Mark McClain, Director, Global Investigations, Walmart Stores, Inc

On a panel at NRF’s Loss Prevention Conference & EXPO, Mark McClain, Director, Global Investigations, Walmart Stores, Inc.;  Gail Morris, Regional Loss Prevention Manager, Williams-Sonoma; and Tony Sheppard, National Manager, ORC Unit, CVS Caremark shared some tips and insights about how to use various tools to solve ORC cases.

A few years ago, Williams-Sonoma noticed something fishy going on with their $80 salt shakers and equally expensive pepper mills. Multiple returns to multiple credit cards belonging to the same two people were popping up in several stores. Nobody had  seen a crime being committed, but Morris was able to piece together data from various systems to build multiple spreadsheets and reports that, when put together, revealed the extent of the crimes and possible next targets. These were no small-time crooks. The criminals had hit 39 states and 500+ malls. This was their full-time job and they were responsible for hundreds of thousands of dollars of thefts over a three-year period. Armed with a slew of data and reports, Morris presented the case to a task force and worked in partnership with them through the investigation and up to the arrest.

This “Salt and Pepper Caper”,  as it became known, is an illustration of successfully using the tools at your disposal to crack a difficult case. But many times, it’s difficult to get a convincing case together and get law enforcement to take it on. McClain shared a few tips for working ORC cases successfully:

1. Know the tools available to you. Be aware of the data available to you from point of sale reporting, SQL queries, gift card history and other sources. You’ll have to follow the data.
2. Think outside your store.  It’s likely that you’re not the only store being targeted, so pool your resources and your information. Other retailers might be able to provide tools, technology and even expertise or skills you don’t have on your own team.
3. Evaluate and elevate the capabilities of your team. A lot of the work it takes to solve an ORC case is behind a desk analyzing data, so having someone on your team or working with a partner who understands data analysis, statistics and predictive analysis is helpful.
4. Build and retain partnerships. This is one thing you can’t do from the office. Get to know those in law enforcement and fellow retailers so you won’t be starting from scratch when you need help.

Ramon Jara, Regional Director, Loss Prevention Sears Holding Corporation

Sears Holding Corporation’s Trisa Gildard and Ramon Jara began their session at the NRF Loss Prevention Conference & EXPO with some eye-opening stats. Speaking generally about employees’ feelings toward their current jobs, Gildard cited a Forbes article which said that more than 60 percent of employees surveyed don’t feel their career goals are aligned with the plans their employers have for them. This discontent can lead to talent leaving for another job. The result: the wealth of organizational knowledge these employees have is lost and is not easily replaced, which immediately impacts results. “You’re only as good as your people. If you have the right people in place your job will be that much easier,” Jara added.

Gildard and Jara then outlined what a developmental culture could look like. They shared a framework Sears Holdings uses in their loss prevention department to identify strengths, opportunities and weaknesses for each employee. These gap analyses should be completed by all employees and their supervisors in order for employees to have responsibilities that best fit their skill set. Another critical component is to ensure that a career path is made clear, and that both the employee and employer are aligned on that vision. At Sears, “from the day a person starts, they know the potential for growth is there,” Gildard said.

After everyone broke in to small groups to build their own career development plan, or SMART plan, Jara shared five things retailers can start doing now to create a culture of development.

1. Internally agree on critical core competencies that will ensure success
2. Build a consistent assessment process
3. Create a plan or strategy around professional growth
4. Implement tactics to measure and reward execution
5. Using SMART, teach your leaders how to create developmental plans for their employees

The competition for talent is fierce across all industries. And a discernible, structured process for growth is critical for retailers to recruit and retain the best of the best.

Did you know that as of last year in the United States, on average two people are killed per day in the workplace? Outside of the United States an astonishing nine people are killed – a number that is likely underreported and more realistically hovers around thirteen.

Crisis Management and Workplace Violence Expert Dr. Larry Barton

As Barton outlined, one of the most serious topics LP professionals face is protection of their people. And while he recognized that, “threat assessment is an imperfect science,” he gave the room of retailers important recommendations to consider for threat assessment and violence prevention.

First, have a threat assessment team and make sure it includes the following professionals:

• HR
• Security
• Legal
• External Assessor
• Supervisor

Look for major warning signs in your employees, which include:

• Recent, negative changes in behavior
• Specific persons, stores, policies referenced
• Physical deterioration, like drastic weight loss
• Shared ideation
• Mention or display of weapon

Be alert to new dynamics that are impacting these situations:

• Bullying
• What motivates retaliation
• Retail ethics/compliance hotlines
• The retail employee as social activist/victim

And finally, remember retail workplace standards and what your obligations are:

• Duty to care
• Duty to warn
• Duty to act
• Duty to supervise

“Every case is different, every victim is different,” Barton explained. “Get people to think in advance about the kinds of circumstances that could occur in your retail establishment.”

Armed with this information, there’s no doubt that the audience will return home with useful information on how to better protect their employees, customers, and brands.

While Tilly’s hasn’t been using the technology long enough to gather ROI data, both American Apparel and Brookstone saw conversion increase and shrink decrease from video analytics.

Blue Montez, Director, Asset Protection, American Apparel

Brookstone and American Apparel use it to determine days and times with the highest customer traffic to optimize staffing. Analyzing “dwell,” or how long customers stay in one area helps place employees and products in optimal places in the store. Merchandisers can use the same technology to determine which displays attract more traffic and marketers can measure promotions.

Video analytics provide data on customers in stores that go way beyond loss prevention, and that’s the key to making the case for it.

“This doesn’t fly as an LP tool. You have to reach across the aisle to other department heads, to store operations, merchandising and marketing folks to show the value from other perspectives,” Burch said.

And when you demonstrate the value, they said, be prepared to be the most popular guy in the office because everyone will want a piece of it.

As with any new technology roll out, there are some key considerations.

• Partnership with IT and operations comes first. “Don’t go to finance by yourself” said Burch. “Partner with operations and improve conversion at the store level.” Soon, merchandising and marketing will want in on it.
• Build a culture around analytics and data. The data “changes the culture for staff in the store. They want more data and it drives performance,” Montez said.
• Start small and avoid a one-size-fits-all approach chain-wide. “Every location is different, so the ROI might not be there for every store,” Montez warned.

Most important is the ability to play an important role in the organization. “With this information, you’re going to be the center of attention. You’ll have multiple departments knocking down your door wanting to look at this and that,” Boremi said. “And that’s what you want to promote with video analytics. You want to drive your business to the next level,” Montez added.

NRF Loss Prevention Conference EXPO Floor (2012)

This week, NRF’s Loss Prevention Conference and EXPO kicks off in San Diego, attracting more than 2,400 loss prevention and law enforcement professionals. Like many other areas of the retail industry, loss prevention has changed dramatically in recent years. As we illustrated earlier with our LP leaders series, those who have more than 15 years of experience under their belts likely started their careers at a time when the profession was more narrowly defined as a security or shoplifter-catching operation. But in many retail organizations today’s loss prevention pros have a more diverse set of responsibilities and an expanded strategic role.

As the retail environment continues to evolve, loss prevention teams are tasked with staying one step ahead of criminals and protecting their organizations against increasingly complex threats like fraud, organized retail crime and more. As thousands of LP leaders make their way to San Diego to sharpen their skills and learn new ways to be successful, we wanted to share some of the hot topics they’ll be talking about at the show. We’ll be expanding on these topics on the blog this week with coverage from the show, and you can get instant updates by following #nrfLP13 on Twitter.

Emerging technologies

Emerging technologies provide both new opportunities and new threats. Retailers are constantly weighing the benefits of the latest customer-wowing technology against the potential risks. Plus new tools like facial recognition and video analytics are becoming more available to retailers. From mobile point of sale to social media monitoring, technology and the trend to omnichannel retailing is changing the retail landscape and creating new questions for LP teams to seriously consider.

Business continuity and emergency preparedness

Reports of violent incidents in or around shopping centers and the complications of gun-carry laws have LP leaders evaluating active shooter emergency protocols, while the extreme weather we’ve seen both recently and over the past year has heightened sensitivity to emergency response and business continuity plans.

Theft and organized retail crime

As criminals evolve and change their behavior, LP leaders are focused on enhancing anti-theft and shrink-management strategies. With ORC growing, there’s a focus on enhancing information-sharing networks and partnerships involving retailers, local law enforcement and mall management.

Professional Development

As the LP role becomes more complex and central to the executive strategy, it’s opening up diverse growth opportunities for those in the LP field. LP professionals are looking for strategies to develop and attract the talent and skills needed for tomorrow’s LP leaders.

NRF’s Loss Prevention Conference and EXPO runs Wednesday through Friday at the San Diego Convention Center. To register, visit www.nrf.com/lp13. Entry to the EXPO Hall, featuring more than 200 solution providers and the Fusion Center, is free for retailers and law enforcement professionals.

With our Loss Prevention Conference coming up next week, we wanted to highlight the ways in which retailers are working together with law enforcement to combat ORC, so we spoke with Captain Bill Williams of the Los Angeles Police Department Commercial Crimes Division. Williams was an integral part of forming the Los Angeles Area Organized Retail Crimes Association (LAAORCA) in 2009, after retailers approached the department about the need for greater collaboration. Since then, the association has become a model for many other ORC associations across the country.

Read on to learn more about how this association helps retailers apprehend ORC suspects and what retailers can do to strengthen partnerships with their local law enforcement agencies.

What are the key elements of your ORC association that have made it successful?
It’s all about developing relationships and partnerships between the public and private sectors to address the ORC issue. One of the ways we do that is by using our website as tool to share information. Through our website, retailers and law enforcement officers can get instant updates about ORC incidents. We also have a general meeting every six weeks for the entire LA area, and an annual conference, which attracted just about 1,000 people this year. With LAAORCA, we believe in building partnerships, providing education and arresting suspects. This is all supported by the chief of police, district attorney and city attorney, and we’re also working with other ORC associations around the area.

What happens at a general meeting?
The meetings are very structured. We have a few people make a short presentation about an issue, and then we discuss it as a body. We have an average of 60 to 100 law enforcement and retailers at the meetings. Sometimes, there’s a retailer or law enforcement officer there who can provide information for the person with the problem. And I’ve seen multiple times where someone at a meeting knew of the suspects, so they get together afterward, and that’s led to some arrests. So the information exchange is great. We also provide some training and bring in topical speakers at the meeting, and we always follow up on the issues discussed at the previous meeting, so we get some closure on those.

Can you share an example of a success story?
One comes to mind. We had a series of burglaries that were going on in LA and elsewhere, and we found out that the suspects were going to a different state. Of course, my people couldn’t go there, but we shared that information and a retailer was able to follow them. The interesting thing was that retailer who followed them wasn’t even one of the retailers that the product was being stolen from, but they were able to provide information to help the investigation. They also observed these suspects burglarize in the other state. We got warrants, and when the suspects came back, we were able to take those people into custody. And that happened because of a partnership between the LAPD and three or four retailers that were working together.

In another instance, my cargo theft people were doing an investigation and came across a large quantity of cosmetics. We determined whose it was, and because we had a partnership and relationship with that company, we knew who to call, and it turned out that we recovered several million dollars worth of product that they didn’t know was stolen yet. So because of the partnership and existing relationships, we were able to connect the dots and return that product to them.

What can retailers do to strengthen their relationships with law enforcement?
Retailers need to go out and introduce themselves to local law enforcement and federal law enforcement. Because it’s human nature—if you don’t have a relationship and trust, when you walk in you’ll have a harder time working together, so you really need to get to know your local station police. And if your local station doesn’t think property crime or retail crime is a priority, then go to the management. The origin of LAAORCA came from our former chief being approached by retailers with some problems they were having.

The LAPD is one of more than 20 law enforcement agencies in the Fusion Center at NRF’s LP Conference next week. What are you most looking forward to about that event?
I’d like for people to come in and tell me the concerns they have. I’d like to get to know more people who are involved in retail LP and really establish good relationships. I also want to learn some things from them and get some new ideas. I think some retailers come in because they want to see who the police department is, but as law enforcement, we also want to get to know retailers because we can learn from them, too. Partnerships and good relationships are the key to fighting the scourge of ORC.

The LAPD and other local, state and federal law enforcement agencies will be available in the Fusion Center at NRF’s Loss Prevention Conference, June 12-14 at the San Diego Convention Center. Retailers and law enforcement professionals can attend the exhibition hall and Fusion Center at no charge.

In my job I’m fortunate enough to speak first-hand with retailers on a regular basis to discuss what is top of mind in the LP community. From these conversations, I’ve learned there is still a great concern over cargo theft, in-store violence from criminals avoiding apprehension, and “gateway crimes” – crimes that are known to lead to bigger crimes.

This year, a troubling new trend emerged: store merchandise credit/gift card fraud. Essentially, experienced “boosters” return stolen merchandise without a receipt for the sole purpose of receiving store credit for a gift card, and then turn around and sell that merchandise credit for cash to secondary markets. Retailers agree this is a very important crime to keep an eye on. Nearly eight in 10 executives surveyed have experienced this threat at their stores.

According to the survey, understanding the complexity of this issue by both law enforcement and top retail management has increased. That’s a good sign, but industry experts and law enforcement officials estimate that ORC stills cost retailers $30 billion a year. NRF designed the infographic seen here to highlight some of the results from the survey. Just how big is $30 billion? See what we found you could buy for that sum.

Embed this infographic on your site using the code below
<a href=”http://blog.nrf.com/2013/06/06/organized-retail-crime-current-challenges-and-future-solutions/”><img src=”http://d6be91a12bc2a9175275-58f3264aceb7500b5b8a66d1cf959fff.r43.cf1.rackcdn.com/ORC-graphic-june2013-700×900.jpg” alt=”Organized Retail Crime (ORC) – Infographic” title=”Organized Retail Crime (ORC) – Infographic” width=”700″ height=”900″ </a>

If you are an Oklahoma retailer and had to shut down business operations as a result of the tornado, or are working with the community recovery efforts, there are ways to get help.

NRF’s LPinformation site has accurate, up-to-date information available for the ongoing recovery efforts. Our Disaster Preparedness and Recovery page has pulled together some important government resources from agencies such as FEMA, including:

• How to apply for disaster assistance
• The Geospatial Platform is a public website for those who need to map their assets in areas impacted by the tornadoes
• Contact the City of Moore Emergency Management Department for inquiries about access to disaster areas
• The Federal Motor Carrier Safety Administration has information on waivers for commercial motor vehicle drivers in direct relief
• A list of federal activities underway to support Oklahoma response efforts
• How to find an open American Red Cross shelter
• Follow @femaregion6, @cityofokc,  @redcrossokc and @NWSNorman on Twitter for the latest updates

If you would like to help in the recovery efforts, we encourage you to visit the American Red Cross website to learn what is most needed at this time.

In advance of our Loss Prevention Conference next month, we’ve been exploring how many of today’s seasoned LP executives have played an integral part in this evolution throughout the course of their careers. To wrap up our series, we spoke with LP Advisory Council Chairman and Vitamin Shoppe Vice President of Loss Prevention Gary Johnson about his personal career journey.

Read on to find out how his first employers gave him a leg up in the business, how rewarding it is to help others and why retail business savvy is critical to success in LP.

Gary Johnson, Vice President of Loss Prevention for Vitamin Shoppe Industries

When were you first exposed to the loss prevention profession? What made you decide to pursue a career in loss prevention/asset protection?

I first heard about loss prevention while studying law enforcement at Western Illinois University. I decided to do my internship with a retailer named Osco Drug because the thought of catching shoplifters sounded fun — and it was one of the paid internships! After that, I became quite interested in it as a career. I always had an interest in business and law enforcement, and it paid more than a patrolman with the Chicago Police Department, so it was the best of both worlds.

How has your unique personal background helped you succeed in your LP career?

When I began in LP, my early mentors were really retail operators first and loss prevention professionals second. They taught me how to sell prevention concepts, how to show the dollars and cents of a particular initiative, and the importance of influencing people to want to play a role in reducing shrink. Certainly, I had to build experience and confidence with the core competences of loss prevention techniques, but looking back it was more important to gain proficiency with retail concepts and “soft” leadership skills.

Tell us about a particular moment, challenge or success that made you certain this was the right profession for you.

Wow, there have been many. It’s very rewarding to help people, whether it’s developing a program that keeps people safe at work, helping advance someone’s career, or catching a criminal that has hurt others. For example, I still recall working at Pier 1 Imports and how gratifying it was to solve a case involving a string of robberies, one of which involved a sexual assault of an associate. Working the data from my office in Fort Worth, I was able to connect numerous dots and link the right law enforcement agencies. Back in the day, this sharing of data didn’t frequently happen between private sector and law enforcement. I’ll never forget the associate’s reaction when I informed her that the guy who assaulted her had been caught.

The role of LP is continuing to expand and grow. When it comes to hiring and promoting team members, what kind of talent and skill sets are you looking for to be successful now and in the future?

Yes, the role of LP continues to evolve — and that’s a great thing! The C-suite has recognized the value that a professionally led loss prevention program means for the business. LP impacts not only shortage reduction and shrink but also IT security, data security, product safety, workplace violence programs, brand reputation, social media and so many more parts of the business. When looking for talent, it’s critical to find LP people who have solid core competences, but just as important is retail business savvy. Understanding how all facets of the business work, the ability to identify gaps, and, of course, build remediation plans. Leadership skills are essential. Being able to coach, train, and be a catalyst of change is vital because today’s LP professional must be able to influence and motivate cross-functional teams at all levels.

White is the senior vice president of loss prevention at Gap Inc., vice chairman of the LP Advisory Council, and a speaker at our upcoming Loss Prevention Conference & EXPO. Read on to find out how he views the profession, how growing up in inner city Chicago gave him an edge in the industry, and what the LP profession needs today.

When were you first exposed to the loss prevention profession? What made you decide to pursue a career in loss prevention/asset protection?

Keith White, SVP, Loss Prevention, GAP Inc.

Like a number of people in the field, I discovered it by accident. After finishing college, I was looking at law enforcement opportunities. A friend told me about an loss prevention job interview he had and asked if I wanted to interview in his place. I said, “what’s loss prevention?” I knew about corporate security, but I wasn’t impressed with being limited to a uniformed guard. I had no idea that loss prevention would be so vast and sophisticated. For me it was the perfect intersection between the investigative training and business acumen I had developed at the collegiate level. I could carry a briefcase, manage a team, oversee a budget and manage business objectives, but I would also have the opportunity to testify in court and manage complex, interesting investigations — everything I like to do.

How has your unique personal background helped you succeed in your LP career?

When you live in the inner city, you have to be extremely perceptive and aware of your surroundings. You have to be able to sense when there is a change in the atmosphere, whether it’s in the personal relationships of those around you or the physical environment. If someone has to tell you something’s not right, then it’s too late—you’re robbed or worse. I think that being perceptive, understanding how to read people, understanding body language and being able to evaluate all kinds of situations has given me a distinct advantage in this role and in all my LP roles.

Tell us about a particular moment, challenge or success that made you certain this was the right profession for you.

I started my career in a distribution center environment, and I got a confidential tip that a receiving dock worker and truck driver were colluding to steal a truckload of swimming pools and fans. I connected with the local PD and we set up an elaborate sting operation to catch them in the act. I learned a lot from that. First, that people always think people steal things like electronics, but that was one of the hottest summers on record and pools and fans were selling like hotcakes, so you have to understand the full context of the environment you’re engaged in.

And second, in setting up that sting with the police, I gave up some control over the investigation. And because union members were involved, it was a political disaster that some of my superiors didn’t want me to pursue. But I told them that the sting is going down, and I’m going to be there – if I’m not here tomorrow, that’s on you. Well, the sting went down like in a textbook. The apprehensions went down perfectly. And then, my boss said, “look what Keith and I did.” It was a laughable moment, but I knew that I was in this career for the long-haul. I stand for what’s right, not what’s politically correct. Being an authority figure, we sometimes get involved in situations that don’t win popularity contests, but I knew I’d be OK doing that.

The role of LP is continuing to expand and grow. When it comes to hiring and promoting team members, what kind of talent and skill sets are you looking for to be successful now and in the future?

In the old days, there were two ways to look at LP. If you’re looking for a management candidate, you were looking for someone who had a law enforcement background with investigative experience. And for an hourly level employee, you were looking for physical presence, what we called the big dude in the door.

Now, for management candidates, I’m looking for someone who has an academic background in criminal justice or law and even an M.B.A. or business background because I want someone who can apply concepts and strategies within a business framework. For those hourly associates, physical presence is not what it used to be. I look for people who can outthink a shoplifter or a criminal, not out-wrestle them or outrun them. If there’s a 5’1” woman who can educate the staff, build awareness, create a shrink-reduction strategy for the store and understand all the technical tools at her disposal, she’ll do 20 times more than the big dude at the door ever could. So we’re looking for people with those ambitions and qualifications.

Stay tuned for the last post in our series, where  Gary Johnson, vice president for loss prevention at The Vitamin Shoppe Inc., will share his story.