March - April 2017 by Loss Prevention Magazine

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BUILDING AN UNBREAKABLE

LP-IT BOND SECRETS TO EFFECTIVE COLLABORATION

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TABLE OF CONTENTS 6 EDITOR’S LETTER

Perspectives from Practitioners By Jack Trlica

Building an Unbreakable LP-IT Bond

10 RETAIL SPONSORS 12 INTERVIEWING Is It Worth the Risk?

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

24 PERSPECTIVES

Leading LP professionals share secrets to effective collaboration with IT departments

The Year Ahead in LP By Merek Bigelow

36 FUTURE OF LP

By Garett Seivold, Contributing Writer

Read the Fine Print

By Tom Meehan, CFI

38 BENCHMARKING

Building an Organization around Data and Technology

Setting the Research Agenda By Adrian Beck, Walter Palmer, and Colin Peacock

40 LPM Excellence

LPM “Magpie” Award: Applauding Excellence

52 CERTIFICATION

Certification Has Tremendous Benefits for Law Enforcement

An interview with Scott Glenn, CSO at Sears Holdings

Interview with Mitzi Perry, LPQ, St. Petersburg (FL) Police Department

By James Lee, LPC, Executive Editor

54 EVIDENCE-BASED LP

Getting the Dosage Right to Stop the Pain By Read Hayes, PhD, CPP

66 SUPPLY CHAIN

Test, Do, Learn, and Share

By Maurizio P. Scrofani, CCSP, LPC

Making It Easier to Get It Right

70 LPM DIGITAL

Navigating a Year in Transition

By Jacque Brittain, LPC, and Kelsey Seidler

74 MY TURN

Walmart’s AP leadership team discusses the evolution of the organization

I Missed My Calling By Kevin Lynch, LPC

By Jacque Brittain, LPC, Editorial Director, Digital, and Kevin McMenimen, LPC, Chief Operating Officer

75 PRODUCT SHOWCASE 77 INDUSTRY NEWS

- Neiman Marcus’ Gary Manson Remembered by Colleagues - LP Community Mourns Death of Jeff Frazier

78 CALENDAR 79 PEOPLE ON THE MOVE 80 ADVERTISERS 80 SUBSCRIPTION FORM 81 VENDOR SPONSORS 82 PARTING WORDS

Modern Data Analytics

The view of its impact on retail from three LP veterans

Hard Work, Talent, and Maybe a Little Luck By Jim Lee, LPC

By Stan Welch, LPC, Senior Account Executive, Agilence

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EDITOR’S LETTER

Perspectives from Practitioners W

e try to always write the articles in this magazine from the perspective of the loss prevention practitioner. Apart from the columns written by LP professionals, the four feature articles in this issue include quotes or references from twenty-three individuals. In the feature on LP and IT collaboration on page 15, there is input from practitioners working for Bloomingdale’s, Brinker, Delhaize America, Macy’s, Neiman Marcus, Sears Holdings, and Walmart. In Jim Lee’s interview with Scott Glenn, JD, LPC, of Sears Holdings on page 27, Glenn describes the responsibilities and accomplishments of his five direct reports who are contributing to the realignment of asset protection at the company. In the article on page 41 about the ongoing success of the Walmart asset protection organization at the world’s largest retailer, Mike Lamb, LPC, and three of his lieutenants discuss the evolution of loss prevention inside the company over the past several years. And in the feature article on data analytics on page 59, three LP executives from retailers At Home, Five Below, and Price Chopper describe how moving from Excel sheets to modern data analysis systems have helped their companies drive profits and reduce loss. We also have included the perspectives of chief executives from three LP solutions providers on page 24 who offer their viewpoints on the pressures, problems, and possibilities for success and failure in 2017.

We appreciate all these professionals and those over the years who have given their time and insights to help inform and educate the industry. It’s remarkable that these individuals and their companies can put aside competition to help each other.

All this to say that both magazines contain content that is valuable to working practitioners on both sides of the Atlantic and across the globe. We invite you to subscribe free to both magazines via our digital channels. You can access the European content at LPportal.eu Bridging the Atlantic and the North American content at LossPreventionMedia.com. For those who Speaking of perspectives, for the prefer the printed editions, we are happy past three years LP Magazine Europe to mail the US magazine to Europe or the has been publishing articles about the European magazine to North America asset protection and profit enhancement for a small annual fee to cover the cost industry on the east side of the Atlantic Ocean. From my point of view after fifteen of shipping. For those companies that supply years of publishing the North American products and services globally, you have version of LP Magazine, I find it most two avenues for reaching your global interesting to read how the strategies and users and prospects by taking advantage tactics of retail LP professionals are at of our print and digital advertising times similar and other times different on platforms. We are happy to work with the two continents. It’s not surprising there are differences you to develop a customized program to meet your communications needs on both given the varying cultures, business sides of the Atlantic. climates, and customer expectations. It’s As the world shrinks, loss prevention also not surprising there are similarities and retail operations will become more given human nature that leads to theft and more similar, changing the wide and other human contributions to Atlantic Ocean to a metaphorical puddle. loss. And as our world shrinks with Today more than ever, we need to bridge global supply chains, international the communication gap between the retail operations, and e-commerce, the continents east-west and north-south similarities today certainly outnumber to share technologies, strategies, and the differences. Over the past three years, our US-based alternate perspectives to benefit the global print magazine has published several of the retail industry. articles that were written and published in Europe. And our digital channel features other articles published in Europe. Vice versa, the European magazine often publishes US-written articles to give their Jack Trlica Managing Editor readers the US perspective.

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EDITORIAL BOARD Jim Carr, CFI Senior Director, Global Asset Protection, Rent-A-Center

David Lund, LPC Vice President of Loss Prevention, DICK’S Sporting Goods

Ray Cloud Senior Vice President, Loss Prevention, Ross Stores

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

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

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

Charles Delgado, LPC Regional Vice President, Store Operations, Academy Sports Scott Draher, LPC Vice President, Loss Prevention, Safety, and Operations, Lowe’s Scott Glenn, LPC Chief Security Officer, Sears Holdings Tim Gorman Divisional Vice President, Loss Prevention, Asset Protection, and Business Continuity, Walgreens Barry Grant Chief Operating Officer, Canadian Images

Randy Meadows Senior Vice President, Loss Prevention, Kohl’s Melissa Mitchell, CFI Director of Asset Protection and Retail Supply Chain, LifeWay Christian Stores Dan Provost, LPC Vice President, Global Loss Prevention, Staples Tina Sellers, LPC Director of Loss Prevention, Retail Business Services LLC, an Ahold-Delhaize Company Mark Stinde, LPC Vice President, Asset Protection, 7-Eleven

Bill Heine Senior Director, Global Security, Brinker International

Paul Stone, LPC Vice President, Loss Prevention and Risk Management, Best Buy

Frank Johns, LPC Chairman, The Loss Prevention Foundation

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.

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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 CONTRIBUTING WRITERS Read Hayes, PhD, CPP Tom Meehan, CFI Walter Palmer, CFI, CPP, CFE Maurizio P. Scrofani, CCSP, LPC Garett Seivold 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 VICE PRESIDENT, 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 SUBSCRIPTION SERVICES

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

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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 LPMsubscription.com. The publisher reserves the right to determine qualification standards. International print subscriptions are available for $99 per year payable in U.S. funds at circulation@LPportal.com. For questions about subscriptions, contact circulation@LPportal.com or call 888-881-5861. Periodicals postage paid at Matthews, NC, and additional mailing offices.

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INTERVIEWING

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

Is It Worth the Risk?

pproximately 29 percent of DNA exonerations across the United States since 1989 involved false confessions to the crime. The actual rate of false confessions will probably never be known for sure since ground truth is elusive in non-experimental settings. One thing is clear—false confessions are real.

Confrontation Equals Conflict

A combination of factors must be considered when deciding what could contribute to an innocent person confessing to a crime he did not commit. When evaluating a confession, we can look to the common attributes academics have chronicled among false-confession cases. What they have found is the suspect is often young, inexperienced, and mentally or intellectually challenged. These suspects were interviewed without an attorney or parent present, and the interrogation was more than three hours in length. In many cases, the interrogators leaked details about the crime to the suspect or used leading questions to bring the individual to the correct answers. Finally, the officers were often trained in the Reid Technique of Interviewing and Interrogation. The Reid Technique includes the Reid Nine Steps of Interrogation process. The nine-step interrogation is a confrontational approach in which the interrogator starts the process with a direct statement of involvement—“Our investigation clearly indicated you took the missing deposit out of the safe here at the store.” This almost always results in the suspect denying involvement and protecting his assertions of innocence with additional denials. Any rapport that was built during the opening interview with the subject is lost after the interrogator directly accuses the individual, listens to his denial of involvement, and then reaccuses him directly again. The situation becomes emotional as the suspect protests his innocence and the interrogator tries to stop his further denials. This can become frustrating for both the interrogator and the suspect as they struggle to control the encounter and emotions built. We have all experienced conversations where emotions got out of control and unfortunate things were said. The interrogator’s choice of starting the interrogation with a direct accusation changes him into an opponent against whom the suspect can direct arguments and aggression, which can inflame a difficult situation further. The emotional

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

nature of the encounter can lead to unfortunate words being spoken by the parties and possibly lead to mistakes in the interrogation and interpretation of the suspect’s behavior. The second step has the interrogator offering a theme, essentially telling the suspect why he committed the act. “You are having financial problems, which caused you to take the deposit.” Even if this were true, the suspect denies the financial problems, interrupting the interrogator’s attempt to allow him to save face, making the approach even less effective. If the suspect is going to confess using the nine steps, it will be an emotional decision to do so. The emotional nature of the decision is reflected in the tearing, crying, and dejected body position taken by the suspect at the point of the first admission. What appeals to some interrogators is the directness of the nine-step approach since they think being heavy-handed and confrontative is the key to dealing with suspects. Clearly, this belief stands in the face of academic research into interview and interrogation to the contrary and our practical experience in tens of thousands of non-confrontational conversations over the last thirty-five years.

Changes at WZ

As many of you know, Wicklander-Zulawski & Associates (WZ) is a world-leading investigative, consulting, and interview training firm that has been focused on non-confrontational interview and interrogation techniques since our inception in 1982. WZ conducts the non-confrontational interview and interrogation training for private and public sector agencies and organizations around the globe. The goal of any interview training session provided by WZ is focused on the search for the truth and reliable information through a collaborative conversation with the suspect. WZ has embraced the changes in interpersonal dynamics, legalities, and academic research into interview and interrogation by offering new ideas and tactics for a changing world. Because of the possible abuses inherent in the confrontational Reid style, we believe it is time to move away from the practices of the 1970s when it was developed. Although the Reid nine-step interrogation approach has been continued on page 14

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successful in solving cases, there are serious potential pitfalls and inherent risks to its use if applied incorrectly. WZ has been licensed to teach the Reid technique since 1984, but has not advocated its use in the private sector. The emotional nature of the interrogation makes it much less appropriate in a workplace environment for a variety of reasons, but none more important than employee relations. The change in personal dynamics from the 1970s, when managing and parenting was autocratic compared to today’s collaborative strategies, means new techniques are needed for a very different society and way of treating people. As of February 2017, WZ no longer offers the Reid technique in our course selections. The Reid Nine Steps of

Wrongful convictions, exonerations, and false confessions have become a global point of discussion and justifiably so. Although the Reid technique can be a useful tool in obtaining a confession, cases have shown that the improper application of the approach combined with the intense emotional pressure caused by its use can lead to horrendous results. Interrogation will only be discussed to highlight the potential risks it poses in obtaining a false or coerced confession or to illustrate the major advantages of using the WZ non-confrontational approach to interview and interrogation.

Proper Justice

The Netflix series Making a Murderer highlighted the case of a young man named Brendan Dassey who was interrogated after his uncle was implicated in the rape and murder of a young woman in Wisconsin. Dassey was young, inexperienced, socially inept, and intellectually challenged. He was interrogated at length by investigators who have fallen under much scrutiny for the manner in which they conducted the conversations. Investigators were observed leaking information to Dassey—they almost fed him the answers to provide, which makes corroboration very

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difficult, if not impossible. These investigators also used several leading questions as well as suggesting leniency and making false promises to Dassey, such as “honesty will set you free.” Due to the questionable investigation and coercive interrogation, it is near impossible to determine if Dassey actually had any involvement in the crime or not; however, what can be said is that his confession was tainted by the investigators’ tactics, implied promises, and information leaks making it, in our opinion, involuntary and unusable. With the commonalities of false confessions we listed earlier in this piece, one would have to look at Dassey’s statements as highly questionable. Wicklander-Zulawski & Associates, the Juvenile Law Center, and University of Virginia Professor of Law Brandon L. Garrett filed an amicus brief in the United States Court of Appeals for the Seventh Circuit on Dassey’s behalf in December 2016. The WZ team is proud to have stood behind the integrity of ethical, moral, and legally acceptable interview and interrogation methods. The amicus brief was provided to the Seventh Circuit in response to the State of Wisconsin’s appeal of an August 12, 2016, decision by a federal magistrate judge. The decision supported the claims by Dassey that his confession was involuntary for a variety of reasons as noted within the amicus brief. The brief highlights critical risks that interrogators have made when dealing with a subject such as Dassey—making false promises or suggestions of leniency, threats of consequences, and lack of considerations of his age, intellectual capacity, and social behaviors when dealing with authority. On February 14, 2017, Laura Nirider of the Center for Wrongful Convictions of Youth presented her oral argument to federal judges on behalf of Dassey. Arguments from both parties, supporting documentation, case law, and the amicus brief will be reviewed by the federal court in hopes for proper justice in this case. This brief can be viewed on the WZ website at w-z.com. Wrongful convictions, exonerations, and false confessions have become a global point of discussion and justifiably so. Although the Reid technique can be a useful tool in obtaining a confession, cases have shown that the improper application of the approach combined with the intense emotional pressure caused by its use can lead to horrendous results. WZ will remain a progressive, evolving organization as we continue to partner with academics, attorneys, and researchers around the world to ensure the interview and interrogation tools we are providing are ethically, morally, and legally acceptable. The goal of WZ will continue to be the search for truth and reliable information in an ethical fashion. The certified forensic interviewers (CFI) who serve as WZ instructors strongly support the research and dedication to the prevention of false confessions and miscarriages of justice.

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FEATURE

BUILDING AN UNBREAKABLE

LP-IT BOND SECRETS TO EFFECTIVE COLLABORATION By Garett Seivold, Contributing Writer

BUILDING AN UNBREAKABLE LP-IT BOND

istening to loss prevention leaders discuss their relationships with information technology (IT) departments and offer advice for strengthening them can seem a bit like eavesdropping on marriage counseling. There is admission of a “love-hate” dynamic, occasional hand-wringing over who gets final say, and counsel to “listen, don’t just talk” and to “see things from their perspective.” There is a critical difference, however. No matter how uphill the battle, divorce is never an option. Loss prevention needs IT. More functions of retail security than ever depend on support from technology departments. LP needs IT permission Virginia French to put technology solutions on the network and increasingly relies on IT for access to the data and the optimization of IP technologies to effectively perform their function. “I simply can’t do my job without them,” explained Virginia French, an investigator at Brinker International, whose brands include Chili’s Grill & Bar. French says she needs her IT partners to provide timely access to a variety of data sets, so she can keep pace with the latest employee fraud or theft scheme. “My job is absolutely crippled if I can’t get the data,” she said.

High Stakes

As more loss prevention technologies migrate to the network and LP increasingly plays in IT’s sandbox of data, IT departments have become indispensable to loss prevention and asset protection (AP) functions. We rely on them for both the implementation and success of asset protection systems and to fully realize the value that our departments can provide our companies. Macy’s for example, has been aggressively pursuing big data projects for years, and tapping into it has been a Thomas Smith

focus of its AP and LP departments, according to Thomas Smith, systems and technology manager in Macy’s asset protection division. “Within the data systems they maintain is all the return information, all the transaction info, and all the marketing information. So we’re looking at all this data and thinking about how we can use that in AP and with our own analytics to make us more efficient and identify issues we haven’t seen before,” said Smith. It’s already had a payoff. Macy’s recently closed several major refund fraud cases, organized retail crime cases, and major insider thefts by digging deeper into its data—with a key assist from IT. As with access to data, network technology drives reliance on IT. “Our relationship with IT really started in earnest with the move to IP cameras Joe Darnell and adding them to more than 500 locations,” explained Joe Darnell, manager of loss prevention administration for Retail Business Services at Delhaize America and its Food Lion and Hannaford brand stores. “For years, we only needed IT to network our DVRs, and that’s not that hard. But when you’re putting every single camera on the network, with every device named,

and making sure ports are available and standardizing the system, the relationship with IT became that much more important.” Clearly, the stakes of effective collaboration with technology departments are extremely high. So how’s it going? Extremely well, if you ask loss prevention executives. In a national security survey on the question, LP pros rated their level of cohesion with technology departments significantly better than security counterparts in other industries. Case in point: fewer than 4 percent of loss prevention executives rated their alignment with IT as particularly weak, a score of 1 or 2 on a 5-point scale. Strategic Alignment between Loss Prevention and Information Technology Departments* But that’s not to say there aren’t challenges and potential pitfalls. Talking with IT isn’t always easy. Cultural and operational differences may exist and act as barriers to effective collaboration. Priorities and project timelines are often at odds. Setbacks occur and can be triggered by even small events like the departure of key personnel. “It’s happened that I’ll work with one person for a long time and educate them to the point where they finally understand the urgency we have and how employees are thinking and stealing, so they are intuitive on their end

Level of Communication, Coordination, and Alignment of Objectives Strategic Alignment between Loss Prevention and Information Technology Departments*

Weak 1

Strong 2

Retail sales

5 4.06

Other industries

3.35 *Opinion of senior security executives

Scale: 1 - Extremely weak or non-existent communication, coordination, alignment of objectives 3 - Moderate level of communication, coordination, alignment of objectives 5 - Extremely strong level of communication, coordination, alignment of objectives Source: SDR/LPM survey for The United States Security Industry: Size and Scope, Insights, Trends, and Data, ASIS International and the Institute of Finance & Management, 2014–2017

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BUILDING AN UNBREAKABLE LP-IT BOND about the data I need as an investigator,” said French. “And then they leave. And I’ll have to teach LP to IT all over again to someone new.” Even IT has limits to its bandwidth, according to Tom Meehan, CFI, director of technology and investigations in the asset protection department at Tom Meehan Bloomingdale’s. “In an omni-channel retail environment, IT departments today have their hands in everything—it’s a true resource challenge. When they say they don’t have time, they really don’t. They are truly dealing with everything a retailer does.” LP Magazine spoke with a dozen leaders in the LP industry, and they seemed to unanimously agree that understanding and avoiding the potential causes of disconnect between IT and LP is as critical as any management challenge facing LP pros today. So what’s the secret to a happy marriage?

The Right Approach

For loss prevention to successfully team with technology departments on, say, a new IP camera roll out, it’s vital to approach them respectfully. Demonstrate an appreciation for their resource challenges and their concerns regarding network security—and certainly don’t arrive at the table spoiling for a fight. “I think LP and IT can be unnecessarily adversarial at times because they’re expecting the relationship to be contentious,” said Bloomingdale’s Meehan. But for LP and IT to be good working partners, LP has to come looking for a true partner, he suggested. “Imagine you’re going to do an interrogation and someone from IT comes in and says, ‘This is how we’re going to do it.’ That approach just doesn’t work.” Christian Romero, data privacy and protection associate at the Technocracy Group, says LP Christian Romero managers may need LP MAGAZINE | MARCH–APRIL 2017

BUILDING AN UNBREAKABLE LP-IT BOND to recalibrate their perception of IT for partnerships to flourish. He warned against holding onto an us-versus-them mindset and the perception of IT as “the guys that are always saying no” and act as roadblocks to your LP projects. “Oftentimes with LP, we will ask, ask, ask—and LP is not giving. It has to be two-way, give and take, to demonstrate, ‘I understand where you’re coming from,’ and to be open and receptive to new ideas,” advised Romero. The proper strategic approach to IT collaboration could also require checking your ego at the door, suggested several LP leaders. Your LP project may be important to you, but it is almost certainly not the most important thing that your IT department is working on. “In any retail organizations today, where the focal point is technology, there could be 100 projects already in the works that are more important to the business. And when you come to the table you have to appreciate that,” said Meehan.

Necessary Skills

Romero, who worked in loss prevention at Neiman Marcus for ten years before making the jump to IT security as its director of security intelligence, thinks LP needs to boost its technology acumen in general. “In my experience, the biggest obstacle to effective collaboration is the lack of technical knowledge on the LP side,” he said. LP executives compound the problem when they try to fake it, he added. “Where LP people get in trouble is when they try to use technical jargon without really understanding the technology. You can lose credibility pretty quickly,” he warned. Meehan offered similar caution. “You have to be up front about what you don’t know,” he said. “There is no sense in trying to pretend you know something that you don’t.” In terms of addressing the knowledge and skill gap, one fix will need to come at the industry level, Romero suggested, with LP certification programs becoming more IT-centric in their content. Internally, if a loss prevention team lacks the necessary depth of technical knowledge, you may need to cede some control. “You have to

acknowledge limitations and instead focus on better articulating what you need to accomplish in LP and identifying your non-negotiables,” said Romero, “And then LP pros have to rely on IT guys and trust that they can do the job.” Personal skill development is also critical according to Smith, who has worked in asset protection for twenty years but has only one year under his belt in his role as systems and technology manager at Macy’s. “I’ve always been a bit of a systems guy, but now I’m learning how much more there is to know.” Smith said he’s aggressively educating himself about technology tools and data resources that will allow him to be both a better partner and to better exploit IT resources to assist loss prevention. Skills building have also been a focus for Joe Darnell. “I’m not an IT expert, but I’ve worked to learn enough of the MARCH–APRIL 2017

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language and develop enough expertise to know what information IT is going to need, so I can I bridge the gap between the LP team and IT.” Several experts identified the importance of this bridge—and of having personnel who both have the skill to act as a liaison between IT and LP and are strategically positioned within the retail organization to permit them to serve effectively in that role. When Mike Wiley Mike Wiley came on board with Walmart, where he serves as director of asset protection point-of-sale programs, a dedicated resource within IT was already in place to help manage asset protection projects, something he mentioned is a must-have. “Having a dedicated IT

BUILDING AN UNBREAKABLE LP-IT BOND resource assigned to AP is a step that I would encourage any asset protection leader to take—and it shouldn’t be a shared resource with another department,” said Wiley. “IT departments at large retailers are huge, and you need that dedicated liaison within IT, that person you can call and discuss projects with and not have it be a different person every time.” Scott Glenn, JD, LPC, chief security officer at Sears Holdings, suggested that AP-IT collaboration is facilitated—or not—by how skill sets are organized within a retailer’s organizational structure. “We actually have a mini Scott Glenn IT team that works within the AP department. We also have a larger team offshore working for us but with an indirect reporting to the IT department.” Those connections help

ensure that AP at Sears Holdings has a voice when projects arise, such as the recent conversion of some data systems to Amazon’s web service. “Without the partnership and collaboration of our personnel in common, we’d be at the mercy of the IT team,” said Glenn. “Instead, we’re in a position to partner on ways to enhance and improve usage of new systems.” Recruiting with IT collaboration in mind is another way to build an LP team that can work with—and extract value from—the IT department. “I look for folks with a skill set that shows they can speak that language. It’s really about understanding how intricate and complex the technology work is,” said Wiley. Acumen is also critical at the field level to keep pace with uses of technology. In today’s tech-heavy LP environment, you need some understanding “of how the clock works and not simply what the time is,” said Wiley.

LP MAGAZINE | MARCH–APRIL 2017

A Platform for Execution

It’s difficult to identify universal best practices for developing and implementing LP projects in concert with IT, according to experts. Every retailer is set up slightly differently to accept new work, invest in new technology, and manage projects— and the best way forward is necessarily resource- and system-dependent. For example, whether the LP team sources and selects an LP technology solution or the IT team takes the lead will reflect the resources of the two departments, the size of the project and company, and whether additional departments are involved. At Sears Holdings, for example, which is in the process of implementing updated network switches on DVRs—enhancing resilience in the event of a power failure with dynamic IP addresses—it was up to AP to develop and present IT with conceptual but realistic options. But it was IT that was tasked with the details of assessing if the project was technically

X BUILDING AN UNBREAKABLE LP-IT BOND

“In my experience, the biggest obstacle to effective collaboration is the lack of technical knowledge on the LP side. Where LP people get in trouble is when they try to use technical jargon without really understanding the technology. You can lose credibility pretty quickly.” – Christian Romero, Technocracy Group feasible, how to implement it, and how to maximize the project’s cost effectiveness. An IP camera project at Food Lion stores was somewhat similar, according to Joe Darnell. IT set the standards; LP researched choices, narrowed the field, and gave IT its preference; and IT made the final choice. Although one size can’t fit all, it’s still instructive to consider the strategies that LP executives say they have found effective in bringing LP projects to fruition. Get comfortable working within the IT project framework. Romero believes it’s critically important for LP to understand the intricacies of how its technology department works and to bend to that structure. For example, he noted that IT projects tend to be planned further out than projects in LP, which may get a capital expenditure for the current year and want to see an immediate roll out. “But IT may have projects planned out for the next year or sixteen months,” said Romero. “Being a good LP partner is about being proactive and saying to IT that ‘this is on the horizon; put a brick in for me,’ and to adjust from there.” Similarly, Romero advised adjusting your project strategies to align with IT’s project management process, such as whether they use a waterfall management approach, which is a sequential design process in which progress is seen as flowing downwards through the many phases from conception, through design, to testing, implementation, and maintenance. Your success working on projects with IT will depend significantly on the extent to which you are comfortable seeing projects the way IT views them, he suggested.

“Be strategic in your asks,” said Macy’s Thomas Smith. It’s important to recognize when the time is ripe to bring a project to IT, which requires “understanding their requirements and limitations and timelines, and where your project will likely rank on their project list,” he continued. Walmart’s Mike Wiley said that effective LP leaders understand their retailer’s project priorities and act accordingly to get their project on the docket—a point echoed by Bloomingdale’s Tom Meehan. “You have to understand where your project fits in with others the business is conducting and to know what issues they are dealing with,” he said. “So when you sit at the table, you can anticipate what their challenges and concerns will be.” Prepare to address IT’s concerns and answer their questions. It’s fairly basic high-performance teamwork stuff, said Meehan, but LP executives need to assess potential LP projects through the prism of IT’s needs and concerns. To start, “Ask them, ‘What are the things you need? What’s off-limits? What technologies are you just not comfortable with?’” Then, more specifically, ask questions of your project—“Are you asking at the right time? Do you understand the network load of what you’re asking for? Is it a potential security risk? Are you sure?” Don’t let loss prevention vendors drive the security debate. Meehan warned against brushing aside the concerns of IT over the security of LP projects and suggested trying to demonstrate that you recognize the legitimate risk of bringing in a new vendor. “Every vendor comes in and says, ‘We’re in this store and this store,’ but all those stores have been breached, and MARCH–APRIL 2017

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some of the victims of the bigger breaches have never fully regained credibility,” said Meehan. “That’s why my team takes the lead in doing risk assessment, and we don’t let vendors drive the discussion in this area. And then also go to IT to see what else you need to do to assuage their concerns,” he suggested. Stay completely engaged as projects move ahead. Wiley warned against stepping aside as projects move into the build phase as things can easily be sidetracked and reshuffled. You may need weekly or even more frequent interaction to drive them through to conclusion. “It’s important to anticipate that other high-impact projects may arise and move ahead of yours, but having a contingency plan in place up front when that impact happens is key. Will your resources be reassigned? And now where is your project in the deployment status?” When that happens, however, it’s imperative to “stay engaged and to ensure operations, IT, and AP executive leaders are aware of and support that reprioritization, but if they don’t, you’re giving them the time needed to lean in and help reprioritize, if necessary.” A different high-impact project may move to the front of the line, “but that doesn’t mean your project needs to fall to ‘sometime next year,’” said Wiley.

Frequent Communication

The skill with which LP communicates with counterparts in IT directly impacts the effectiveness of collaboration and shouldn’t be taken for granted, experts warned. “If that dialog is not there, then you won’t be successful,” said Romero. “Even with

something that is relied on heavily, like email, meanings can be lost in translation; issues can be misinterpreted.” LP may also have to accommodate, and avoid misinterpreting, different personalities. IT professionals often differ in mannerisms from their colleagues in LP, something to consider when trying to make headway with them. “Some folks in IT are more introverted. They’re often not the guys who tend to jump up and down and scream in objection,” explained Meehan. “Often, they may be more mild in their dissent, but that’s just the way they make their objection. LP can’t confuse what they’re saying with how they’re saying it. You have to appreciate that personality piece,” he said. It helps to be transparent and direct, according to Sears’ Scott Glenn. He believes that doing so has helped his department get past any residual mistrust technology leaders may have held about asset protection’s use of its network. “In terms of vision and strategies, we’ve found it critical that there be no secrets about what we’re trying to accomplish and to help them understand how we utilize the data we need for investigations. This way, they have the assurance that we’re not going to use the systems improperly,” he said. Several experts cited the importance of forging personal alliances with counterparts in IT, and it may help to cast a wide net, according to Macy’s Thomas Smith. “For me, being new in my role, partnering has meant doing a lot of outreach, even searching the company directory and doing some cold calls. Telling them, ‘Here is what I’m looking to do,’ and asking if they can help, and if not, can they point me in the right direction.” The strategy has worked, said Smith. “With our size, there are more than fifty flavors of IT leaders, and I’ve found many that have been more than willing to help us.” For Brinker’s Virginia French, education has been an important part of communication. She said the data she needs to conduct theft investigations changes frequently, alongside implementation of new software, technology, programs, or business tools. So she invests heavily in educating IT in the LP function, so they can more easily anticipate how her needs may change. “Sometimes we need a lot of register data, check-level data, or to identify coupons applied to specific transactions—really granular information and often at the last minute,” she explained. “So I make an effort to describe LP to them and to educate them. Because when they understand the bigger picture about what LP does, they more easily understand the data I need.” Finally, good communication must extend beyond person-to-person rapport. Several LP experts cited relatively high turnover rates in their company’s IT departments, which means personal relationships may come and go. Procedures, protocols, and value creation persist, however, and can provide an enduring foundation to the IT-LP partnership. The original process at Delhaize America, when a Food Lion camera wasn’t working or some other part of the system wasn’t functioning, involved notifying a third party who would then report the incident to IT. “The main problem with this process was not all of the details were being captured by that third party. All the details weren’t being included. So IT didn’t have everything they needed to fix the problem,” explained Darnell. A more formalized continued on page 22

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BUILDING AN UNBREAKABLE LP-IT BOND continued from page 21

IT-incident ticketing system has since been implemented. LP opens up a ticket and is guided through a series of specific questions depending on the type of problem, including when the device or system was last working, how it’s supposed to work, what steps the LP team has already taken in an effort to fix it, and necessary technical information. “It clarifies things, streamlines the process, and speeds up the process to fixing it,” said Darnell. “Without it, it can become like a volleyball match, with the two sides going back and forth collecting the different data that is needed to address the issue.” At Walmart, Mike Wiley said the AP department works closely with their IT partners in initial planning stages to build out specific requirements covering many of the details regarding the project build and how alterations to requirements might be made. Changing requirements after a build, without any contingencies for that, is extremely difficult. “If you happen onto a business need and you want to change something once the build is underway or completed, you may pick up the phone and have a conversation and assume all is well only to find out that you didn’t follow the rules or get the change request into the project on time,” said Wiley. “You should still always try to make it right, but understanding and appreciating that your IT partners have processes to follow and budgets to keep in-check—just like you do—usually results in more forethought and participation in the requirements discussions phase.” Wiley added that it’s critical to get clarity up front on change request matters to avoid miscommunication once the project is well underway. Sears’ Glenn said that communication lines with IT are more likely to remain open when AP can show embedded value into the DNA of the company, and it acts as a hedge against turnover at the top of the IT department. “In the past few years, we have worked with several CIOs,” he said. “So you better have a good, well-vetted use case for what you want to

“Some folks in IT are more introverted. They’re often not the guys who tend to jump up and down and scream in objection. Often, they may be more mild in their dissent, but that’s just the way they make their objection. LP can’t confuse what they’re saying with how they’re saying it. You have to appreciate that personality piece.” – Tom Meehan, CFI, Bloomingdale’s get done. It’s important, so you don’t find yourself having to reinvent the wheel.”

An Expansive View of the Relationship

A final piece of advice for improving LP’s relationship with IT—identified repeatedly by LP experts—is to enlist others in the collaboration. Working effectively with IT—and pushing LP higher up their priority list for projects—is made easier when you have the backing of front-end operations, management, and other key departments. Virginia French, for example, has taken strategic aim at “getting management to respect the interaction that LP and IT need to have and the time the two departments need to work out potential problems and issues.” For example, a new loyalty program or a new tabletop payment system creates a whole new set of scams that LP needs to plan for. If management is sensitive to the need for LP and IT to collaborate on such a rollout, LP may gain critical time to plan, she suggested. Mike Wiley says the AP department’s relationship with IT has benefited significantly by partnering closely with the front-end operations team. “Being as aligned as possible with your business partners, for example the front-end operations team, is important because an aligned AP/operations team can present the ROI and benefits from many viewpoints—sales, service, loss mitigation, risk exposure reduction, compliance, labor savings, and the list goes on,” said Wiley. “Being joined cohesively with your

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business partners should give you an advantage, add credibility to the overall project need, and improve your chances of elevating the priority of your projects with your IT team,” he offered. Tom Meehan made a similar suggestion to his industry peers. “You need to understand your business needs before you go to IT, and that frequently may mean going to other departments before you go to IT. There are lots of players—it’s not usually just an IT-LP collaboration.” It helps if the LP team sees itself as part of the larger business whole, according to Thomas Smith. “One of the big things at Macy’s is that we’re not in silos; everyone has their hands in everything,” he said. “That global business mindset helps us in LP forge the partnerships we need to get things done.” Finally, several LP executives noted that they’ve used outreach to other departments not only to push joint projects higher up on the agenda of IT, but also to arrive at bigger, better, and more expansive technology solutions than ones they had initially identified. One expert shared the example of an LP department that wanted a virtual network to segment its cameras from the store’s network. And because partnering was a core mission of the LP group, it became aware that an engineering group had been investigating a similar network setup for its own purposes. The technology team was then able to put it all together—providing both groups what they needed by combining the two projects—and saved money by doing so.

PERSPECTIVES

The Year Ahead in LP

By Merek Bigelow Bigelow is vice president, director of marketing for LP Magazine. Having joined the magazine in 2013, she has led the efforts in the digital transformation of losspreventionmedia.com, driving digital content and strategy, as well as helping solution providers in their marketing strategies. Her previous experience includes over twelve years of marketing experience working with clients such as Progressive insurance, Bank of America, Merrill Lynch, and Carnival Cruise Line. Bigelow can be reached at merekb@lpportal.com.

Pressures, Problems, and Possibilities

hese are clearly turbulent times in retail. How people shop is changing—and with it the strategies employed to attract and retain customers. Store technology is changing, offering new opportunities, and ushering in new risks. What does the upheaval mean for loss prevention? What are the primary challenges the industry may face this year, and how might we rise to meet them? For perspective and input into where 2017 may take LP, we turned to executive leadership from three leading retail solution providers to help identify some common themes. Not shockingly, our conversations were interesting, insightful, and struck similar chords with each other.

Rod Diplock CEO ControlTek

Steve May CEO/President LP Innovations

Patrick O’Leary Vice President and General Manager, the Americas Nedap Retail

Was there a key trend or development in 2016 that you think will drive the loss prevention agenda in 2017? Or might something new steal LP’s focus in the year ahead?

DIPLOCK: In one word—connectivity. Steve Case, the founder of AOL, once said that to say that something today is Internet-based is the same as saying that it’s electricity-based. Being Internet-based is a default for almost any technology today. I think the same will be the case with connectivity in a few years when it comes to LP systems. Today, a standard EAS system goes “beep” when something goes out the door. A connected EAS system can communicate with the surveillance video to capture that event for easier investigation. This requires connectivity. Taking it another step further, an RFID system does all of the above and also tells the LP team that a pair of blue Levi’s in size 34 left the store and communicates that to the inventory management system. Due to budgetary constraints and some technological limitations, many retail enterprises can’t make an immediate leap into this kind of future. But I think it’s time to start thinking about and planning for a day when all LP systems will be interconnected.

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MAY: The retail industry will continue to undergo a seismic shift, and everyone in loss prevention—and anyone engaged in retail—will be challenged because of it. It’s similar in significance to 2008 to 2009, when the failure in the macro economy had a huge impact on retail and store closings; only this time the challenges are being driven by the shift away from brick-and-mortar stores and the acceleration of online sales. Just look at Amazon. They conduct one-in-three retail transactions. They have 360 million products. That has a tremendous impact on retailers, including how to shift to online, cutting costs, and maybe store closings. I’m not sure when we’ll realize an equilibrium between brick-and-mortar and online, but we’re not there yet. We’re in the middle of that dramatic change, and all retailers will be challenged to deal with it, and that’s going to have an enormous impact on every discipline—merchandising, finance, as well as loss prevention. It’s going to affect everything we do in LP because it alters everything about how a retailer operates. And this is really unique because unlike an economic crisis where things eventually return to normal, after this shift there is no turning back. O’LEARY: I think the key trend is definitely the advancement in omni-channel retailing. Although omni-channel was certainly not developed in the last year, more and more organizations are finally starting to understand all of the necessary components that need to be synchronized in order to play in this space. For example, RFID Journal recently published an article revealing what some of us already knew—that omni-channel cannot work without RFID. There is no other tool on the market that can manage inventory like RFID technology. As you look over the risk landscape in 2017 and consider the many challenges currently facing LP, which of these do you think the industry is least prepared for or perhaps not giving enough attention? In other words, are there any areas where you think LP might need to step up its game?

DIPLOCK: I don’t think it’s so much about LP stepping up its game as it is about thoughtfully continuing its game. Every year there are new challenges, and at the same time there are emerging technologies that offer new promises. But one of the basic functions of LP never goes away, and that is fighting shrink. As an industry— and I mean both on the retail and solution provider side—we have to be careful not to get distracted by every new thing that comes along. We should always keep in focus what’s proven to be effective and continue to drive it. Take EAS for example. It’s neither new nor sexy, but it has proven to be effective over several decades LOSSPREVENTIONMEDIA.COM

of use. Why neglect it by completely refocusing on a promising new technology that’s still just a promise? I don’t suggest that we should not innovate or take calculated risks on new things. On the contrary, we should; but at the same time never forget the primary function of LP or neglect the proven tools and strategies that help us get the job done today. MAY: First, accept and embrace the shift in retail. There will be pressure on everyone as a result of a realignment of budgets across the board. We’re seeing reduced budgets because of the shift to online. One of the major challenges is how do you manage within new resource allocations and still be effective in meeting today’s challenges? For example, how do you deal with organized retail crime with a cut in budget? There has been a lot more visibility and understanding of ORC, but what if you’re now challenged from a resource perspective? How do you advocate effective solutions without those resources? It’s going to have to be a combination of an intelligent use of resources and enabling technology. Another concern is employee fraud. It’s still a major component of loss in retail, and the great shift to online will cause additional uncertainty and stress among store personnel, which may cause additional pressure on employee fraud. People always look for a justification to commit fraud, and I’m anticipating this uncertainty in retail is going to provide it for some. O’LEARY: Again, I think the answer here surrounds omni-channel. The truth is, LP professionals need to be fanatically involved within every aspect of what omni-channel retailing offers. Most retailers are playing in this space, but few have mastered it. The challenges are complex, and when any part of the complex omni-channel machine fails to function, oftentimes its LP who is looked to for answers. When customers decide to buy online and pick up in a store (BOPIS), they expect the item to be there. But when it isn’t there, everyone is looking at LP for an answer. At that point, it’s too late. The damage is done. Some of the most successful companies ingrained in the omni-channel way of business have their LP executives involved at the onset. LP professionals have a way of identifying risks of loss before they occur, so having LP involved at the beginning will allow an organization to plug the holes before a customer becomes disappointed and a brand is damaged. Technology advancements are coming fast and furious. As you look at the year ahead, do you see technology reshaping retail or loss prevention? If so, how?

DIPLOCK: No matter what new technology is widely adopted, I believe it will be predicated on its ability to create data. The creation, moving, sharing, and using of data in retail is going to continue to be one of the most important adaptations in our industry. Now, while the technology will help capture the data, it’s the people who will need to interpret and make decisions with that data who will make a real difference in their enterprises. So when it comes to how technology will reshape retail and loss prevention, I strongly believe it will force all of us to get better at understanding which data is most meaningful in our decision-making and then becoming skillful at using that data to achieve the business objectives. MAY: Anything to do with inventory control is going to be a key technology. When you can integrate GPS, Bluetooth, and RFID for insight into products as they’re manufactured, sold, potentially returned, or diverted on purpose or because of fraud—these are the technologies that retailers need to invest in. These technologies are

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finally maturing and getting smaller, less expensive, and showing great promise. The challenge is managing investment in those critical technologies and using it to improve sales performance with the right inventory at right time with an integrated approach that benefits the entire organization. O’LEARY: Absolutely. Look at what Amazon has done with Amazon Go—no line, no checkout, just grab and go. Technology will always continue to change, and that change will reshape retail and create new challenges for loss prevention. The opportunity for the LP role to advance and become more ingrained in the retail landscape is greater than ever today. In my opinion, loss prevention needs to be proactively involved in all areas of the business, and not just when there is a problem. They should be involved in all areas of the business through building positive relationships with leaders in merchandising, operations, human resources, and even accounting, so they can be at planning meetings for nearly all new company initiatives.

“Being Internet-based is a default for almost any technology today. I think the same will be the case with connectivity in a few years when it comes to LP systems.”

When we take look back at 2017, what do you think will be the year’s big story in loss prevention?

– Rod Diplock, CEO, ControlTek There is a lot of industry talk about changes in retail strategies to drive revenues. One of these, for example, is to offer more engaging in-store experiences and events to entice customers to return to brick-and-mortar stores. Do you see any emerging retail strategies impacting loss prevention?

DIPLOCK: Many industry professionals I talk to understand fully well that LP cannot operate in a silo. So they are increasingly placing an emphasis on building partnerships with other departments in their organizations. I think this is the key to being able to take on the expanded role of not just preventing loss, but also helping drive more top-line business. Having good relationships with other stakeholders helps LP understand what it can do to help merchants and operations, while at the same time helping their peers understand the value of LP and what they can do to help LP do its job. Along the same lines, I think it’s crucial to network with LP professionals from other companies through industry organizations and think tanks to share experiences and ideas. MAY: Across the industry there has been a significant effort to focus on enhancing the customer experience to drive repeat business. One example is return policies, where some retailers have created a policy to make it difficult to make an exchange, while others have taken the opposite approach to allow customers an easy experience, which may have more fraud attached to it. There needs to be a balance. An LP executive can’t advocate making returns as difficult as possible and not think about the need to enhance guest services.

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We need to work more closely with those that are part of the process of enhancing retail experience and be willing to be more creative in our approach to the fraud issue. O’LEARY: We will continue to see more and more strategies implemented by retailers to bring customers into their brick-and-mortar locations. The key will be to make sure that when the customers come in, the product they are looking for is available. If all inventory within retail was accounted for, there would be no need for loss prevention as we know it today. At its core, LP is really about inventory management. No matter what changes may come to any retailer’s strategy, the protection of inventory will always be the cornerstone of that strategy. Simply put, a retailer cannot sell off empty shelves. And no matter what type of in-store experience you offer if the product is not on the shelves, it won’t matter. LP professionals need to excel at building relationships. There is no technology, no new retail strategy, or no new widget that will change that. Loss prevention is about educating the executives and employees on what causes loss and risk of loss and finding ways to entice them all to adhere to the controls put in place to protect assets. That can only be done with buy-in from the C-suite all the way down to the store employees. That takes highly effective relationship-building skills.

DIPLOCK: The big story might be this—“Again this year, not everyone followed the Ten Commandments.” I say this half-jokingly to emphasize the point made earlier that no matter what the actual big story ends up being, the need for loss prevention will not go away since thieves will always think that actually “thou shall steal.” This might not be a bold prediction, but keeping this in mind is what keeps my team and me focused on driving new creativity to help retailers. At the end of 2017, theft and loss in retail will continue to be a major problem that we will have to continue to address. MAY: I think we’ll have seen some real winners and losers both among retailers and among LP leaders. Unfortunately, there will be some who don’t adapt to the great shift going on, who don’t react effectively to resources challenges, and who insist on doing things the way they’ve always done them. If you’re an LP director working for a challenged retailer that is closing stores and comps are flat, you have an obligation to help create the most profit you can. You can’t just sit back and hope it passes. You have to become a true partner in profitability, take some leadership, and take some risk. It’s the LP leaders that adjust to the new reality—and examine how to reapply resources in more effective way, work with different partners, find new solutions, and help drive profitability—who will be the winners. It’s retailers and LP pros who are unwilling to try something out of the box and just hope that things don’t get worse who will be the losers. Doing nothing today is a prescription for failure. O’LEARY: I think the big story will be how winning retailers embraced RFID technology in ways that allowed them to service their customers the best. Just a few months ago, Macy’s announced plans to have 100 percent of all items in every store RFID-tagged by the end of 2017. What does Macy’s know that other retailers do not? Perhaps they just decided to be one of the first to do what they feel needs to be done to service their customers better than their competition. I predict the big story will not only be Macy’s success in this endeavor, but also how many other retailers followed suit.

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INTERVIEW

BUILDING AN ORGANIZATION AROUND DATA AND TECHNOLOGY

AN INTERVIEW WITH SCOTT GLENN, CSO AT SEARS HOLDINGS By James Lee, LPC, Executive Editor

INTERVIEW EDITOR’S NOTE: Scott Glenn, JD, LPC, is the chief security officer for Sears Holdings where he is responsible for asset and profit protection, safety and food safety, business continuity, and crisis response among other duties. Prior to joining Sears in 2008, Glenn held various loss prevention roles at Kohl’s, TJ Maxx, and Target and worked at the United States Treasury Department. He also plays an active role in the industry as a member of the Loss Prevention Foundation board of directors, the editorial board of LP Magazine, and the Retail Industry Leaders Association asset protection leadership council. Glenn earned a bachelor’s degree in criminal justice from the University of North Carolina at Charlotte and a law degree from Concord University School of Law. EDITOR: How did you get started in loss prevention? GLENN: Like many of my peers,

I just fell into it in college when I started to work at Target. I did my undergraduate work at the University of North Carolina in beautiful Charlotte, North Carolina, and in my senior year I wanted to get a part-time job while I was looking at my career options. I was the cliché like so many others in our industry. I spent a lot of time thinking I was going to be a federal agent and go work at the FBI or another one of the alphabet organizations. I had done my internship with the Bureau of Alcohol, Tobacco, and Firearms. They hired me as a civilian analyst while I was going through the process to get hired on as an agent. I saw some things in government work that I wasn’t really thrilled with, politics and such, and around this time I was fortunate that an old boss at Target offered me my first job as an AP manager. I took the job and fell in love with the role, the company, and the profession itself. EDITOR: How long were you at Target? GLENN: I was with Target for five

years, starting out as a single-store AP manager and then went to a multi-store. Then I moved into my

first district role in what was then called an investigation and training specialist. That was my last position before I left the company. EDITOR: Now twenty-plus years later, you’re the chief security officer with Sears Holdings. What exactly is Sears Holdings? GLENN: Sears Holdings is a company

that was formed out of a merger in the early 2000s. Eddie Lampert, MARCH–APRIL 2017

who was our largest shareholder at the time, and is now our chairman and CEO, took a controlling interest in Kmart, which then bought Sears, Roebuck, and Company. He merged them into one consolidated organization called Sears Holdings. Today, we are that plus so much more, including our home services business, our integrated retail and e-commerce business, our Shop Your Way loyalty program, a pharmacy

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INTERVIEW

since September of 2013 when my predecessor, Bill Titus, decided to move on to the next phase of his career. I was fortunate enough to be selected to replace Bill and lead this organization. It’s been about three-and-a-half years now. Prior to that I served as the divisional vice president and pyramid leader for the Kmart business. At that time, we still ran as separate formats within the company. EDITOR: Are the two big brands, Sears and Kmart, organized similarly? Is the LP function independent for each, or is there crossover from one to the other? GLENN: Great timing on that question.

Up until recently we were organized similarly with some obvious operational differences, Kmart being a discounter and Sears being a department store. But at the end of the day, we were pretty traditional in the hierarchies and structures. As far as the AP function, corporately we have always been a blended group. However, in the field up until 2015, we operated as separate format-specific AP programs under that corporate structure. In 2016, we started to pilot cross-formatting test-and-learn scenarios. We created districts and regions as shared services,

and now in 2017, we will be moving fully to shared services. What this means is that our leadership teams in the field now support all formats within a geographic region. It’s a significant change for us, and there is a lot of below-the-surface work being done to support the transition. EDITOR: Since your internal promotion at Sears, and based on your experience early in your career, what advice would you give to young people who ask, “What do I have to do to get noticed? What do I have to do to get promoted?” GLENN: The answer is everything

with a large caveat. You have to be willing to do anything that can help the team and that you have the skillsets to do well. You have to be someone who is willing to put themselves out there and do things that may not be in your job description. You need to be willing to accept challenges, projects, or opportunities whether they are in AP or outside like working on a special project for operations or for a merchant group. Early in my career at Target, I volunteered to work on the company diversity committee. Later at Kohl’s I worked on the “new store” development team. Here at Sears Holdings, we have taken on digital device management. All of these were opportunities to work with cross-functional teams outside of the LP/AP space or expand the reach of our department. In every case, it helped me to develop either new skills or relationships. LP MAGAZINE | MARCH–APRIL 2017

I think that willingness to adventure outside your safe space to take on new and challenging opportunities is something that will get your name out there. Now that’s not the primary reason to do it; I would do it for the developmental experience, for the chance to learn and grow. But getting your name out there is certainly a side benefit. Now, the caveat I spoke of earlier is that you are careful to not over-promise and under-deliver. Sometimes you can stretch yourself so thin in those pursuits that you do not meet the commitments that you’ve already made, and that can have a negative effect on your credibility and ultimately your career. I have been guilty of trying to do too much a couple of times, and it has left me with a black eye that takes some work to recover from. So it’s critically important to make sure that you can handle what you commit to without it affecting either your day job or even your personal life. EDITOR: Did you sit down at some point early on in your career and set career goals? Did you ever think, “I’m going to be the senior leader of a major corporation?” GLENN: When I first started in AP,

I wasn’t particularly introspective about that kind of stuff. Most people that know me today find that difficult to believe. But I didn’t think too much in terms of long-term goals in AP. I wasn’t unhappy, but I just didn’t know if that’s where I would be the rest of my career. I enjoyed it, but sometimes I thought about exploring operations, and even looking at something outside of retail always had some pull for me. But at the end of the day, I realized that I really liked what I was doing, I was decent at it, and I was making some impact on the companies that I was working for. That’s when I really started to sit down and say, “If I’m going to do this for the next twenty or thirty years, I need to have some objectives and a timeline.” This was the time when I really started to learn the value of planning, of having mentors and my own personal board of directors.

INTERVIEW

Byung Kang

Lisa Kane

Lonndon Seely

Don Knox

Nadine Lajeune

As well rounded as many of our retail LP and AP leaders are today on the operational aspects of the business—certainly more so than ten or twenty years ago—it’s still a completely different perspective when you have a mentor who is a merchant, CFO, or an operator, somebody that has four-wall accountability and is making corporate-wide decisions. EDITOR: Is there anybody who has helped you along the way that you think of as a mentor? GLENN: There are so many people

that would qualify, but I’ll never be able to mention them all. However, there are a couple that really affected my career in a significant way. The first person that comes to mind is Genny Shields, who was my VP of loss prevention at Kohl’s at the time and eventually went on to become the executive vice president of HR. Genny had a profound effect on the way I looked at the business as a professional. She taught me how to challenge myself, whether it’s setting goals for myself or setting goals for the performance of my team at the time. But most importantly, Genny challenged me from an educational perspective. She was one of the people who drove me to continue my education and ultimately to go back to law school. The second person I’d mention is Jim Haworth. Jim was a former CEO of Walmart Stores US and came here to

Sears Holdings as our EVP of retail. I had an opportunity to work with Jim on several projects and issues over the years, and he took me under his wing. Jim taught me invaluable lessons around the politics of the business. He helped me to learn about how you navigate and work in the boardroom, how you manage senior-level relationships. He was always there to be able to give me advice and course correction as necessary. Both are people that I admire and follow to this day. EDITOR: How important is it to have mentors outside of the LP world, like Jim Haworth in your case? GLENN: You’re going to do fine

having mentors that are confined to the LP world. But you will lack some perspective on how things work in the context of the larger industry. As well rounded as many of our retail LP and AP leaders are today on the operational aspects of the business—certainly more so than ten or twenty years ago—it’s still a MARCH–APRIL 2017

completely different perspective when you have a mentor who is a merchant, CFO, or an operator, somebody that has four-wall accountability and is making corporate-wide decisions. They have a different way of looking at things, and you can learn from that perspective. The interaction and advice that comes from that group is invaluable. EDITOR: What sort of leadership team have you assembled as direct reports? GLENN: Well in my mind, I have the

best leadership team in the industry, and I’ve been blessed to have the opportunity to lead them. Some have been promoted up through the organization, and some have come in from the outside. I think we have a really nice balance of internal and external perspective. I want to walk through my direct reports very quickly. The person I would call my right hand is Byung Kang. He runs our operations, finance, investigations/analytics, and systems/technology group. He has a big job, one that I know how difficult it can be because I did it for three years. Byung is not an AP practitioner, but an information technology person by trade. However, our business has become so data-centric, so technology-driven, he has become an indispensable part of our team. Byung and the investigations and analytics teams have built some of the finest data-mining and interdictive and predictive models that I have ever seen. This is the driving component of our strategy to be more efficient with our resources and add value to the company’s bottom line. Next is Lisa Kane, LPC, who comes from Target and has been with us now for almost four years. She runs our internal AP learning and development (L&D) organization, which is critical when you’re working with an organization of 4,000-plus individuals that need to be career shaped. Lisa and her unit have been a phenomenal addition to the team. The value that they add to our organizational structure is beyond words. Our teams are truly developing into

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INTERVIEW well-rounded business runners that happen to specialize in asset protection, and it is in large part due to the structural learning and skill-gap development that the L&D team provides. Lisa recently picked up responsibility for our safety organization, which made a lot of sense since safety is so process and training intensive. She and her team have been able to seamlessly incorporate the policy, procedure, and best-practice side of this into our learning platforms. Then there’s Lonndon Seely. She runs our specialty retail group, which consists of supply chain, e-commerce/online fraud, and our home services organization. Those are three big businesses within our organization that have their own complexity and their own scale. They are taking on more and more importance within the industry as you think about multi-channel and the blending of brick-and-mortar with the online presence. Lonndon has been with us for about three years. She came from the banking world and then previously from Home Depot where she used to run their supply-chain AP team. So again, a great addition to the organization. We also have Don Knox, CPP, CITRMS, who runs our enterprise resiliency and business continuity team. Don has been with us for about six months and is responsible for our 2,100-plus retail locations, domestic and international facilities, and our travelers around the world. This is an area that, as you know, only gets attention when things go critically wrong, and we cannot operate the business or a sub-unit. Don’s role is to modernize and update our capabilities. He and the team have done some really nice things in bringing this up to industry standards in areas that we’ve been lacking over the years. Then last but certainly not least, there’s Nadine Lejeune who runs our retail AP group. As I mentioned earlier, up until last year, we were running separate AP organizations for Kmart and Sears. This of course is our largest sector of the organization with the 2,600 big box stores, pharmacies, and auto centers, $20 billion in volume, and well over 3,800 associates in the stores. Nadine took over all the retail AP group in mid- to late-2016, and now she’s running the new shared-services organization for us. This month is her fifteenth anniversary with the company. In the past, she ran our safety and food safety organization, initially with Sears, then Kmart, and finally corporately before transitioning into AP about three years ago. Nadine is very smart and has done a phenomenal job transitioning to the AP side of the business, as well as leading the transition of the retail AP team to a shared-services model. EDITOR: What special initiatives have you put in place over the past year or so that are responsible for driving your AP performance? GLENN: I have at times been called a data person. I’m OK with

that, and I do think I’m somebody who is very cognizant of the value that data brings. I would say that our philosophy over the last several years has been to replace manual work with smart data analysis. I am driven by the search for the perfect algorithm that explains what will happen six to twelve months from now. continued on page 32 LP MAGAZINE | MARCH–APRIL 2017

INTERVIEW continued from page 31

This of course is pie in the sky, but it is a target for how we look at things, how we focus. We are striving for that goal. I do know that we have spent a lot of time sourcing the right information, building the right systems, educating our teams to understand those systems, and building a data-centric approach for the organization. I feel very comfortable that we’re at a point where our teams are truly data capable and flourishing based off the work that’s been done over the last couple of years. So I would say that our number one initiative has been to build extremely well-developed teams who understand technology, systems, and data in order to help make our job not only easier, but also more intuitive. We are centering the organization around better use of information and technology in what I call an interdictive manner, one that can isolate the problem and tell us how to fix it before it actually becomes a larger issue. EDITOR: How do you rank the importance of focus between organized retail crime and online exposures? GLENN: Online exposures are a top

focus for us. As integrated retail and omni-channel becomes part and parcel of everything our company does, online fraud mitigation while balancing member impact is a top priority. As I mentioned earlier, Lonndon Seely runs our e-commerce team, and she has a rather large group of fraud investigators and analysts that work in a couple of different sites around the world. Having the front-end fraud-screening processes in place, which Lonndon’s team is responsible for, is a necessity in this day and age. But it’s also very important to have that back-end process of reviewing transactions for fraud and building databases that help you make good foundational decisions. These days, our members expect to be able to place an order on their computer and to be able to pick that item up on the way home from work that day. That means you can’t have a long, tenuous fraud review process. Lonndon and her team have built an

amazingly nimble collection of tools for that purpose. Because we are such a large company that does delivery and installation in 12 million people’s homes a year, and we have 8 million people come through our auto centers, and we have millions of Shop Your Way loyalty program members, we have access to data that we can use to help make good decisions in the process. For example, if I know that a large online order comes though that might look suspicious, but I also know that the member has had their oil changed with us for the last twenty years in a Sears Auto Center, I can quickly approve that order with no impact or delay to that member and very little risk of a chargeback. EDITOR: Does your team take on any responsibilities that might be seen as an expanded role that encompasses things outside of the traditional LP domain? GLENN: In general, as we work

through our corporate turnaround, we’re certainly being tasked to do more with less and to be more efficient. To support that, we have taken on some things that have been outside of the traditional AP role. One example would be cyber-event management. We don’t do cyber investigations. IT security and the legal department do with our partnership. But what we have done MARCH–APRIL 2017

is helped develop a framework for how to manage these events. For example, in the case of a data breach or brute-force attack on our systems, we developed protocols with the key stakeholders, hold tabletop exercises based on industry standards, and help ensure that people can make the right decisions within the right timeframe during those very tense situations. I liken our role to being the quarterback that calls the plays during the game to ensure that we execute the game plan. Another area is money laundering. That’s something that has traditionally been the purview of either internal audit or the legal department, but we’ve taken it on because we have the right data. All the things that we’ve done over the last couple of years have allowed us to data mine transactions to ensure that anything that potentially would be reportable to the IRS is flagged. It’s all already there in our data steam. We already had it, so why have people manually review those reports when we can create systems that can pick them out better than a human being can? And maybe the last example to discuss here is again in the world of data. As I spoke of earlier, we have built dynamic data models that can tell us in advance where our trouble spots and outliers are. Now, based on that success we are being sought out to build these same tools for our

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INTERVIEW operational businesses and even some of our merchant partners. EDITOR: Do you or your team have a role in crisis management and the protection of human life? GLENN: We absolutely do, and it’s

probably one of the more serious and somber parts of what we do. It’s definitely something that we take very seriously. We have a crisis management organization within the company. It’s a small team, but they are 100 percent charged with making sure that we have the right processes and the right training mechanisms in place. During actual events, they are 100 percent in charge. They manage those events very closely with our business partners to ensure that first and foremost people are safe, but then secondarily our buildings and our properties are safe and that we get our business back up to speed as quickly as possible. So whether it’s a manmade event, like an active shooter, or whether it’s some type of natural disaster, such as

a hurricane, tornado, or earthquake, we have very, very robust protocols in place to help us manage the situation, get relief to the individuals who are affected, and make sure that we get back in business as quickly as possible. Similar to the cyber-investigation process I spoke of earlier, this team prepares endlessly with our critical response teams to drill and ensure that we have no hiccups as we execute during an actual event. EDITOR: I understand that in mid-March you’re holding your annual AP meeting where you’re going to bring in most of your management team. Can you speak about the agenda and the purpose of that meeting? GLENN: First and foremost, that

meeting is just a great networking opportunity to get everybody together to spend some quality time with our team. The corporate support team and I are lucky if we get to see some markets but once or twice a

year, so it’s great to be able to build some camaraderie and enjoy some downtime together. As hard as we work all year, we ensure that there is some fun built into these meetings. It’s a chance to bond. This year, about 250 of our field and corporate associates will be attending, and we will simulcast parts of the meeting out to our store teams. LP Magazine, as you know, has also been attending for the last three years, and we love having you guys there. That said, this year the meeting takes on more importance for us because we’re in the process of our migration to shared services. We have already begun the transition—onboarding new leaders into their roles, building new hierarchies and processes—but there are so many critical things that we have to train our team on. If you think about it, if you were a district AP manager who spent twenty years working for Kmart and now you have fifteen Sears stores that you’re responsible for, it’s a very different and, to be honest, scary kind of situation. The processes, the

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INTERVIEW culture, the systems—they are all new to you. Our professionals really know the ins and out of the business, but if you are that Kmart district AP manager, you’ve never dealt with an automotive center. It can be daunting and complex with a multitude of environmental safety and regulatory issues. There is a lot to adapt to. So aside from the camaraderie side of it, now there’s a very practical need for us to spend this time refining our learning on the tactical pieces of the business and how they can help manage that even better. I also want to make sure to note that we always take the time to give back during this event. This year we’re partnering with USS to provide fifty brand new bicycles, locks, and helmets to deserving and underprivileged children who otherwise wouldn’t have an opportunity to afford them. All of that was donated by our sporting goods business unit, and I cannot thank them enough for their support of this event. We get to go to the school as a team and spend time with these kids and their families. I know that it will be very emotional for me personally and the teams. EDITOR: You’ve been involved with the Retail Industry Leaders Association (RILA) and National Retail Federation (NRF) as a leader in our industry. How important is it for you and your counterparts to have an active role in these associations? GLENN: For one, I think it’s a

responsibility as any senior leader in the industry to give back. I think about when I was a district or regional manager and was coming up through the ranks. I had the opportunity to go to some of those conferences. It was the biggest thing in the world to me to get to see and talk to some of the people in person that I’d only ever heard their names before—you (Jim Lee), King Rogers, Paul Jones, Marvin Ellison, and so forth. You realize that they’re living, breathing humans just like all the rest of us. It made me feel like I could do that, that I could grow into what they were doing, and it made it real for me. So I think that obligation is incredibly important as a role model for others.

Second, these groups create a vehicle for us to share and bond as an industry. As we always talk about within AP, yes, we compete. Kmart and Walmart, Home Depot and Sears—we are business competitors. But when it comes to AP, we all have generally the same accountabilities and common goals. Being able to present and share some of the things that are important to our industry is an opportunity that we all benefit from, especially when it comes to new concepts, technologies, and best practices. There’s not a conference that I’ve ever gone to—NRF, RILA, Loss Prevention Foundation, Loss Prevention Research Council, and so forth—where I haven’t taken things back that I could implement in my organization and be better as a result. EDITOR: You are also a member of the board of directors for the Loss Prevention Foundation (LPF). What do you think about its position in the industry today? GLENN: We didn’t have anything like

the foundation when I was growing up. We didn’t have that professional, credible organization that was there for us as an industry to make us better. I know there were some regional versions, but at the end of the day, we did not have a macro-level sponsor and advocate for us. And if I haven’t said it lately, I thank you and Gene Smith for making it happen. LPF, in my mind, is all about bringing that credibility to our industry. Having LPQ and LPC certification as the standard, one that is becoming accepted as a “must-have” for many companies, is key. In my humble opinion, the value proposition that it provides to the industry is the academic legitimacy portion of it. They just take it to the next level, and it is something I would have never thought about twenty years ago. My opportunity to be able to contribute to that has been something that I’m very proud of. We have been offering LPC and more recently now LPQ scholarships to fifty of our associates free of charge every year now for the last three years. At the end of the day, when I get an email from an AP manager or a district AP manager saying, “Thank you for this. I never would have MARCH–APRIL 2017

been able to afford it on my own. It’s something that I’ll be forever grateful to the organization for”—that’s what makes it all worth it for me, in part because we just garnered a tremendous amount of loyalty to the organization, and in part because they know that we’re doing it for their development. So from that standpoint, it’s been a great journey. It’s been an honor to be able to contribute to the foundation. EDITOR: For those who are busy with a career, it can be difficult to manage their business and also to get their certification. What advice do you have to those that are trying to make those both work? GLENN: I’m a planner, so for me

it’s about discipline. We all have responsibilities. Depending on where you are in your career, depending on where you are in your personal life, everybody has different pulls and tugs on their time and their responsibilities. My advice is to be incredibly disciplined and time-concise. Make sure that you sit down and look through the course criteria and really plan it out over the period of time. I would encourage everybody to use the full year to go through the coursework and to schedule just enough time at the end so that you can take the exam. And being a planner, make sure that just in case something happens, or maybe you didn’t pass the first time, you have an opportunity to get to the second exam. If it’s important enough to you to push yourself into this program, it’s important enough for you to plan your time and plan your resources to get through it. Speaking of planning and discipline, it’s more than a talking point. People in our industry deal with a lot of high-stress, high-risk situations day in and day out, especially our field and store personnel. As important as everything seems to us at work, which of course it is, you must have a level of work-life balance, or you will not be long for this industry. So my parting advice would be to make time for your family; make time for yourself. You have to make time for the things that you like to do to be able to decompress and have a life outside of work.

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FUTURE OF LPVIEWPOINT ACADEMIC By Tom Meehan, CFI

Read the Fine Print

Meehan is director of technology and investigations for Bloomingdale’s. He 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.

n my last article, we reviewed what social media is, how it is commonly used in retail, and the basics of how it works from a technology standpoint. This time, we will cover recent events surrounding privacy, live monitoring, and live video related to criminal activity.

In fall 2015, you may have heard some news about social media monitoring for law enforcement and investigation purposes. The American Civil Liberties Union (ACLU) was looking into two of the larger social media monitoring vendors designed for law enforcement and investigation purposes. At that time, about fifteen such providers existed. The ACLU probe caused several of the vendors to lose their access to the Twitter API (firehouse) based on violations of Twitter’s terms of service. The ACLU obtained several emails between police departments containing details of how the service would be used and details surrounding payment to the vendors. The probe focused on local and federal law enforcement rather than the private sector. The International Association of Chiefs of Police conducted a survey in 2015 that involved more than 400 police agencies and found that 96 percent of them used social media, in some capacity, for intelligence gathering purposes. “Social media has become a new tool for law enforcement as people like to brag about crimes that they are doing,” noted Hollywood, Florida, Police Chief Tomas Sanchez (reported via CBS Miami). Twitter spokespersons publicly said their service should not be used to

In most circumstances, a violation of terms doesn’t equate to breaking the law. Partner appropriately before taking any action based on social media. How and whom you partner with will depend on your organization’s policies. 36

MARCH–APRIL 2017

identify someone or to conduct an investigation. Several of the companies rebranded themselves and are back up and running. If you choose a third-party solution, read the terms carefully and have a plan of what it will be used for. For example, if you are using social media to track an active-shooter event, that would in most cases be acceptable to the terms of service and should cause no issue. On the other hand, if you use it to try and find out who a person is talking about in an active-shooter event, that could be a violation of terms. In most circumstances, a violation of terms doesn’t equate to breaking the law. Partner appropriately before taking any action based on social media. How and whom you partner with will depend on your organization’s policies. A takeaway from all of the info surrounding the ACLU probe is the continued necessity to evolve with the social media landscape. Like any investigative method, assess whether or not it is ethical and falls within the company’s policies.

Live Streaming

In 2015, there were multiple public and private events streamed live on social media, including more than fifty criminal acts such as rape, murder, and robbery. There were also at least fifteen suicides and several hundred protests streamed live via a social media platform. In the past twenty-four months, live streaming has changed the way news is consumed and reported. When you are developing a strategy related to social media monitoring, you will need to spend a significant portion of time addressing live streaming. In the last three false active-shooter events at malls in the US, someone was live streaming while it was happening, which allowed first responders and security professionals to get a first-person point of view. During some of these incidents, there was a misconception that guns were involved, but the tool of live streaming allowed law enforcement to identify that the incidents were actually fights and no firearms were used. Live streaming could be the tipping point of how you react to an event. At the Loss Prevention Research Council, we currently have a working group focused on special operation and emergency operation centers. We are reviewing the consumption of data, social media monitoring, and how to communicate it effectively. If you’re interested in learning more, please visit lpresearch.org or reach out to me directly.

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BENCHMARKING by Adrian Beck, Walter Palmer, and Colin Peacock

Setting the Research Agenda I

n the last edition of LP Magazine, we presented the findings from our first benchmark study, which focused on comparing practices and policies on managing shoplifting in retailing. This topic was chosen primarily because it had been discussed extensively at a recent practitioner meeting and was deemed a good starter topic for initiating this series of benchmarks. It also enabled us to gauge the degree of support we were likely to receive from industry leaders. After all, there is no point in starting a benchmarking series if there is no support or interest from those it is aimed to benefit. As was outlined in the previous article and in the free benchmark report, the response rate was very good, soliciting feedback from companies representing 40 percent of the total US market, with a combined retail estate of more than 92,000 stores and annual retail sales of more than $1.3 trillion. Given this high level of support for this first benchmark study, it was agreed that we needed to develop a method to decide on what topics should be the focus of future benchmark surveys. It seemed sensible that the only way to do this was to reach out to the LP community and ask them what they would like to see covered next. After an extensive brainstorming exercise and consultation with a number of LP representatives, we developed a list of ten possible topics that could be the focus of future benchmark studies, which are detailed below. We then developed a very short online questionnaire to find out from LP practitioners what their priorities would be based upon these ten topics, asking them to rank each of them based on their level of interest in the topic, using a five-point Likert scale. The questionnaire was sent out to the fifty-eight LP executives who had been approached for the first benchmark study on shoplifting policies and practices. In addition to scoring each of the possible

Beck is a professor in the criminality department of the University of Leicester in the UK where he is primarily focused on research on retail crime and shrinkage issues. He can be reached at bna@le.ac.uk. Palmer is CEO/president of PCG Solutions, a loss prevention consulting, training, and education firm. He can be reached at wpalmer@pcgsolutions.com. 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 the Retail Industry Leaders Association Asset Protection Leaders Council in the US. He can be reached at colinpeacock@hotmail.co.uk. All are frequent contributors to both LP Magazine US and European editions.

topics, respondents were also given the option to add suggestions for subjects not covered by the ten topic areas offered. Those receiving the survey request were given a relatively short period of time to offer their opinions (one week), and in total twenty-two responded (a response rate of 38%). No information was collected about the respondents, and so it is not possible to undertake any analysis by size or type of retailer. The survey was kept purposefully very short to encourage a quick response to enable the next benchmark study to be identified as quickly as possible.

What the Industry Wants to Know

As can be seen in the chart below, the ten topics have been ranked in terms of the average score they received, where 5 equates to “very interesting” and 1 equates to “not interesting at all.” The overall score across all topics was 2.8, which suggests that there was a good degree of interest across all the ideas put forward for consideration. The topic receiving the highest level of interest was The Use of Emerging Loss Prevention Technologies, which scored 3.3 out of 5. The aim of this proposed benchmark study is to understand what new types of technology are currently being used and/or whether plans are in place to undertake a trial in the near future. It also plans to look at how existing technologies, such as EAS and CCTV systems, are being used in different ways.

Future Benchmarking Priorities Benchmark Options

Level of Interest

The Use of Emerging Loss Prevention Technologies

3.3 3.2

The Use of Analytics in Loss Prevention 3.0

Managing Total Retail Loss Returns Policies and Practices

3.0

The Organization and Structure of LP in the Business

2.9 2.6

Policies and Practices on Safety

2.5

Inventory Counting Practices Understanding the Management and Control of Non-sellable Items

2.4

Pre-employment Screening Practices

2.4 2.2

How Collaboration Is Sustained and Embedded in the Business 1 1.5 Not interesting at all

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2.5

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3.5

4.5 5 Very interesting

It is perhaps easy to understand why this topic came out on top—the world of retail is changing fast with new technologies emerging at an increasingly rapid rate. Understanding what to invest in, in terms of new LP technologies is difficult, so it is easy to understand why it would be considered of real value to LP practitioners to understand more fully what their peers are investing in now and what they are planning to trial in the near future. This topic was closely followed by The Use of Analytics in Loss Prevention, which scored 3.2 out of 5. Closely aligned with the first topic on emerging technologies, the LP industry has seen a dramatic increase in the volume and range of data now available to their businesses. As one LP practitioner described it recently. “We now have a ‘data lake’ in the company, and the challenge is understanding how to navigate it in the best way to help the business the most.” He could have also added that it’s not just about navigating the “data lake” but also working out what to do with the information you have “fished” out of it. The second proposed benchmark survey will therefore focus on understanding how companies are using data analytics to better manage the problem of retail losses—what systems are in place, what skill sets are required, and how information is utilized and shared. Two other topics received a score of 3 out of 5: Managing Total Retail Loss and Returns Policies and Practices. The former builds upon the recent report published by the Retail Industry Leaders Association’s Asset Protection Leaders Council and would consider how retail companies are going about defining and measuring losses in their businesses and what impact different categories of loss are having. The latter topic would focus on understanding the scale and nature of all types of product returns to retail businesses and charting the various policies and practices used and how these are balanced against other company priorities. At the other end of the scale—suggested topics on how collaboration is sustained and embedded in the business, current practices on pre-employment screening, and developing a better understanding of the management and control of non-sellable items— all received a score of less than 2.5 out of 5 indicating they do have some interest but not as much as the topics listed earlier. Some respondents did offer suggestions for other benchmark topics, including comparing LP salaries across functions and responsibilities; methods being adopted to manage mobile point-of-sale technologies; the impact and control of e-commerce; and the identification and effective management of high-risk stores. These topics will be included in lists of topics put forward for consideration in the future. We would also welcome more suggestions for possible benchmark surveys. Please feel free to get in touch with your ideas.

The Next Benchmark Survey: The Use of Emerging LP Technologies

We will now begin preparing the questions for this next survey and aim to have the results ready for the next edition of the LP Magazine. We are very keen to broaden the range of companies taking part in these benchmark surveys. The more respondents we have, the better the sample will represent US retailing. It will also enable us to carry out more detailed analysis of the data, particularly by type of retail category, which was not possible with our previous study. If you would like to help with the next study as a respondent company, please get in touch at one of the email addresses in the authors box, and we will add you to our circulation list.

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LPM EXCELLENCE

LPM “Magpie” Awards: Applauding Excellence

he LPM team is privileged to have a front-row seat to the very best in the loss prevention industry, providing a unique opportunity to present

Excellence in Leadership Excellence in Community Service Johnny Turner, Director of Loss Prevention at Rack Room Shoes

A veteran leader in the profession, Turner began his retail career with Rack Room Shoes, formerly Learner Shoes, as a controller in 1982, and five years later became the company’s first merchandise manager. In 1992 he took on the role of building the company’s loss prevention program from the ground floor. Twenty-five years later, that program has become an integral part of the company’s business model. “We really didn’t know at the time what a successful loss prevention program looked like,” said Turner. “But networking and mentors played a crucial role in my development. I used every conference, meeting, and training session as a way to learn from the best LP leaders in the business. We established shrinkage goals, established robust audits, worked with store operations, and increased awareness through training and communication. But I’m most proud of my team and the store employees who bought into what we were trying to accomplish to increase both our profits and our value to the organization. It’s these people that make success happen every day.”

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

positive, productive ways to promote loss prevention, build successful and constructive partnerships, educate and inform the LP community, and support the thought leadership that drives us forward. The LP Magazine “Magpie” Awards are a means to celebrate industry accomplishments on an ongoing basis, recognizing the loss prevention professionals, teams, solution providers, law enforcement partners, and others that demonstrate a stellar contribution to the profession.

Melissa Mitchell, CFI, Director, Asset Protection and Retail Supply Chain, LifeWay Christian Stores

A veteran of the United States Air Force and an experienced leader in the loss prevention community, Mitchell has provided the light of leadership for many men and women across the industry as she has taken on greater responsibilities in her own career. But it is her contagious spirit and giving personality that helps set Mitchell apart. An active participant in many projects that support the loss prevention community, she also cofounded Katie’s Helping Hands along with her daughter, Katie Mitchell. Facing their own life-changing events, these courageous women looked beyond themselves to support families in their time of greatest need in the battle against cancer. “What we do in loss prevention is fix things,” said Mitchell. “It’s really about the power of handing people an opportunity to do the right thing and showing what they’re capable of accomplishing. This provides the momentum to help make things better, which is what leadership is all about.”

Excellence in Partnerships Mike Grady, LPC, Executive Vice President at Vector Security Having served with Vector Security since 1983, Grady is a long-term supporter of the loss prevention community both as a solution provider and as an advocate for the industry as a whole. He serves on the Loss Prevention Foundation board of directors and the Retail Industry Leaders Association steering committee, and is an active member of the National Retail Federation, ASIS International, and other industry associations. To date, the team at Vector Security has awarded 184 LPQ and LPC scholarships to support continuing education across the industry. “Building a business relationship is a lot like developing and building a personal relationship,” said Grady. “You have to identify shared values, develop mutual respect, and always be upfront and honest with each other. If you can do these things, trust will come naturally. Also, it is imperative that you get involved and contribute your time to the industry that you serve. Dedication and commitment builds trust and credibility. These connections can go a long way in helping you become more successful.”

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

MARCH–APRIL 2017

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FEATURE

THE WALMART ASSET PROTECTION TEAM

MAKING IT EASIER TO GET IT RIGHT

By Jacque Brittain, LPC, Editorial Director, Digital, and Kevin McMenimen, LPC, Chief Operating Officer, LP Magazine

MAKING IT EASIER TO GET IT RIGHT

avigating the asset protection responsibilities at the world’s largest retailer requires patience, perspective, partnerships, and outstanding leadership. Mike Lamb, LPC, is the vice president of asset protection and safety at Walmart US. A seasoned industry leader, Lamb has served with some of the nation’s most prominent loss prevention programs. He has also offered his guidance and leadership throughout the loss prevention community as a board member with the Loss Prevention Foundation (LPF), the Loss Prevention Research Council (LPRC), the Loss Prevention Research Foundation, the Retail Industry Leaders Association (RILA) LP Steering Committee, and LP Magazine’s editorial board. Recently LP Magazine sat down with Lamb and key members of his senior leadership team including Paul Jaeckle, LPC, senior director of asset protection strategy and operations; Tom Arigi, senior director of asset protection; and Gary Smith, LPC, senior director of asset protection. [EDITOR’S NOTE: Just prior to publication, Jaeckle accepted a new position as vice president of asset protection at Meijer.] When you first came to Walmart, what was your vision for the department? LAMB: When I first came to Walmart

my vision was, “How can I make a measurable difference for the company, given what they’ve hired me to do and my ambition to ultimately accomplish more over my career here?” Walmart is a fantastic organization with a tremendous legacy of success. I think it’s important that no matter the organization you step into, whether you’re a long-term employee working for the only organization that you’ve been a part of or someone that has worked for many organizations, it’s important to seek to understand before you seek to be understood. I think there’s a stop, look, listen, and learn aspect for any leader, and I tried to practice that coming on board here. Embracing the culture of an organization is vitally important. There’s an outstanding culture at Walmart with tremendous core values that I embrace,

“My boss has a saying: ‘You’ve got to make it easier for the stores to get it right than to get it wrong.’ There were too many priorities, both within the asset protection team as well as the operators. There was no singular focus on the work that needed to get done and the things that needed to be executed in the stores for us to deliver successful results.” - Mike Lamb TM

so that transition was very easy for me. I think that we all get paid to bring fresh ideas to the business no matter what the level in an organization—to challenge the norm, to look at things differently and through a different lens from time to time, and to make recommendations on how the business can be better. And I’ve really tried to focus on those things in my time here. When you took over the leadership role, what did you see as your top priority? LAMB: I think the starting point

in many ways was to say to the organization that we are going to come up with solutions. Our approach MARCH–APRIL 2017

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was to provide a simplified way of working, focusing on what matters most. This begins by assessing the business, determining what needs to change, and understanding where the opportunities exist to improve our overall performance. Working as a team, we wanted to identify the most significant tasks at hand and determine what was really critical to work on. There needs to be a balance between resolving process-related shrink and the opportunities we have in that space versus the malicious shrinkage that we see with respect to theft. My boss has a saying: “You’ve got to make it easier for the stores to get it right than to get it wrong.” There were

MAKING IT EASIER TO GET IT RIGHT the nuances that are unique to the culture of Walmart. He’s learned to ask the right questions before making decisions. There’s never a circumstance where he’s not transparent about where we need to go or a time when you don’t feel like your input is valued. There’s a true diversity of thought that leads to strong, unified, and joint decisions that are the right thing for the business.

Paul Jaeckle, LPC Senior Director, Asset Protection Strategy and Operations

Tom Arigi Senior Director, Asset Protection

too many priorities, both within the asset protection team as well as the operators. There was no singular focus on the work that needed to get done and the things that needed to be executed in the stores for us to deliver successful results. How did you approach that with your team? LAMB: We relied very heavily on

data and analytics. One size does not fit all in any retail environment, and it certainly didn’t for Walmart. First, we took a risk-tiered approach to our stores, realizing that some stores were more opportunistic with more risks than others. We looked at the potential tools that we could provide to the organization that would allow them to make it easier to get it right. Among those tools was a shrink dashboard, which provided diagnostics, particularly around inventory management. This was intended to identify more process-related shrink opportunities and really point the stores to the areas of the business that they needed to address to effectively manage shrink. We got serious about training and education for the asset protection teams. We reinvigorated our mid-level AP training through our “MAPM Academies,” bringing those men and women in on a regular basis to train them on the expectations of the role. We realized that we had to reach our team using various forms of communication, which led to the creation of the LEAP digital newsletter. LEAP

Gary Smith, LPC Senior Director, Asset Protection

What do you see as some of the biggest changes? JAECKLE: Mike challenged us to

Paul, you’ve been with Walmart your entire career and worked your way up from the ground floor with the company. How do you feel the employees have responded to the new asset protection strategy? JAECKLE: The thing that’s probably

simplify the business. He challenged us to not simply maintain the status quo. He’s challenged each and every one of us to be a student of the business—not just within the company, but with what’s happening within the industry. We needed to pay attention, and it’s made a big difference. We’ve partnered with the Loss Prevention Research Council and are an active partner in industry research and development. Walmart is investing in the team through LP certification with the LP Foundation, which provides an industry standard and a way that you can better yourself. Looking at it from my personal experience—I have my LPC now—it just fundamentally changes things and exposes you to a very different side of the business. We’ve taken a critical look at the way we approach the department, the team, and the business, and it’s making better partners and better leaders at every level. Also, if there might be a smarter, more efficient, more effective way of operating, then it’s open for discussion. Restorative justice is now part of the conversation. We’ve re-energized the greeter programs at the doors. We’ve reinforced our return program. All the steps we’re taking strengthen both the department and the company mission.

the most interesting about how the department operates today is that it isn’t simply a top-down strategy. The team is given the opportunity to provide feedback on how we adjust, how we learn, and how we move forward. Mike has created a culture that invites feedback. He has a very sound understanding of where we need to go, but is cognizant of some of

ARIGI: I have a three-year perspective now, and it’s changed a lot in that time frame. I imagine that anyone that’s been around any longer can really see it. I think that AP around here is in a much better place today. A lot of good leaders focus on different things—compliance, operations,

stands for Leadership and Excellence in Asset Protection—an outstanding tool that we developed in partnership with LP Magazine and LPM Media Group. We also took advantage of satellite TV. Walmart has the capabilities of transmitting a broadcast to all our stores, and we set up a broadcast we call Same Page. Once a month we engage all the men and women in asset protection around the most relevant topics in the business, with half of that broadcast dedicated to an open-line question-and-answer session. This helps ensure that the folks in the field know who we are and what we were doing to support them while sending a strong message that they have an open line of communication to us. We give anyone and everyone a chance to speak their minds on this broadcast while emphasizing the need to drive execution and actions in the store.

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MAKING IT EASIER TO GET IT RIGHT and whatever. Mike came into the role and brought balance and perspective to the job because of his experience in the industry. You can’t just be great operators. You can’t just catch shoplifters. You can’t just focus on internals. It’s that blend that builds a winning program. I think what the team was looking for was a little role clarity. It’s interesting to see how all of these things have aligned to get maximum push.

as there are for all retailers, where there’s an inordinate amount of shrink. There are certain departments where you are at a higher risk for loss, and partnering with our merchants in a way that’s meaningful is very critical. Your work there is never done, but we’ve made really strong progress. So it’s been a journey. And it’s not necessarily been one or two or three things but an overall culmination of things that have led to our success.

SMITH: Having had roles in several

How did you approach this strategy with company leadership? LAMB: When you’re dealing with

different areas of the company, I think broadening our perspective and our role has been extremely important. For example, something that we’re really focused on now is the digital path—how we’re interacting with the customer and how things are intersecting with the Internet. One of the things my team is really focused on now is understanding all the different aspects of loss that occur in that world. It’s one of the challenges that we’ve been given both from our leadership team and that we’ve given ourselves within the asset protection department. Where do we fit in? We need to understand how that loss occurs and how we can make an impact because that’s the future. The future isn’t just brick-and-mortar stores. It’s learning how to perform for the next generation. That’s exciting, and we’re learning as the business is learning. How have you gone about gaining support in the stores? LAMB: There’s been a myriad of

things that we’ve done. We actually look at shrink and plan our shrink goals knowing that as we improve shrink we improve profitability for the stores. That makes us more relevant. We don’t necessarily share all the proprietary information, but we share the progress that we’re making and the success that we’ve had across the organization. The other thing I think we’ve done effectively is to market asset protection across all areas of the business. Our merchants are our key stakeholders, and as we think about merchandising, we know that there are select departments,

executive leadership, you had better bring facts. You had better have done your homework. Your hypothesis or suggestion or recommendation should be grounded in solid data, analytics, and fact. It’s okay to have the passion and the emotion, but you must have more than that. You have to make a compelling business case to leadership that there will be a return on the investment, whatever that investment is. I can tell you that I’ve had unwavering support here. We knew that we could do better on some of our deliverables. The definition of insanity is doing the same thing over and over again and expecting a different result. We knew that we had to approach the business differently. You have to be persistent as well. You can’t just walk away at the first no. You have to demonstrate that it is a business priority that our strategic objectives will not interfere with our good customers. In fact, you’ll make it a customer-service enabler, and this is how you’ll make it happen. Taking the opportunity to fall back on your history, showing that you’ve done it before and done it successfully, serves as a good model for doing it again. I had worked for another large retailer where we had successfully rolled out a similar strategy, which allowed the opportunity for our organization to recognize it made sense for us to do it and it’s right for MARCH–APRIL 2017

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the business. You can’t just go in with an emotional argument. You’ve got to bring facts, you’ve got to bring data, and you’ve got to bring a conviction that what you’re advocating for is going to make a difference as well. How involved is the rest of your leadership team? JAECKLE: There’s rarely a time when

Mike goes into a meeting with senior executive leadership without pulling one of us along with him. I remember Mike and I going to executive steering committees with all the C-level individuals—merchandising, marketing, supply chain, and so

“The thing that’s probably the most interesting about how the department operates today is that it isn’t simply a top-down strategy. The team is given the opportunity to provide feedback on how we adjust, how we learn, and how we move forward.” - Paul Jaeckle forth—and having to gain their alignment and support on programs or investments in the business. Most thought that it was all about investigative work because that’s the image we had provided them previously. We worked at informing and educating

MAKING IT EASIER TO GET IT RIGHT them to understand that there was a whole different side of the AP business and that loss is comprised of a lot of different things. And the responsibility that everyone has in that is considerably different than what people believed it was before. That was a really interesting time. ARIGI: Mike has taken the lead, and our executive leadership has responded. We’ve developed a strong working relationship with executive leadership, and that makes all the difference. But it wasn’t simply the reporting structure for asset protection in the organization; it’s the individuals that make the difference. We reacted to the things that our leadership wanted us to, and we’ve gained credibility along the way. Not only did we execute, but we’ve also exceeded some of those expectations. We took ideas and made them a little bit better—a few more features, a little bit more predictive. As that relationship evolved, I found that our thought processes were very much aligned. That builds credibility and

ultimately builds trust, which is why you see all the smiles on this side of the table. It’s fun when it all comes together that way.

LAMB: I think as a leader if you rely

too much on micromanaging and don’t allow people to leverage the skills that they bring to the table, then you’re never going to accomplish the things you set out to accomplish. I know it’s cliché, but everything starts and stops with people. You can have the best-laid strategy and the most well-thought-through and formulated plan, but having the right people that have a passion about making a difference and are willing to go out and work hard to demonstrate that is absolutely essential. And it’s not just a question of having quality people; it’s having the right people in the right jobs. I think for any leader perhaps the most challenging decisions you make is getting those people in “the right seat on the bus,” as the saying goes. We’ve been very fortunate to have some really good men and women on the asset protection team, who with the mere notion of a vision or idea or concept have the unique ability to bring that to life. For example, two years ago, our restorative justice program was just an

SMITH: Mike had experience and

understanding of how to manage, how to instill confidence to help us perform, and how to take the team, galvanize them, and get them going in the right direction. There have been a lot of different dynamics and a lot of pressure, but it’s been handled in a way that’s very collaborative both inside and outside the department. I think that’s really been the key—to have someone that shows consistent leadership and has played a few seasons in a leadership role and understands what must happen versus what can we get to later. Part of accomplishing the things that you want to do involves having the right players. Tell us a little more about how you put together your team.

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MAKING IT EASIER TO GET IT RIGHT idea. We challenged the team to make an effective difference in the communities and for the stores with a diversionary program. The new program is being expanded to over 1,500 stores. It has been largely perceived as absolutely appropriate for the business, allowing for good corporate citizenship and serving us in a way that we hoped it would. In another situation, we took a very calculated but somewhat risky step in reallocating resources. We shifted resources at the door in the highest-loss stores across the US, a program we’ve dubbed “More at the Door.” The way the leadership team took that concept and made it a deliverable for the stores was just exceptional.

“We’ve developed a strong working relationship with executive leadership, and that makes all the difference. But it wasn’t simply the reporting structure for asset protection in the organization; it’s the individuals that make the difference.” - Tom Arigi I’m very blessed to have talented people that don’t wait for the day-to-day direction, but take the ball and run with it. Sometimes you’re better served to execute something with speed rather than having meeting after meeting to determine what that next step will be, and just say, “Let’s go.” And I’ve got a group of men and women that really operate with that sense of urgency, and it’s made a difference in the business.

Looking at the idea of finding the “right seat on the bus” from the perspective of someone who aspires to be in that spot, what types of things are you looking for in that type of individual? LAMB: I would say that above all,

it’s attitude. When you spend a little time with someone, you learn to gain a sense for their energy, their passion, their attitude, and their desire to make a difference. Most of what we do in retail that’s technical can be learned. But having that drive and inner passion—the motivation to really make a difference—is one of the big delineators for me. If an individual can demonstrate those qualities, I think that the sky’s the limit for what they can do. Certainly, there are some complicated components of retailing. But for me, attitude is everything. You can teach and train the technical skill sets, but it’s hard to teach willingness and attitude. I look for those things above all else. To me it makes good sense to spend a dime if you can save a dollar. We’ve really tried to make recommendations and investments in the business where we think it’s most relevant and where we’re going to see the largest payback. Many of our programs are accomplishing just that. For example, our store returns program has been extraordinarily successful in vetting out and identifying the abusive and fraudulent return customer while ensuring the highest level and quality of service for our good customers. There was a lot of work that went into that in terms of investment, time, cross-functional alignment, and partnerships. A year later we can look back on that and say we know that this is going to be a difference-maker as we move forward. In the LEAP newsletter, you always send a personal message to the field AP team. How do you decide what that message is going to be? MARCH–APRIL 2017

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LAMB: The business we run is

fast-paced, and things change with short notice. Whatever we feel is most significant in the business at the time, or is most relevant for the team to hear about from me, is generally what guides that content. I think it’s important that the team hears from their leader. I also think it’s critically important that they hear how we’re doing as a whole because the newsletter reaches all the way to the hourly AP associate. The majority of our shareholders care about the well-being of the company, so I generally try to incorporate a message that takes into account the health of the department or anything I believe they need to be made aware of or reacting to, based on what’s trending. We’ll attempt this in a variety of ways. We may shoot a video, or sometimes it’s in text. But I always try to bring a message to them that they’ll find relevant and worthwhile. These meetings that you hold on an annual basis—that seems to really bring your team together. We understand there was a special moment at the last meeting. What was the “shearing of the Lamb?” LAMB: That was one that started

earlier this year. In early 2016, we had a few years where we weren’t necessarily moving in the direction that we wanted to with some pieces of the business. And as a lot of companies do, we set a shrink target. There’s an expectation to manage that controllable loss, and we tried to set a pretty aggressive target. We owe that to the business, and we owe that to the shareholders. So in an impromptu moment on one of our monthly AP broadcasts, one of my colleagues challenged me that if we were to deliver on our shrink target by our end-of-August annual meeting, I would shave my head—thus the term “shear the Lamb.” So I acquiesced. Quite candidly, while I had every faith that we would deliver improvement, I had no realization nor did I have any expectation that we would reach this stretch goal. Well, to the team’s credit—due to the hard work of

MAKING IT EASIER TO GET IT RIGHT the men and women in AP and our operators—we did in fact just that. But you know what? I felt going into it that it would be a moment of trepidation, but it was actually a moment of joy. Because, actually, to realize that you’re taking a haircut for the team that had worked so hard to deliver such a meaningful business result made it all worthwhile. Sounds like it was a moment of joy for a lot of people. LAMB: There was a lot of

laughs and jeers, but all in good fun. I’ve always believed there is nothing wrong with laughing on company time. Let’s focus a little more on your leadership style. What was the most difficult decision that you’ve had to make as a leader? LAMB: I don’t think that I can point

to one specific decision and say it was the most difficult. But I can tell you that the most difficult decisions

that I’ve made on balance is when you have to make the tough decision involving people that, either through lack of willingness, capabilities, or competencies, you’ve got to make a change. The significance of changing or altering someone’s career, their job, and their ability to earn a living should never be taken lightly. As a leader, I believe it’s incumbent that you always give them every opportunity to demonstrate that as an individual they can succeed and there is a place for them. For me, the most difficult decisions occur when there are no good answers to those questions and you have to make that change. What do you think are some of the most important lessons that you’ve learned over the course of your career? LAMB: I would say that, on balance,

it’s never as good as it seems. It’s also never as bad as it seems. I’ve always tried to use that as a leveler to make sure that you don’t get overly

concerned when you shouldn’t, nor do you get a false sense of security when you shouldn’t. I also feel it’s important to maintain a healthy paranoia. Looking at some of the best leaders in retailing, I look back at the leaders that I’ve most admired. You really didn’t see them manage things any differently when things were at their best or when things were at their worst. Manage things the way that they need to be managed, and the results will be the results. You don’t want to over-index or declare victory. Particularly in our industry, you can work hard and achieve a desired result. But the reality is you’re going to recalibrate and start over the next year. I think one of the most difficult challenges for leaders in our industry is to ensure that you work equally as hard or harder as things are improving as you do when they’re not. The first time I had an opportunity to present to the team at our national meeting after having been appointed to my current role, I knew that we had a

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MAKING IT EASIER TO GET IT RIGHT lot of opportunities. And as I thought about what message I could leave them with, I wanted it to be a message that not only applied to them, but also applied to me. I wanted my message to say that we’re all in this together and have an equal challenge. Thinking it through, four thoughts came to mind. Expect to win. I look at business and retailing a little bit like I do collegiate sports. I happen to be a big college football fan, and I believe that winning is an attitude. You’ve got to believe. You should go out every day and expect to win, knowing that you can make a difference—and when you make that difference, you will win. Be relevant. Insert yourself and have a seat at the table. Make sure your voice is heard. You can, do, and are required to make a difference in the business. Don’t just comply with what you believe isn’t appropriate—speak up no matter your level in the organization. Be a difference maker, and be relevant in the things you do each and every day. Take a swing. As a baseball fan, you learn that you don’t want to strike out without swinging at the ball. We have programs. We have identified actions that the stores need to take and you need to take as an asset protection professional. Don’t look for the walk—get the bat off your shoulder. Take a swing and make a difference in the business. You’re expected to do that. You have an obligation to do that. And if you’re not doing that, start doing it now. In too many cases, we wait for someone else to make it happen. Don’t assume that someone else will be the star. You have to take personal ownership, and you have to be the person to take that swing. It’s okay to make a mistake. The road to success is paved with a lot of errors. And don’t be shy about trying to make a difference, even if what you’re doing doesn’t turn out in the way that you think it should. At least swing the bat. Take it personal. Refuse to lose. We are in this thing to win. Effort is important, but never confuse effort with results. And expect to have that pit in your stomach if you’re not delivering on

the things that you have a responsibility to deliver on. These concepts resonated with me because I could apply each one personally as part of my job. I’ve committed to practicing this each and every day throughout the year, looking to make the same difference that I’ve challenged the team to make themselves. Let’s talk about the notion that you have to make it easier for the stores to get it right than to get it wrong. LAMB: I must admit, I took that

phrase from my boss. He’s our executive vice president of central operations, and I heard him say it not long after my reporting relationship to him began. When you walk into a Walmart Supercenter, you’ve got eight or nine businesses in one: apparel and home and automotive and pharmaceutical and food and toys and on and on. It’s a very complex business, and there are many things that will attribute to the losses that we incur as a retailer. As a result, we should spend our time and energy where it’s going to matter most. Let’s look at the things that are truly critical to the business versus those that may be more trivial. Let’s just be insanely good at driving execution around a select number of things versus trying to be a jack of all trades and a master of none. We’ve developed reporting and diagnostic tools that apply not only to AP, but also for store operators. That way, we can focus on a select number of things that are going to make a bigger impact on the business as opposed to trying to solve everything. We always know that there’s going to be shrink in our business. It’s impossible to reduce shrinkage to zero. Focus on the biggest chunks of opportunity, the biggest priorities within the business. And once we’re able to knock those out, we’re able to move on to something else. MARCH–APRIL 2017

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In far too many circumstances across retailing, we tend to make it more difficult to get it right than we do to get it wrong. I think you’re better served when you’re able to more appropriately level your resources. You’ve commented several times on the importance of marketing. LAMB: I used to work for a leader that

would say, “If you don’t know where you’re going, any road will take you there.” For us, we’ve tried to define the road and the road map. I believe that it’s very important to have a mission statement. It’s very important to have an ambition. It’s very important to talk to those things routinely and continue the redundancy of talking about those things that matter. So we’ve set up a three-dimensional approach to managing our business within asset protection we call “Direct. Deter. Detect.” The “direct” portion means we have a responsibility to design the

“Having had roles in several different areas of the company, I think broadening our perspective and our role has been extremely important. For example, something that we’re really focused on now is the digital path—how we’re interacting with the customer and how things are intersecting with the Internet.” - Gary Smith continued on page 50

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MAKING IT EASIER TO GET IT RIGHT continued from page 48

right tools, the right diagnostics, the right reports, and the right actions for both the store operators and the asset protection teams to take to manage shrink. “Deter” means we have to do a much better job of at hardening the target and making it more difficult for someone to commit a malicious act of theft at Walmart, whether that’s a customer or an associate. Asset protection will always be responsible for the identification and apprehension of those that engage in theft. But we knew that we had to get more preventative in our approach, so we took a critical look at resources in the field and reallocated those resources, knowing that we had to get better at preventing the incident versus trying to detect it. It’s the old proverbial saying that, “An ounce of prevention is worth a pound of cure.” We knew that we had to come up with a method that would apply at all levels throughout the organization, being very intentional about the way that we worked and what we asked the stores to do. The last is “detect” because, despite our best efforts to prevent, we also know that theft is going to occur in our business. We understand that apprehension of those individuals that take advantage of us is just a natural function of what we do. So we’ve trademarked it, we talk about it, and we’ve got wristbands around it. I think the team has rallied around the idea that these three things matter, and we’re going to keep talking about them because they do matter. You’ve said, “If you’ve repeated something twenty times, you’re just getting started.” How does that apply? LAMB: It’s about the redundancy of

communication. Communication is arguably the lifeblood of your ability to execute. If you don’t talk about what it is that you expect, if you don’t reinforce through communication the things that need to happen in your

business, how do you engage your teams to execute it? You just don’t win. And you can’t talk about it just once. You’ve got to talk about it—whatever the “it” is—routinely. Repetitively. And when you do that, you start to see the effects, and it becomes contagious. Others talk about it. Then it becomes the way of working, and it’s embraced more by the organization. We do that a lot, and we’ve selected a few vehicles that we feel will help us accomplish that. The broadcast is one; the newsletter is another. We want them to hear from us what it is we intend to do and how well we’re doing the things we said we’re going to do. What are some of your thoughts on setting shrink goals? LAMB: We set an ambition for the

organization to reach a measurable point of shrink that we think would represent best-in-class and to maintain that outcome over an extended period of time. We’ve established what we feel that number should be, we talk about it internally, and we rally behind it. But you must also have a degree of patience. This will be an evolution, not a revolution. The one thing that I think we all have to safeguard against is that shrink has a long tail, and when you begin taking the steps that will help effectively manage it, it takes a while for that to manifest itself. You also have to be careful that you don’t initiate the launch and leave. Once you implement a program, you can’t look at it ninety days later and realize you’ve left it on the side of the road or you’ve simply stopped talking about it. It may take months and months before you realize the benefit of that initiative and the trailing indicator that is shrink. What we try to do is identify and understand the leading indicators along the way, those things that give us confidence that the lagging indicator—shrink performance—is going to be at an acceptable level. We have to believe that whatever that initiative is, it will work for us and drive that number down. MARCH–APRIL 2017

Patience is a virtue. What I’ve found in my thirty-five-plus years of managing in this industry is don’t give up too soon. There’s a point with every initiative where you say, “We’ve tried it, it didn’t work, and let’s move on to something else.” But it takes a degree of patience to understand if it will work, and we shouldn’t walk away too soon. What’s next at Walmart? LAMB: I’m very fortunate to work

for a company that’s very receptive to our suggestions and ideas. Some work for you, and some don’t. But it all goes back to being relevant, taking a swing, and expecting to win. You target those things and make recommendations for the business—no matter what your level in the organization. You then hope that you can make a compelling case, one that makes sense to the business, and in some way, large or small, you feel like you’ve contributed to the success of the company. Walmart has such a significant footprint and serves such a large number of individuals that no matter what’s happening in society—good, bad, or indifferent—it’s happening at or near a Walmart. That brings about unique challenges and keeps us always in the mindset of continuous improvement. I’m very pleased with the progress we are making with respect to what we’re doing from the law enforcement outreach perspective, ensuring that we are vested partners with law enforcement agencies across the country. We’ve been able to make inroads through restorative justice with a program that affords the first-time offender the opportunity to avoid criminal prosecution, which lessens the burden on law enforcement. It’s good for the offender who has the opportunity to be rehabilitated and quite frankly good for our business. We’re constantly looking at how we continue to be a good corporate citizen within our communities, serve our customers in a way that matters to them, and do it in the safest and most secure way possible.

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CERTIFICATION

Certification Has Tremendous Benefits for Law Enforcement

Interview with Mitzi Perry, LPQ Mitzi Perry, LPQ, has been an investigator at the St. Petersburg (Florida) Police Department since 1999. In 2001 she was assigned to the auto theft unit and in 2002 transferred to the property recovery unit. Perry is the current president of the Florida Law Enforcement Recovery Unit (FLEPRU), training codirector for the Coalition of Law Enforcement and Retail (CLEAR), and secretary for the Florida Organized Retail Crime Association (FLAORCA). She received her LPQ certification in January 2017.

Why did you decide to pursue certification? Was there something specific that influenced your decision?

communicate with other loss prevention professionals because now we will be speaking the same language.

I started my career with the St. Petersburg Police Department in 1999. In 2001 I became an investigator assigned to the auto theft unit. In 2002 I transferred to the property recovery unit and shortly thereafter became involved with the Florida Law Enforcement Property Recovery Unit (FLEPRU) where I met Detective Jack Gee, who is now retired from the Ft. Lauderdale Police Department. Jack was president of FLEPRU at that time. In 2008 Jack and other loss prevention professionals noticed an increase in organized retail crime (ORC) and felt it was necessary to encourage mutual cooperation between all law enforcement agencies and retail corporations throughout the United States to address this problem. This resulted in the creation of the Coalition of Law Enforcement and Retail (CLEAR). Since its inception, I have been the training codirector for the organization. This opportunity opened my eyes to how important it is for law enforcement and retail to learn about each other, so they can effectively work together. I decided to complete the LPQ course because I felt that using the knowledge learned from the coursework will allow me to further my investigative skills and make me a better partner to retail.

Was the course what you expected? The LPQ course was so much more than I expected. As a law enforcement investigator, there are many things that we do not think about when we are conducting a retail theft investigation.

Tell us more about the process of going through the coursework and taking the exam. The course gives anyone, with or without a retail background, the basic information needed to understand the basics of retail and retail loss prevention. Having the Gopher Study Notes was very helpful in studying for the test. My advice to test takers is to study and take your time reading and answering the test questions.

Looking at your own personal development, what information within the course helped you the most? Understanding the retail loss prevention process and terminology learned in this course work will help my personal development by allowing me to better

MARCH–APRIL 2017

What was the most eye-opening information that was part of the curriculum? The biggest eye-opening information from the curriculum were the shrink calculations and the true effects of shrink on the retail business.

What benefits have you seen from taking the course? I will now have the ability to draw on my knowledge, experiences, and observations when providing guidance and thoughtful opinions on the wide variety of issues impacting the retail industry and to enhance the capabilities of my peers within both the public and private sectors through organizations such as FLEPRU, CLEAR, and FLAORCA. I will continue to work hard in breaking down the barriers. It has also given me lots ideas for topics for this year’s CLEAR and FLEPRU conferences.

If you could offer one key takeaway to someone currently considering getting certified, what would it be? This course is a must for new or even experienced loss prevention professionals and law enforcement. Not only do you learn many aspects of the fundamentals of retail loss prevention, but also it shows others that you are a committed loss prevention professional or someone who is committed to partnering with the LP industry.

How has going through the certification process influenced the way that you approach your job? This course has reinforced how important it is for law enforcement to share their knowledge with other law enforcement investigators and patrol officers. We need to retrain how law enforcement looks at retail theft. Many times law enforcement responds and investigates a retail theft call for a highly desirable item. Generally, law enforcement’s response to the problem is, “Why don’t they just lock that item up?” This course has given me a better understanding as to why or why not an item is locked up and how that decision impacts sales and shrink. LOSSPREVENTIONMEDIA.COM

We also need to retrain officers responding to these calls. They need to know if they are responding to a call involving a professional or amateur shoplifter. When making a traffic stop, they need to know what some of the indicators are when they have detained someone who may be involved in ORC?

How would you compare certification to other educational courses that you’ve taken? Most of the other work-related courses I have taken have been on company time. Completing this certification coursework and studying was a little more challenging because I completed it on my own time. I did it in addition to working my regular job, volunteering commitments, and home life. But it was definitely well worth it.

As a law enforcement professional who has never worked LP in a retail store, going through the LPQ certification process has shown me how much more there is to know about the retail process and retail loss prevention. It has also shown me there is still so much more to learn. Do you think getting certified will help make you a better law enforcement professional? Having completed the LPQ or LPC coursework shows others that you are a dedicated and educated loss prevention professional, and it gives you the advantage over others that have not completed the coursework. The coursework covers more than just loss prevention. It helps give you an understanding of labor laws, human resources, understanding and resolving conflict, and other topics that many may not immediately associate with loss prevention. As a law enforcement professional who has never worked LP in a retail store, going through the LPQ certification process has shown me how much more there is to know about the retail process and retail loss prevention. It has also shown me there is still so much more to learn. And I look forward to taking the LPC course in the future. I feel this will make me a well-rounded property crimes investigator.

Would you recommend certification to others? I would definitely recommend the LPQ and LPC certifications to others. Completion of this coursework serves

as a benchmark of your knowledge and will help the LP professional earn the respect of others in the process, just as it helps law enforcement better partner with retail.

Is there anything else that you would like to share regarding the learning experience? The coursework discusses the importance of networking. I could not agree more. I have had many opportunities to network with other law enforcement investigators and retail loss prevention professionals through local meetings and with the associations I am involved with. These individuals have become great partners. Others have become good friends and mentors. I would like to take a moment to thank Mark Neapolitan, LPC, CFI, with Signet Jewelers and John Clark with PCI Services for their support and encouragement of my decision to complete the LPQ coursework.

Newly Certified

Following are individuals who recently earned their certifications.

Recent LPC Recipients Cory Arnsperger, LPC, Sears Holdings Gregory Bleakley, LPC CFI, Office Depot Robert Cochran, LPC, Rite Aid Britt Davidson, LPC, Kum & Go Bradley Donatille, LPC, Sears Holdings Jacob Feldhaus, LPC, Blain’s Supply Jason Fiszer, LPC, Office Depot James Freeman, LPC, Lowe’s Mark Hand, LPC, Lowe’s Brian Keefer, LPC, Regis Corporation Kristen Kurek, LPC, Sears Holdings Frederick Lipscomb, LPC, Rite Aid Sarah McCoin, LPC, CFI, Hibbett Sporting Goods Kazuya Ohara, LPC, Sears Holdings Dennis Pruitt, LPC, Lowe’s Jacob Russell, LPC, Blain Supply Randall Stirewalt, LPC, Walmart Christine Sullivan, LPC, Kum & Go David Swift, LPC, H&M Armando Velasquez, LPC, Goodwill Industries of Orange County Dustin Young, LPC, Kum & Go

Recent LPQ Recipients Nathan Cordero, LPQ, Kmart Jeffrey Gonzalez, LPQ, Walmart Marc Hamilton, LPQ, ShopRite Adrienne Holliday, LPQ, Goodwill Industries of the Columbia Wesley Justice, LPQ, TJX Douglas Lopez, LPQ Mitzi Perry, LPQ, St. Petersburg Police Department Brittany Phillippy, LPQ, Lowe’s Stephen Ragosta, LPQ, Westcott Properties Philipp Reinecke, LPQ, Starbucks Coffee Clinton Sprenger, LPQ, Pineland Co-op

LP MAGAZINE | MARCH–APRIL 2017

EVIDENCE-BASED LP

Getting the Dosage Right to Stop the Pain

e have new CCTV cameras, but now what? This is the type of question we often hear. For example, do we primarily want the CCTV devices to deter offenders, detect attempts, or document them for trial and planning, or some combination? This distinction is huge because each CCTV use objective can mean slightly different camera form factors and deployment tactics. And to cost-effectively reduce crime and loss, we really have to get it right or at least close. The fancy term for this in policing and medicine is dosage and diffusion. What we do, not just that we do it, is critical. We’ve got to engage with the asset, the space or place, and of course the offender. But how do we best do this? What are some evidence-based methods?

The Why Is Important

Before we do something, however, it is always important to think about and know, via evidence, why we’re doing something. Why do we want to deploy this tactic? What do we expect it to do? How will it do this? How does it really work in the field? We call this a logic model.

As the loss prevention experts for our employers, we should have a good understanding of how an investment we want to make will actually do what we say it will. And we need to know how much of our LP solution to deploy.

MARCH–APRIL 2017

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. © 2017 Loss Prevention Research Council

in a 2014 edition of Pharmacogenetics and Genomics: “The main mechanism of action of ibuprofen is the non-selective, reversible inhibition of the cyclooxygenase enzymes COX-1 and COX-2 (coded for by PTGS1 and PTGS2, respectively). Of the two enantiomers, S-ibuprofen is a more potent inhibitor of COX enzymes than R-ibuprofen, with a stronger inhibitory activity at COX-1 than COX-2 in vitro. COX-1 and COX-2 catalyze the first committed step in the synthesis of prostanoids–prostaglandin (PG) E2, PGD2, PGF2alpha, PGI2 (also known as prostacyclin), and thromboxane (Tx) A2–from arachidonic acid. Arachidonic acid is released from the cell membrane phospholipids by phospholipase A2, PLA2, encoded by PLA2G4A (cytosolic, calcium-dependent) and PLA2G2A (in platelets and synovial fluid). …” We certainly don’t need nor will probably ever have such a scientifically derived MOA, but as the loss prevention experts for our employers, we should have a good understanding of how an investment we want to make will actually do what we say it will. And we need to know how much of our LP solution to deploy. For Advil, a brand-name ibuprofen, the standard adult dosage is one tablet by mouth while symptoms persist, not to exceed six tablets in twenty-four hours unless directed by a doctor.

The How Is Important

We take a pain reliever to relive a headache because multiple randomized controlled trials demonstrate consistent efficacy. Further, how the medicine works to relieve pain—its mechanism of action or MOA—has been repeatedly identified. Doctors know not only that it generally works but also how it works to relieve pain. Here is ibuprofen’s MOA according to “PharmGKB Summary: Ibuprofen Pathways” by Mazaleuskaya and others

by Read Hayes, PhD, CPP

What, how, where, how much, how often, and how long we do something really matters. Our team suggests you consider several dosage dimensions when you’re looking to deploy a protective action: ■ Active. How do we do this, what does it look like, who should do it, how many do we need, and what else should I do to make this work better? ■ Spatial. Where across my chain, and where on my property? ■ Temporal. When do I deploy and for how long? And how often do I change things up? In this column this year, we’ll continue to discuss our findings on what works better than other options. We have new research findings around what, how much, where, when, and who—in other words, dosage.

Working Groups Make Us Go

Loss Prevention Research Council (LPRC) working groups are the primary way the organization supports retailer member improvement. Working groups get multiple retail experts, solution partners, LPRC staff, and others together monthly to set and discuss priority research and development needs and

LOSSPREVENTIONMEDIA.COM

findings. Here are some key points followed by a list of the groups themselves: ■ LPRC’s eleven working groups focus retailers, solution partners, and scientists collaboratively on specific crime and loss control problems. ■ LPRC members enroll their corporate and field team members into all their priority working groups to simultaneously provide company LP/AP process improvement and individual professional development. ■ Retailer experts drive the working groups’ outputs by working group leaders setting group priorities, running the monthly group calls, webinars, and field trips, and making the working group part of their regular work efforts. Each group strives to generate two to four actionable project reports annually. ■ The working groups also meet at the annual LPRC Impact conference to discuss the year’s work and projects and to plan for next year’s output. ■ The LPRC board of advisors working group committee checks in quarterly with all working group leaders and monitors at least one call to assess the groups’ focus, member experience, and work output. Product Protection Working Group Team coleaders: Adam Hartway, Digital Safety; Corrie Tallman, Walmart; Brianna Betts, CVS Current members: Verizon, Best Buy, Office Depot, Price Chopper, Target, Walgreens, Loblaw, Sam’s Club

Data Analytics Working Group Coleaders: Scott Pethuyne, Justice; Kyle Grottini, CAP Index Current members: Walmart, Meijer, dressbarn, Bloomingdale’s, Loblaw, Ralph Lauren, Target, Office Depot, REI, Price Chopper Video Solutions Working Group Coleaders: Justin Taylor, TJX; Jeana Pantoliano, Bloomingdale’s; Hedgie Bartol, Axis Current members: Price Chopper, Walmart, Office Depot, 7-Eleven, Publix Supply-Chain Protection Working Group Leader: Kevin Taparausky, TJX Coleaders: Mike Combs, Home Depot; Shannon Hunter, Office Depot Current members: Target, Luxottica, Tractor Supply, Best Buy, 7-Eleven, ULTA Beauty, Publix LP Innovation Working Group Coleaders: Tom Meehan, Bloomingdale’s; Stacie Bearden, Home Depot Current members: Target, Tyco, AutoZone, Price Chopper, Ralph Lauren, Verizon, Macy’s, REI

continued on page 57

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LP MAGAZINE | MARCH–APRIL 2017

RETAIL ASSET PROTECTION CONFERENCE 2017

APRIL 9-12, 2017 I HYATT REGENCY NEW ORLEANS I NEW ORLEANS, LOUISIANA

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Opening Keynote: There’s no better place to share the challenges and insights gleaned from retail’s disruption than with the leaders in the industry. Richard Ashworth, President, Pharmacy & Retail Operations, Walgreen Co.

Join more than 1,000 asset protection executives for the best educational program, unparalleled networking opportunities and a buzzing exhibit hall.

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Check Out These Keynote Speakers SESSION:

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Whole Community Preparedness for Evolving Threats & Hazards

Generational Blindspots: How to Communicate Across Generations Hannah Ubl, Gen Junkie, Research Nerd & Communication Wizard, BridgeWorks: The Generations People

SESSION:

Internet Investigations Moderator: Rob Glenn, Director, FEMA Private Sector Division

Aaron Miller, Director, New Orleans Office of Homeland Security & Emergency Preparedness

JoAnne Moreau, Director, Baton Rouge Mayor’s Office of Homeland Security & Emergency Preparedness.

Cynthia Hetherington, President, Hetherington Group

SESSION:

Can You Hear Me Now? The Key to Effective Communication Kimberly Overton, Chief Resource Prosecutor, North Carolina Conference of District Attorneys

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Portable

continued from page 55

Organized Retail Crime Working Group Leaders: Denny Dansak, Kroger; Tony Sheppard, CVS Coleaders: Abe Gonzalez, Bloomingdale’s; Shane Hunter, Walmart Current members: Publix, Walmart, Ahold USA, Walgreens, Target, Best Buy, Home Depot, Tractor Supply, Lowe’s, AutoZone, Verizon, T-Mobile, Macy’s, eBay, DICK’s Sporting Goods, Luxottica

Prevention

Violent Crime Working Group Leader: Kevin Larson, Kroger Coleaders: Basia Pietrawska, CAP Index; Russell Hinds, Walmart; Mike Aldridge, 7-Eleven; Nolan Bomar, Publix Current members: Rite Aid, T-Mobile, Walgreens, CVS, Target, Location Inc., General Growth Properties, Best Buy Retail Fraud Working Group Leader: Sean O’Brien, Target Coleaders: Tom Meehan, Bloomingdale’s; Graham Twidale, 7-Eleven Current members: Walmart, CVS, Macy’s, Ahold USA, Justice, Walgreens, DICK’s Sporting Goods, Office Depot, Kroger LP Strategic Partnerships Working Group Leader: John Doggette, Lowe’s Coleaders: Karen Sinning, Walmart; Andrea Guthrie, DICK’s Sporting Goods; Maria Acosta, Zip Ed Tech Current members: Toys“R”Us, Best Buy, Tractor Supply, Home Depot, Bloomingdale’s, Ascena, Cracker Barrel, CVS, General Growth Properties, Kroger, Luxottica, Publix, REI, Rite Aid

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Food and Drug and Health and Beauty Care Action Team Coleaders: Kevin Larson, Kroger; Ben Friedman, Walmart; Jim Cosseboom, Ahold USA; Scott Ziter, Price Chopper; Renee Micek, Avery Dennison Current members: Walgreens, CVS, Publix, Target, Best Buy, DICK’s Sporting Goods, Luxottica, Meijer, Tractor Supply, REI Specialty Retail Action Team Leaders: Millie Kresevich, Luxottica; Miguel Merino, Ralph Lauren Current members: Sterling Jewelers, AutoZone, 7-Eleven, ULTA Beauty, Verizon Summits LPRC and the University of Florida (UF) are conducting some upcoming gatherings to explore and set research and development priorities. These include the Baltimore/DC Corridor Robbery and Violence Summit on Tuesday, March 21, 2017; Canada Day at the LPRC UF Innovation Lab (date to be announced); and Total Community Solution Colloquy, a law enforcement, retailer, and media gathering at UF (date to be announced). Recommended Reading Space, Time, and Crime (third edition) by Kim Lersch and Timothy Hart describes theory and logic models and evidence around why crime events tend to concentrate in place and time and for specific reasons. The more we know about those mechanisms, the more precise our protective actions to affect specific mechanisms or variables.

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FEATURE

MODERN DATA

ANALYTICS THE VIEW OF ITS IMPACT ON RETAIL FROM THREE LP VETERANS By Stan Welch, LPC

MODERN DATA ANALYTICS

etailers who have made the jump to modern data analytics solutions know that the retail industry has moved past being overwhelmed by too much data and instead is now entering a time where this important data needs to become actionable. To remain competitive, it is vital that retailers use the data at their disposal intelligently, and data analytics is making this easier than ever.

Rick Beardsley Director of Loss Prevention, Safety and Risk Management At Home

Gregg Smith Senior Director of Loss Prevention Five Below

Scott Ziter Director of Asset Protection Price Chopper

To see how loss prevention departments are effectively using their data to drive profits and reduce losses, I reached out to three thought leaders in the space—Rick Beardsley, director of loss prevention, safety, and risk management at At Home; Gregg Smith, senior director of loss prevention at Five Below; and Scott Ziter, director of asset protection at Price Chopper. Our discussions included life before data analytics, how their current applications are utilized, what business impact they have seen, and how they see data analytics evolving over the next few years.

Life before Data Analytics

“For a long time, we used what was built into the point of sale,” stated Beardsley. “Those built-in tools would call themselves exception reporting, but there was no real reporting behind them. If we knew what we were looking for, we could write a query and go look for it, but that’s not exception reporting; that’s just you looking for something based on a tip or a known fraudulent tactic like line voids.” Smith added that their system, in the beginning, consisted of reports that came in the form of Microsoft Excel sheets from their IT department. “Excel can be useful if you already know what you are looking for, but it is not an efficient way to analyze information. That takes time,” Smith noted. Both Smith and Beardsley pointed out how labor intensive their methods were before data analytics. Beardsley’s company, At Home, employed a time-consuming, manual process that involved creating queries that they expected would identify various events or exceptions. If nothing came back, they would then have to brainstorm new exception situations and run queries on them to see if their assumptions were right. “That took up a lot of our time,” reflected Beardsley. Smith noted that he was hired as the first asset protection employee at Five Below. For him, being tasked with building a team from the ground up while also performing the daily activities of an AP department was difficult due to the considerable amount of time he had to dedicate toward mining through the Excel sheets produced by IT. Things were not much better for those with existing exception-reporting tools either. “From the time I started here at Price Chopper, we have always had access to some form of exception reporting,” said Ziter. He went on to add that even though their exception-reporting tool had its uses, it was outdated and not user-friendly.

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“Our internal audit team uses our data analytics system to prepare for required cash and pharmacy audits. Our legal department uses it to research accidents. And our field team uses it to keep a close eye on store performance.” – Scott Ziter, Price Chopper

Price Chopper personnel were limited to the reports that came from their vendor, as well as a few reports that were generated by their IT team. These reports focused on fraud tactics and exceptions that were known to produce some results. “If a new issue arose, it was difficult to research the cause and who or what was contributing to the loss,” Ziter added. This often led to manual manipulation of the data, which resulted in a drain on time. Though their departmental goals are slightly different, all three loss prevention professionals unanimously agreed that their old systems and processes were not sustainable. For them to grow as departments and companies, they needed something powerful, something user-friendly, and something that would do the legwork of analytics for them so that their teams could focus on solutions

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“We have had success in sharing our data analytics capabilities with partners throughout our organization. By aligning our goals across the chain, we can equip ourselves with a broader brush to positively impact overall business operation.” – Gregg Smith, Five Below

and results. They needed a modern data analytics application. Once the decision was made to start vetting data analytics solutions, all three had to comply with corporate directives as well as their individual departmental needs. Smith was told that the company would only invest in products that were scalable. On top of this, Smith added his own requirement. “Finding a solution that would allow a small team to make a big impact was imperative,” said Smith. Ziter and Beardsley both echoed that sentiment. All three had to meet specific financial parameters and include the needs of other departments such as operations, IT, finance, and legal in their search criteria as well. In other words, the product selected had to work for more than just loss prevention and had to allow teams across the business to work smarter, not harder.

A New Era in Data Analytics

The first thing the At Home team noticed about their new data analytics solution was how light it was on their

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IT department. “The biggest challenge was getting the IT group to move up the priority of our project. They provided us with their requirements and set a limit on man-hours to be spent,” said Beardsley. Thanks to the simplicity of the solution’s infrastructure and the help of the support staff, “we were able to get the system up and running three months ahead of projections,” he added. Ziter and Smith both had similar stories, and once the solution was up and running in all three organizations, the impact was instant. “Our team became far more efficient at identifying and correcting issues,” noted Ziter. The ability to easily create complex queries and develop personalized reports had a big impact on their team’s performance. Ziter also added, “The new solution allows us to focus on resolving root causes of loss, not just individual cases.” Beardsley added to Ziter’s observations. “Everything we did became much more efficient. Everything the new software presented to us had a reason behind it. The question during analysis changed from ‘Is this actually an exception?’ to ‘How do we resolve this?’

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Not only are we able to go through our data extremely quickly, but we are identifying fraudulent employees faster too. This is the most important thing to us, because catching problems sooner is the easiest way to minimize the impact of whatever they’re doing on our financials,” noted Beardsley. While improvements were being made in their own departments, all three began to notice that the impact of data analytics was reaching far beyond loss prevention. “Not only has the application helped us to identify fraud and fraudulent activity quickly, but it has also helped us to identify operational opportunities,” said Smith. He went on to add that by allowing cross-functional departments like operations to use the tool, they have been able to identify additional sources of loss, as well as opportunities to increase sales in their stores. “Our operations team uses the software as well,” said Beardsley. “With operations we have built dashboards for district managers that let them see what is going on in their stores at a glance. Many of them use these dashboards

as a report card to rank an individual store’s performance.” Beardsley goes on to add that the new application is one of the better platforms in their company. It provides quick access to vital information for LP, operations, and even finance and accounting, who use it to find specific data that would never appear in their own applications, such as the utilization and impact of employee discounts. Of the three, the broadest adoption of data analytics comes from Price Chopper. Ziter noted that throughout the organization there are over 400 users of their data analytics application, which started out as an asset protection-specific software. “Along with asset protection, our legal department, internal audit team, front-end store operations, and our field teams all use the application now,” said Ziter. One of the surprises of our conversation came from Ziter. “Our front-end operations team used a homegrown system to monitor and balance common daily POS activities like refunds, coupon usage, postage stamp purchases, and charity MARCH–APRIL 2017

“There is so much data out there to look at, and you can spend a lot of time going through it. But if it doesn’t help you accomplish a goal, or increase profits, or reduce losses, it’s a waste of time. And that’s where I see the ultimate benefit of analytics.”

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– Rick Beardsley, At Home

MODERN DATA ANALYTICS donations,” said Ziter. “The flexibility and ease of use of our new data analytics application won them over, and they opted to use it to replace their homegrown system.” Ziter went on to add that the other departments who use the application also take advantage of the flexibility and put it to work for their own needs. “Our internal audit team uses it to prepare for required cash and pharmacy audits. Our legal department uses it to research accidents. And our field team uses it to keep a close eye on store performance,” remarked Ziter. The flexibility, power, and ease of use of the application has allowed it to spread throughout the organization.

The Future of Data Analytics

“As data analytics continues to evolve, our ability to use it will as well,” said Beardsley. “As our ability to pull in more and more external data grows, usage at At Home will take off.” He added that

data analytics takes the guesswork out of translating raw data because the interface presents their data in a more useful way. “As other departments take notice of that, more will jump on board.” Ziter added that he sees usage at Price Chopper expanding as well. “We are always looking for new ways that the application will help us perform better,” said Ziter. “We are currently revising some of our existing queries and reports to better target issues and opportunities. We are also working to take more advantage of new functionality as it comes out, such as alerts that let specific users know when something needs their attention.” Ziter went on to note that as long as new functionality continues to be added, the application’s use at Price Chopper will continue to expand. Smith noted that Five Below sees a slightly different future for data analytics within their organization. Of course, they see other departments jumping on board and using data analytics, but

Smith plans to integrate the application deeper into the organization by opening it up to store users. “We plan on evolving the process by giving our stores direct access to the application. This way they can get firsthand access to analyze their own data, rather than hearing it from somewhere else in the chain.” Smith added that this will allow decisions to be made even faster and on a local scale. Smith wrapped up the interview with this remark: “We have had success in sharing our data analytics capabilities with partners throughout our organization. By aligning our goals across the chain, we can equip ourselves with a broader brush to positively impact overall business operation.”

Final Thoughts

After speaking with these three executives and watching what has taken place in retail over the last few years, one thing is clear—the data analytics

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MODERN DATA ANALYTICS

Retailers who have made the jump to modern data analytics solutions know that the retail industry has moved past being overwhelmed by too much data and instead is now entering a time where this important data needs to become actionable. To remain competitive, it is vital that retailers use the data at their disposal intelligently, and data analytics is making this easier than ever.

revolution is here, and loss prevention is at the center of it. Ziter, Beardsley, and Smith all pointed out multiple times during our discussion that for data analytics to have a real impact, collaboration is key. Loss prevention professionals have always excelled at collaborating with each other on concepts that help them do their jobs better. Now it is time to spread that collaboration skill to other departments within your organizations so that you can use the data at your disposal to not only prevent loss, but also improve efficiencies and increase sales.

Beardsley put it best when he said, “There is so much data out there to look at, and you can spend a lot of time going through it. But if it doesn’t help you accomplish a goal, or increase profits, or reduce losses, it’s a waste of time. And that’s where I see the ultimate benefit of analytics. Modern data analytics applications take your data and present it in the form of actionable items that help improve efficiencies, improve profits, and prevent loss.” Data analytics is no longer just another buzzword. It is the next big thing for success in loss prevention and throughout the retail enterprise.

STAN WELCH, LPC, is a three-decade veteran of the retail loss prevention industry, most recently as vice president of LP for JCPenney. He also held leadership positions at Sears Holdings, Target, Marshall’s, Lazarus Department stores, and Famous Barr. Welch joined Agilence in January 2016 as senior account executive. He can be reached at swelch@agilenceinc.com.

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SUPPLY CHAIN

Test, Do, Learn, and Share

By Maurizio P. Scrofani, CCSP, LPC Scrofani is a well-known supply-chain asset protection professional with over twenty-five years’ experience in retail and manufacturing. He is a prolific writer and frequent speaker at regional and national conferences. Scrofani is a consultant and general partner with MPS Ventures. He was recently named vice president of supply chain security and intelligence for Grupo ALTO. Scrofani can be reached at maurizio@mpsconsultants.com.

ver the years, enterprise needs for supply-chain asset protection (SCAP) have undergone a transformation from lock-and-key security operations to more integrated supply-chain security and facilitation networks. By taking advantage of the latest technology, this evolution is possible. However, too many organizations look to technology as a cure-all. This leads to a false sense of security and weaknesses in the network that are difficult to diagnose without the right team in place. As we look forward to the next frontiers in SCAP, we must think integration. The following is a roadmap, based on my experience, that integrates various business concepts from financial stewardship to organizational culture creation. You might also use it as an à la carte menu not only to solve short-term challenges but also to position your organization to succeed long term.

Connect the Network and Get Organized

Find the right operating and reporting structure to allow your team to thrive and you to spend your time where most needed. As I set out on my own roadmap some years ago, I quickly realized that to build on accomplishments, I would need a structure to institutionalize learning and tackle big projects. I focused first on collaboration and created regions supported by a network of project management teams (PMTs). This structure progressed and socialized ideas in the business and encouraged interfacility, interdivisional collaboration on such topics as audits, green initiatives, investigations, shortage awareness, technology, training, uniforms (yep, those too if you use them), and vendor vetting and engagement. Team leaders were encouraged to become subject-matter experts (SMEs) certified by the Loss Prevention Foundation, American Trucking Association, and International Association of Interviewers. From this experience, the PMT in charge of training enhanced our standard operating manual, which eventually became a digital interactive tutorial. Building on shared knowledge and a “pay it forward” attitude, the network became connected and focused on a singular vision—one team with one goal “to win at all we do.”

Capture Quick Wins

Once the right organization is in place, identify immediate fixes that will help your team gain traction and provide immediate financial benefit that could support funding for larger programs. We upgraded our SCAP network with technological enhancements

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to quickly connect qualitative (CCTV and Regiscope) and quantitative (business intelligence tool) information. The CCTV platform provided multiple advantages: ■ Remote access via PC, smartphone, or tablet ■ Thermal imaging and motion tracking technology ■ Advanced video review on an IP platform ■ Analytics with smart alerts based on a facility profile Maximizing network visibility coverage was invaluable. Capturing, storing, and being able to transmit small clips of video to the appropriate resources minimized time spent investigating. Instituting protocols that allowed off-site support teams to provide more-focused monitoring during high-awareness events allowed for a targeted focus on key assignments without any task interference for the talented team that needed to be “on” all day and every day. Introducing the Regiscope system provided an immediate improvement to a soft-target hardening program. At welcome centers (guard houses), Regiscope can record every inbound shipment, video capture, appointment, and bill of lading that enters and exits a facility. At facility entrances, it records the entry and egress time of every visitor and temporary employee as well as their purpose for visiting (and can flag them as a no return as well). The Regiscope helped crack a multimillion-dollar cargo theft investigation that connected specific suspects to high-shortage appointments within a very short window of deployment.

Examine the Field

With the right teams in place supported by core technology, turn your efforts to improving speed-to-market for your enterprise product strategies. Improvements such as 24/7 yard access and other risk-mitigated throughput initiatives for select facilities will move your merchandise closer to the consumer while maintaining or increasing security layers. Having a well-trained officer working the welcome center at all hours will make receiving inbound and outbound appointments more fluid and flexible while getting your freight one step closer to its final destination. In addition to the operating benefits, 24/7 yard access mitigated cargo theft risk by keeping our freight out of unsecured parking lots. More than 80 percent of reported US cargo theft occurs in unsecured parking lots. We focused on that risk as measured by the volume of freight held in our secured yards over weekends—a portion of which could have been parked in unsecured lots in the past. continued on page 68 LOSSPREVENTIONMEDIA.COM

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such as loss avoidance and fraudulent stop orders. A crucial aspect of our financial stewardship was properly managing outsourced resources. Our SCAP team was able to secure and document significant financial benefit of double-digit millions in recovered losses by preventing fraudulent orders and closing cargo theft investigations with greater efficiency.

Implement a lane risk management program to keep your inbound cargo safe and secure. We used origin and destination zip code to identify the highest-risk inbound shipments in our supply chain. We then partnered with high-risk vendors to create a GPS program to track all high-risk or high-value shipments. The GPS tracking program was expanded to encompass all inbound shipments from our high-risk vendors, not just those on high-risk lanes. In addition to the covert GPS program, all new carriers were vetted for safety, financial, and security best practices as an additional layer of review before entering contract negotiations.

Create Culture

Celebrate progress and give your team the credit they deserve. Transparent and authentic interaction, recognition programs with committed quarterly network calls, and an annual team-branded digital magazine served as effective vehicles for improving and maintaining strong communication and employee engagement in the SCAP mission. A commitment to open, honest communication and “people first, mission always” was evidenced in improved manager trust scores. We gave our team a voice with an inclusive digital magazine to celebrate success and share knowledge across the network. An officer of the month is selected in each facility based on the officer’s monthly performance and their personification of core values. Each quarter, one of the many SCAP supervisors is selected as leader of the quarter, and one of our many national asset protection investigators is selected as investigator of the quarter based on exceptional results (not heavily weighing on stats but overall performance as an SME). To extend our culture outward across our network, we converted our guard houses into welcome centers. This engagement moment with the carrier and driver community has shown that we genuinely care about their experience of moving our freight.

Gain Visibility and Measure Progress

To best align SCAP to business goals, establish a technology tool set to analyze performance and document progress. With the benefits of quick wins proving our approach, we were positioned to create greater value for the enterprise. The focus at this stage was to provide the SCAP team with improved tools to effectively and efficiently execute at a high level while containing payroll expense and minimizing span of performance.

Once the right organization is in place, identify immediate fixes that will help your team gain traction and provide immediate financial benefit that could support funding for larger programs.

Look Ahead

The two linchpin tools for one of the networks I designed were APPro™ and a fraud portal. A business intelligence platform, APPro (designed with strategic provider Ministry of Ideas out of the UK) supports digital auditing, reporting, and a case management system that provides real-time information and analysis to our SCAP teams. The introduction of APPro also marked the start of SCAP mobility. The application was designed with tablet use in mind, in addition to PC and smartphones, to allow our SCAP officers to enter audits and information as it happened from anywhere in our facilities. The fraud portal was created as a digital interface to expedite communication between SCAP and digital fraud teams. Over a three-year period, double-digit millions of dollars’ worth of fraudulent orders were identified and stopped before shipment.

Build the Business Case

Align your technology strategy to the enterprise’s critical business strategies and show your results. To keep our team focused on quantifiable progress, we established strict financial discipline. With a keen eye on expenses, we focused on adding value to the enterprise by closing large-value investigations, minimizing risk exposure, and creating a unique relationship within the virtual supply-chain community. Effective adoption of technology allowed us to increase value without increasing cost. Keeping payroll expense flat, we were able to positively impact key risk indicators

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Build on momentum to tackle the toughest challenges before you even know what they are. With a roadmap laid out and in motion, we were able to move forward to increase visibility so that we could address weaknesses in the supply chain before they became issues. We partnered with our GPS provider on enhanced dashboarding that tracks potential risk while in transit using both GPS and, most recently, EDI data inputs. This integrated view of high-level order data, carrier information, and shipping events should allow you to review estimated time of arrival, lane risk, inventory management, and risk mitigation as the supply chain is performing in real-time. (I refer to it as a supply-chain visibility initiative or SCVI.) We converted our training programs, policies, procedures, audits, and case management to digital platforms, all accessible via the SCAP portal, to allow for real-time information and communication across all screen sizes and devices. To further support the SCVI, I worked with third-party solution providers to develop a unique and one-of-a-kind overt/covert camera and locking platform with GPS and RFID technology that can be used on and in trailers for outbound deliveries. As the group intelligence improves and the tool set evolves to support it, you may reach the point where you can predict potential issues before they impact operations. Teams may also come forward with new solutions that all can leverage. With true stochastic analysis techniques, you should be able to plan, define probability, and model based on predictive analytics with the confidence to act.

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- -   - -  

       

  

    

       

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LPM DIGITAL

Navigating a Year of Transition F

By Jacque Brittain, LPC, and Kelsey Seidler Brittain is editorial director, digital, and Seidler is managing editor, digital. The two manage the magazine’s digital channels that includes multiple daily e-newsletters featuring original content and breaking news as well as vibrant social media conversations. Brittain can be reached at JacB@LPportal.com and Seidler at KelseyS@LPportal.com.

C oncur Loss prevention professionals tend to travel a lot. Concur for Mobile allows users to manage travel itineraries and expense reports from their mobile devices. Loss prevention executives can approve or reject expense reports submitted by their team members, and the app can even be used to import credit card activity data, add event attendees, book suggested hotels, and keep track of car mileage. Available for iOS, Android, Windows Phone, and Blackberry.

ollowing are a few article summaries that can provide you with a small taste of the original content available to you every day through our daily digital offerings, which are offered free through LossPreventionMedia.com. In addition to our daily newsletter, a comprehensive library of original content is available to our digital subscribers at no cost to you. Visit our website to gain access to all of our content. You can also follow us on Facebook (search LP Voices), Twitter (@LPmag), and LinkedIn.

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Top Apps for Loss Prevention Professionals

F acebook and LinkedIn Social media apps get a bad reputation for being time-wasting distractions, but for the loss prevention executive, they’re a must. Not only do they allow you to keep in touch with family and colleagues while you’re on the road, but they serve the important function of being an investigative loss prevention tool. People—including criminals—often publicly post where they are and what they’re doing on social media. Use this information to your advantage. Both apps available for iOS, Android, Windows Phone, and Blackberry.

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By Kelsey Seidler

A slew of mobile apps are making the day-to-day lives of loss prevention professionals everywhere a little bit easier. The very best business and travel apps improve productivity and efficiency for busy LP pros who are always on the go. With the thousands of options available, however, it’s sometimes difficult to decide which apps are worth your while and which are a waste of time. The LP Magazine team, with some valuable input from the members of a panel at the 2016 Restaurant Loss Prevention and Safety Association event, created this list to get you started.

B urner This app has also proven to be valuable to loss prevention professionals during the course of their investigations. It permits users to create and dispose of phone numbers for any situation that might require disposable contact information. The average smartphone owner may use a Burner-generated phone number for online sales transactions (Craigslist, eBay). An LP pro may want it for online fraud investigations and controlled buys. Available for iOS and Android.

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D ark Sky This popular weather app offers hyper-localized, precise weather forecasts that provide up-to-the-minute information on impending rain or potentially dangerous storms. The app is customizable—you can set your own weather alerts for anywhere in the world to be delivered to your device as a push notification. Sophisticated, well-designed maps offer a contextual view of storm patterns that you can manipulate to view over a given time period. Available for iOS and Android.

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C amScanner This app functions as a mobile PDF creator for scanning any and all documents. Users can conveniently digitize and share travel receipts with colleagues via email or save business cards to their smartphones. Enhanced features allow users to extract text from images for editing and annotating purposes. The app also includes collaboration and security tools, such as document password encryption, for added functionality. Available for iOS, Android, and Windows Phone.

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MARCH–APRIL 2017

M y TSA This app from the Transportation Security Administration gives travelers easy access to frequently sought information, such as which items can pass through security checkpoints, which airports support TSA PreCheck, and what the weather conditions are at any airport. Users can also check approximate wait times for security checkpoints and share their own wait time to help others. Available for iOS, Android, and Blackberry.

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LOSSPREVENTIONMEDIA.COM

L P Magazine No “Top Apps for LP” list would be complete without the inclusion of the LP Magazine app. LP Magazine has been delivering top-quality news and educational content for over fifteen years. The invaluable app provides users with the latest content about retail loss prevention, security, LP technology, upcoming conferences, and more. It offers simple navigation and is updated daily. Available for iOS and Android.

changing merchandise—all factors that undercut the classic department store model.

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What’s Next?

2017 Retail Trends—Are We Really Witnessing the Death of Department Stores? By Jac Brittain, LPC

We often talk about the growing demands of the retail customer and how this can influence retail performance. But it’s not just retail sales that have been influenced by the tides of change. In fact, by most accounts it was a strong holiday season for America’s retailers. Consumer confidence has surged, thanks to low unemployment, and reports have indicated that holiday spending was up double digits over last year’s comparable sales. We can no longer simply focus on the way our customers spend. Today, retail trends demand that our attention clearly focuses on the way customers shop.

A Shift in the Shopping Experience

The traditional image of shopping malls packed with shoppers isn’t necessarily fading away, but it’s definitely providing us with a different picture. Several department store chains have performed poorly and/or below expectations leading to retail icons such as Macy’s, Sears, Kmart, Kohls, JCPenney, and others facing forbidding challenges in the new year. It’s no secret where shoppers are turning instead of department stores. According to multiple reports, US consumers spent a record high $91.7 billion online over the holiday season alone, up 11 percent over 2015. Discount stores have also performed well, thriving at the expense of their higher-priced department store counterparts. On the other hand, both Macy’s and Sears have recently announced store closures in the works. The closing of many of the department stores that anchor malls across the country are also likely to change the way traditional malls operate. Such changes can impact lease agreements, overall mall traffic, and a host of other factors. Traditional department store retailers can’t reverse retail trends that have been years in the making, and must accept the need for a new way of approaching the business. Consumers have grown steadily more comfortable making their purchases online, and at their own convenience. They’ve come to expect low prices, deep discounting, and a huge selection of rapidly

Does this necessarily point to the death of the retail department store? Not necessarily. But the ongoing struggles of department stores during the 2016 holidays should serve to reinforce the idea that retail is evolving quickly and perhaps at a much faster pace than many traditional retailers may have anticipated. Survival clearly depends on the retailer’s ability to react to these changes, embrace retail technology, adopt omni-channel resources, and aggressively pursue new and innovative ways to appeal to the retail customer. By the same respect, the picture might not be as grim as some anticipate. Despite these recent closures, the United States is still considered by many to be oversaturated with stores, with an excess of available shopping space. According to a recent article on Business Insider, the United States has 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia—the next two countries with the highest retail space per capita. “Across retail overall, the US has too much space and too many shops,” said Neil Saunders, CEO of the retail consulting firm Conlumino. “As shopping patterns have changed, some of those shops are also in the wrong place and are of the wrong size or configuration.” If retailers in other nations can find success, there’s no reason why we shouldn’t be able to adapt as well. It’s going to be another year of transition for many retail companies, and for some it may conclude as a year of reckoning. But as traditional department store retailers try to compete in an environment in which consumers can buy virtually any item by browsing online and without setting foot in a store, all signs point to a need to adapt and change. In loss prevention, this only further underscores our need to evolve with the needs of the business. Finding ways to enhance profits becomes paramount in times of transition, and our efforts to reduce losses can have a direct and lasting impact on the success of the business. Keeping current with the dynamic retail trends that shape the retail industry exponentially increases our value to the organization, and will ultimately influence how the profession is perceived and how the future of retail will unfold.

Would a Lost-and-Found Audit Find These Problems? By Garett Seivold

Some 43.8 percent of loss prevention departments operate a lost and found, according to a survey of 238 executives by Security Director's Report and LP Magazine in 2012. Any mishandling or theft of found property while under LP’s control is sure to give the department a black eye and reflect poorly on those in charge. What does it take to avoid that embarrassment? Tight controls that quickly raise red flags of wrongdoing are critical. Loss prevention staff members often have access to many assets, including found property, so conducting complete personnel screening and hiring honest officers is obviously an important first step. But a retailer can’t put blind faith in

LP MAGAZINE | MARCH–APRIL 2017

individuals in charge of valuables regardless of its background check process—it needs layers of security in case a bad apple is in the batch. Case in point: Orange County, CA, prosecutors charged a security officer with grand theft and commercial burglary for his scheme to steal money and other items from the lost and found of the Surf and Sand Resort, a luxury hotel in Laguna Beach. The officer was a twenty-one-year veteran of the Los Angeles Police Department moonlighting as a security guard. As part of his job, the officer had access to the hotel’s computerized lost-and-found system, and he allegedly accessed the system and changed a record showing that hotel staff had found $2,000 in a hotel room. He changed the room number and the item description to a gold watch and then falsified that the watch was returned to its owner. He then stole money from the safe, according to authorities. A surveillance camera in the hotel’s security office where the lost-and-found safe was located aided the arrest. Is the answer to simply refuse to operate a lost and found? Not necessarily, as such a decision can frustrate shoppers and may not eliminate bad press. For example, on December 9, 2016, the news agency MassLive reported that a Worcester couple tried to turn in a found cell phone to a Walgreens employee but were told the store did not operate a lost and found. After the couple went home with the phone, two men broke in their house, one brandishing a machete, to retrieve it.

Problems Found in Handling Lost Items

It’s instructive to look at an actual program audit to understand problems that can plague a lost-and-found program. Several years ago, a change purse containing cash and credit cards was found at UCLA Health System and accepted into the lost-and-found system operated by its security department. When the property owner came to claim the item, it had mysteriously disappeared from the security department safe. Administration subsequently called for an audit of the system, which took in an average of sixteen items per week, from cell phones to sunglasses. The audit’s recommendations provide real-world best practices for retail loss prevention professionals to consider. Foremost, minimize access to found property. UCLA’s security department safe had dual-locking capability, meant to require two employees to jointly open it. Security office staff had one key and security supervisors the other. But the review discovered that poor key control had resulted in a training coordinator/supervisor obtaining both keys, and he accessed the safe without another employee present. Another problem—the keys were not marked “do not duplicate,” and a back-up to both safe keys were stored in a key box in the security manager’s office, which was accessible to the training coordinator/supervisor. Controls to consider: ■R equire dual-controlled access for the assignment of backup keys, so more than one employee is present for access to a backup key box. Just as a safe should require dual-access controls, dual-access controls should be placed on access to the safe’s backup keys. ■M ark all keys with “do not duplicate.” ■ I mplement a key control log to maintain accountability over access to the found-property storage facilities.

MARCH–APRIL 2017

C hange keys to the security department safe whenever individuals who have had access leave the department. Secure all found items in locked receptacles. The audit found that some valuables were placed in the security department safe, but others were placed in desk drawers, and large items were stored in an open, back-office cubicle, neither of which were secured. Tag and secure found items in zippered plastic bags or envelopes to keep contents intact. The program review found that found items were neither consistently labeled nor protected before being dropped into the safe or placed in storage drawers. These steps are crucial. Affix a date sticker—and other identifiers, in case more than one item is found on a given day—to all found items before they are placed in storage. Improve record keeping of found items. During the investigation of the missing change purse, it was discovered that the log sheet page detailing intake of the item was missing from the logbook, thereby compromising any attempt to reconcile records against inventory. In addition, the program was not keeping detailed descriptions or historical records; for example, “book bag” didn’t include itemized content descriptions. It’s wise to standardize logs for receiving lost-and-found items, and to include: ■A data field to record the name and phone number of the finder. ■A detailed description of items and/or inventory of contents. ■D ate of receipt of property. ■A rea for staff initials. ■A rea to indicate when items are placed in the safe. ■A rea for acknowledgment of transfer of property between departments (from customer service to loss prevention, for example). ■A rea for LP staff to record dates and times that they attempt to contact property owner if information is available. ■T he property owner’s phone number and date the property was released. Consider other best practices. The case study suggested some other best practices to consider: ■R equire property owners to sign the log when claiming their items(s). ■R equire any transfer of found items to require a signature on the log, including if the item is removed for disposal. ■P eriodically review logs to ensure that found property is recorded per policy. ■M aintain lost-and-found logs and copies of property transfer lists for two years from the date the item was found. ■M aintain the logbook for found property in a secure area separate from where property is stored, so as to ensure records remain available in the event of unauthorized access to the property. ■O n a surprise basis, reconcile lost-and-found inventory to the lost-and-found log. ■D on’t allow a backlog of found property to accumulate. Unclaimed found property should be dealt with according to policy, typically after ninety days. ■P eriodically ensure that procedures and instructions for processing found property are not outdated and that they reflect current operating procedures and requirements. For example, don’t allow security procedures to call for daily transfer of ■

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property from customer service to the loss prevention office if transfers actually occur on a weekly basis.

Former LP Executive Represents Retail Industry at White House Meeting By Jack Trlica

Jill Soltau, Target CEO Brian Cornell, Tractor Supply CEO Gregory Sandfort, and Walgreens Boots Alliance CEO Stefano Pessina.The delegation was accompanied by RILA Executive Vice President Jennifer Safavian. Following the meeting at the White House, the group went to Capitol Hill to meet with Senate Finance Committee Chairman Orrin Hatch (R-UT), House Ways and Means Committee Chairman Kevin Brady (R-TX), Senator Bob Corker (R-TN), and Senate Majority Leader Mitch McConnell (R-KY).

March - April 2017

Articles inside

PRODUCT SHOWCASE

PEOPLE ON THE MOVE

INDUSTRY NEWS

PARTING WORDS

MY TURN

FUTURE OF LP

EVIDENCE-BASED LP

LPM Excellence

SUPPLY CHAIN

BENCHMARKING

EDITOR’S LETTER

LPM DIGITAL

CERTIFICATION