May - June 2016 by Loss Prevention Magazine

May–June 2016 | V15.3 LOSSPREVENTIONMEDIA.COM

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Table of Contents 6 EDITOR’S LETTER

Growing the Magazine Staff By Jack Trlica

8 ON THE WEB 10 RETAIL SPONSORS 12 INTERVIEWING

RFID in Retail

To Record or Not Record

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

The journey to adoption by the retail enterprise

26 CERTIFICATION

Certification Benefits Both Retail and Non-retail Segments

By Lee Pernice, LPC, Contributing Writer

Interview with Zuzana Crawford, LPC, PayPal

28 FUTURE OF LP

LP Associates of the Future

By Tom Meehan, CFI

42 PERSPECTIVES BY VERVILLE

Forty Years of Researching Retail Loss Prevention

It’s Never Personal; It’s Business. By Claude R. Verville, LPC

54 STRATEGIES

Using Social Media to Predict Shrink By David Speights, PhD, The Retail Equation

A retrospective with Professor Dick Hollinger

56 ASK THE EXPERT

Alternatives for Preventing Retail Theft

By James Lee, LPC, Executive Editor

Interview with Dr. Lucia Summers, Texas State University

60 PARTNERING WITH RETAILERS

How eBay Works with Law Enforcement By Dave DiSilva

70 EVIDENCE-BASED LP

Readying Retail for Terrorism’s New Battleground

Working Together against Violent Crime By Read Hayes, PhD, CPP

71 SOLUTIONS SHOWCASE - Detex - InstaKey - Tyco Integrated Security

How retailers are addressing stores as possible targets

74 INDUSTRY NEWS

Profitect Wins First RILA Asset Protection Innovation Award

By Garett Seivold, Editor, Security Director’s Report

75 PRODUCT SHOWCASE 76 DIGITAL DIALOGUE No One Winning Approach to Loss Prevention Culture By Jacque Brittain, LPC

79 PEOPLE ON THE MOVE 79 CALENDAR 80 ADVERTISER DIRECTORY 81 VENDOR SPONSORS 82 PARTING WORDS

Watch and Learn

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It’s Good to Be an Observer By Jim Lee, LPC

By John Wilson, Executive Editor, LP Magazine EU

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Editor’s Letter

Growing the Magazine Staff

ike most start-ups, when we launched the magazine fifteen years ago, we operated on a shoestring. With just two or three on the payroll, we worked out of our houses, using a select few freelancers to fill the gaps. Over the years we’ve added new staff to keep up with the demands of a growing publication. Here are our newest team members.

Garett Seivold

Garett Seivold is a veteran journalist in the corporate security space. Since 1998 he has been the principal editor of what evolved into the Security Director’s Report (SDR). Last year the magazine Garett Seivold acquired the SDR, which primarily published a subscription-based monthly printed newsletter as well as in-depth reports based on proprietary research. We are currently transitioning away from the printed newsletter to a digital newsletter that will be made available to the LP Magazine audience. While much of the content is not retail loss prevention specific, it will benefit those in our industry who are responsible for physical security, executive protection, and other corporate security-related activities. Garett will also write feature articles, such as the one on page 45 titled “Readying Retail for Terrorism’s New Battleground.” He will also assist with surveys and research we do for ourselves or in partnership with others.

Kelsey Seidler

Kelsey Seidler joined our team last summer as our digital managing editor to help us develop our new digital platform that launched in late 2015. She’s a millennial who grew up in today’s digital world with experience editing digital

Kelsey Seidler

LOSS PREVENTION MAGAZINE

content for BNP Media, a large publisher of business-to-business magazines. Although millennials sometimes get maligned for their work ethic as Bruce Tulgan’s research has found, Kelsey has shown nothing but diligence and professionalism taking on the task of managing our new website and daily newsletters. At the same time she is completing her master’s degree in technology and communication from the University of North Carolina’s School of Media and Journalism. Like Garett, who is also a graduate of Chapel Hill, we are extremely happy to have both Kelsey and Garett bring their journalistic skills to the magazine team.

Digital and EyeOnLP Team

Garett and Kelsey are the newest members of the magazine team. They join Jacque Brittain, LPC, and John Selevitch, who have worked for the magazine for several years supporting our digital, webinar, and social media channels. Our EyeOnLP video team that includes Kat Houston, LPQ; Justin Kemp, LPQ; and Karen Rondeau are part-time, yet significant, magazine contributors we borrow from their full-time jobs with our sister organization LPM Media Group that produces internal awareness and employee training programs for retail LP organizations and solutions providers. Working at a small business often requires wearing multiple hats and working long hours. We’ve done that for fifteen years and will continue to do so to provide the best communication products for retail loss prevention professionals—and now a broader security audience.

Jack Trlica Managing Editor

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

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

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

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On The Web

Editorial Board

EyeOnLP Team Covers the RILA Asset Protection Conference LP Magazine’s EyeOnLP video team provided exclusive video coverage of the Retail Industry Leaders Association Asset Protection Conference in Dallas April 17-20. To view daily recap videos, visit LossPreventionMedia.com/video.

New LPM Website

Our new digital platform has hundreds of current and archived articles aligned by key categories: ■ Data protection ■ Employee theft ■ Inventory shrinkage ■ Loss prevention ■ LP technology ■ Professional development ■ Retail fraud ■ Retail industry ■ Retail security ■ Shoplifting and organized retail crime ■ Supply-chain security

Free Special Reports

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

Shawn Blankenship Vice President of Asset Protection, The Home Depot

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

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

Bob MacLea Senior Vice President, Loss Prevention, TJX

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

In addition to ongoing original articles on a variety of topics, our new website offers select special reports on focused topics that will provide both an overview as well as detailed information to help LP professionals understand the key issues impacting the industry.

Bill Heine Senior Director, Global Security, Brinker International

Subscribe Now Go to LossPreventionMedia.com to sign up one time to access all the current, past, and upcoming information from the number one publication and resource for the loss prevention and asset protection industry.

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

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Frank Johns, LPC Chairman, The Loss Prevention Foundation Mike Lamb, LPC Vice President, Asset Protection & Safety, Walmart Stores US

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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 Director of Loss Prevention, Delhaize America Mark Stinde Vice President, Asset Protection, 7-Eleven Paul Stone, LPC Vice President, Loss Prevention and Risk Management, Best Buy Robert Vranek Vice President, Loss Prevention Belk Keith White, LPC Senior Vice President, Loss Prevention and Corporate Administration, Gap Inc.

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interviewing

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

To Record or Not Record

e just returned from the International Association of Interviewers’ Elite Training Days in Minnesota at the Best Buy corporate headquarters. We had a number of wonderful speakers covering topics ranging from false confessions, the PEACE interviewing model, and Making a Murderer confession tapes evaluations, plus some tips on leadership. All in all it was an interesting and thought-provoking two days of instruction. One topic that seemed to form a connecting thread through many of the topics was a discussion of confessions,

The recording provides outstanding feedback to the interviewer that can’t be replicated by simply sitting in and observing the conversation. Undoubtedly, the supervisor will miss any number of potential critiques because he is listening in real time. contaminated statements, or improper tactics used by interviewers. The program started off with Steven Z. Kaplan, a litigator with the Fredrikson & Byron law firm discussing a case he worked on that was a miscarriage of justice. He along with other lawyers helped establish the individual’s innocence in a rape-homicide. He went on to discuss some of the causes of false confessions, including presentation of false evidence, age and mental capacity of the suspect, and length of the conversation, to name but a few.

Contaminated Confessions

One of the fundamental issues being addressed by legislatures across the country is the failure of police to record the interview and interrogation of suspects. A number

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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.

of states have mandated the audio-video recording of police interrogations of suspects. The law firm Jenner & Block has an ongoing research project run by a senior partner to catalog states and cities that mandate recording of interviews and interrogations and the police response to having to record these conversations. This study is available on their website at jenner.com. Kaplan suggested the introduction of evidence by the police could contaminate the conversation and provide the suspect with information to make his confession seem credible when compared against the investigative findings. He went on to say that the use of false evidence and the extended length of interrogations can increase the possibility of a false confession occurring. Having a recording of the interview and interrogation can identify if the investigators fed the suspect investigative findings that were later used to corroborate the confession. Unfortunately, simply identifying points in the conversation where information was leaked to the suspect does not clearly identify the suspect’s statement as a false confession. It simply suggests that if the suspect was innocent, the crime scene information could have been introduced by the police. However, if the suspect was guilty, he would’ve already known that information regardless of whether it was leaked by the police or not. Simply stated, the discussion of evidence should be limited during the interview and interrogation so that contamination does not occur. Michael Yoder, supervisory special agent with the FBI’s Behavioral Analysis Unit, discussed personality types that fit along with the discussion of false confession, which as we mentioned threaded through most of the presentations. Pulling the two previous discussions together, David Thompson, CFI, discussed the implications of these two presentations while discussing and evaluating the documentary Making a Murderer. Evaluating the recorded conversations in the Dassey interrogation, the group was able to critique the conversation and potential missteps that may have affected the suspect’s decision to confess. It was this session that brought up a significant conversation about organizations currently using recordings in their dishonest employee interviews. It is this topic we want to focus the remainder of this and our next column on.

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Training and Accountability

As most of you know, we have been actively recording our interviews since we opened our doors as Wicklander-Zulawski in 1982. While we use the recorded interviews to illustrate the techniques and strategies in our training sessions, we also use them as a means to monitor and measure our investigators. If a supervisor is simply evaluating the effectiveness of the interviewer based on the subject’s written statement and whether or not the case was successfully closed with an admission and written statement, she may be missing crucial information on the process. The recording provides outstanding feedback to the interviewer that can’t be replicated by simply sitting in and observing the conversation. Undoubtedly, the supervisor will miss any number of potential critiques because he is listening in real time. The other problem with this mentoring and evaluation strategy is it requires the evaluator to be present at the time of the interview. Being present may be cost prohibitive or time sensitive because of other commitments.

One of the most widely reported studies of the use of body cams was conducted by the City of Rialto, California, which reported use-of-force incidents reduced by 59 percent and citizen complaints by 87.5 percent. The recording provides an accurate reflection of what happened, when it happened, and how things were said that could never be replicated by an in-person evaluator. Review of the recording can provide significantly more relevant critiques to the new interviewer since he can actually see his behavior and hear his own words and the effect that they are having on the subject. There’s also an opportunity to evaluate behavioral clues that may have been present or verbal statements that could have led the interview in an entirely different direction. We find in our after-action evaluations of WZ interviewers that we can be particularly successful in identifying difficulties or strengths in the conversation. Many of the participants in the Elite Training Days agreed that their organizations’ legal teams are reluctant to utilize recordings feeling that an investigator’s testimony is sufficient to defend the company against litigation. It is our feeling that times are changing, and there will be an expectation of a recording that will satisfy what actually occurred during the conversation between the investigator and subject. We are currently seeing a significant change in policing across the country first with the advent of dash cams in squad cars and more recently with body cams worn by

may–june 2016

officers. The quality of these videos and perspective is often limited leaving open to interpretation what was actually happening at the time of the incident. But without question, the preliminary response from police departments using cameras has been a significant reduction in citizen complaints. One of the most widely reported studies of the use of body cams was conducted by the City of Rialto, California, which reported use-of-force incidents reduced by 59 percent and citizen complaints by 87.5 percent. Other departments have seen similar reductions in use-of-force and citizen complaints since the use of body cams was instituted. It is likely that the body cams significantly alter the police-public encounters since both are consciously aware the conversation is being recorded. This should translate into a significant savings on litigation costs and expenses associated with these types of use-of-force or complaint incidents. Clearly, the officers are aware they are being closely monitored and are thus focused on adhering to their training in handling field incidents. Recording in an interview also seems to encourage interviewers to stick closely to the training model chosen for their conversation in a more formal interview setting in the station. The use of the recordings holds the officers accountable to the community in both the formal interview setting at the station and infield encounters. In our last expert-witness engagement, the plaintiff’s attorney broached the question of recording the interview. During our testimony relating to recordings, we focused on the differences between an established interviewing room in a law enforcement facility and those who would have to record in a remote location or store facility that was not set up for recordings. In response to these questions, we noted that there were cost considerations a company must consider in providing its investigators with recording equipment, as well as maintaining and storing it, preserving the recordings, and reviewing the recordings, to name but a few. In the business world, there is going to be a close examination of the return on investment before any capital expenditures are made. Because of the random nature of recording in the field, there would also be issues relating to recordings that were incomplete because of equipment problems, audio that was garbled due to microphone malfunctions or background noise, and potentially the space available to remotely store the recording. This does not even mention the possibility of human error compromising the operation of the equipment, which may come into play. In our next column, we will continue with the discussion of recording or not recording interviews. We will focus on some aspects of selling recording interviews to the organization and overcoming objections to its use. We will also discuss some of the practical aspects relating to legal issues of recording conversations in the workplace. Finally, we will focus on the benefits of monitoring and measuring interviewers using field interviews as the basis for self-improvement. In the meantime, if you have been successful implementing recording of interviews within your organization and would like to share how you were able to sell the concept or if you have not been successful and would like to share the obstacles you are facing, we will share those thoughts and some recommendations in the next column. Please forward to DZulawski@W-Z.com.

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FEATURE

RFID IN RETAIL

the journey to adoption By Lee Pernice, LPC, Contributing Writer

RFID IN Retail

adio frequency identification, or RFID, has been touted as a magic elixir for retail for more than twenty years. Sometimes referred to as an intelligent alternative to standard electronic article surveillance (EAS) systems, a path to better inventory tracking, and a supply chain replenishment tool, the technology at times struggled to find a use case that would make a real impact on retail operations. This article will take a look back at where it all started to where we are today, attempting to capture the milestones, obstacles, and triumphs along the way. So let the journey begin.

A Little History

The technology is widely believed to have been invented in 1945 as an espionage tool for the Soviet Union and used during World War II by allies and Germany alike to identify aircraft as either friend or foe. Over the years it has been used to track everything from automobile parts during the assembly process to pharmaceuticals in warehouses and livestock on farms.

for the technology with a wide array of frequencies in use by a number of different companies and in different parts of the world. Originally funded by Proctor & Gamble, Gillette, and the Uniform Code Council, the center was formed to develop an electronic product code (EPC), a global RFID-based item identification system to ultimately replace the Universal Product Code (UPC). While the EPC is more prevalent today with billions of items now tagged each year, the goal of phasing out the UPC was never realized for a number of reasons, foremost being cost, volume, and the need for a human-readable format. As a early member of the center, Kevin Lynch, LPC, Tyco’s executive

A 2014 survey of 120 major retailers polled by Chain Link Research found improved inventory accuracy, which translated into reduced out-of-stock and better on-floor availability of merchandise, was the number one reason for implementing an RFID program. RFID started to gain attention, both good and bad, in the retail world in the mid-to-late 1990s. The formation of the Massachusetts Institute of Technology Auto-ID Center in 1999 by Sanjay Sarma, PhD—who also co-founded the RFID software firm OATSystems (acquired by Checkpoint Systems in 2008)—helped legitimize the process of applying the technology to meet retail needs. Before the formation of the center, there were no standards

director of business development, reflected back on the early days at the center and said, “It was always my belief that my personal time and the company’s (at the time Sensormatic Electronics Corp.) financial investment may–june 2016

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in the MIT Auto-ID Center was well worth it. Proctor & Gamble was a forward-thinking company. It spent considerable dollars in helping create the RFID standard that is now EPCglobal®. Once the retailers that were escorted through the lab realized that ultimately RFID would help to provide increased throughput at their front end and provide greater inventory accuracy, they started to help fund the effort as well.”

RFID IN Retail In 2005, the RFID Research Center opened at the University of Arkansas as part of the Sam M. Walton College of Business under the direction of Bill Hardgrave, PhD. Initially funded by companies such as ACNielsen, Deloitte, Gallo Winery, Tyson Foods, and Walmart, it focused its work on technology deployment, data analytics, and business cases for deploying RFID primarily for retail and the retail supply chain. It was there that Claude Verville, LPC, the former vice president of loss prevention, safety, and hazmat for Lowe’s and now the president Claude Verville of Shrink & Safety Solutions, and his executive team got one of their early demos of a proposed RFID application for retail. The demo consisted of a shelf-sweeping incident where the

RFID technology detected an anomaly tied to the number of razor blades removed from the shelf as it related to what would be considered average product removal. The event triggered a camera to capture an image and send an alert to a store manager. “I felt the concept was good in theory, but at that time, there was no tie-in to the exit. Getting a notification and an image of the theft after the fact had value, but I felt it fell more into the loss reaction category than the loss prevention category. I still feel today that while knowing what is being stolen is important, preventing the theft needs to be a priority,” commented Verville. Through most of the 2000s, RFID in retail development concentrated heavily on case and pallet tagging in a warehouse environment and throughout the supply chain. Leading this charge was Walmart, which implemented a project across a number of its warehouses and distribution centers and asked key suppliers to participate

by tagging their pallets and cases with RFID sensors. Limitations to the technology’s ability to read the tags in a somewhat harsh warehouse environment with tall ceilings and metal racking along with the high costs of readers and tags caused the programs and widespread adoption to languish through the balance of the decade. But perhaps the biggest drawback the technology faced was the lack of a clearly defined use case or cases that could deliver a proven return on investment. “I think the industry was slow to use based on cost to implement and trying to determine ROI,” stated Stan Welch, vice president of business development for the Zellman Group, senior account executive for Agilence, and a former loss prevention executive for several major retail chains. Case and pallet tagging was not delivering the desired results, and privacy issues relating to item-level tagging at the time made many

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RFID IN Retail retailers leery of going down that path. Those privacy issues were later proven to be unfounded, but the attention that certain privacy groups received had an early impact. “For many years, RFID was considered a promising option for retail applications. The industry just hadn’t found the right fit to take advantage of its capabilities,” stated Kim Melvin, director of global solutions and product marketing for Tyco. “Tracking inventory through a warehouse with traditional barcodes was fairly efficient. It was once that inventory made it to the store that the real problems starting to emerge, and a viable use case began to take shape.”

The Era of Dot.Com and the Dawn of Omni‑channel Retailing

smart phones, tablets, and social media. Consumer expectations are at an all-time high, putting unprecedented demands on retailers across all channels. And while customer service has always been a determining factor in the success or failure of a retail brand, never has it been more important or more challenging to deliver thanks to this thing called omni-channel retailing. At its core, omni-channel is defined as a multichannel sales approach that provides the customer with an integrated shopping experience. The customer can be shopping online from a desktop

The art and science of retailing is an ever-changing dynamic. What worked five or ten years ago is probably no longer relevant in today’s

Perhaps one of the biggest understandings to come out of the deployments so far is that RFID is not a one-trick pony. The benefits the technology delivers are cross-functional and cross disciplines and departments. It has the ability to fundamentally change the way retailers operate their businesses. retail world. Growth from building new stores or entering new markets no longer delivers the results an organization needs to be successful. Without a doubt, one of the biggest factors affecting retail as we know it today is the impact the Internet has on the way consumers shop. Sometimes coined “the connected consumer,” this new breed of shoppers is more educated on the products they seek to buy through the use of the Internet,

or mobile device, by telephone, or in a bricks-and-mortar store, and the experience would be seamless. According to the Home Depot’s 2015 fourth quarter investor call, the company saw its online business grow may–june 2016

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25 percent year-over-year contributing more than $4.5 billion in revenue. And of that number, more than 40 percent of those customers chose to pick up the merchandise in store, a form of omni-channel fulfillment. “Inventory accuracy has never been more important than in today’s omni-channel world,” stated Su Doyle, director of RFID applications for Checkpoint Systems. “When a customer orders something online for store pick-up

RFID IN Retail and the products is not available, it creates a recipe for disaster. That customer doesn’t care if the product is missing due to theft, paperwork error, or an unforeseen out-of-stock. The end Su Doyle result is the same.” Even before omni-channel retailing came into prominence, retailers realize the importance of inventory counts. For most retailers, a reserve was taken at the end of the year to account for deviations between book and physical inventory. While painful enough to the company’s bottom line, the toll that missing inventory was taking on customer satisfaction levels was not as obvious.

Use Cases for RFID In Retail—Finding The ROI

A 2014 survey of 120 major retailers polled by Chain Link Research found

improved inventory accuracy, which translated into reduced out-of-stock and better on-floor availability of merchandise, was the number one reason for implementing an RFID program. According to Checkpoint’s Doyle, several of the company’s apparel retail and department store customers have increased on-shelf availability by 20 percent with RFID and experienced a 10 to 15 percent sales uplift for RFID-tagged merchandise. As it relates to omni-channel fulfillment, its customers have reportedly been able to double the fulfillment speed with near-perfect order accuracy when using RFID-enabled process automation. An early proponent of the technology, Bloomingdale’s Vice President of Shortage Control Roger Blazek found the accuracy that RFID delivers to item-level inventory was one of the main driving forces for adoption. “Using RFID to course-correct inventory throughout the year instead

of waiting for the annual inventory processes helps retailers make better business decision. The accuracy of the technology also contributes to confidence in the data, which can take a lot of the guesswork out of the equation when planning the next strategic direction,” stated Blazek. Other prominent use cases for the technology include product location and loss reduction. An emerging business case revolves around lowering on-hand inventory levels while not impacting customer service levels, although this application is in the early stages of adoption. Many times retailers actually have the inventory on-hand, but it is stuck in a backroom, noted Melvin. RFID can streamline locating missing inventory through the use of mobile handheld readers significantly saving both time and money and a potential lost sale. This is particularly important in complex merchandise categories where color

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RFID IN Retail and size variations matter most, such as fashion and footwear. “RFID helps us better manage replenishment items and leverage our owned inventory by ensuring that merchandise that is already in our stores is ready and available for purchase, not sitting in a stockroom. Customers expect to find what they are looking for immediately, not wait for an associate to search through back stock to find it,” said Blazek. As it relates to loss reduction, Verville believes that RFID is an essential tool for LP teams as well. In many companies, it is the LP team that performs daily, weekly, or monthly cycle counts of high-cost, high-margin, or high-risk merchandise to identify shrink trends and proactively analyze why, what, when,

for Bloomingdale’s, agreed with Verville and added, “Having the visibility to more frequent and accurate inventory counts helps us better analyze the Chad McIntosh discrepancies between book and physical inventory, identify potential areas of vulnerabilities, and quickly re-tool our loss prevention programs, particularly during high-peak times.”

“Using RFID to course-correct inventory throughout the year instead of waiting for the annual inventory processes helps retailers make better business decision. The accuracy of the technology also contributes to confidence in the data, which can take a lot of the guesswork out of the equation when planning the next strategic direction.” – Roger Blazek, Vice President of Shortage Control, Bloomingdale’s and where the losses are coming from in order to adjust LP, operations, and merchandising strategies. “RFID can help to greatly accelerate the cycle counting process, saving both time and payroll dollars,” stated Verville. “By the very nature of what we do in loss prevention, asset protection, and risk management, accuracy of information is the foundation of the programs we create and execute to improve overall business results across departments and the company.” Chad McIntosh, vice president of loss prevention and risk management

Lessons Learned So Far Perhaps one of the biggest understandings to come out of the deployments so far is that RFID is not a one-trick pony. The benefits the technology delivers are cross-functional and cross

may–june 2016

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disciplines and departments. It has the ability to fundamentally change the way retailers operate their businesses. To be effective and successful, RFID programs and their sponsors need executive level buy-in at the highest level and a commitment from all areas of the company. “Perhaps more than any other technology introduced into retail since the barcode, RFID has the ability to shape and improve the way retailers operate,” said Brian Boyle, RFID continued on page 24

LISTEN. SOLVE. DELIVER.

RFID IN Retail continued from page 22

business development for Tyco. “From merchandising, store operations, loss prevention, and supply chain to the executive offices, the technology can have a profound impact on the operations given the right level of support from all parties involved.” Boyle went on to emphasize the importance of beginning any RFID program with a pilot. It is here that the use case or business case is built out and where expected results can be clearly defined. “We started our RFID journey with a small pilot in a single department in one of our locations

program across a large retail chain. Decentralized operations require consistent processes and compliance to ensure data quality and ROI,” she explained.

Parting Advice

No program can be successful without a plan whether tactical or strategic, and RFID programs are no different.

“Every aspect of your business needs to be analyzed to see how this technology application can be effective. From inventory accuracy to order online for in-store pickup to warehouse fulfillment operations, the right, well thought-out program can deliver benefits not previously seen.” – Claude Verville, LPC, President, Shrink & Safety Solutions to prove out the concept and develop the business case,” stated Blazek. “Today, all of our locations are RFID compatible and capable of accepting RFID-tagged merchandise.” Another key element to implementing a successful program involves managing the volume of data that RFID produces. Doyle stated that her company works closely with its customers to understand the value the data brings and how to incorporate RFID benefits into daily operations using task management. “Showing the store-level employee how their work impacts and benefits the organization—so they don’t feel like it is just another task or step they are required to do—is important to consistent adoption of any RFID

“Every aspect of your business needs to be analyzed to see how this technology application can be effective. From inventory accuracy to order online for in-store pickup to warehouse

fulfillment operations, the right, well thought-out program can deliver benefits not previously seen. Every year, I put together my strategic business plan that covered the next three to five years, and every year RFID and big data was part of that plan,” concluded Verville. Whether you are just starting your journey or are continuing down the path, may you find increased sales, profits, and customer satisfaction along the way. Bon Voyage.

LEE A. PERNICE, LPC, is a freelance writer with more than twenty years’ experience in the retail loss prevention industry. She has held director-level positions with leading high-tech and security solutions providers specializing in the areas of communications and marketing. Pernice is LPC certified and has a thorough understanding of the technologies used to reduce shrink and improve profits for retailers. She can be reached by email at leepernice@gmail.com or 954-682-8551. may–june 2016

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certification

Certification Benefits Both Retail and Non-retail Segments T

Interview with Zuzana Crawford, LPC Zuzana Crawford, LPC, currently serves as a senior investigator on the PayPal Global Asset Protection team. She is responsible for investigations into possible criminal activity directed at PayPal platforms to protect both the PayPal brand and its users. Crawford has seven years of criminal fraud investigations experience within the e-commerce and financial space.

intellectually and in terms of thinking bigger picture. When I found the curriculum for the LPC, I didn’t have to think too much; I knew it was a right thing to do.

Was the course what you expected?

his is another series of interviews with working LP professionals who have earned their LPQ or LPC certifications from the Loss Prevention Foundation (LPF) to hear in their own words why they pursued certification and how it benefited their careers. Zuzana Crawford’s perspective is unique in that she completed both the LPQ and the LPC.

Why did you decide to pursue certification? Was there something specific that influenced your decision? We all own our own professional development. Striving for a continuous and consistent approach to identifying new opportunities of advancing our education is crucial and very important to me. I was looking for a course that would not only give me what I was looking for in terms of the theoretical knowledge that would set me for success in my previous and current roles within the asset protection team, but more importantly, for a course that would also inspire and challenge me

When it comes to loss prevention, we all know that the boundaries between online and off-line and other business segments are fading, if not completely disappearing. As such, the information covered in this course makes it broadly applicable and usable not only in the traditional retail setting, but in the financial sector alike. 26

may–june 2016

It actually wasn’t; it was so much more than I expected. Similarly to the LPQ, I have to reiterate that taking the course was an amazing experience, not only because of the quality and comprehensiveness of the study material, but also because of the way the course is written inspired me on many different levels. It opens up one’s mind and inspires you to think differently. It encourages us all to see a bigger picture and shows us what difference the knowledge and practical application of this material can make in both our careers and every day roles. And most importantly, it certainly makes us more well-rounded and skilled business professionals, leaders, and subject-matter experts in our chosen field.

What was the most eye-opening information that was part of the curriculum? This course study is designed mainly for loss prevention professionals in the retail industry. However, when it comes to loss prevention, we all know that the boundaries between online and off-line and other business segments are fading, if not completely disappearing. As such, the information covered in this course makes it broadly applicable and usable not only in the traditional retail setting, but also in the financial sector. It amazed me how simple things like, for example, having a job description and a mission statement are taken for granted and how the impact of not having them might sometimes be overlooked. This course enabled me to recognize each step my management follows. It is a recipe listing the steps that can be tweaked and adjusted the way we need them. It is an enabler to help us succeed.

If you could offer one key takeaway to someone currently considering getting certified, what would it be? Personal development and professional growth via studying opportunities like LPC is the best decision we can ever take. Why should the LPC certification be given a preference over other courses out there in terms of the takeaways? The answer is simple— it’s a granular and comprehensive knowledge resource covering all aspects of the loss prevention industry in one interactive, thought-inspiring, and inspirational course that will guarantee one’s mind-set change at the same time. Why would you want to miss it? |

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Do you think certification offers a professional advantage over those that have not been certified? None of us know it all or will have an opportunity during our careers to get an exposure to all aspects of the loss prevention or asset protection profession. This is usually dictated by the needs of the company we work for, our position and time available, by our interests and opportunities, and essentially by the choices we make. In my opinion, the LPC certification accomplishes several things. Apart from providing a very comprehensive overview of the major aspects of the profession, it also covers many other ones that we might have none or a very limited knowledge about. No matter where the career takes us in the future, I know for sure that whatever it is I learned will stay with me moving forward and will help me make more informed decisions in any situation or challenge that will be thrown at me. The professional advantage of having this certification can also be viewed as simply being recognized by others for having a certain knowledge level within the loss prevention sector, and it validates in the eyes of others that I did invest in my professional development. Belonging to the LPQ and LPC family is without any hesitations a good thing. It creates professional trust, and it helped me to open many doors that I never knew ever existed.

Would you recommend certification to others? I would recommend this course to anyone who is passionate about our profession and is prepared to invest time and energy to take their career to the next level. The broad application of the comprehensive knowledge is definitely a unique asset and advantage of this course, a course that is challenging and taking us on a journey at the same time.

Newly Certified

Following are individuals who recently earned their certifications.

Recent LPC Recipients Bret Graddy, LPC, Sears Holdings Shaun Hilton, LPC, TJMaxx William Ives, LPC, Gulfstream Goodwill Industries Charles Lindow, LPC Jayne McGrath, LPC, CFI, Sears Holdings Heather Ryder, LPC, CVS Health Brandon Smith, LPC, Walmart Stores Adam Wollman, LPC, Sears Holdings

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Future of lp By Tom Meehan, CFI

LP Associates of the Future T

he Loss Prevention Research Council (LPRC) Future of LP Working Group looks to the horizon for loss prevention issues that are sure to plague the industry in the near and long-term future. Collaborating with other retailers, as well as relying on the research produced by the LPRC, we as asset protection professionals can make sure we’re taking an objective and scientific approach to dealing with LP issues. This collaboration occurs in monthly conference calls and at the LPRC Impact conference, which occurs October 3–5 this year at the University of Florida in Gainesville. One issue discussed in this group is what the LP associate of the future will look like.

What and Who

Hiring new people is always tricky, balancing their current qualifications versus the current requirements of today and the evolving challenges of tomorrow. Consider this—a loss prevention associate starts his career looking for shoplifters physically taking items out of the store. Then the job evolves into detecting associates trying to pull one over on the point-of-sale system and then detecting fraud from an organized retail crime ring. With the more ways we as LP professionals try to prevent and detect crime, criminals evolve their behavior to defeat it. In the era of ever-evolving technology, the world of loss prevention needs to keep up. While marketing departments are using machine-learning algorithms to determine whether or not to send an individual customer a flyer advertising shoes, loss prevention is toiling in Excel putting together bar charts for high-shrink departments. Not that the information isn’t useful—it’s an illustration of how far LP has come and how far it still needs to go to be a thriving part of the business. With the Future of LP Working Group, we asked LP professionals and store managers to consider what are important characteristics of an LP associate today and what those skill sets will look like down the road. The survey captured the feedback of nearly 200 respondents.

Focusing on the Now

Starting with the top-rated characteristics for current loss prevention associates, qualities that require engaging with others and having a good head on their shoulders rank higher over other skills. The social aspect of the LP associate, as

may–june 2016

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

well as being able to communicate the impact of an investigation to the store and company, take precedence over more technical or analytic qualities. Additionally, knowledge of physical systems through experience is a desired skill for current LP associates. Many respondents noted that the current LP associate really has to leverage the current technology to its fullest as many companies do not have the time budget allocation to experiment with new technologies that are not yet “tried and true.” These are all very traditional skills for LP and even law enforcement. These are mainly soft skills that encourage cooperation between store staff and LP. The ability to make solid business decisions also encourages a certain amount of autonomy in the choices an LP associate makes. This makes sense because a lot of their decisions to investigate or detain an individual typically have to happen in a short period of time. Otherwise, they may lose the opportunity to make an apprehension.

While marketing departments are using machine-learning algorithms to determine whether or not to send an individual customer a flyer advertising shoes, loss prevention is toiling in Excel putting together bar charts for high-shrink departments. Looking Ahead

With greater interconnectivity of technology, it appears that the loss prevention associate can no longer rely

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continued on page 30

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solely on good investigative skills and intuition; however, those characteristics will remain as a backbone for them in the future. With the availability of data and the various ways it can be looked at, the future LP associate should be looking to detect certain crimes before they happen or conduct their surveillance more in line with the “hot spot” policing tactics employed by law enforcement.

may–june 2016

When looking to the future, many of the characteristics for current associates are still important but need to take a more evidence- and logic-based approach to new problems. As data becomes more available to AP professionals, the field will have to become more accustomed to looking at its own information and drawing conclusions from it. Problem-solving and analytical skills will likely dictate how an AP associate spends time investigating. Having a background in Excel and being able to visualize data will allow the AP associate to quickly identify problematic departments, as opposed to having them wait to receive data analysis results from a centralized portion of your organization. As I’ve mentioned in previous articles, it’s easier to teach a data person LP than it is to teach data analysis to an LP person. Being a good business partner is integral to any company’s success. Many of us are still relying on employee training that is dated and doesn’t consider how the retail landscape has changed over the years. Even here, we still have AP training videos where the people look like they just came from a filming of Saved by the Bell. Studies have been conducted regarding the impact of different training methods on differing age levels and found that there is no one-size-fits-all-ages training. It’s important to keep this in mind because if we are expecting future LP associates to adapt their skill set to a changing environment, we’d better be doing our part to make sure the training is in line with our future expectations. Remember—we’d love to get you and your organization in the LPRC and working with us. Discussing what the future LP associate and key pieces of training they will need is just one of many issues we’re working together on in the Loss Prevention Research Council’s Future of LP Working Group.

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interview

Forty Years of Researching

Retail Loss Prevention

A Retrospective with Professor Dick Hollinger By James Lee, LPC, Executive Editor

INTERVIEW Editor’s Note: Richard “Dick” Hollinger, PhD, is a professor at the University of Florida in Gainesville who studies employee dishonesty and has overseen the National Retail Security Survey for the past twenty-five years. As he nears retirement, Dr. Hollinger reflects on the changes he has observed in the loss prevention industry over his career and the attitudes and approaches that remain opportunities. EDITOR: What does retirement mean to you? HOLLINGER: To me, it means that

my thirty-three-year career here at the University of Florida will come to a close, but not full closure. I’m going to become what’s called a “professor emeritus.” I’ll still be advising one or two graduate students who are finishing their dissertations. I will still be playing a role, but I won’t be teaching daily undergraduate courses or seminars. My time will be dictated by my desires rather than the university’s desires. My wife, Candy, and I can travel more, and perhaps do some retail consulting and speaking. EDITOR: How is your retirement going to impact your relationship with retail and loss prevention? HOLLINGER: Last year I reached out

to Bob Moraca at the National Retail Federation (NRF) and told him that I had plans of retirement. He wanted to know what the future of the National Retail Security Survey (NRSS) would be. It’s something that, because of my impending retirement, I’m not going to be able to direct alone. And I was having trouble getting funding for it. But they wanted to continue it, so I thought we may be able to work out a mutually beneficial relationship. So we all sat down and figured out a way for the NRF to carry out the survey. I would help out as a contributor, editor, and co-principal investigator. But their research unit would actually carry out the data collection, taking that responsibility off my shoulders. And then eventually, I think this will become something that they will do on their own.

Hollinger receiving his doctoral degree March 17, 1979, with his wife, Candy (left), and his mother, Eleanor (right). EDITOR: Will the project be changing at all? HOLLINGER: While gradually phasing

me out, they will still be maintaining the integrity and direction of the project, and hopefully maintaining or increasing the response rates—currently around 100 participating companies. EDITOR: What has the issue been with response rates recently? HOLLINGER: Part of the future of

retail is that in some ways, the industry is shrinking in front of us as companies acquire each other. As a function of that, there are fewer companies to interview and survey. As I wrote in my March–April column, there are also fewer directors of loss prevention. Companies seem to be cutting back on their senior loss prevention people, so there are fewer actual people to fill out the questionnaires. So many of the folks that I had counted on who were regular participants in past years may–june 2016

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have been outplaced…I think that’s the new terminology. It sounds ominous, doesn’t it? EDITOR: Do you think that the NRF will include non-NRF members in its solicitation for the National Retail Security Survey? HOLLINGER: They always have. We

merged our datasets of names and companies. The solicitations are going out. But to be honest with you, many of the Retail Industry Leaders Association (RILA) members, the big-box stores, and some of the non-NRF members have never participated at as high a level, and that worries me. There still are these two organizations that have some overlap, but also some special constituencies. I had always hoped that this would be a retail study—not an NRF study or a RILA study or a Food Marketing Institute (FMI) study—but it would be a study that the whole industry could rely

INTERVIEW

The main trend that I’ve seen over the years—leveraging technology, moving away from people catching people toward technology catching people—has been geared primarily toward the shoplifter. I think employee theft is the hardest of the pieces of the pie to have a direct impact on because of that. upon without bias or hidden agendas. It would be the bellwether—sort of like the uniform crime reports that the FBI produces—that everybody could fall back on and use. I hear from loss prevention executives that they keep getting

more and more surveys from various groups. My hopes are that the National Retail Security Survey will continue and will be the primary data source for loss prevention and shrink. We’ll just have to see how it turns out.

EDITOR: How many years has the NRSS been in existence? HOLLINGER: Read Hayes and I did the

first study in 1991. It was a two-pager, front and back, more of a brochure than anything else, but it was the beginning of the National Retail Security Survey. And there was one year that I did not do the survey because I was out of the country on sabbatical. So this year will be twenty-five years. EDITOR: You are well known for your survey, but tell us more about the primary studies throughout your career on dishonesty in the workplace. HOLLINGER: Employee theft research

is really how I got into this field. That was my dissertation and then became a Federal Justice Department grant. So the Theft by Employees project is what got me interested in shrinkage because internal theft is such a big part of total loss. After that project I started getting asked to come to conferences. So it was

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LP Magazine | may–june 2016

INTERVIEW the employee theft research that really got people’s attention. Then when Read Hayes, Bart Weitz, and I started doing this survey, we realized that we would have to include all the different sources of shrinkage, including shoplifting, which is a big piece of the pie as well. But you’re right, I’ve done more papers, more books, and more research on employee theft and employee dishonesty than I have on probably any other topic. EDITOR: What changes have you seen over the twenty-five years of the survey in which slices of the shrinkage pie are the biggest? HOLLINGER: When we first started

out, a lot of people who were filling out the survey told me that they really couldn’t divide this pie up very easily. They had this thing called shrinkage, which was their loss, and they knew what that was. But where the loss came from, where it originated, was a much more difficult thing because they didn’t have an audit trail to easily determine where the losses were coming from. Then we started pressing retailers to give us some more accurate numbers, so the numbers started to get more stable. Last year, 2015, was the first year that we actually saw shoplifting slightly exceed employee theft as a percentage of the whole. I don’t know exactly what to make of that. I think it probably has something to do with the attention and perhaps the behavior and serious involvement of professional shoplifters—the ORC groups—that are hitting stores and doing some very serious damage to those shrinkage rates. There still is this problem of the internal theft, the dishonest employee, but maybe retailers are doing a better job of controlling internal theft while still being victimized by the professional organized retail gangs. EDITOR: Even given the pace of improvement in technology and methodology in the industry, we’re still seeing similar rates of employee theft. Do you think that internal theft is just a cost of

Hollinger on his boat practicing for retirement. doing business that retailers will have to pay no matter what? HOLLINGER: The main trend that

I’ve seen over the years—leveraging technology, moving away from people catching people toward technology catching people—has been geared primarily toward the shoplifter. And it’s much more difficult to catch employees, particularly because employees know how the system works, where the cameras are, how to disarm the tags, how to shut the system off, and basically how to avoid getting caught. I think employee theft is the hardest of the pieces of the pie to have a direct impact on because of that. There’s also this huge problem that retailers seem to not be able to get their handle around, and that is how to select a staff of people that will give them the high level of dedication and commitment to the organization. EDITOR: Have you seen a greater or lesser emphasis by LP in educating employees on dishonesty or creating training programs to prevent dishonesty? HOLLINGER: It has been my

impression that many of these awareness programs were dismissed by employees as not really being valid or effective because they were in many ways more may–june 2016

LOSSPREVENTIONMEDIA.COM

of a wish by the employer than a reality. And many of the ones I looked at very early in my career were very draconian. I remember looking at videos that essentially said that if you steal, you’ll go to jail, and your life will be over. And we know that’s not the case. And in many ways employees know that. They know that they can get away with more than employers let on. And they also know, to some extent, that retailers are reluctant to prosecute. I remember talking to loss prevention directors in the very early days of my research on this, and in many ways, employee theft is an embarrassment. It says we have hired people, they have worked alongside of us, we have trained them, we have made them aware of the loss, and yet they still steal. And in many ways, that paradox is still with us. EDITOR: Then how best should retailers discourage employee dishonesty? HOLLINGER: It turns out that our

best indirect measure of shrinkage is employee turnover, which is a sad commentary because it says that many retail employees see retail employment as a temporary job, not a career. I gave a lecture just the other day, and I asked how many of my students worked or have worked in some aspect of retail,

When retailers have a highly ethical management team, pay a living wage, give sick leave, provide daycare, provide their employees with the kinds of expectations that one gets in a genuine career, then shrinkage is under control, and profitability goes up. and most of their hands went up. And then I asked how many were contemplating a career in retail, either in sales or merchandising or in loss prevention, and after they stopped laughing, all the hands went down. Retail is still not viewed in the same way as other jobs. Most of my criminology students want jobs in law enforcement, legal firms, the FBI, or Homeland Security. They want careers that will last beyond the current holiday season, so to speak, and they want jobs that pay well. And that’s still a problem with retail, where many retail employees are still paid minimum wage. Yet companies that do pay better actually have lower shrinkage rates. If you pay people better, you have lower turnover, you have higher levels of dedication, and the employees now have some “skin in the game” because it’s their company too and their profits. And if the company is doing better, they will get increased hours and increased wages. So they begin to realize in those circumstances that it’s in the best interest of the store and the employee to have lower shrink. And one of the ways to do that is to pay people more. But unfortunately, many retailers see retail employees as temporary, as marginal employees, much like we see agricultural workers here in the state of Florida. When the oranges are done and the tomatoes are finished ripening, everybody gets laid off. And the same thing happens in retail right after the Christmas season. So until retail can convince young, bright people, both in loss prevention and in merchandising and other areas, that retail can be a career, I think we’re going to continue to have serious problems with internal theft and employee dishonesty. EDITOR: In the past you’ve used the phrase “trickle-down ethics”—does that apply here?

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continued on page 38 LP Magazine | may–june 2016

INTERVIEW continued from page 37 HOLLINGER: Although the survey

is anonymous, there are many loss prevention directors who I have come to know personally who have confided in me about their particular companies. And when they have a highly ethical management team, pay a living wage, give sick leave, provide daycare, provide their employees with the kinds of expectations that one gets in a genuine career, then shrinkage is under control, and profitability goes up. I’m not sure why there aren’t more retail chains that have looked at these models and realized that you get what you pay for. I think trickle-down ethics does work, and responsibility and care for the workforce does have a trickle-down effect on the employee. They begin to realize that this could be more than just a job; it could be a career. It could be something that they could invest their lives in. EDITOR: Do you sometimes think that there may be many C-level executives who would rather hear about a big investigation than a theft prevention program? HOLLINGER: I think any C-level person

in an organization would be impressed by a large successful investigation, just as we are in the public, whether it is drugs or smuggling immigrants or a retail theft case. We’re always attracted by the big cases, and we look at it from a law enforcement perspective. I tend to view loss prevention more from a human resources perspective than from a law enforcement model. Clearly we’re enforcing laws, and clearly we are establishing standards, but from what I can tell you after almost forty years of research, how you treat people makes a difference. And I think the magic in the process is simply convincing the employee that it’s in his or her best interests to increase the honesty of the workforce and also of the shoppers. And if that happens, then everybody benefits—higher sales, lower shrinkage, and higher profitability. But you’re right, C-level executives oftentimes tend to look at “what have you done for me lately” or maybe “what

Professor Hollinger presenting the results of the National Retail Security Survey at the 2011 NRF loss prevention conference in Dallas.

C-level executives oftentimes tend to look at “what have you done for me lately” or maybe “what have you done for me in the last hour” as opposed to “what is the overall trend” and looking at the bigger picture of how to reduce shrinkage. have you done for me in the last hour” as opposed to “what is the overall trend” and looking at the bigger picture of how to reduce shrinkage. EDITOR: What is your opinion of organized retail crime (ORC) as an influencer in the LP community? HOLLINGER: I remember the first

book that I read on shoplifting. Mary Cameron’s book published back in the early 1960s, had a whole chapter dedicated to professional shoplifters. They’ve always been out there. ORC is not new; we’ve just been focusing recently on how sophisticated they are and, especially, how they have been may–june 2016

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using online auction sites as opposed to flea markets or other ways of liquidating stolen assets. But I would argue that in many cases, these huge ORC cases—while they are real, and I’m not trying to diminish their importance—do tend to distract from the day-to-day shoplifters. Read Hayes has a typology that he has developed over the years. There are professional shoplifters who are very sophisticated and use shoplifting to make a living. But there also are what he calls “primary household shoplifters” who are just trying to get through the day and who are stealing enough to get around their shrinking

INTERVIEW budget. Then there are people who steal by necessity because they have no food or can’t afford necessities. There are so many different variations of shoplifting, we sometimes just look at the big cases and get distracted. The analogy that I like to use is that of the leaking faucet. Yes, when one of your pipes ruptures, you instantly know something is wrong because you see that the carpet is wet and you’re splashing through your house. But when you look at the larger loss of water, or in this case the loss of profitability, that ruptured pipe is dwarfed by that washer that hasn’t been replaced in twenty years. That leaking faucet, that drip, drip, drip—that’s the traditional shoplifter that, in many cases, we’ve forgotten about in our zeal to shut down these ORC cases. I really do believe that there are these big ORC cases, but in retail, we always seem to be in search of the silver bullet. We want that one solution that will stop shrinkage or lower it to a point where it won’t be a problem anymore. And I

think every time we think we have found that silver bullet, whether it be RFID or digital cameras or cracking down on ORC gangs, we soon learn that there’s still shrinkage and still at unacceptable levels. So I think we have to look at this more from a global, holistic perspective rather than just focusing on whatever the sexiest topic is at the moment. EDITOR: Doesn’t it appear that the silver bullet has always been predicated on a new type of technology—a new camera or new tag—that is almost always focused on external theft? Where has the silver bullet been that focuses on the behaviors, training, motivation, and development of employees to be dissuaded from stealing? HOLLINGER: I think the issue is the

notion that somehow we can buy a new technology and install it, and then shrinkage will just dissipate, will go away, instead of investing in people who are the heart of retail. The retail shopper

LP Magazine | may–june 2016

is a person, and the retail employee is a person. And until the retail employee sees a benefit in trying to control losses in their store—and I use that pronoun purposefully, “their store”—until they buy into the loss, there isn’t a camera, there isn’t a tag, there isn’t a technology in the world that will completely solve the problem until it is seen as a cooperative problem in which the employees are a part of the solution. I’ve always argued—and sometimes been laughed off the stage—that this is a problem that can’t be easily solved with technology. Now, that said, many of the supporters of the National Retail Security Survey, over these many years, are companies that sell very sophisticated products that can be used as tools in solving these crimes or providing a deterrent. I don’t want to minimize their effect, but they have to be used by an educated employee staff and not just the loss prevention people. It has to be the sales staff working hand in hand with the loss prevention personnel.

INTERVIEW EDITOR: Over the nearly four decades of your career, have you seen changes in LP leadership thinking or changes in C-level thinking as they view LP? HOLLINGER: I think that’s been one of

the biggest changes. I remember when I first started approaching retailers about doing research back in the 1970s, we’d ask to talk to the person in charge of loss prevention and security, and we’d have to go down to a basement office. And it was pretty clear that their level of influence in the company was right up there with grounds and maintenance, sanitation, and garbage disposal. Loss prevention was a necessary task that needed to be done, but they clearly were not sitting around the table where the most important decisions were being made.

EDITOR: The LP industry has struggled for years when it comes to recruiting talented young people into the industry. From your perspective as a professor, how can the LP industry more effectively recruit young, bright people out of college, not only from criminal justice but also from business and finance and other disciplines? HOLLINGER: It’s not that difficult.

Every university worth its salt has a career day, where representatives from various industries come to the university and talk with the students. It’s advertised across the campus. The students bring their resumes, and they can connect one-on-one with hiring representatives from a bunch of different companies.

I want to express my thanks to the industry for letting me play around, so to speak, in the retail industry and hopefully make some contribution. But for the most part, I think this has been a win-win situation. I have benefited greatly from this relationship and hopefully the industry has as well. That’s the biggest change. Now we have chief security officers. Now we have vice presidents of loss prevention. If I look at my career, one of the things that makes me the happiest is that now loss prevention sits at the table equal—maybe not in all cases but often—to the influence of human resources or to the merchandising vice presidents. And over the years we’ve been doing this survey, shrinkage has been going down. That’s the good news. The bad news is it’s not zero yet. But nevertheless, I remember in the ‘90s we were reporting average shrinkage numbers around 3 and 4 percent. In some cases, some firms had 5 percent.

I can’t tell you the number of times that we have had career day and my criminology and sociology students have come back disenchanted because the only people that these companies sent to career day were people in either merchandising or HR. These students would walk up, naively, and say, “I’d like to talk to somebody in loss prevention.” And the HR rep would say, “Oh, gee, that’s a shame. Nobody from that part of the business is here. Here’s a number to call, and here’s my card. I’ll see if I can connect you.” If every retail company sent an LP representative along with the merchandising people and the HR may–june 2016

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people so that these students had someone there to talk to and give them some hope that there was an LP career opportunity in their futures, this problem would go away overnight. Companies have needs, and students have needs. It’s just a matter of putting these two together in the same room and not having to go through some obtuse website for recruiting purposes. And it doesn’t have to be individual companies. I think the industry could do a better job of making use of career days, even if it means having vendors send representatives, or a retail group, not just retailers themselves. EDITOR: Certainly, we at the magazine and those in the LP community owe a big debt of gratitude to you for all of your contributions to the industry. We wish you and Candy a lot of wonderful time together in retirement. We hope that you will continue to be a contributing writer to the magazine because we always look forward to your observations on what’s going on in the LP industry. HOLLINGER: Oh, you can count on

that. What I want to say to the retail industry is to thank them for allowing an outsider to be a part of this outstanding segment. I remember when Dan Doyle proposed my presence on the Loss Prevention Advisory Board at the NRF, and I said, “You know I’m not a retailer.” He said something to the effect of, “We’re tired of talking to each other because we don’t have anything new to say. We want someone who has the guts to come in and tell us that there are other solutions to consider.” For me, as an academic, that’s what we’re trained to do—think outside the box and come up with new solutions and look at new theories. So I want to express my thanks to the industry for letting me play around, so to speak, in the retail industry and hopefully make some contribution. But for the most part, I think this has been a win-win situation. I have benefited greatly from this relationship and hopefully the industry has as well.

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PERSPECTIVES by verville

It’s Never Personal; It’s Business. I

By Claude R. Verville, LPC Verville is the former vice president of loss prevention, safety, and hazmat at Lowe’s. He joined the company in 1993 and was promoted to VP in 1998. Verville started his LP career in California at Robinsons-May, a subsidiary of The May Company, where he worked thirteen years leaving as director of investigations. He has been a leading voice in the LP industry as a member of the Loss Prevention Foundation board of directors, LP Magazine editorial board, and the Retail Industry Leaders Association steering committee. He can be reached at ClaudeV@LPportal.com.

’m pretty sure most if not all our readers have heard this line on many occasions during their careers. Whether you are a loss prevention professional at the store, district, region, or corporate level, you have likely been on the receiving end of this phrase. As a recipient of this phrase over the years, I was fairly certain on some occasions that the issues and decisions being made had in fact been determined based on individuals’ personal opinions and experiences and often with limited exposure to my team’s winning formula. Even more troubling was when successful performance was not a key element in the decisions. As I heard on some occasions, “Claude, this is not about your team’s failure to perform to the established objectives; this is strictly a business decision.” Oh, okay then. In particular, a negative situation where not all perspectives had been solicited—which I realized was not always a requirement when tough business decisions had to be made—just made accepting the news and the subsequent outcome that much less palpable for me to digest. I will never forget one experience I had in my early years as a vice president of LP and safety. During a weekly executive store operations meeting, I was advised of a decision that required me to eliminate approximately fifty district-level LP and safety manager positions—one-third of my field district staff—within the next thirty days. As is often the case at the corporate level, I was not aware of or briefed on this decision prior to this weekly staff meeting. As anyone can imagine, I was less than enthusiastic, joyful, and supportive when all eyes turned toward me to gauge my response. As I sat in shock and thought about the personal impact this was going to have on these highly productive, committed, loyal employees, the next topic of conversation quickly turned to how many vehicles would be given out at our upcoming national sales meeting. One of the suggestions was to increase the number of vehicles. I, without much forethought, blurted out, “Maybe we give away a few less vehicles instead of reducing my field staff by 33 percent.” Later that evening, I received a heads-up call from one of the executives who had been in the meeting, who happened to be a huge supporter of my team. This executive understood my frustration and took the time to explain to me the importance of always remaining composed during such moments. He then informed me just how upset the lead executive was at my response and advised me to call

may–june 2016

the lead executive and apologize before more time elapsed to avoid any further consequences. I took his advice and contacted the lead executive. Do you want to guess what line was bestowed upon me? You guessed it—“Claude, it’s never personal; it’s business.”

Recognizing Your Supporters and Understanding Your Adversaries

Years later, I was told in confidence how close I actually came to being a former employee—one of my many encounters with near death, so to speak. The moral of this story: even if you suspect that it is indeed personal, don’t go there like I did. Stay calm, internalize your feelings, and keep in mind there is much at stake, both short term and long term. Everyone at every level—store, field, and corporate—will have supporters and detractors. And it is critical that we learn how and when to leverage the supporters while coming to terms with what we must do to change the attitudes and perspectives of our detractors.

Everyone at every level—store, field, and corporate—will have supporters and detractors. And it is critical that we learn how and when to leverage the supporters while coming to terms with what we must do to change the attitudes and perspectives of our detractors. I have absolutely no doubt that all people from all walks of life sometimes simply cannot forget, forgive, or let go of encounters that may have occurred years earlier. As a result, they will continually paint you and your team with the same negative brush, whether you are present or absent in the conversation. This of course becomes detrimental for

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you and your team as it relates to driving the department’s performance objectives. I also believe my personal growth over the years evolved well past what I will call the “justification syndrome.” Let’s be honest and keep it real here for a moment. At some point throughout our careers, we have all felt the burden of being viewed as strictly a sales support group and possibly by some companies as merely a necessary evil, where we constantly felt the pressure to deliver strong business results in order to justify the need to keep us around. I’ve even heard of some companies that use as harsh a term as “sales prevention” when describing their AP/LP departments. I mean, no one has ever second-guessed the necessity of having a merchandising department, IT, legal, finance, or store operations. Heck, even the need to staff an internal audit team is never in question. But LP/AP has always fallen deep in the batting order for many companies—that is until they establish themselves and are fully integrated with the entire enterprise strategy along with consistently delivering strong and favorable results. I believe there were times where my level of sensitivity might have been a bit elevated. This sensitivity was a result of working extremely hard to establish my team’s credibility and value to the organization while also fully aware of the low-value perspective held by some key individuals, again at every level I ever worked from store managers, assistant managers, district managers, and corporate personnel.

The Right Attitude and Approach

The most effective way to turn a detractor into a potential supporter is first to change our attitudes and behaviors. The great Earl Nightingale said that people give us back reflections of our own attitudes. So if we desire a positive business relationship, it must begin with us! There were many instances where I encountered a pre-conceived negative perception of what benefits the company derived from the loss prevention and safety team and how our efforts contributed to the success of the company. I learned some tough lessons over the years. The most important one was that every morning, I had to make a conscious decision either to awake with a grateful, appreciative heart and mindset with high expectations for progress and success or to allow a negative thought or encounter to influence and dominate my day. I learned that when presenting to a large group of cross-functional teams, remain focused and deliver the message to the 85 to 90 percent of the room that believe in and support LP programs, rather than trying to target the 10 to 15 percent of the detractors who are amazingly consistent in trying to identify defects or obstacles. My next article will be a continuation on the all-important topic of building strong cross-functional business partnerships at all levels. If you have a personal story you would like to share about an occasion where you reacted impulsively when confronted with a difficult situation and what you learned from your experience, please feel free to share. I may include it in an upcoming segment.

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LP Magazine | may–june 2016

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FEATURE

Readying Retail for Terrorism’s New Battleground By Garett Seivold

LP Magazine | may–june 2016

Readying Retail for Terrorism’s New Battleground

“E

verything changed after 9/11” was a frequently heard refrain—from the president and other politicians and in law enforcement and private security circles. The same may, in time, be said of the Paris attacks in November. Targets included restaurants and bars and seemed to cement a disturbing trend: public spaces and private businesses have become the battleground of choice for international terrorists. While symbolism surely still matters, a preference has emerged for attacking vulnerable locations that can yield a high casualty count as opposed to well-fortified sites. When the goal is simply to spill as much blood as possible, private businesses, including retailers, are more likely to be attacked than government facilities. Shopping centers and other hard-to-defend commercial places—such as large restaurants, department stores, and supermarkets—have occasionally been the subjects of alerts from the Department of Homeland Security (DHS) and in congressional testimony from government officials. Terrorists themselves have said they’re targets. Al-Shabab, the Somali terror group behind the days-long attack in 2013 on a Westgate mall in Kenya that left more than sixty dead, issued a video in 2015 threatening to attack shopping malls in the US, Canada, and England. It has started to take a toll. In a recent research note, Jeffries financial analysts identified the Paris attacks as a contributing cause to soft sales at Tiffany’s. Starbucks closed all its stores in Belgium after the recent attacks there, as did Domino’s. And while most Americans feel safe while shopping, 18 percent said they don’t always feel secure in a store or mall, according to a survey conducted by consumer insight and consulting firm C4 post-San Bernardino. The rise of the Islamic State (IS) group is increasing the risk, according to a new report by the House Committee on

Homeland Security (Terrorism Gone Viral, March 2016). IS has been linked to at least seventy-five terrorism plots against Western countries with the US as its main target. IS-related plots more than doubled between 2014 and 2015 from nineteen to forty-eight, according to the study. “ISIS has reached an unprecedented level of terror plotting against the United States and our allies,” said US House of Representatives Homeland Security Committee Chairman Michael McCaul (R-TX). “The group’s focus on ‘do-it-yourself’ jihad has allowed them to franchise their attacks worldwide, achieving a tempo of violence that has surpassed even al-Qaeda’s most violent years.” Bob Moraca, CPP, CFE, MBA, the National Retail Federation’s vice president of loss prevention, promises that retailers recognize the risk, as well as “their unique responsibility” Bob Moraca in preparing for threats and emergencies. “Retailers will remain vigilant and proactive as they work with each other and domestic and international may–june 2016

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law enforcement agencies to bolster their security preparations after events like what took place in Brussels,” said Moraca. Vigilant—but undoubtedly still vulnerable, said one Northeast retailer responding to a survey by Security Director’s Report (SDR). “Retail stores are tempting targets because people congregate there and there’s essentially no security. Can you imagine a suicide bomber exploding in a crowd during a grand opening or Christmas rush?” Indeed, there is some suggestion that the retail industry—perhaps because of its extreme vulnerability and a lack of clarity on how to address it—has not always been aggressive in response to the terrorist threat. For example, a majority of retail industry chief financial officers in a survey by Financial Executives International after 9/11 said they were not changing security as a result of the attacks. Some 63.8 percent of retailers would keep security “as is,” they said. By comparison, only 41 percent of communication companies said the same. Retail also lags behind general industry in conducting terrorism risk assessments (see chart on page 48). The low-likelihood but high-cost of a

Readying Retail for Terrorism’s New Battleground

While symbolism surely still matters, a preference has emerged for attacking vulnerable locations that can yield a high casualty count as opposed to well-fortified sites. When the goal is simply to spill as much blood as possible, private businesses, including retailers, are more likely to be attacked than government facilities. terrorist event has made—and continues to make—retail terrorism protection a risk-management conundrum. For some potential targets action is clearly necessary (see case study on page 50), but for many it remains unclear what, if anything, they should do. Some businesses in select industries have been forced to comply with new security regulations, but retailers don’t operate under a specific mandate for action—no minimum standard to achieve. Brian Jenkins, a terrorism expert and one of the most interviewed sources on the subject, noted to SDR that terrorism defies risk

models that security professionals are comfortable using. He asked, “How much security is enough? What is the optimum allocation of security dollars? What is the best combination of risk avoidance, insurance, security, and response preparedness?” And he added, “These are tough questions.”

Maximizing Value from Anti-terrorism Measures

Risk assessment is the most assured way to minimize costs as it focuses anti-terrorism where it’s most needed. Risk

LP Magazine | may–june 2016

assessments serve as the foundation to mitigation and prevention, which makes it critical that they be accurate, detailed, and frequently updated. They should encompass external factors—country and city terror risk ratings, average emergency response times, the government’s capacity to disrupt terror plots—as well as store-specific factors, such as its proximity to high-value targets, standoff, and foot traffic. “More than likely, a terrorist isn’t going to target a Staples in Peoria or a Starbucks in Austin. They will probably target a mall in a major metro region or a high-profile store like Tiffany’s and Macy’s

Readying Retail for Terrorism’s New Battleground

Vehicle-Borne Improvised Explosive Device Risk Assessment by Industry

Annual Terrorism Vulnerability/Risk Assessment by Industry Other Industries

69.5%

Retail Sales

41.2%

In the last twelve months, the organization has conducted an assessment of the potential impact of the threat of terrorism on assets, operations, people, and value.

Other Industries

48.1%

Retail Sales

17.6%

In the last twelve months, the organization has conducted an assessment to review the vulnerability of primary buildings/headquarters to high-speed vehicle approaches and potential blast damage in light of standoff from the nearest publicly accessible area or parking space.

Source: Controller’s Guide to Corporate Security: Best Practices in Oversight, Funding, Performance Measurement, and Protection, SDR, 2012

in New York City,” said Ronald Margulis, a retail consultant and managing director of RAM Communications. (And even that is less true than it used to be.) A robust intelligence pipeline will keep security levels properly aligned with the threat (and prevent overspending out of fear). Loss prevention executives have a responsibility to stay effectively plugged into the threat-communication network, such as through a local joint terrorism task force and via contact with industry counterparts and law enforcement, so as to receive early warnings in time to take appropriate (not excessive) countermeasures. Aiming security at the most likely attack scenario also helps to minimize terrorism prevention spending. But what is it? In a follow-up survey to SDR’s Corporate Anti-terrorism Benchmarks report, retailers said the most likely incident to impact them was the same in 2012 as back in 2006: disruption of a major event. They think the most likely attack method on a retail store is a knapsack suicide bomber or a shooter. But how—without breaking the bank or disrupting business—can retail locations protect against a suicide attack? Staff already drawing a paycheck may provide the best opportunity. A suicide bomber is unlikely to blend seamlessly with the crowd and may exhibit “multiple anomalies,” according to training guidance by the International Association of Chiefs of Police. Prevention may hinge on including suicide bomber awareness and response in loss prevention

agents’ training and insisting that contract guards have such training. Consultant Arik Arad, former head of shopping-center security in Israel, said the best way to stop or preempt an attack is to make “soft contact” by walking up to a suspect and asking, “Can I help you?” He said it’s often enough to force a bomber to abandon his plan and that foiling suicide bombers is about training, not guns. Spotting indicators of terrorist planning is another key topic in counterterrorism training. Since 9/11, the preparatory conduct of terrorists has been the subject of significant study. A terrorist might loiter for weeks near a target to observe entry points and security measures, perhaps by posing as a panhandler or flower vendor. According to one study, excluding outliers, the average preparatory behavior phase for a terrorist attack is fifty-four days (Pre-Incident Indicators of Terrorist Incidents: The Identification of Behavioral, Geographic, and Temporal Patterns of Preparatory Conduct, Dept. of Justice). Security officers know to keep an eye out for anything suspicious—it’s at the core of their job—but refresher training should outline and emphasize the range of behaviors and specific activities that demand reporting (see “Counterterrorism Training Points” on page 50). Simultaneously, loss prevention teams might assess if their suspicious activity reporting processes need refinement. A security camera might catch someone peeking in the store window after hours. A sales associate might tell an agent that a may–june 2016

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strange guy was hanging around the store all day. But then what? Corporate security teams need to examine their processes for encouraging reporting of suspicious activity; getting those reports into a written, trackable form; identifying patterns of clusters of pre-incident indicators; and delivering relevant information back to people in the field. Finally, focusing on security strategies that serve a dual purpose can enhance terrorism prevention while mitigating its expense. For example, many of the same security strategies that reduce shoplifting and parking lot assaults can reduce the likelihood of a successful terrorist attack.

Possible Store-Level Solutions

I mprove coordination with others with whom you share a responsibility for security. In the aftermath of a scare at IKEA, in which explosives were found inside two IKEA stores, Sears said it had “stepped up its relationship with mall security.” Forging closer ties is an important prevention tool for all types of crime. ■ U se bike patrols, marked security vehicles, or parking lot attendants to control large parking areas. These measures could push a car bomber to a softer target. It can also keep fire zones clear of parked cars, improve shoppers’ experience by improving the flow of traffic, prevent car break-ins, and limit parking garage or parking lot assaults—the top location for ■

Readying Retail for Terrorism’s New Battleground

Some businesses in select industries have been forced to comply with new security regulations, but retailers don’t operate under a specific mandate for action—no minimum standard to achieve. incidents resulting in negligent security lawsuits. Outside patrols also expand the detection perimeter, which is the best way to identify and intercept a suicide bomber before the store’s front door. ■ U se vehicle-halting planters or concrete bollards to prevent trucks or cars from getting too close. In addition to limiting damage from a truck bomb, such devices can reduce pedestrian-vehicle accidents. ■ T ighten parking controls. Simon Property Group, which owns or has an interest in 325 malls or shopping centers nationwide, instituted a ban on overnight parking in response to the terrorism threat. Such a policy may also prevent after-hours crime.

E nforce access restrictions. Controlling access to restricted areas within stores can prevent theft as well as prevent a terrorist from gaining access to a store’s heating and air-conditioning system where there is the potential for introducing poisonous gases. ■ P lace uniform guards in plain sight. Visible security on patrols in shopping areas was once bad for business, but perhaps not any more, say experts. Bringing officers out into the open helps them control crowds and keep a closer eye on shopping-area crime, as well as giving a potential target-seeking terrorist pause. Jenkins suggests supplementing visible security with plainclothes agents. “Their presence, ■

LP Magazine | may–june 2016

occasionally publicized through arrests, greatly increases uncertainty on the part of would-be bombers.” ■ G et employees to be on the lookout for individuals leaving behind packages. Such security awareness may help foil a terrorist bomb plot, but will more likely engender customer goodwill and save money. (Although there’s no need to isolate an area for a suspicious package.) ■ L et law enforcement review your evacuation plan for a special event to help save lives in the rare event of a terrorist strike. It can also help protect individuals in more likely crises: power failures, earthquakes, or weather events. ■ E mploy visible video surveillance and enforce routine camera inspection

Readying Retail for Terrorism’s New Battleground Counterterrorism Training Points

Possible indicators of a suicide bomber: ■ ■ ■ ■ ■ ■ ■

W earing inappropriately heavy clothing. A n unusual gait, especially a robotic walk. T unnel vision or fixated gaze. I rritability, sweating, tics, nervous behavior. A ppearance of being drugged. C lutching bags or backpacks. B riefcase, duffel bag, or backpack with protrusions or visible wires.

■ ■ ■ ■ ■ ■ ■ ■

A fresh shave and lighter skin on lower face. T ightly gripping something in his or her pocket. U nwilling to make eye contact. S mell of fragrant soap or rosewater. R epeatedly circling or pacing in front of a venue. M umbling prayers. R epeatedly checking a watch or cell phone. F ertilizer or petrochemical smell.

Possible indicators of terrorist operational and logistical planning: ■

■

■ ■

■

U nusual or prolonged interest in security measures, personnel, entry points, access controls, or perimeter barriers such as fences or walls.

newspaper or magazine vendors, or street sweepers not previously seen in the area. ■

U nusual behavior such as staring or quickly looking away from personnel or vehicles entering or leaving designated facilities or parking areas.

■

O bservation of security reaction, drills, or procedures. I ncrease in anonymous telephone or e-mail threats in conjunction with suspected surveillance incidents, which may indicate surveillance of threat reaction procedures. F oot surveillance that appears to involve two or three individuals working together.

■

M obile surveillance using bicycles, scooters, motorcycles, cars, trucks, sport utility vehicles, limousines, boats, or small aircraft.

■

P rolonged static surveillance using operatives disguised as panhandlers, shoe shiners, food or flower vendors,

D iscreet use of cameras, video recorders, or note taking at non-tourist locations. A ttempts to gain sensitive information regarding key facilities or personnel through personal contact or by telephone, mail, or e-mail. A ttempts to penetrate or test physical security and response procedures. S uspicious or improper attempts to acquire uniforms, badges, access cards, or identification. P resence of individuals who do not appear to belong in the establishment or near a key facility. B ehavior that appears to denote planning for terrorist activity, such as mapping out routes, playing out scenarios, and timing traffic flow.

Source: International Association of Chiefs of Police, Department of Justice, Department of Homeland Security, and other sources.

schedules. CCTV is a vital tool to prevent many types of crime, and in plots in which an escape is planned, terrorists do seem to avoid security video. “One jihadist manual advised would-be terrorists to avoid train stations with CCTV cameras, which suggests that the cameras have some deterrent value,” a recent report concluded (Carnage Interrupted: An Analysis of Fifteen Terrorist Plots Against Public Surface Transportation, Brian Jenkins and Joseph Trella, Mineta Transportation Institute, April 2012). ■ E mploy store greeters to spook or spot suspicious persons as well as enhance customer service. ■ R eview shipping and receiving security. Pre-schedule loading dock deliveries,

make trucks subject to search, accept deliveries at the side of the store instead of underneath it, insist on identification, and use cameras to record delivery areas. Stricter access controls in sensitive areas such as delivery zones and loading docks reduce the risk of a catastrophic terrorist event while curbing theft during shipping and receiving. ■ P lan and practice for going on high alert. Confusion and unnecessary spending go hand in hand, so preparing for coordinated attacks on several targets in different locations (a multiple dispersed attack) could help check costs. For example, if a suicide bomber attacks a retail strip in Las Vegas, retailers elsewhere might mobilize security staff may–june 2016

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to conduct security checks at entrances, check delivery drivers’ IDs, inspect truck trailers, and conduct spot checks of customers’ bags. Ask yourself these questions: Would we immediately learn of an attack? Would we be able to quickly make a decision about procedures to implement? Could we efficiently communicate the alert to every store location that needs to know? Are those store units prepared to quickly implement our high-alert security procedures?

Case Study: What Can You Take from Israeli-Style Security?

The Mall of America is big—520 stores, eight acres of skylights, and 42 million annual visitors big. With the

Readying Retail for Terrorism’s New Battleground public encouraged to enter through any of its twenty-four entrances and shop at its 4.3 miles of total storefront footage and as a symbol of America’s consumer culture, it is a stereotypical terrorist target. It faces all the risk of a retail location—multiplied. So on what does the Mall of America (MOA) rely for protection? A lot of it derives not from the latest technology but from the sharp eyes and quick intervention and interviewing Doug Reynolds skills of the officers in its Risk Assessment and Mitigation (RAM) unit. “We didn’t want all the facial recognition and metal detectors that the mall wanted to buy us after 9/11,” said Doug Reynolds, director of security. Instead, the security team looked to a model of counterterrorism used to protect Ben Gurion Airport in Israel that centers on behavior detection and assessment (BDA). Naturally, the MOA uses the typical

layered security approach to prevent crime, but it’s behavior detection that is central to its effort to minimize the damage and potential for a terrorist attack. The mall’s RAM officers spot anomalous behavior and quickly move in to interview subjects. Within the timeline of a typical attack, there are just a few chances for a target’s security team to intervene: (1) when attackers conduct surveillance of the target; (2) when they conduct a rehearsal Michael Rozin of the attack; and (3) during the actual execution. It is within these small windows that RAM officers have an opportunity to thwart a potentially deadly incident. “There is no possible way, operationally, that you can racially profile—there are too many motives, too many types of individuals,” said Michael Rozin, president of Rozin Security Consulting LLC, who helped the MOA set up its behavior detection program. Instead,

RAM officers focus on detecting intent—one thing that all attackers have in common. How do RAM officers detect intent? It starts by understanding the normal, legitimate behavior that exists within each area of the mall. (Normal behavior in the amusement park differs from that in shopping areas, for example.) It’s up to RAM officers—in the fifteen or so seconds they usually have—to notice individuals exhibiting atypical behavior, whether in their body language, what they are carrying, or their attire. If something seems amiss, RAM officers—skilled in security interviewing—talk to the individual to probe the situation and determine if a legitimate threat exists. Case in point: On January 29, 2011, RAM officers noticed an individual exhibiting atypical behavior at a Government on Display event, including frequent touching of various body parts and other signs of nervousness. He also appeared to be carrying a concealed item. A RAM officer approached, and the suspect

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RETHINKING Readying Retail LOSSfor PREVENTION Terrorism’s AND New SHRINK Battleground MANAGEMENT ran. Caught later by Bloomington police, he turned out to have a loaded gun and was a “sovereign citizen” (a group that denies the legitimacy of the US government).

Making It Work

Whether or not a threat is successfully (a) noticed and (b) investigated depends foremost on the extent and quality of the specialized training that officers need to receive in behavior detection and interviewing. However, there are also program obstacles and best practices, and Reynolds and Rozin shared them at a recent national security conference. Stick with It. A behavior detection program requires ongoing attention, frequent retraining, and continuous improvement. “Everyone loves a puppy,” warned Reynolds, noting that the program is not a good fit for a security department looking to implement a counterterrorism program and then forget about it. Hire the Right People. Security interviews are central to the program’s effectiveness, and the vast majority of them are conducted with legitimate visitors who happen to exhibit suspicious behavior. Because of this, Reynolds said interviews need to be conducted in an open and friendly manner, and MOA hires people specifically suited to that type of role. “Most of them have a sales background or other social contact positions. We want individuals who can find a way to socially engage anybody they come across.” Implement an Organization-Wide Behavior Detection Culture. “A RAM unit alone is by itself insufficient,” noted Rozin. RAM officers may undergo ten to twelve weeks of training. But everyone—from housekeeping to amusement ride operators—might need one to two days of training to implement a culture change. Appropriate groups also receive training specifically tailored to the intersection of their jobs and terrorism: human resources and

Spotting indicators of terrorist planning is another key topic in counterterrorism training. Since 9/11, the preparatory conduct of terrorists has been the subject of significant study. A terrorist might loiter for weeks near a target to observe entry points and security measures, perhaps by posing as a panhandler or flower vendor. According to one study, excluding outliers, the average preparatory behavior phase for a terrorist attack is fifty-four days. insider threats, the leasing department and applicant screening, events staff and security design and threat detection, and so on. The RAM unit is the heart of the program but “to a lesser degree everyone is involved in RAM,” said Reynolds. Adopt a New Attitude Toward PR. The MOA security department had a typically adversarial relationship with the media but now uses the media as a tool to promote the work of the RAM unit and the mall’s concern for visitor safety. MOA was specifically named in a 2015 video by al-Shabab, a Somali terror group. Homeland Security Secretary Jeh Johnson then told CNN, “If anyone is planning to go to the Mall of America today, they’ve got to be particularly careful.” Facing the prospect of shoppers staying away, MOA undertook a very public campaign to reassure potential shoppers that the mall’s security was up to the job. It invited in news media

for a rare inside look at its operation, resulting in numerous reports on its diverse protection measures, including bomb-sniffing dogs, bike patrols, social media monitoring, hundreds of cameras, and explosives screening of delivery trucks. And promoting security may have worked. Despite the very specific and public threat, subsequent headlines such as “Mall of America shoppers take terror alert in stride” were commonplace. Define the Information-Sharing Process. How and to whom will you report information that a RAM unit learns? Reinforce Vigilance through Red Teaming. MOA uses individuals to probe for holes in the security defense and test whether RAM officers identify the problem. “It’s not easy to leave an unintended bag or to act nervous in the MOA and not get noticed,” said Rozin. “Again, though, security can’t get it done all by themselves.”

GARETT SEIVOLD is a journalist who has been covering corporate security for industry professionals for eighteen years. Since 1998, he has served as the principal writer and editor of Security Director’s Report, a monthly publication highlighting trends and best practices in corporate security management. Seivold has been recognized by several organizations for outstanding writing, investigative reporting, and instructional journalism. He has authored dozens of survey-based research reports and best-practice manuals on securityrelated topics. Seivold can be reached at GarettS@LPportal.com. may–june 2016

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strategies

Recommended Reading

Loss prevention executives have long told us they need a one-stop source for keyword-searchable LP and AP research reports, videos, and white papers. The LPRC team has worked hard to bring this industry need to fruition. The LPRC Knowledge Center launches in May. As it turns out, LPRC has produced over 250 research briefs and reports over the last fifteen years, and these are combined with

by Read Hayes, PhD, CPP

Routine Activity and Rational Choice edited by Ronald V. Clarke and Marcus Felson is a classic reference that provides both actionable theory tools and real-world examples of how these landmark environmental criminological theories inform crime prevention programs. The two distinct but mutually usable opportunity reduction approaches are: ■ Routine activity—how motivated offenders come into contact with desirable and vulnerable targets to create the momentum for a crime attempt. ■ Rational choice—how individuals notice, interpret, and respond to opportunities and environmental cues when considering crime attempts. As always, our UF and LPRC teams are working to support you, so please let me know your thoughts and suggestions via our website at lpresearch.org, on LinkedIn, or at rhayes@lpresearch.org.

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showcase solutions detex Corporation

Is Your Back Door Protected?

etex introduces a maximum security, multi-point lock so big and strong that it stands up to assault by the bad guys and reduces employee and customer theft. The ECL-230X-TDB is a heavy-duty, easy-to-install, three-bolt multipoint lock whose construction takes panic hardware to a whole new level of toughness and eases your back-door security worries. It is designed with a larger deadbolt that goes deeper into the frame than other locks in the category. Connecting rods are solid steel, rather than the less reliable hollow rod/cable construction. Life safety and code compliant, the new Detex ECL-230X-TDB serves as both panic hardware and a maximum-strength locking device. ottom Bolt— 5/8” HEX bolt with B ¾” throw, engages the floor with 5/8” penetration to provide better attack resistance and superior defense against the “peeling up” of the bottom of the door. Combining the ECL-230X-TDB with Detex’s DX bolts provides an additional line of defense against break-ins via additional locking points. Even if the exterior door hinges are compromised, the DX bolts keep the door locked and secure. These passive deadbolts are easy to install and offer another layer of attack resistance.

■

Features of the ECL-230X-TDB

The ECL-230X-TDB includes a photo-luminescent sign available in more than ten color/language combinations, 100-decibel alarm, and three locking points per door. ■ T op Deadbolt—Approximately 1” wide by ½” thick deadbolt, the top bolt provides additional stability to the top corner of the door. ■ S ide Deadbolt—2¼” tall by ½” thick deadbolt with a 1” throw allows for ¾” penetration into strike. Detex recommends flush installation for maximum security. With 1.6875 square inches of bolt engagement, the side deadbolt provides superior defense against pulling and prying on the side of the door.

How Tough Is the ECL-230X-TDB?

Independent laboratory testing proves a door secured by the ECL-230X-TDB, and when combined with three DX bolts can withstand 16,000 pounds of pull force. Add suffix DX3 (ECL-230X-TDB-DX3) for six locking points for even stronger security. Single- and double-bolt and weatherized models are also available. Optional accessories include hinge side-locking bolts and inside pull handle. Other 230X models include ■ E CL-230X (Dead Bolt Only), ■ E CL-230X-W (Weatherized Dead Bolt), ■ E CL-230X-TB (Top and Bottom Bolt), ■ E CL-230X-W-TB (Weatherized Top and Bottom Bolt), ■ E CL-230X-TD (Top and Dead Bolt), LP Magazine | may–june 2016

E CL-230X-W-TD (Weatherized Top and Dead Bolt), and ■ E CL-230X-W-TDB (Weatherized Top Bolt, Dead Bolt, and Bottom Bolt). Almost all hardware and accessories can be customized with different finishes, colors, sizes, and more. Ask us how this new generation of life safety and security hardware can make a powerful difference at your back door. ■

Securing Property for More than a Century

An American company for more than a century, Detex has earned the trust of millions of property owners to secure and protect their people and property. From the newest innovations in life safety and security door hardware, integrated door security systems, and guard tour verification technologies to the original Watchman’s clocks, Detex designs, manufactures, markets, and ships products from New Braunfels, Texas, and is recognized as a best-in-class life safety, security, and security assurance manufacturer, worldwide. Learn more at detex.com/solutions or call 866-927-8422.

showcase solutions INSTAKEY SECURITY SYSTEMS

Great Technology with Great Partnerships

n 2015, Under Armour, a rapidly growing sports clothing and accessory company headquartered in Baltimore, Maryland, established a partnership with InstaKey Security Systems to implement a key control solution for 158 stores. The company recognized an opportunity for improvement in its key control to increase its ability to manage records more efficiently and to gain remote access to auditing of store key logs. Under Armour sought to partner with a business that could handle their continuous growth, scale efficiencies of service, and provide the ability to audit remotely.

Working Together on a Rapid Conversion

The Under Armour global store development, asset protection, and store maintenance teams worked closely with InstaKey’s program development team to create and execute a rollout strategy that would generate the least impact on stores with the greatest efficiency for the conversion. Each team clearly knew its role in the conversion process and worked diligently to achieve the end goal in mind: to keep it simple for the stores. Under Armour converted a set number of locations per week, allowing for a structured and efficient rollout. Proactive communication and training with each location prior to its installation was key to the success. “The InstaKey setup was very simple to understand. There were no hurdles to jump through to start our relationship. Our teams worked cohesively to get the conversion accomplished in a timely manner,” said Robert Gibson, asset protection senior manager. Mike Kujawa, asset protection senior manager, also added, “The conversion process was seamless. Converting to InstaKey was a no brainer for us.” With effective

communication, training, and combined partnership resources, Under Armour was able to achieve an extremely efficient, accurate, and quick conversion of its 158 locations.

Successes Realized From Innovation

InstaKey’s KeyControl® Program has made a significant impact on the practices of Under Armour personnel. Management of locks and keys has become a worry-free process and are no longer a concern even when a security issue arises. In the event an issue does occur, there is a simple solution to rekey an entire facility with a turn of a specialized key. This “turnkey” process has resulted in significant time and cost savings for the company. Asset protection maximizes value by use of the cloud-based KeyControl® Reporting Dashboard as compared to a previous paper records methodology. The dashboard provides real-time visibility to aggregated key control reporting in a visual display of a client’s global key control program. Clients frequently utilize the dashboard to determine a store’s active key series and current key holders, allowing for auditing to quickly define exceptions or possible areas of concern. They may–june 2016

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also use the data to review turnover metrics, cost savings, order turnaround, and future budgets. Store managers also have access to a Digital Key Holder Update feature to change key holder assignments in real time, so they can track keys during employee turnover. This functionality gives the asset protection team an up-to-the-minute report of the store’s key control activity. Robert Gibson referred to this feature as “smart access” versus “dumb locks and keys.” He went on to say, “Digital is the way of the future and where we all want to be. The InstaKey technology is essential to the health of our business.” Mike Kujawa summed it up best: “Great technology with a great partnership—that’s what success looks like.” As Under Armour continues its growth worldwide in 2016, its InstaKey program investment shall continue to help provide safety, security, and cost savings to its locations. No matter which feature a retailer values, InstaKey’s programs are designed to provide simple solutions to key control challenges.

showcase solutions TYCO INTEGRATED SECURITY

How Smart Loss Prevention Is Fueling Better Customer Experiences The two strategies are no longer mutually exclusive in an omni-channel retail environment By Joan Sparks, Vertical Market Leader, Retail, Tyco Integrated Security

hile maintaining store safety and reducing shrink will always be the core focus of retail security solutions and loss prevention teams, these solutions have evolved in a way that can better support retailers’ goals of increased business intelligence and positive customer experiences. When retailers strategically integrate Joan Sparks these technologies with store operations, they can achieve a higher store performance and ROI that spans beyond the loss prevention team. In today’s dynamic retail environment, radio frequency identification (RFID) technology is adding value in a big way. In fact, some retailers acknowledge that RFID and its impact on accuracy of inventory is a key to success from a business operations and customer relations perspective. In some use cases, RFID can provide nearly 100 percent inventory accuracy and the ability to pinpoint the location of merchandise. RFID handheld readers can be used almost like Geiger counters to find misplaced inventory in the store. This results in significant time savings when fulfilling web orders from store inventory or supporting buy online pick-up in-store (BOPIS) and makes RFID-enabled inventory the foundation for a successful omni-channel strategy.

Enabling Omni-channel Commerce

By combining RFID-enabled inventory and source tagging re-circulation programs with smarter, more sophisticated electronic article surveillance (EAS), retailers gain real-time insight into everything from what is available to sell via online and in-store channels to how much is needed on the

shelf. The strategic implementation of these technologies together—versus thinking of them as separate solutions to solve only security challenges—better equips retailers to maintain accurate inventory and enables efficient and effective omni-channel execution, resulting in overall improved customer experience. Cross-functional coordination between loss prevention, e-commerce, operations, merchandising, and information technology teams is an essential best practice.

Providing a Smart Shopping Experience in the Dressing Room

Beyond the strategic deployment of traditional security technologies, RFID-enabled technologies are helping retailers balance costs while meeting today’s customer expectations. For example, fitting rooms can be equipped with in-room digital displays that read the RFID-tagged merchandise customers bring into the space. The system can now alert sales associates as to what items are in the dressing room, so they can offer suggestions or provide additional products based on complementary items. Retailers’ mobile apps may also be able to provide size availability to customers in the fitting room. Additionally, on the LP side, this technology can send notifications when multiple sizes of the same item have been taken into fitting rooms, alerting sales associates to theft potential.

Empowering Sales Associates

Tyco’s RFID technology offers retailers valuable insights into fitting room analytics to better serve customers and minimize losses.

real-time inventory data, there is no longer the need to leave to check the backroom. Instead, associates are empowered like never before to quickly and effectively answer customers’ item-level inventory questions. Additionally, tablets can help the business organize and manage all in-store customer and product requests, capturing associate-level interaction data for use in performance analysis. As technology leaders, we have an opportunity to innovate and help retailers think beyond the traditional ROI they look for in physical security and loss prevention solutions. The increased value of an integrated security solution in an omni-channel retail environment is the data and insight it provides across all levels of the business to strengthen operations and retail performance, improve profitability, and personalize the customer experience.

Since customers are connected to information in real-time, it only makes sense to have store associates connected as well to help guide the shopping experience. When associates have mobile access to LP Magazine | may–june 2016

industry news

Profitect Wins First RILA Asset Protection Innovation Award

welve industry solutions providers were finalists in the inaugural 2016 Retail Asset Protection Innovation Award competition at the Retail Industry Leaders Association (RILA) Asset Protection Conference in Dallas. The award program is intended to recognize the most visionary technology solutions presented at the conference. “Our industry has to continue to innovate to stay ahead of the pace at which retail is changing,” said Lisa LaBruno, RILA’s senior vice president of retail operations. “I congratulate the finalists for developing cutting-edge technologies to address emerging asset protection risks. Their solutions stood out among a crowded field of qualified applicants.”

Innovation Award Finalists

RILA’s horizon committee reviewed the entries and narrowed the finalists to twelve solutions: ■ Axis Communications’ Zipstream technology ■ Centronex’s retail employee safety service ■ Checkpoint Systems’ iS AutoPeg tag solution ■ ClickIt’s Virtual LineupTM consumer tracking application ■ Dataminr’s social media monitoring analytics ■ Digital Signal Corporation’s facial recognition technology ■ DiSa Digital Safety ■ Prism Skylabs’ video compression and analysis solution ■ Profitect’s prescriptive analytics technology ■ Snaptagg’s light-based self-alarming tag ■ Zebra Technologies’ AirDefense network protection platform ■ Zebra Technologies’ MPACT device tracking technology A team of industry judges as well as horizon committee members voted for their top three solutions. Retail attendees also voted on their top choice for the Retailer’s Choice Award. Profitect won both the judge’s top vote as well as the Retailer’s Choice Award. ClickIt was the judge’s second choice, and Prism Skylab came in third. The award winners were announced by LaBruno at the close of Tuesday’s conference activities.

RILA’s Largest Conference to Date

Other highlights from the conference—the largest attendance in RILA’s history according to

may–june 2016

Guy Yehiav, chief executive officer of Profitect, receives the top innovation award from RILA’s Lisa LaBruno.

LaBruno—included an impressive opening keynote presentation titled “Making LP Matter” by David Lund, LPC, vice president of LP for DICK’S Sporting Goods. He challenged the attendees saying, “If loss prevention wants to remain relevant, we have to change our perceptions.” Lund pointed to the importance of evolving as partners within the retail enterprise and finding new ways to contribute to the success of the organization as a whole as a means of keeping the department productive and valued by the entire organization. Former FBI profiler Joe Navarro captured the audience with his talk on “Dangerous Personalities.” Navarro analyzed the four most common threats from the Narcissist, the Predator, the Paranoid, and the Unstable Personality and offered advice on how to deal with these personalities when revealed in the workforce. RILA announced that next year’s conference will be held April 9–12 at the Hyatt Regency in New Orleans. To see video coverage of the RILA conference, visit LossPreventionMedia.com/video.

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LP Magazine | may–june 2016

Digital Dialogue By Jacque Brittain, LPC

No One Winning Approach to Loss Prevention Culture

“

have worked in loss prevention for a number of years now and recently joined a new company. At my new company, I have grown a little frustrated over what they claim to be effective loss prevention strategies. They don’t seem to know what they’re doing. While the company likes to give the illusion of having a strong LP presence, there is no loss prevention culture to speak of, and it’s just about impossible to get things accomplished or have the type of impact that we should have.” Does this sound familiar? It should. For anyone who has been in retail loss prevention for any significant length of time, it’s probably something that we’ve heard repeatedly. In fact if we’re being honest, it’s likely something that each one of us have voiced ourselves at some point in our careers. Having spent many years in executive search and working as a loss prevention career consultant, I interviewed thousands of loss prevention professionals working for just about every retail organization that has a loss prevention department in this country. Yet regardless of the particular organization, there are always those who think they have a better way to get things done. While it may bruise an ego or two, there isn’t a single leader out there that hasn’t been criticized at some point by members of their own team. The individual that forwarded this message provided some additional details and thought it would be a good subject for an article. I believe it is—but perhaps it won’t be the particular message that they were expecting. It has always been common to hear “at my previous company we did things this way…” or “where I used to work we did things that way…” from the occasional new hire when they come on board. And our response? “You no longer work for that company—you work for us now.” That response wasn’t about stifling ideas or discouraging a new or different way to accomplish our goals. Rather, it was about breaking down rigid perceptions and seeing things in a different way. It was about opening eyes to a different approach to loss prevention. If the loss prevention professional isn’t receptive to changing the way that they do things, there’s very little chance that they’re going to be successful in their new company. In fact, lacking the ability to adapt, there’s very little chance that they’re going to have long-term success in loss prevention as a career.

may–june 2016

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

In many ways this is expected. We are all products of our own environments and will tend to fall back on the things that we know and the ways that we’ve learned. Our professional identities are largely shaped by our professional experiences, and we often fall back on what is familiar and comfortable. Often the comments are made with the best of intensions. But we always have to remain open to new and different possibilities. And while we often associate this practice with a particular career level, it can—and does—happen at every level of a professional career.

If the loss prevention professional isn’t receptive to changing the way that they do things, there’s very little chance that they’re going to be successful in their new company. Establishing a Culture

How do we go about establishing the loss prevention culture within a particular organization? What makes a particular strategy successful? This is the challenge that loss prevention leadership must face on a regular and consistent basis in the retail setting. Retail organizations are extremely diverse. It’s fairly simple to recognize the differences in the way that we might have to approach loss prevention in a grocery store versus a department store, or a department store versus a specialty environment. With the physical and organizational differences in the stores, the sizes and structures of the staffs, the products and store resources, and other philosophical and practical variables, the loss prevention needs and strategies quickly stand out. But there are many other factors that will come into play, and each much be addressed by loss prevention leadership in order to establish a successful program.

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own approaches, experiences, and backgrounds when determining the way they want to lead the department. They will gather information from mentors and colleagues. They will stand on the shoulders of those who came before them, learning from mistakes as well as victories in order to build upon these lessons. They will consider departmental dynamics, available talent, professional backgrounds and experiences, their own skill sets, and many other tangible and intangible considerations when making these decisions. All of these influences and many others will come into play when determining the approach of the loss prevention department, and this only scratches the surface. It’s not a simple matter of determining whether the loss prevention department will focus on investigations, audits, or catching shoplifters. When asking the question why we do things this way, a flood of answers may come to mind.

The products sold will factor into the loss prevention culture. In a clothing-based retailer, for example, a retail shrink of 1.5–2 percent may be considered acceptable. However, a retailer that primarily sells electronics will be dealing with products with much lower profit margins. In this case, a 2 percent retail shrink number could potentially put them out of business. Tighter inventory controls, physical security, audits, cycle counts, and other measures may be more urgent in this type of retail setting, which can dramatically change the approach of the department, the way that budgets are allocated, the size and responsibilities of the loss prevention team, and other key departmental decisions. In other situations, safety can play a much bigger role. While safety is always a concern, a warehouse-type retailer with merchandise stacked twenty-plus feet off of the ground will have heightened concerns. Grocery stores must deal with issues such as Freon, meat cutters, spills,

Carrying the Message Forward

There’s no one winning loss prevention culture. Every program is different—and it’s different for a reason. A constructive evaluation of our loss prevention program is a healthy and positive thing. However, that evaluation should take place with an open mind and a much broader perspective. and even concerns such as insects and pest control. Quick service restaurants must deal with fryers, grills, and other food-related concerns. In the home improvement world, retailers must deal with propane, fertilizers, splinters, lifting incidents, and a host of other issues. Robberies are a much larger issue in some retailers, while controlled drugs may play a role in other organizations. Looking at a different perspective there are other influences that may be less visible but more important, even in companies that appear very similar. Company history, the overall company culture, the influence and cooperation of other departments, budget constraints, supply chain management, seasonal and geographical issues, leadership philosophies and objectives, and a host of other factors will play a part in the approach of the loss prevention department. Naturally, departmental leadership will influence the approach of the department as well. The director and vice president of loss prevention will consider their

may–june 2016

Once these decisions are made, it’s then the responsibility of every member of the team to carry out the mission and vision of the department as determined by loss prevention leadership. While individual team members are typically provided certain leverages in carrying out those duties based on positions, skills, abilities, responsibilities, accountability, creativity, and other factors, there is still an immediate and unwavering need to fulfill the objectives of the program. This is absolutely essential to building a winning culture and ensuring that every associate in the company takes ownership of the loss prevention program. If we are having difficulty getting the buy-in of the store teams or if we believe that there is a problem with the way a particular approach is managed, maybe it’s best if we look in the mirror first. A little information can be very dangerous, and these decisions are rarely as simple as some may think. Every day we look at all things digital and how these different factors influence the incidents and events that take place in the retail setting. We look at the criminal element that’s involved, the situations as they unfold, the decisions that are made, and how the evolving role of loss prevention impacts every one of these circumstances in the retail setting. Ultimately, the role of loss prevention is to enhance the profitability of our companies, just like every other role in retail. In loss prevention, this requires a collaborative approach and a shared effort from the entire team. The approach may be different. It may not be one that we are accustomed to or understand. But that doesn’t mean it’s not the best-possible approach for that particular department. There’s no one winning loss prevention culture. Every program is different—and it’s different for a reason. A constructive evaluation of our loss prevention program is a healthy and positive thing. However, that evaluation should take place with an open mind and a much broader perspective. This makes us much better at what we do and makes our departments that much stronger and productive.

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People on the move Mark Suppe is now a Territory Director of LP for Burlington Stores.

Bobby DeAgostino was made Safety Director for Floor & Décor.

Nate Salazar is now Divisional AP and Safety Manager for Cabela’s.

Tim Lapinski, CFI, LPC was appointed Divisional VP of LP for Helzberg Diamonds.

CarMax announced the following changes: Craig Cronheim, CFI to VP of HR and LP and Eric Chase, CFI to Assistant VP of LP. Lisa Benson, CFI was appointed VP, Global Investigations Unit/AML Compliance for Citi. Mark Townsend, LPC is now Regional LP Manager, East for DHL eCommerce. Jordan Rivchun, MBA was appointed Director of Field LP for DSW. John Pool was appointed Senior VP, Corporate Security & Fraud for Eastern Bank.

Hermés of Paris announced that Kwame Acree, CFI, LPQ, Juan Guerrero, LPQ, and Devin King have been made Regional LP Managers. Patrick McEvoy was appointed Director, AP Systems and Technology for Hudson’s Bay Company. Deanna Bonachea, CFI is now Regional Asset and Profit Protection Manager for Justice. Michael Tracy was made Zone Manager, LP and Safety for Lumber Liquidators.

Suzanne Read, LPC is now Director of LP Process & Strategy, and Emily Akino (Bosworth), LPC is now Market Director, Stores for Lowe’s. Zachary Smith was appointed Director, LP and Corporate Security for Lucky Brands. Nate Frazier, CPP, CFI, LPC was appointed VP of LP for Mattress Firm. Scott Springer, CFI is now Director of LP for Michael’s Stores. Tracey Garnett is now a District LP Manager for Michael Kors. Sephora announced the following changes: Brent Hamlin to Director of LP and Walter Dubose to LP Program Manager. Rob Gibson, CFI is now AP Manager, West, and Mike Kujawa is now Senior Regional Manager, AP for Under Armour.

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

Calendar May 3, 2016 Dallas Cyber Security Summit Omni Dallas (TX) Hotel cybersummitusa.com June 14–16, 2016 National Retail Federation NRF PROTECT Loss Prevention Conference & Expo Pennsylvania Convention Center Philadelphia, PA nrfprotect16.nrf.com June 30, 2016 DC/Metro Cyber Security Summit Ritz-Carlton Tysons Corner McLean, VA cybersummitusa.com July 18–20, 2016 Security100 Summits Security100 Retail Chateau Elan Winery & Resort Braselton, GA security100summits.com

July 24–27, 2016 Restaurant Loss Prevention & Security Association Annual Conference La Cantera Hills Resort San Antonio, TX rlpsa.com

September 12–15, 2016 ASIS International 62nd Annual Seminar and Exhibits Orange County Convention Center Orlando, FL asisonline.org

August 24, 2016 Georgia Retail Association 6th Annual GRAORCA Retail Crime Conference AmericasMart, Atlanta, GA graorca.org

September 21, 2016 New York Cyber Security Summit Grand Hyatt New York cybersummitusa.com

August 25, 2016 Chicago Cyber Security Summit Hyatt Regency Chicago cybersummitusa.com September 7 – 8, 2016 International Supply Chain Protection Organization 2016 Conference Fossil Group Headquarters Richardson, TX iscpo.org

October 3–5, 2016 Loss Prevention Research Council 12th Annual IMPACT Conference University of Florida Reitz Union Gainesville, FL lpresearch.org October 27, 2016 Los Angeles Cyber Security Summit Fairmont Miramar Hotel cybersummitusa.com

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

LP Magazine | may–june 2016

Advertisers Agilence.................................................................75 agilenceinc.com/retail-2020 American Public University.................................31 studyatapu.com/lp-mag Axis Communications...........................................29 axis.com/products/axis-s10-series BSI...........................................................................30 bsi-eas.com CAP Index...............................................................51 capindex.com/compare CBC Americas.......................................................13 ganzsecurity.com CEC..........................................................................35 correctiveeducation.com Checkpoint.............................................................19 checkpointsystems.com CIS Security Solutions...........................................2 cisssinc.com ClickIt Inc...............................................................53 clickitinc.com Cyber Security Summit........................................69 cybersummitusa.com Detex.......................................................................41 detex.com/badboys1 FireKing Security Group.......................................43 fireking.com Genetec..................................................................15 genetec.com/retail Industrial Security Solutions...............................49 isscorpus.com Indyme....................................................................75 indyme.com/spvm InstaKey Security Systems.................................47 instakey.com International Assoc. of Interviewers.................77 certifiedinterviewer.com Loss Prevention Foundation................................57 losspreventionfoundation.org LPM Media Group.................................................16 lpmmediagroup.com LPjobs.com.............................................................44 lpjobs.com LP Software...........................................................55 lpguys.com March Networks.....................................................9 marchnetworks.com/lp Nedap.....................................................................75 nedapretail-americas.com Palmer, Reifler and Associates..........................67 palmerreiflerlaw.com Protection 1............................................................39 protection1retail.com/loss-prevention Protivity...................................................................75 protivitycommunications.com Protos Security........................................................3 protossecurity.com The Retail Equation.................................................5 theretailequation.com Restaurant LP & Security Assoc........................59 rlpsaannualconference.com SAMSUNG.............................................................25 samsung-security.com SECURITECH............................................................7 securitech.com/simplethebest Security Resources..............................................83 securityresources.net Security100 Summits Retail.................................32 security100summits.com/retail Southern Imperial.................................................65 intelligentlossprevention.com S-TRON...................................................................63 s-tron.com Sysrepublic........................................................3, 37 sysrepublic.com Turning Point Justice...........................................21 turningpointjustice.com Tyco Integrated Security.....................................84 tycois.com/synergy USS..........................................................................23 ussinnovate.com Verisk Retail...........................................................27 veriskretail.com

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Vendor advisory board American Public University Tatiana Sehring Director, Corporate & Strategic Relationships Axis Communication Hedgie Bartol Business Development Manager, Retail Best Security Systems (BSI) John Gantenbein President CAP Index Stephen B. Longo Vice President, Strategic Initiatives Checkpoint Carlos Perez Senior Director, Global Marketing

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Turning Point Justice Lohra Miller President and CEO

Detex Ken Kuehler National Account Manager

Palmer, Reifler & Associates Jeff Welch Executive Director

Tyco Integrated Security Kevin E. Lynch, LPC Executive Director

Protos Security Kris Vece Director of Client Relations

Universal Surveillance Systems Steve Sell Chief Marketing Officer

FireKing Security Group James Currey Senior Vice President Cash Management Solutions Industrial Security Solutions Dave Sandoval President

The Retail Equation Tom Rittman Vice President, Marketing

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

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

LP Magazine | may–june 2016

Parting words

It’s Good to Be an Observer

Jim Lee, LPC Executive Editor

hanks go to the RILA staff and the asset protection leadership committee for staging a superb conference in Dallas. Those of us with the magazine thoroughly enjoyed the show, the speakers, and the networking. But the conference had a rocky start as April showers turned to stormy weather that caused airplane delays and cancellations for a large number of attendees trying to get in on Sunday.

David Lund and Maurizio Scrofani represent two types of leadership styles that lead to excellence. Lund is the passionate leader. He gets excited about what he is doing. Scrofani is more the visionary leader. He gets what he wants because he knows what he wants. We are blessed that we have such leaders and many others like them. David Lund of DICK’S Sporting Goods had one of the most challenging situations. He was stranded in Charlotte Sunday afternoon and scheduled to give the keynote opening presentation Monday at 8:00 a.m. So David made an executive decision to drive the 1,025 miles, which he and two of his team did in about fifteen hours overnight. David told the audience bright and early Monday that a great snack at Krystal Burgers along the way put him in the mood to address RILA’s largest attended conference in its history. David was on fire, partially fueled by caffeine I suspect, as he spoke with passion, enthusiasm, and love for the loss prevention profession. He indeed has a seat at the table with DICK’S. Thank you, David, for a great opening speech.

may–june 2016

I had a second occasion recently to observe another exceptional leader in action. I was invited to attend the Macy’s supply-chain asset protection internal team meeting. Those of you with a little grey in your hair or just little hair can remember when distribution security was a stepchild in retail. The stores got all the attention, the best people, and the most money to spend. That’s no longer true as several retailers have made a real commitment and upgraded their LP logistics programs; none more than Macy’s. Maurizio Scrofani, vice president of AP supply chain, and his leadership team have a program that leverages technology, analytics, passion, and cross-functional inclusion. Best I have seen. Lund and Scrofani represent two types of leadership styles that lead to excellence. Lund is the passionate leader. He gets excited about what he is doing. He is invested in the journey as well as the goal. For him it is not tiring (fifteen hours of driving), and the pursuit of the goal is fun and intriguing. Passionate leaders are contagious. Scrofani is more the visionary leader. He gets what he wants because he knows what he wants. These visionary leaders see it, feel it, and experience it in their minds and hearts. They envision what they want and where they are going so clearly that they can project themselves forward to that moment of victory and describe it to you as though it were happening right then. They have a vision that becomes their compass. It keeps them motivated and efficiently on track, which is exactly what I observed with Maurizio and his team. We are blessed that we have such leaders and many others like them. But we should not forget the people down a rung or two in the districts, the distribution centers, and the stores who are the implementers and executors of the programs. They are where the rubber meets the road and deserve a lot of credit. To shift gears a bit, I really wanted to spend some time writing about “fairness in life and the LP world.” Maybe next time. For now I will leave you with this bit of trivia. In the fifteenth year of the magazine, what was the featured interview in the very first issue? Here’s a bonus question. What was RILA called before it was called RILA? Happy Mother’s Day, Happy Father’s Day, and please fly the flag on Memorial Day in remembrance of all those who have served.

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May - June 2016

Articles inside

PARTING WORDS

PERSPECTIVES By VERVILLE

DIGITAL DIALOGuE

EVIDENCE-BASED LP

ASK THE EXPERT

SOLuTIONS SHOWCASE

INTERVIEWING

INDuSTRy NEWS

EDITOR’S LETTER