It’s always something—literally, retailers are always dealing with something. Retail enterprises are so attractive, complex, dispersed, and crowded, and provide so many opportunities for good (but all too often bad) behavior. But not all issues are built the same. Some problems seem to always be here, like theft and fraud, while others tend to pop up unexpectantly, like violence.
We’ve all seen this incredible dynamic with periodic active-assailant surges. Acute conditions are severe and sudden. This could describe anything from a disruptive customer to an armed-robbery attempt to an active-killer event. A chronic condition, by contrast, is a long-developing syndrome, such as merchandise theft, employee dishonesty, and frequent parking-lot loiterers. Note, however, that a chronic condition like persistent shoplifting can be accented by a violent, organized, hit-and-run theft that injures a nearby shopper, thereby creating an acute condition. Or a new theft or fraud trend can appear rapidly, then wane as desired crime targets’ supply and demand change.
The point here is that loss prevention and asset protection practitioners and their law enforcement and solution partners should think in terms of chronic and acute threats and train accordingly for scenarios your data indicates might occur or is already occurring. The chronic versus acute threat dynamic also helps us prioritize efforts and action, as well as brief senior corporate leaders as the budget is constructed. Think strategic and tactical-reserve line items, for example. Acute events are rare, often seemingly random, but their impact can be devastating, while chronic problems may seem minor at times but can also destroy a business. And don’t forget our bosses should know we’re hoping for the best but always preparing for the worst.
Innovate
Everything keeps changing at what seems like light speed, and we must keep up or even strive to get out front. Current and possible crime and loss issues provide ample opportunity to improve processes and results. We must think deeply about what our data shows and what others are saying and doing about evolving processes, such as open and distributed selling, increasingly convenient but risky checkout options, logistics, and data interchange.
LP’s purpose is to enable total enterprise success by suppressing theft, fraud, and violence that disrupts or even precludes how competitive retailers would like to, or even must, operate their businesses. People need to be and feel safe and secure, and the merchandise and other assets must be protected in increasingly engaging venues that need more creative display and faster checkout.
LPRC Innovate NextRetail Center’s Purpose
As I’ve mentioned before, major retailers asked our team to stand up cutting-edge innovation capability. They wanted us to provide the right people, places, and process for them and their business partners to more deeply and less expensively ideate, simulate, and test new or enhanced operational and protective options. To that end, LPRC Innovate’s NextRetail Center (NRC) is now operational to support retailers’ profit and growth strategies via research and development centers of excellence (COEs). These COEs are designed to link improved protection with improved safety, sales, and margin by tying them to the shopper sales journey and actual experience. The COEs include:
- On-Shelf Availability Center of Excellence. What the consumer wants to buy is available and accessible when they go to select it.
- SmartCheckout Center of Excellence. The checkout experience is quick, easy, and secure.
- Safe and Secure Center of Excellence. Consumers and their data are safe and secure during store and website/app visits.
- Connected Enterprise Center of Excellence. Smarter data collection, analysis, distribution, and use improves total performance.
- People and Performance Center of Excellence. Smart people recruiting, training, motivation, and execution is mission critical.
The LPRC Innovate NextRetail Center features elite, independent, problem-solving people and design-thinking places and spaces bridged to field-test locations that enable cross-functional retailer teams to grow their businesses and people. Cutting-edge research and development spaces have also been established to leverage the design-thinking process to brainstorm and test more focused and impactful options. Contact operations@lpresearch.org to schedule a visit to our special people, places, and processes.
The CLOAK and DAGGER Analytical Approach
Aili Malm, PhD, of California State University, Long Beach, developed a systematic way to think about people-and-place threats as you plan your protection and suppression action plan. CLOAK and DAGGER is a structured analytical approach derived from social network analysis (SNA) that involves building networks, for a defined set of individuals, based on five different types of positive relationships between actors in an illicit network/market. These networks can be layered on top of one another to assess relationships.
- Co-offending. Co-offending networks are defined as individuals who commit crimes with one another. It is often found in co-arrest data and more generally through intelligence collection.
- Legitimate. Many offenders are also involved in legitimate business dealings, such as co-owning small shops and other real estate. You may need to adjust how you define legitimate by the amount of gray activity in your target illicit market.
- Organization. These are defined as formal group ties in organizations, such as outlaw motorcycle gangs or MS-13. Participants tend to have specific roles. These will usually be reciprocal ties since all individuals will be connected to one another through group membership. These will mostly (but not always) be criminal ties.
- Acquaintance. These networks are built by connecting acquaintances and friends. For example, neighborhood gangs (especially on the US East Coast) often lack the formality of organizations and instead are based on loose affiliations from school or block ties.
- Kinship. Kinship networks are formed by actors tied through biological or family-based relationships. These networks also include romantic relationship ties outside of marriage.
Using a CLOAK structured approach to analysis requires knowing more than the traditional binary connection between individuals. You need content and context. After all, it’s difficult to differentiate between the five different types of relationships if you do not have the content of phone calls or texts between people. But with this information, you gain much more insight and understanding of different networks. And that is where DAGGER comes in.
For much more detail, please visit Temple University Professor Jerry Ratcliff’s website and blog.
If every network was the same, there would be little point in analyzing the different components of relationships. But diverse illicit markets stress different connections. Like so many structured analytical techniques (think PESTEL or ACH), CLOAK doesn’t necessarily cover every possible eventuality, but it covers most of what you will need—the same with the various markets covered by DAGGER. The table above shows a first estimate of which ties are most important to various illicit markets: drugs, art/antiquities, guns (small arms), gangs, exploitation (and trafficking), and religious extremism. For example, in drug networks, co-offender ties are often weak and transitory, whereas organizational and kinship ties are strong bonds important to the success and strength of the criminal network. The table is intended to guide both data collection and analysis. Researchers and analysts should (1) prioritize data collection for the important ties and (2) consider a link-weighting strategy where important ties are emphasized.
The table is a first estimate based on my interpretation of the existing research, and the row at the bottom provides an estimate of the relative confidence we should draw from the literature. Drug networks are relatively well understood, but illicit gun and art networks still need much more research. It is highly likely this table will change as research increases in this area.
The potential value of focused deterrence as an effective crime prevention technique has highlighted the importance of SNA as integral to crime reduction in complicated environments. Many analysts are now aware of SNA, though it is often applied in a binary fashion that provides little more than rudimentary insight. To reach that goal, accessible and structured approaches such as CLOAK and DAGGER might help spread not just SNA but also a way to apply it to a broader audience of analysts and researchers.