoyed by the attitudes and behavior of each successive new young generation. New young employees are, by definition, always younger and less experienced and, therefore, lacking in the corresponding maturity and patience. As they step into the adult world with youthful energy and enthusiasm, young workers often clash with their older colleagues. That’s always part of the story. But there is something much bigger going on here. On a macro level, Generation Z represents a tipping point in the post-Boomer generational shift transforming the workforce. With older (first-wave) Boomers now retiring in droves, they are taking with them the last vestiges of the old-fashioned work ethic. By 2020, more than 80 percent of the workforce will be post-Boomer dominated in numbers, norms, and values by Generations X, Y, and Z. Generation Z will be greater than 20 percent of the North American and European workforce (and a much greater percentage in younger parts of the world, especially South Asia, Sub Saharan Africa, and South America). Much of why Generation Z seems like a new species from another planet is really just an accident of history. They just happen to be the generation to come of age in the 2010s, during an era of profound change and uncertainty driven by a confluence of epic historical forces. Globalization. Generation Z will be the first truly global generation—connecting and traveling to work across borders in every direction and combination. Unlike any other generation in history, Gen Z can look forward to a lifetime of interdependency and competition with a rising global youth-tide from every corner of this ever-flattening world. Technology. The pace of technological advance today is unprecedented. Information. Computing. Communication. Transportation. Commerce.

Entertainment. Food. Medicine. War. In every aspect of life, anything can become obsolete any time—possibilities appear and disappear swiftly, radically, and often without warning. Institutional Insecurity. Gen Zers were small children on 9/11 and young teenagers when the economy collapsed in 2008. Theirs is a world threatened by terrorism and environmental cataclysm in which the economy fluctuates wildly from boom to bust, governments sometimes shut down or run out of money, and great companies conquer or fail or merge or continually downsize, restructure, and reengineer. Institutions in every domain

have been forced into a constant state of flux just in order to survive and succeed in this constantly changing world. Gen Zers know enough to know that they can’t rely on institutions to be the anchors of their success and security. The Information Environment. Gen Zers are the first true “digital natives.” They learned how to think, learn, and communicate in a never-ending ocean of information. Theirs is an information environment defined by wireless Internet ubiquity, wholesale technology integration, infinite content, and immediacy. From a dangerously young age, their infinite access to information and ideas and

Much of why Generation Z seems like a new species from another planet is really just an accident of history. They just happen to be the generation to come of age in the 2010s, during an era of profound change and uncertainty driven by a confluence of epic historical forces.

January–February 2016

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perspectives—unlimited words, images, and sounds—is completely without precedent. Human Diversity. In every dimension, the world is becoming more diverse and more integrated. Generation Z will be the most diverse workforce in history, by far. That’s true in terms of geographical point of origin, ethnic heritage, ability/disability, age, language, lifestyle preference, sexual orientation, color, size, and every other way of categorizing people. For one thing, the Generation Z workforce will include a global mix like never before. Equally important, Gen Zers look at every single individual—with his/her own combination of background, traits, and characteristics—in his or her own unique diversity story. They value difference, uniqueness, and customization, most of all their own. At the same time, Generation Z has been also been shaped by two very important micro trends. Helicopter Parenting on Steroids. By the late 1990s, the Boomer-esque self-esteem based “everyone gets a trophy” style parenting was morphing anew. The parents of these second-wave Millennials are mostly Gen Xers who have had fewer children and typically have children at a later age than Boomers did. Xer parents have taken helicopter parenting to a whole new level. As one Gen Xer parent told me, “I don’t want to make my kid just feel like a winner no matter what happens; I want to do everything I can to set him up with every possible advantage to make sure he has a big head start in the real world, so he can win for real.” Parents (and contingent authority figures) are so engaged in supervising and supporting the child’s every move, validating their differences, excusing (or medicating) their weaknesses, and setting them up with every material advantage possible. In China, where there are so many only-children due to the longstanding “single child policy,” a similar trend in child-rearing has yielded a phenomenon referred to by many as “Little Emperor Syndrome.” Gen Zers grew up spending most of their time ensconced in their own highly customized safety zones—the private comfort of protection and resources provided by responsible adults who are always supposed to be looking out for them. Gen Zers have been insulated and scheduled and supervised and supported to a degree that no children or young adults have ever been before. It’s been decades since children were told to “go outside and play.” Even school no longer functions (as it used to) as a robust quasi-public sphere for children to “scrimmage” real-life social interaction. More Gen Zers per capita, by far, have been home-schooled than any generation since the rise of public schooling. Meanwhile, parental involvement in the classroom is more pervasive than ever before. Gen Zers have grown accustomed to being treated almost as customers or users of services and products provided by authority figures in institutions, both in schools and in extracurricular activities, not to mention in their not-infrequent experiences as actual customers. As a result of all of this, relationship boundaries with authority figures are rather blurry for Gen Zers. They expect

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THE soft skills gap continued from page 55

authority figures to be always in their corner, to set them up for success, and to be of service. They are often startled when authority figures see it otherwise. Virtual Reality. It’s not just that they are always looking down at their hand-held devices. Gen Zers are

equally valid” and try to “fit in” with each other, in a never-ending digital dance, by projecting their uniquely diverse persona(s) in their own highly customized virtual peer ecosystems. Trying to make the adjustment to “fitting in” in the very real, truly high stakes, mostly adult world of the

Some standards of conduct are more burdensome than others. Some are arbitrary, exclusionary, constraining, and worth resisting. Others are necessary, efficacious, and worth some inconvenience. How does one tell the difference? This question holds the key to bridging the soft skills gap with today’s young talent. always totally plugged in to an endless stream of content and in continuous dialogue—through social-media based chatting and sharing and gaming— with peers (and practical strangers) however far away (or near) they might be. They are forever mixing and matching and manipulating from an infinite array of sources to create and then project back out into the world their own ever-changing personal montage of information, knowledge, meaning, and selfhood. They try on personas, virtually. Social media makes it easy to experiment with extreme versions of one persona or another more or less (or much more) crass means of expression. Gen Zers are perfectly accustomed to feeling worldly and ambitious and successful by engaging virtually in an incredibly malleable reality where the stakes can seem all-important one moment, until the game is lost and reset with the push of a button. In a nutshell, Generation Z might be seen as a rising global youth-tide of “Little Emperors” who have been told their whole lives “all styles are

workplace is a whole new game for them. And it’s not really their kind of game. They are less inclined to try to “fit in” at work and more inclined to try to make this “whole work thing” fit in with them.

Gen Zers: The Ultimate Non-conformists in an Age of Non-conformism

If you think about it, soft skills are mostly about “fitting in”—making an effort to conform one’s attitude and behavior to established standards of conduct—in order to engage and work together effectively with others in a shared enterprise. Here’s the thing: Gen Zers are the ultimate non-conformists in an age of non-conformism. For some time now, the pendulum of the zeitgeist has been swinging (more or less) away from conformism. Non-conformism is the belief that it is better for individuals to be unique and emphasize their individual differences from the group; conformism is the belief that it is better for individuals to subordinate their individual differences and adopt the normative/dominant

January–February 2016

attitudes and behaviors accepted by the group in order to “fit in.” Of course, in any era there are conformists and outliers, regardless of the zeitgeist. But the pendulum does swing one way or the other. Think of the relative conformism of the 1950s when so many were trying to assimilate and come together after the global upheaval of World War II and its aftermath. The revolutionary non-conformity of the 1960s yanked the pendulum in the other direction, and it’s been swinging that way ever since. There have been ebbs in the swing, notably in the middle 1980s and the years immediately following 9/11. Still, the pendulum has kept swinging away from conformism and toward a broad cultural relativism for many good reasons. It is unfortunate that cultural relativism has been widely misunderstood and is often misappropriated (in a classic case of reductio ad absurdum) by those who wish to argue that no expectations of conformity to any norms of conduct are legitimate. This is the kind of thinking that leads to the wishful notion that “all styles are equally valid.” It is easy to see why cultural relativism is so important to understand: it provides much of the intellectual underpinning behind some very important long-term cultural and social trends away from oppressively hierarchical systems and one-size-fits-all rules. Strict hierarchy and one-size-fits-all rules are extremely limiting: by design, they prescribe and proscribe the behavior of those who wish to belong. They constrain individual expression, creativity, and innovation. They exclude those outside the norm or unwilling to conform. Sometimes they exclude people for very bad reasons, sometimes even with malice, as in “no Irish need apply,” a sign common in US workplaces in the middle- to late-nineteenth century. Cultural relativism teaches us that differences in norms and values are not an indication of moral failure. There may be many different ways to think

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continued on page 58

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THE soft skills gap continued from page 56

about or do things that are equally legitimate, on some fundamental level, even if they might be more or less appropriate in one culture versus another. Plus, being open to people with differing norms and values can open valuable new opportunities and possibilities. Still, none of this means that “all styles are equally valid.” What it really means is that a style that may be appropriate in one time and place may not be appropriate in another. Any cultural anthropologist will tell you that the way to get along in a different culture is to adjust your attitude and behavior to what is appropriate in that place and time. That doesn’t mean you have to compromise your values or integrity or abandon your “true self.” It just means, if you want to develop good relationships with others and be effective, you need to be adaptable. Dress codes offer a simple example: I often say, “If you don’t want to wear a uniform, you shouldn’t become a police officer, a firefighter, or a soldier.” Uniforms function to help police, firefighters, and soldiers identify each other in a crowd; signal to outsiders the special role of those in uniform; provide important information such as name and rank; and have built-in equipment for doing the job. Uniforms can make a lot of sense in some jobs. So where do you draw the line? What about suits and ties for men? Skirts and jackets for women? When I was a young associate at a Wall Street law firm in the early 1990s, there was a serious brouhaha among the young associates over women lawyers being required to wear skirts instead of pants. In the 1990s! The Gen X lawyers had a mini-revolt in favor of women being able to wear pantsuits. What rebels!

The Bottom Line: Managing Gen Zers

The bottom line is this: you simply cannot have a functional workplace where everybody makes his own rules of conduct. Imagine an organization where some employees support the mission, but others support the opposite mission. Where nobody agrees about who is in charge. Where people come and go whenever they feel like it. Where some people wear pantsuits, and others wear bathing suits. Where people only work on the tasks and responsibilities they enjoy, insist on doing everything their own way, and only work with the people they like. Where meetings are held with no particular agenda, and people are encouraged to blurt out whatever pops into their heads. Where people may or may not return each other’s calls and emails. And so on. Sometimes conforming makes a lot of sense. Consider the essential soft skills such as the elements of professionalism, critical thinking, and followership. These are old-fashioned basics for a reason: they are time-tested best practices. They work. Nobody needs Gen Zers to give up their uniqueness as individuals, their overall non-conformism, or adopt too many arbitrary, exclusionary, or overly constraining standards. But most managers would very much like Gen Zers to make some reasonable adaptations—to adjust at least some of their attitudes and behaviors to the realities of the adult workplace.

The problem is that Gen Zers are neither accustomed nor inclined to conform their attitudes and behavior for an institution or an authority figure (especially a non-parental authority figure). Yes, they apply for the job. They accept the job. They might be excited about the job. They might want your approval. They usually are very keen to succeed. They definitely want the paycheck. Nonetheless, they usually do not realize just how much “just doing their own thing” makes their attitudes and behavior maladaptive in the real world of the workplace. Most of them have no concept of the incredible power of the old-fashioned soft skills. If you want your employees to really focus on high-priority soft skill behaviors, then you need to: ■ Set clear goals for specific behaviors. ■ Monitor and measure each employee’s actual performance on those specific behaviors in relation to those goals. ■ Provide candid feedback, direction, and guidance on those behaviors. ■ Problem solve and troubleshoot when course correction is necessary. ■ Identify opportunities to improve on those specific behaviors. ■ Recognize and reward success on those specific behaviors. ■ Identify high performers for key assignments, opportunities, and promotions based on success in those specific behaviors. Your young employees need to know exactly what is expected and required of them every step of the way when it comes to high-priority soft skill behaviors. They also need to know that their performance will be measured and that the score will have real consequences for failure and real rewards for success.

BRUCE TULGAN is an adviser to business leaders all over the world and a sought-after keynote speaker and seminar leader. He is the founder and CEO of RainmakerThinking, Inc., a management research and training firm, as well as RainmakerThinking.training, an online training company. He has authored numerous books, including the best-selling It’s Okay to Be the Boss (2007), the classic Managing Generation X (1995), The 27 Challenges Managers Face: Step-By-Step Solutions to (Nearly) All of Your Management Problems (2014), It’s Okay to Manage Your Boss (2010), and his newest release Bridging the Soft Skills Gap: How to Teach the Missing Basics to Today’s Young Talent (2015). Tulgan can be reached by email at brucet@rainmakerthinking.com.

January–February 2016

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digital dialogue By Jacque Brittain, LPC

How Will Retail Respond to a New Wave of Cyber Crime? T

he retail industry faced unprecedented cyber crime conflicts in 2014 with a barrage of data breach incidents that exposed hundreds of millions of retail customers to the long and often international reach of a growing breed of criminal. Data breaches and other cyber-crime insults were a regular and consistent occurrence across retail channels, resulting in significant changes in both approach and practice for many retail organizations. Cyber crime remained a primary topic across digital channels once again in 2015 with cyber criminals hacking into everything from the Ashley Madison database—which proudly boasts it is “the most famous name in infidelity and married dating” website—to prison phones to CIA Director John Brennan’s AOL account. Personal information belonging to more than 178 million Americans was exposed in cyber attacks, according to the Identity Theft Research Center. Lessons learned took us in several different directions. Government data breaches including the breach of the Office of Personnel Management exposed the personal information of tens of millions of Americans and made it clear that our own government agencies are actually lagging behind in the area of data protection and are in desperate need of fortification. On the other end of the spectrum, the self-proclaimed adulterers' website claims that the publicity from the data breach has actually increased their traffic and popularity. Go figure.

Retail Cyber Crime

The retail industry has responded aggressively to the threat of cyber crime, increasing awareness, enhancing education and training opportunities, restructuring responsibilities, and adding new positions to better prepare for such threats. But while the industry didn’t face the bombardment of attacks that occurred in 2014, retailers certainly didn’t escape unscathed in 2015 as the following examples illustrate. Pharmacy chain CVS was forced to take down its online photo print ordering site as the result of a data breach.

January–February 2016

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

Walmart Canada then reported it was investigating a similar breach of its online photo website, which the company said was operated by a third party. That same third-party provider claimed to be working “with over 19,000 retail locations and 8,000 kiosks to generate more than 18 million transactions for personalized products.” Retailers reported to be working with the third-party provider included Sam’s Club, Walgreens, Costco, Tesco, Rite Aid, among others. Credit card data, email and postal addresses, phone numbers, and passwords were taken, but it’s not clear how many millions were affected by the breach.

Retailers must continue the push toward cooperative partnerships between loss prevention and information technology departments, continuing education and training programs, and proactive strategies to minimize cyber threats and protect company assets. Staying current with these threats has become a professional responsibility, while being prepared has become a business necessity. Credit bureau and consumer data broker Experian disclosed that a data breach involving its computer systems exposed approximately 15 million social security numbers and other data on people who applied for financing from wireless provider T-Mobile. While Experian stressed that no payment card or banking details were continued on page 62

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stolen, the compromise exposed names, dates of birth, addresses, social security numbers and/or drivers’ license numbers, as well as additional information used in T-Mobile’s own credit assessment. From a more global perspective, perhaps the UK’s largest cyber crime of the year involved Carphone Warehouse, a retail phone store. As many as 2.4 million customers (roughly 4 percent of the country’s population) had their personal information compromised as part of the data breach, with approximately 90,000 customers having their encrypted credit card data stolen.

A Different Kind of Cyber Crime

When cyber crime involves the theft of information from children, the ruthless nature of some of these hackers becomes crystal clear. In one of the largest data breaches of the year, toymaker VTech suffered a major data breach with reports claiming that personal data for as many as 12 million records, including 6.4 million minors was exposed. This was followed by a data breach of the online community for Hello Kitty, which exposed the first and last names, birth dates, genders, countries of origin, and email addresses for 3.3 million accounts. While the data breaches don’t appear to be related, this particular brand of cyber crime is notable because children’s personal information was compromised. Data security experts say children have become a popular target for identity theft because their clean credit histories can be used to apply for government benefits, open fraudulent bank and credit card accounts, and apply for loans. This also points to additional concerns involving retail products in general. All kinds of new “smart products” are making their way onto the shelves of retail stores, from smart watches, televisions, and other electronic devices to children’s toys. A

mountain of new products may offer exciting new ventures for retailers and retail customers alike. However, many may not be designed with data protection and cyber security as a top priority, which may lead to further exploitation and the emergence of a different type of cyber crime. This may or may not directly impact a retail organization or the way that a loss prevention program operates, yet such issues do have the potential to influence everything from retail sales and product returns to the way that certain products are managed and displayed.

Ransomware

We’ve experienced cyber crime involving the release of personal and sensitive information, such as the Sony data breach from late 2014 that included personal information about Sony Pictures employees and their families, emails between employees, information about executive salaries at the company, copies of then-unreleased Sony films, and other information. The Ashley Madison data breach is another example of this type of cyber attack. But there is another type of malware that takes cyber crime to the other end of the spectrum. How much would the average consumer be willing to pay to regain access to their television or home computer? How much would a retailer be willing to pay to regain access to its corporate files or POS system? Ransomware is a type of malware that prevents or limits users from gaining access to their systems . The cyber criminal then threatens to lock the user out permanently or delete data, forcing infected victims to pay a “ransom” using certain online payment methods in order to regain access to their systems or retrieve their data. Some industry experts believe that this type of “cyber extortion” might lead the next wave of cyber crime.

will have access to the Internet in 2016. The flow of information across digital channels serves as a beacon, warning us of the latest threats. And as cyber crimes continue to increase on an international scale and cyber threats expand in both the public and private sectors, the pressure for governmental response will continue to escalate. Many experts expect a push for additional legislation dealing with threats, reporting, data protections, and ways to help support the millions of victims of data breaches—some of whom never learn that their information was exposed. By the same respect, retailers must continue the push toward cooperative partnerships between loss prevention and information technology departments, continuing education and training programs, and proactive strategies to minimize cyber threats and protect company assets. Staying current with these threats has become a professional responsibility, while being prepared has become a business necessity. INTERNAL THEFT

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January–February 2016

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People on the move Blue Montez has been appointed Vice President of Risk Management for American Apparel. George Schweitzer, CFI was named Zone AP Leader, and Richard Stidham is now an Area AP Leader for Big Lots. Adam Fulton has a new position as Regional LP Manager for Cracker Barrel. Sherry Nichols is now a Regional LP Manager for Destination Maternity. Peter Van Loon was made Manager of Information Security for Eddie Bauer. Dave Anatra is now a Regional LP Supervisor for Goodwill Industries. Ron Smith, CPP was made Director, Global Physical Security and Compliance for Mattel.

Frank Camerino has been appointed Vice President of Business Development for Metro One Loss Prevention Services Group. Ron Taylor, CFI is now a Senior Regional AP Manager, and Kim Schmidt, CFI was made a Regional AP Manager for Regis.

Chuck Reno, CFE has been appointed Vice President, Risk Management for Sotheby’s. Joseph Rapacz was named Regional LP Manager for Spencer Gifts. Jeremy Willis was made a Senior Executive Team Leader for Target.

David Cohen is a Corporate MultiChannel AP Manager for Rent-A-Center.

Steven Bova, CPP was appointed Director of AP for Taco Bell.

Chris Savage is now an AP District Manager for Rite Aid.

Julie Giblin has a new position as Vice President of LP for ULTA Beauty.

Sdiqa Sharifi was made Senior Manager, RISC for Ross Stores.

Neema Wasira-Johnson is now Manager of Information Security Services for Walgreens.

Jason Alexander was made Regional Director Asset and Profit Protection for Sears Holdings.

Jeff Buskirk is now a Market AP Manager, and Vincent Sonner is now Senior Manager GISAT Associate Vetting for Walmart.

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.

Calendar January 17–20, 2016 National Retail Federation Big Show 2016 Jacob Javits Convention Center New York City bigshow16.nrf.com February 21–23, 2016 Secure Stores Forum Eden Roc Resort, Miami, FL securestoresforum.com February 28-March 2, 2016 Retail Industry Leaders Association Retail Supply Chain Conference Gaylord Texan Resort & Convention Center Dallas, TX rila.org February 29–March 1, 2016 Security Executive Council Next Generation Security Leader Event Delta Airlines Headquarters Hartsfield-Jackson Atlanta (GA) International Airport securityexecutivecouncil.com

March 1–3, 2016 Jewelers’ Security Alliance 38th Annual Security Seminar & Expo Hard Rock Hotel & Casino Hollywood, FL jewelerssecurity.org March 7–10, 2016 Merchant Risk Council e-Commerce Payments & Risk Conference Aria Resort and Casino Las Vegas, NV merchantriskcouncil.org March 14–17, 2016 Food Marketing Institute Asset Protection Conference Westin La Paloma Resort & Spa Tucson, AZ fmi.org April 5–8, 2016 ISC West Sands Expo & Convention Center Las Vegas, NV iscwest.com

April 17–20, 2016 Retail Industry Leaders Association Retail Asset Protection Conference Gaylord Texan Resort & Convention Center Dallas, TX rila.org June 14–16, 2016 National Retail Federation NRF PROTECT Loss Prevention Conference & Expo Pennsylvania Convention Center Philadelphia, PA nrfprotect16.nrf.com July 24–27, 2016 Restaurant Loss Prevention & Security Association Annual Conference La Cantera Hills Resort San Antonio, TX rlpsa.com

For more information about these and other industry events, visit the Events page at LossPreventionMedia.com.

LP Magazine | January–February 2016

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LP Magazine | January–February 2016

Parting words

Fifteen Years of Growth and Change

Jim Lee, LPC Executive Editor

t’s been fifteen years since LP Magazine was first introduced to the loss prevention industry. From that inaugural edition through today, there have been many great stories and great people that have filled the pages of the magazine. Many things have changed with both the people and the initiatives across the retail industry over that time. The clothes and the hairstyles that we wear have changed—at least for most of us. Fifty shades of grey was something that happened to the color of our hair rather than providing the theme for a movie. But as we’ve grown older, hopefully we’ve also grown a little wiser over that period of time. Hopefully, we’ve learned from the good and bad decisions that we’ve made in order to become more well-rounded leaders, better business partners, and better people.

and Cubs still haven’t won the World Series (sorry Cleveland and Chicago). While many of the faces and some of the names may have transformed over the past fifteen years, we still see a willingness to adapt and grow with the business. We see a commitment to professional development, the need to learn as much as we can, and the need to share our knowledge and experience with others. We still have strong leadership as an industry, strong mentors, and promising up-and-comers to take us forward as a profession. Retail shrinkage and shrink management remain a concern, along with the need to always find new approaches and better solutions to the many different factors that influence retail losses. A criminal element that we must confront and overcome continues to evolve with the advancements in technology. Internal losses, external losses, paperwork issues, safety concerns, and other business insults continue to be an element that we have to address and control. But the primary role of loss prevention is still to enhance the profitability of our companies—just like every other role in retail. This is also why a lot must continue to change. As an industry and a professional community, we must continue to take the steps to move forward. The evolution of the loss prevention industry is a living process that requires all of us to adapt and grow. We must also continue to evolve as individuals. We have to approach what we do with flexibility and an open mind. We have to keep that spark alive in ourselves and help bring it out in others. As a publication serving the retail community, we must continue to evolve as well. We are committed to bringing you the best and most productive information to help you continue to grow and develop as a professional. That’s why we’ve taken the steps to move forward.

Things That Have Changed

Loss prevention and the retail industry in general have also gone through some tremendous changes. We’ve chronicled the explosion of loss prevention technology, the changes to the world in general, and how those changes have impacted the way that retailers do business. We’ve seen the rise of new products and new businesses. We’ve experienced the challenges and resilience of the business through difficult economic times. We’re witnessing how e-commerce and the world of omni-channel retailing are revolutionizing the business of retail. New growth, new faces, and new ideas continue to influence the way that we do business and our approach to loss prevention as a profession. And with this has come new challenges. Data security threats have increased. Budgets have tightened. Organized retail crime has taken on new meaning. There’s an expectation to do more with less, yet still do it better. But we’ve also seen the rise of an industry certification. We have new and better tools that are available to help us, new solution providers to guide us through the process, new responsibilities, and new positions.

Things That Remain the Same

Still, there’s much that hasn’t changed, and I’m talking about much more than the fact that the Indians

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January - February 2016

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SuPPLy CHAIN

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PARTING WORDS

EDITOR’S LETTER

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