NRF's 2019 Organized Retail Crime Report

Two-Thirds of Retailers See Increase in Organized Thefts

Average ORC Loss Tops $700K per $1B in sales - 71% Support Federal ORC Law
97% Have Been Victimized in the Past 12 Months

Organized retail crime affects almost all merchants and more than two-thirds of those surveyed have seen an increase in the past year, according to the 15th annual ORC study released today by the National Retail Federation.

The report found that 97 percent of retailers had been victimized by ORC in the past year and that 68 percent had seen an increase in ORC activity. Losses averaged $703,320 per $1 billion in sales, marking the fourth year in a row that the figure topped the $700,000 mark.

Nearly two-thirds (65 percent) of retailers said ORC is a higher priority for their companies than five years ago, while 56 percent were allocating additional technology resources to the issue and 44 percent were increasing their loss prevention budgets.

Among steps taken to fight ORC, 38 percent had changed or were planning to change return policies while 37 percent were doing the same with point-of-sale policies, 27 percent with employee screening and 24 percent with the way they handle trespassing.

Retailers in areas with state-level ORC laws said they were happy with help received from local law enforcement (84 percent) and state law enforcement (75 percent) but somewhat less so with federal law enforcement (64 percent). ORC often crosses state lines, and 71 percent said a federal ORC law is needed.

A number of states have increased the threshold of what constitutes a felony in recent years, allowing criminals to steal more before being subject to the stronger penalties that come with a felony. Among retailers surveyed, 51 percent had seen an increase in average ORC case values in states where that has happened.

Retailers’ efforts to fight ORC focus on more than just preventing the theft of merchandise. The survey found that 68 percent of retailers said ORC gangs had shown more aggression or violence in the past year, and many anti-ORC resources are directed toward protecting the safety of customers and employees.

The top five cities for ORC in the past year in order were Los Angeles, New York, Houston, Chicago and Miami, with a number of ties rounding out the top 10.

Click here to read the full report

Click here to read the D&D Daily's latest Q3 2019 ORC Report
 

Toys "R" Us Is Back-Now With More Surveillance!
Retailer Faces Backlash for 'Spying' on Kids
The iconic retailer has opened two new mall outposts, one in Texas and another in New Jersey, just in time for the holidays. The stores are packed with some of the most kid-coveted products of the year, but have been garnering attention for another reason: the surveillance technology they're using.

Media reports described how Toys "R" Us partnered with the startup b8ta to install sensors in the stores' ceilings, which track people as they walk around and look at toys. "Toys 'R' Us is monitoring where kids go to produce data for brands," wrote iO9 last week. Tweets expressing outrage that the stores would "spy" on kids have collectively been shared thousands of times.

Collecting information on kids is a highly sensitive issue, and US law carves out various additional protections or restrictions when it comes to minors-the only major federal law on digital privacy, the Children's Online Privacy Protection Act, for example, was passed to protect children under 13. Often these rules, including COPPA, require obtaining parents' permission before collecting data.

But the companies behind the monitoring technology in the Toys "R" Us stores say they have designed their products specifically not to record children's data at all.

The cameras are powered by technology from RetailNext, a surveillance giant that supplies more than 500 brands and malls in more than 90 countries. wired.com

Using Credit Card Info, Retail Purchase History to Crack Down on Gun Violence?
Lawmaker hopes to tackle gun violence with financial information
Should the bill makes its way through Congress, lawmakers would direct the Financial Crimes Enforcement Network (FinCEN) to assist financial institutions through its Financial Institutions Advisory Program in identifying and reporting suspicious or illegal financial activity related to firearms.

The new proposal would require FinCEN to spend up to a year collecting financial information for the purpose of issuing an advisory to assist financial institutions in identifying suspicious firearms transactions, officials said. Historically, retail-level purchase information -- or SKU-level data -- has been hard to obtain and the effectiveness of the advisory would depend on merchants sharing information about specific firearms products.

"Banks, credit card companies, and retailers have unique insight into the behavior and purchasing patterns that can help identify and prevent mass shootings. We know that financial intelligence can be an effective tool to combat gun violence in the same way it is for money laundering, human smuggling, and fentanyl trafficking," Wexton said in a prepared statement. loudountimes.com

Apple has 'deep concerns' that ex-employees accused of theft will flee to China
Apple Inc. on Monday told a federal court it has "deep concerns" that two Chinese-born former employees accused of stealing trade secrets from the company will try to flee before their trials if their locations are not monitored. At a hearing in U.S. District Court for the Northern District of California, prosecutors argued that Xiaolang Zhang and Jizhong Chen should continue to be monitored because they present flight risks.

Both men were arrested on criminal trade secrets theft charges while heading to airports to fly to China and have been monitored after being released on bail. Their defense attorney said Monday that both men had family reasons to visit China and had shown no signs of violating their pre-trial conditions so far.

In the cases of both men, Assistant U.S. Attorney Marissa Harris argued that if either man fled to China, it would be difficult if not impossible for federal officials to secure their extradition for a trial. Three Apple employees showed up to support prosecutors, including Anthony DeMario, a strategic adviser to Apple's global security group and veteran of the U.S. Central Intelligence Agency.  nasdaq.com
 

Amazon Under Fire for Warehouse
Working Conditions

Amazon NYC Warehouse, More Dangerous Than Coal Mine, Spurs Fury

New York lawmakers told Amazon to address concerns at a Staten Island warehouse where 15 out of every 100 workers were injured last year.

Dozens of New York lawmakers are demanding safety fixes at Amazon's Staten Island warehouse which a recent analysis shows is more dangerous than a coal mine. Forty-two members of New York's City Council, state Senate and Assembly wrote Amazon Monday to demand worker safety improvements at its million-square-foot JFK8 Fulfillment Center in Bloomsfield.

"We continue to receive incredibly disturbing reports of dangerous working conditions in the Amazon Warehouse on Staten Island that we believe must be addressed," wrote lawmakers, who include City Council Speaker Corey Johnson and Comptroller Scott Stringer.

The missive comes weeks after Make The Road New York, an immigrant and workers rights group, released an analysis showing 15 out of every 100 employees injured in 2018, making it one of the nation's most dangerous jobs.

That's nearly five times the incident rate seen in coal mining and logging as well as three times the rate seen in the warehousing industry, U.S. Bureau of Labor Statistics data show.

The report - an analysis of Occupational Safety and Health Administration data - came on the heels of Amazon's "peak season" from Thanksgiving through New Years, when workers say they are forced to work mandatory overtime under continuous pressure to increase speeds. patch.com

Report: Amazon workers' injuries spike during holiday season at Illinois facility
Safety records obtained by workers at the Amazon fulfillment center in Monee in Will County show that over 10% of its workers suffered injuries last year, and 40 were injured so badly that they couldn't return to work, often sustaining permanent disabilities, according to Warehouse Workers for Justice.

Amazon told Reveal that its high injury rates reflect improved reporting, but the former head of OSHA called the risk of work injuries "unacceptably high." chicagoreporter.com
 

Hong Kong Unrest Causes 'Worst Ever' Retail Decline,
With Thousands Of Possible Store Closures, Layoffs
Over 10% of retailers in Hong Kong-thousands of stores-could shut down in the next six months, with more than 5,600 jobs set to be lost, as the city faces its "worst ever" wave of store closures and layoffs amid ongoing protests that continue to disrupt Hong Kong's economy, Bloomberg first reported.

The survey, released on Monday, covers chain stores and small retailers, encompassing some 176 companies, over 4,000 stores and 89,700 employees in total. Going into the crucial holiday period in December, which is usually a busy shopping season, the retail industry is at a new low, in part due to a lack of Chinese consumers.

"Given that such protests are set to become the 'new normal' in Hong Kong and there is little room for compromise, tourism flows and retail numbers will have difficulty recovering to previous levels."  forbes.com

Digital Maturity Benchmark Study Ranks Grocery's Top Retailers
The Grocery Digital Benchmark Maturity study takes a sweeping view of digital grocery sales platforms in conventional grocery stores, hypermarkets, discount/cash-and-carry stores and warehouse clubs. The report provides the industry's first global assessment of grocery retailers' digital performance and identifies areas of improvement and investment for the 80 largest retailers in the United States and Europe.

The top 25 Digital Maturity Benchmark leading retailers include:

1. BJ's Wholesale Club (U.S.)
2. Carrefour (Europe)
3. Albert Heijn (Europe)
4. LeShop (Europe)
5. Auchan (Europe)
6. The Kroger Co. (U.S.)
7. Costco Wholesale Club (U.S.)
8. Target Corp. (U.S.)
9. Rewe (Europe)
10. Walmart (U.S.)
11. SPAR (Europe)
12. Wegmans Food Markets (U.S.)
13. Monoprix (Europe)
14. Hy-Vee (U.S.)
15. H-E-B (U.S.)
16. Eroski (Europe)
17. Safeway (U.S.)
18. Albertsons Cos. (U.S.)
19. Waitrose (Europe)
20. Family Fare (U.S.)
21. Coop at Home (Europe)
22. Cub Foods (U.S.)
23. Sainsbury (Europe)
24. Metro (Europe)
25. SuperValu (Europe)
prnewswire.com

Moody's Cuts Department Store Outlook Again, Projects 20% Operating Profit Decline In 2019
Moody's Investors Service is now calling for department stores' operating profits to be down 20% in 2019, compared with prior expectations for a 15% drop. What's perhaps more alarming is that this is not the first downward adjustment. Moody's cut its forecast from an initial expected 10% operating profit decline to 15% in October.

If there is one piece of somewhat good news, Moody's expects the overall profit declines to subside significantly in 2020, to roughly a 1% decline as department stores cycle the weak results of 2019. retailtouchpoints.com

ClickIt Shares Their Video Management for Retailers
Jim Paul from Click It discusses their capabilities in partnering with retailers to handle their surveillance, analytics, customer traffic, POS needs and more. They have approximately 200,000 installations in multiple retail formats, including convenient stores, pharmacy, specialty and big box stores, ranging up into the larger distribution centers.   

For more information about Click It, visit http://www.clickitinc.com/.

Senior LP & AP Jobs Market

Dir. Security & Asset Protection posted for Rent the Runway in Secaucus, NJ
The Director of Security & Asset Protection is responsible for innovation, strategic development and successful operations of Rent The Runway's network wide profit protection initiatives including but not limited to total loss improvement, protecting all company assets (buildings, equipment, inventory), physical security measures, investigations, inventory control programs, business continuity and security disciplines.

Rent the Runway has five retail stores of the future, 11 million community members and employs nearly 1,800 people. linkedin.com
 

Biggest Holiday Risk Factors
No matter the industry in which you operate, there are common risk factors to the security of your digital assets. Giving some attention to these common issues could help you stay cheery as the holidays go on.

1. Poor employee security hygiene
Data may not be backed up regularly enough, or employees may leave sensitive data available in the form of tablets or other connected devices not properly secured. They may discuss sensitive information in earshot of customers or clients. These actions are often not taken out of malice: but simply because the employees don’t realize the danger. Take the time to train your workforce on good security hygiene and put policies in place to keep them up-to-date.

2. Poor patch and vulnerability management
Patch management is a key part of asset protection. Take the time, no matter how big or small your business is, to create an inventory of your e-assets. For each piece of hardware, track the software and version number running on it.

3. Misconfigured or poorly-secured online resources
Accidentally misconfiguring a webserver or unintentionally exposing an AWS S3 bucket to the public can leave critical data wide open, in such an obvious manner than your cybersecurity team may not even think to check.

4. Point-of-sale (POS) vulnerabilities
Review the POS communications, connections, and settings on a regular basis, and make sure you’re patching your POS system every time a new update is released. Ensure that the only applications and systems connected to the POS are those that need access. Ensure that smartcards or chip readers are activated and set up correctly. Make sure the POS system has a strong password policy. rhisac.org

2019 ReliaQuest Security Technology Sprawl Report Finds
More Security Tools are Increasing Risk of Cyber Threats
ReliaQuest, a leader in enterprise security, today released the findings of the 2019 ReliaQuest Security Technology Sprawl Report, which reveals how a rapid increase in the number of security tools used by large companies is limiting their return on investment while increasing the risk of cyber threats.

The survey of 400 security decision makers at companies with more than 1,000 employees found there is a “security tool tipping point” where the number of cybersecurity solutions becomes overwhelming and increases organizational risk levels. The result is underutilized technology, ineffective use of valuable security resources and overwhelmed and inefficient teams that spend more time trying to manage their wide range of tools than proactively defending against threats.

Key findings include:

• Security teams are deploying more tools than ever. Almost three-quarters (70%) of respondents say they’ve invested in more than five new technologies in the last year, including 19% who say they’ve invested in more than 20.

• Teams are struggling to implement the tools. Seventy-one percent report they are adding security technologies faster than they are adding the capacity to productively use them.

• The burden of tools maintenance compromises threat response. Sixty-nine percent report their security team currently spends more time managing security tools than effectively defending against threats.

• A majority of enterprises are less secure today as a result of tools sprawl. Over half (53%) say their security team has reached a tipping point where the excessive number of security tools in place adversely impacts security posture.

Read the complete Security Technology Sprawl Report here.

Three Men Arrested in $722 Million Cryptocurrency Fraud Scheme
Three men were arrested today in connection with a cryptocurrency mining scheme that defrauded investors of $722 million, U.S. Attorney Craig Carpenito announced.

From April 2014 through December 2019, the defendants operated BitClub Network, a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors. Goettsche, Weeks, and others conspired to solicit investments in BitClub Network by providing false and misleading figures that BitClub investors were told were “bitcoin mining earnings,” purportedly generated by BitClub Network’s bitcoin mining pool.

Goettsche discussed with his conspirators that their target audience would be “dumb” investors, referred to them as “sheep,” and said he was “building this whole model on the backs of idiots.” Goettsche directed others to manipulate the figures displayed as “mining earnings” during the course of the conspiracy.

The wire fraud conspiracy charge carries a maximum potential penalty of 20 years in prison, and a fine of up to $250,000. The conspiracy to sell unregistered securities charge carries a maximum penalty of five years in prison and a fine up to $250,000. justice.gov

Q&A with Akamai on the challenges of cybersecurity in retail