Retail shrink tops $50 billion as cyber threats become more of a priority

25th Annual National Retail Security Survey Released

Theft, fraud and losses from other retail “shrink” totaled $50.6 billion in 2018, up from $46.8 billion the year before as industry security executives said there is a growing overlap between loss prevention and cybersecurity efforts, according to the annual National Retail Security Survey released today by the National Retail Federation and the University of Florida.

“We are seeing dramatic changes in the risks faced by retailers, and loss prevention practices and priorities are evolving to meet those challenges,” NRF Vice President for Loss Prevention Bob Moraca said. “As criminals find new ways to steal, loss prevention teams are finding new ways to stop them. Increasingly, this is a battle focused on technology.”

According to the report, shrink averaged 1.38 percent of sales during 2018, up slightly from 1.33 percent in 2017, but has held steady around 1.4 percent over the past few years. With the percentage largely unchanged, the increase in the dollar amount is due primarily to growth in retail sales.

The largest losses per incident came from robberies at an average $2,885.15 (down from $4,237.02 in 2017), followed by employee theft at $1,264.10 (up from $1,203.16), and shoplifting/organized retail crime at $546.67 (up from $543.28). Robberies are comparatively rare, however, while shoplifting/ORC and employee theft together typically account for about two-thirds of shrink each year, with most of the remainder coming from vendor or paperwork errors.

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FRT - The Game-Changing Technology
Facial Recognition: A Strategic Imperative for National Security
An abundance of data is overwhelming intelligence analysts and law enforcement officials across the globe. Without immediate action to get ahead of this challenge, our national security will fall behind.

In recent years, the intelligence and law enforcement communities have struggled to extract actionable and accurate investigative information from a constantly expanding database of image evidence.

Additionally, the sheer number of malevolent actors on the web, especially the dark web – coupled with the rapidly expanding use of video – exacerbates this investigative challenge. As the volume of information balloons and the types of nefarious activity increases, the limits of current systems to analyze data and extract meaningful insights have already been reached.

Facial recognition technology (FRT) provides a game-changing technology that is likely to become one of the most strategic tools to support our national security posture.

A first look at Amazon’s new delivery drone
For the first time, Amazon, today showed off its newest fully electric delivery drone at its first re:Mars conference in Las Vegas. Chances are, it neither looks nor flies like what you’d expect from a drone. It’s an ingenious hexagonal hybrid design, though, that has very few moving parts and uses the shroud that protects its blades as its wings when it transitions from vertical, helicopter-like flight at takeoff to its airplane-like mode.

What’s maybe even more important, though, is that the drone is chock-full of sensors and a suite of compute modules that run a variety of machine learning models to keep the drone safe. Today’s announcement marks the first time Amazon is publicly talking about those visual, thermal and ultrasonic sensors, which it designed in-house, and how the drone’s autonomous flight systems maneuver it to its landing spot. The focus here was on building a drone that is as safe as possible and able to be independently safe. Even when it’s not connected to a network and it encounters a new situation, it’ll be able to react appropriately and safely. techcrunch.com

Princess Cruise Lines Plead Guilty - Environmental Probation Violations, Pays $20M Criminal Penalty
Princess was convicted and sentenced in April 2017, after pleading guilty to felony charges stemming from its deliberate dumping of oil-contaminated waste from one of its vessels and intentional acts to cover it up.

Carnival admitted it was guilty of committing six violations of probation. Two of the violations involved interfering with the court’s supervision of probation by sending undisclosed teams to ships to prepare them for the independent inspections required during probation.
 
Under the terms of the settlement, Carnival will do the following:

Issue a statement to all employees in which Carnival’s CEO accepts management’s responsibility for the probation violations;

Restructure the company’s corporate compliance efforts, including appointing a new chief Corporate Compliance Officer, creating an Executive Compliance Committee across all cruise lines, adding a new member to the Board of Directors with corporate compliance expertise, and train its Board of Directors;

Pay up to $10 million per day if it does not meet deadlines for submitting and implementing needed changes to its corporate structure. justice.gov

7,500 Workers Used College Benefit in 1st Year
Walmart Offers Cyber Education for Employees
Adds 14 Technology Degrees & Cyber Security
Walmart, which is the largest U.S. private sector employer, with a nearly 1.5 million workforce, said it will cover the costs of tuition, books and fees while employees will be required to pay $1 a day for the duration of their studies.

Walmart’s initial offer required employees to get degrees in business and supply chain management. The expanded program, it said, will add 14 new technology degrees in areas including cyber security and computer science.

The expanded program will also seek to draw and retain high school students by offering them jobs with scheduling options, such as the opportunity to work the same day and shift for 13 weeks.

It will also offer free ACT and SAT test prep, up to seven hours of free college credit, a debt-free college degree and a graduation bonus program of up to $1,500 for 5,000 U.S. workers who have not previously completed a college degree. reuters.com

OSHA's Emergency Preparedness and Response web pages
Emergencies can create a variety of hazards for workers in the impacted area. Preparing before an emergency incident plays a vital role in ensuring that employers and workers have the necessary equipment, know where to go, and know how to keep themselves safe when an emergency occurs. These Emergency Preparedness and Response pages provide information on how to prepare and train for emergencies and the hazards to be aware of when an emergency occurs. The pages provide information for employers and workers across industries, and for workers who will be responding to the emergency. osha.gov
 

'Benign' vs. 'Hostile' Friendly Fraud
Steve Durney is senior vice president for market strategy at Ethoca, a chargeback management firm recently acquired by Mastercard. Durney makes a distinction between “benign” and “hostile” friendly fraud, or false claims, as they are also called.

The benign type can result “when cardholders honestly don’t realize that they or another family member made a certain card purchase, so they dispute it.” That’s in contrast to the hostile variety “when cardholders decide to dispute a transaction they knowingly made.”

The two types of friendly fraud “have created a perfect storm,” Durney says, “where merchants and issuers are dealing with an increasing number of genuine transactions that should never have been disputed.”

Durney estimates that 28 percent of all ecommerce revenue today is lost to friendly fraud. In addition, he says, friendly fraud constitutes over 30 percent of total card fraud, up from just 18 percent in 2012.

The impact varies by retail segment, he says, from about 10 percent or less for apparel retailers to as much as 90 percent for sellers of digital goods and services.

Part of the problem in grappling with friendly fraud is that retailers are often reluctant to push back when cardholders dispute transactions, especially if there is a longstanding purchase history with the consumer, Durney says. stores.org

'The mall is now a warehouse'
Blackstone Bets $18.7 Billion on Amazon Effect in Warehouse Deal
That’s how much the alternative investment manager is paying for 179 million square feet of urban logistics properties -- the warehouses used by Amazon.com Inc. and other retailers to fulfill orders from online shoppers. The deal with Singapore’s GLP Pte, the second-largest owner of U.S. logistics real estate, will almost double Blackstone’s U.S. industrial footprint.

The rise of Amazon and other e-commerce companies has increased the need for warehouse space by retailers seeking to expand their digital operations and cut delivery times. The shift toward online shopping is reconfiguring supply chains and shaping the fortunes of industrial landlords, with demand especially high in and around large cities, where e-commerce has taken off fastest. bloomberg.com

Fears grow over 'food swamps' as drugstores outsell major grocers
With CVS selling more groceries than Whole Foods and Trader Joe’s combined, researchers fear food ‘deserts’ are becoming ‘swamps’ of processed food.

In 2017, CVS held a 3.9% share of the grocery market. Walgreens came in at 2.4%. That may not seem like much, but it far outpaced both Whole Foods and Trader Joe’s, which had 1.4% and 1% respectively. The eyebrow-raising figure probably comes down to an issue of scale – last year CVS and Walgreens each had close to 10,000 stores in the US, while Trader Joe’s and Whole Foods each had fewer than 500 locations. theguardian.com

Charlotte Russe Relaunches Five Stores, E-Commerce Site Under New Owner
Less than two months after shuttering all of its 500+ stores, Charlotte Russe is making a minor comeback. The fashion retailer relaunched its online store on June 3, and reopened five physical stores on June 5. YM Inc., the new owner of Charlotte Russe, plans to open 100 locations. retailtouchpoints.com


Quarterly Results
Tiffany Q1 comp's down 3%, net sales down 3%
  Americas comp's down 4%, Asia-Pacific down 5%, Japan down 4%, Europe down 7%, UAE down 17%