Fifteen Years of Loss Prevention

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Based on another project, I have spent two months combing over every issue of Loss Prevention magazine. Being a reader from the very beginning and contributing content every now and then, I thought I was pretty familiar with the magazine’s history, its development, and the changes in the industry over the years. I wasn’t wrong in that thinking, but it is amazing how much more you learn when you actually sit down and re-read every issue from cover to cover.

What you realize is that some things have changed, some things have remained the same, and some subjects formerly of great interest and concern to the retail LP industry have literally come and gone. Some issues are here to stay, and new developments and technology are forming the future direction of our business.

I quickly knew that there would not be enough room in one article to accurately describe the changes in the industry evident in the pages of the magazine over the past fifteen years. So this article will be the first in a three-part series. We will begin by looking at the first five years, from the inaugural issue in fall 2001 through 2006. In the November–December 2016 issue, we will cover the middle years of 2007 through 2011. And in the January–February 2017 issue, we will conclude with 2012 through today and look at current concerns and what the future may bring to our industry.

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It’s about Time

You are reading the ninetieth issue of Loss Prevention magazine. As Jim Lee and Jack Trlica tell the story, it began with the belief that retail loss prevention professionals needed their own magazine. The magazine’s mission, as originally drafted, was to “provide the industry with a high-quality, contemporary magazine of high interest to retail loss prevention management and professionals.” The concept was introduced in June 2001 at the National Retail Federation (NRF) loss prevention conference in Vancouver, British Columbia. The response from the majority of the LP professionals and vendors in attendance was “it’s about time.”

With that positive encouragement and the support of retailers and vendors alike, the inaugural edition was published and distributed to the industry at the beginning of September 2001. Just days later, the horrible events of 9/11 changed the world. As Tina Sellers stated in the tenth anniversary issue of the magazine in 2011, “9/11 was the trigger that shifted retail loss prevention’s focus from traditional shrink reduction programs to true asset protection measures.” She was right. A lot has changed in our industry since 2001, and Loss Prevention magazine has been there every step of the way.

Looking back over the past fifteen years, there are certain subjects that have become mainstays and building blocks of the magazine’s very foundation. Organized retail crime and shoplifting, crisis management, exception reporting, electronic article surveillance (EAS), credit card fraud, certification, high-shrink programs, the National Retail Security Survey, data protection, people, education, diversity, employee dishonesty, and LP technology are subjects that have been written about and discussed in the magazine over and over again.

Numerous LP professionals have made huge contributions and are a critical part of the magazine’s foundation and success. It is impossible to list them all, but there are certain individuals who have contributed hours and hours and page after page of interesting and thoughtful content over the years. Among them are Doug Wicklander, Dave Zulawski, Bob DiLonardo, Richard Hollinger, Walter Palmer, Read Hayes, King Rogers, Mike Marquis, Gene Smith, Adrian Beck, Shane Sturman, and of course, Jim Lee and Jack Trlica. A big thanks goes to each of them.

And we shouldn’t forget the solution providers who have been tremendous supporters over the years. There are many, but certainly ADT/Sensormatic/Tyco and Learn It Solutions/Enable-u/Verisk Retail deserve recognition as two that have been with the magazine from the very beginning.

I think a way to get a good feel for the changes to the LP industry over the past fifteen years may be to briefly look at some of the magazine’s mainstay subjects listed earlier and their evolution since 2001.

Shoplifting and Organized Retail Crime (ORC)

LPM Premier IssueThe very first issue and the very first cover of the magazine in fall 2001 featured an article by King Rogers titled “Organized Retail Theft.” Perhaps it is appropriate that this fifteenth anniversary issue also includes a feature article on ORC.

In his 2001 article, King talked about the evolution from professional adult thieves from foreign countries operating on the east coast to highly organized former felons targeting household products and over-the-counter pharmaceuticals. By the next time organized retail theft was the topic of a major article (in the July–August 2002 issue), the name had changed to organized retail crime. The older term of organized retail theft showed up periodically, but organized retail crime is now used almost exclusively. In that July–August 2002 issue, Target described its investigation strategy that specifically addressed ORC. Highly trained mobile teams, law enforcement partnerships, intelligence gathering, and state-of-the-art technology were the main components of that strategy.

In a later issue, Rogers described ORC as one of the primary trends in retail loss prevention. Numerous articles referenced ORC as part of a bigger story, but the next in-depth look was in the May–June 2002 issue. In that issue GAP talked about its efforts to combat ORC and the importance of partnerships with law enforcement. It was GAP’s opinion at the time that 25 percent of the company’s overall shrink was attributable to professional boosters. The article went on to describe the lookouts, boosters, mules, and a LPM 15yrs 2director as the components of an ORC crime ring.

The cover story of the January–February 2005 issue looked at ORC through the eyes of the grocery store industry. It described ORC’s attack on baby formula and outlined professional shoplifting’s possible ties to terrorism. Once again, the partnership with law enforcement was emphasized. An article on Internet fraud in the March–April 2005 issue made one of the first mentions of Limited Brands’ dedicated ORC team. The last major article on ORC during the magazine’s first five years was in the March–April 2006 issue. It described NRF’s and the Retail Industry Leaders Association’s early attempts to connect retailers in the fight against ORC in the form of RLPIN and InfoShare, respectively.

Simple shoplifting is a basic component of ORC and has been a primary focus and concern of LP departments forever. While the subject comes up often as part of the National Retail Security Survey (more on that later) and is mentioned frequently in other articles, I found it interesting that there are only about four feature articles in the magazine’s history that concentrated on ordinary shoplifting. One of those in the September–October 2002 issue looked at what shoplifters say about shoplifting. They said that they fear cameras the most, followed by guards, EAS, and alert employees. The January–February 2004 issue raised the growing concern about pharmacy theft incidents of all types, including shoplifting. A database connecting drug store chains was just being developed at that time.

LPM 15yrs 3Crisis Management

As noted earlier, 9/11 was probably the biggest single event that reshaped the thinking and direction of the retail loss prevention industry. As such, it is no surprise that crisis management has been the subject of numerous articles in the magazine. The cover story of the second issue (January–February 2002) featured retail’s response to 9/11. Discussing a wide range of issues including communications, business continuity, physical security, and mailroom security, it basically outlined concerns that would become some of the top priorities of retailers going forward.

In the September–October 2006 issue, Bobby Senn of the New York City Fire Department wrote a very touching and compassionate article describing his experience on 9/11. He talked about how he miraculously escaped certain death when the south tower fell. He further described the lasting effect on him five years later and how telling the story is his way of remembering and paying tribute to his lost comrades and all the other people who lost their lives that day.

Planning for a terrorist attack against US retailers was a topic in the January–February 2003 issue. The need for enhanced food security and numerous other threats were discussed. Seven steps to implementing a workplace violent crisis response plan was a feature article topic in September–October 2004. As with many articles on crisis management, formal planning and regular training exercises were emphasized. The same issue contained an article discussing general business continuity planning. The need for every company to have a formal plan and the importance of having the complete support from senior management were described as critical.LPM 15yrs 4

In a November–December 2005 feature article, Jack Trlica described the devastating effect of Hurricane Katrina on major retailers. He talked about the issues of power, tracking down employees, securing data, communications, and looting after the storm.

LP’s role in preventing workplace violence was a topic in the March–April 2006 issue. Preventive practices, screening protocols, types of threats, and early warning signs were described.

Fraud

Fraud of all types is a major concern and area of focus for most retailers and their LP departments. So it makes sense that the subject is covered in numerous articles in the magazine over the years. The subject of identity theft was the cover story of the March–April 2003 issue. It was written by Frank Abagnale, the author of Catch Me if You CanLPM 15yrs 5. Abagnale is now an internationally renowned consultant. However, in his younger years he was a master forger and confidence man. In the article, he describes the increasing threat of identity theft, the most common types, how it’s done, and how to protect yourself and your business from it. An interesting side note is that, according to Jim Lee, the cover on the issue containing Abagnale’s identity theft article is one of the favorites, if not the favorite cover in the magazine’s fifteen-year history. It depicts a man’s head being zipped open down the face, revealing a totally different person’s head inside. Lee said it was so popular that only two or three copies remain in the magazine’s office.

Abagnale followed up in the next issue of the magazine talking about check fraud and its threat to retailers, which was interesting to read, but it’s one of those subjects that was then of major concern and is virtually non-existent today.

An initial retail survey around refund fraud and abuse was the topic of a July–August 2003 article. Rates of return in various retail segments and numerous types of return fraud were outlined. A year later, in the March–April 2004 issue, internal fraud perpetrated by retail buyers was the topic. A company’s vulnerability and methods used by dishonest procurement individuals were pointed out.

The March–April 2005 cover story showcased Internet fraud, one of the magazine’s first major articles covering this new and growing concern. The article described electronic fencing, paperless fraud methods used to purchase gift cards, and how easy and relatively anonymous these types of fraud are. An interesting sidebar in this article talked about controlling fraud at eBay. This was at a time that eBay’s sincerity in wanting to deal with fraud was being questioned by many retail LP professionals.

Identity fraud was back again in a feature article in the September–October 2005 issue. This time, recent data breaches of various retailers and banks were described. The article further discussed data protection methods for both businesses and individuals.LPM 15yrs 6

The National Retail Security Survey (NRSS) and Employee Theft

Richard Hollinger, PhD, and the University of Florida have conducted the NRSS every year since the early 1990s. In the March–April issue of 2002, Dr. Hollinger expressed concern that participation hit a new low in 2001 with only 120 retailers filling out the survey. He wondered if the survey was even worth continuing and asked how participation could be increased. The survey did continue and participation was up to 150 by 2006. Over the years, participation has seen its ups and downs, but the survey is still going strong today. Dr. Hollinger has speculated that retail mergers, acquisitions, and bankruptcies have made it more difficult to grow participation numbers. In the final installment of this series in January–February 2017, we will compare and contrast the findings of the NRSS over the years.

In addition to often discussing the NRSS and its findings in the magazine, Dr. Hollinger has written a column in almost every issue discussing all aspects of workplace dishonesty. Those articles are too numerous to recap here, but his insights and research have been invaluable to the industry in its fight against employee theft.

Others who have contributed greatly to the subject of dishonest employees include the Wicklander-Zulawski team. From the very beginning in 2001 through today, Dave Zulawski, Doug Wicklander, and the team have written a column in every issue on interviews and interrogations. Their tips, techniques, and how-tos are invaluable reading for any LP professional and have been instrumental in teaching a whole generation how to be better interviewers. Because there are so many, it’s impossible to capture them all here, but the magazine owes a huge debt of gratitude to the WZ team for their contributions and continual support over the years. Given that employee theft is such a big part of retail loss prevention, it’s interesting to note that, like shoplifting, there are very few feature articles in the magazine concentrating solely on the subject. But as mentioned above, the efforts of Dr. Hollinger and WZ have more than covered the subject.

LPM 15yrs 7Loss Prevention Technology

Unlike employee theft, feature articles on retail technology affecting retail loss prevention are numerous. In fact, stand-alone technology articles are probably the most numerous of any type in the magazine’s fifteen-year history. From RFID to EAS, biometrics, exception reporting, video of all types, and self-checkout, it’s all here.

RFID was the cover story in the September–October issue in 2002. In that article, Trlica speculated that RFID would be a key component in the future of supply chain management. Six senior retail and solution provider executives quoted in the article touted RFID as the biggest retail game changer ever. In an interesting turn of events, we learned in the November–December 2003 issue that Walmart, which had earlier pushed for total RFID saturation in the industry down to the item level, was modifying its position and approach and would only concentrate on RFID at the carton and pallet level in its distribution centers.

Walter Palmer was bullish on RFID’s future and its impact on retail in his article from November–December 2004. In it, he described the creation of global standards, the shrinking size and cost of RFID chips, IT infrastructure needs, and end-user demands from Walmart and the Department of Defense. Citing numerous benefits, despite some privacy concerns, he concluded that RFID’s future was bright and advised LP professionals to study up and get involved. RFID and EAS as complementary technologies were discussed in the March–April 2005 issue. A lot of time has gone by since then, but basically we are still talking about the same thing—how RFID will dramatically change the retail industry in the future. In the third installment in this series, we will take a closer look at where RFID stands in retail today.

The May–June 2002 issue contains the magazine’s first major article on EAS source tagging. Topics such as which EAS technology to use (AM or RF), the need to deploy EAS in all stores, leverage over manufacturers, and costing were all discussed as part of the questions to be answered to make source tagging viable. The article touts source tagging of CDs and DVDs as a big success and a primary driver of reduced shrink in that category. The November–December 2003 issue found DiLonardo, one of the foremost authorities on EAS, discussing its overall economic proposition. He discussed the fact that early adopters of EAS were struggling with continued cost justification and how source tagging may improve ROI.

Biometric technology was a topic in the March–April 2004 issue. The article described the various types being developed such as finger, eye, DNA, human scent, vein-scan, ear shape, and gait recognition and how they may be used in retail. But the author admitted that mass deployment of the LPM 15yrs 8technology could be several years away.

Point-of-sale (POS) exception reporting was the subject of three major articles from 2003 to 2005. In the March–April 2003 issue, JCPenny described the development of its homegrown POS exception reporting system and the success the company had dealing with various POS transaction types. In the cover article from May–June 2004, Walter Palmer covered the benefits and ROI of POS exception reporting in detail. He described the excitement in the LP industry around the subject and projected that additional data streams beyond POS would be added to further leverage the technology. In the July–August 2005 cover story, Jon Grander of Brown Shoe Co. described how exception-reporting data can go beyond investigations and be used as a training tool to modify associate behavior.

Remote video monitoring made the cover of the September–October 2005 issue. The pros and cons of that technology and how it would affect the next generation of LP were discussed. In the article, many industry practitioners gave their opinions on the current and future state of remote monitoring and its ever-increasing value to the retail LP industry.

LPM 15yrs 9No discussion of evolving retail technology and LP concerns would be complete without talking about self-checkout. In the January–February 2006 issue, DiLonardo was back describing what it was, how it worked, and the challenges it presented to the LP world. He concluded that self-checkout was here to stay and would eventually grow as a self-service tool well beyond retail.

Shrink Reduction and Loss Prevention Programs

Obviously these two subjects go hand-in-hand and are usually the core focus and concern of most retail LP professionals. A September–October 2003 article looked at Stage Stores’ program for high-risk locations. Lee Bland discussed identification of metrics and outlined the key components of their program including general shortage interviews, awareness programs, operational audits, and physical security issues. She emphasized the need to keep any target store program flexible and concluded by noting that their program had resulted in a 48 percent shrink reduction in targeted stores.
The very next month, in November–December 2003, we got a look at GAP’s approach to specialty retail target store programs. It’s no surprise that the basic pieces and parts of GAP’s plan closely mirrored that of Stage Stores. One interesting addition was that GAP gave cash bonuses to target store managers who met their shrink goals. The company cited a 20 percent shrink reduction as a result of its program.

In the May–June 2005 issue, Dan Faketty began a series discussing a six-step strategic approach to a targeted loss prevention program. One technique he suggested was videotaping interviews with professional boosters who were caught, so the videos could be used as associate training tools in the future.

People, Education, and Diversity

One of the primary missions of Loss Prevention magazine has always been to serve as an ongoing source of information and education to the professionals in the retail LP industry. That education, in some form, is present in virtually every article published. And no discussion about the magazine would be complete without acknowledging the great people who make up this industry.LPM 15yrs 10

The focus on people comes in many forms. One is the in-depth interview of an individual by Jim Lee in every issue. Quite often, the subject of the interview is a top LP professional in his or her company who offers great overviews of the issues facing our industry and how companies are dealing with them. But the interview isn’t always at the VP or director level.

One interview that has always been popular and is still talked about today is the one from July–August 2003 showcasing the “go-to people inside LP.” In that interview, Lee talked to six individuals who occupied the number two positions in their LP departments and inquired about how they supported their organizations and their bosses. Interviewed were Jim Carr of Pep Boys, John Matas of Macy’s East, Nick Russu of JCPenney, John Selevitch of Limited Brands, Suni Shamapande of Nike, and Pat Swansick of Hollywood Entertainment. The group talked about the strength needed in their roles, the difficulties of the position, how they managed their bosses, how they lead, and the challenges they needed to overcome.

It’s interesting to look at where these six individuals are thirteen years later. Only one is with the same company, and all but two have left traditional retail. Carr is currently the senior director of asset protection at Rent-A-Center. Matas is the vice president of loss prevention, investigations, and ORC at Macy’s. Reports are that Nick Russu is now in the plumbing business in Texas. Selevitch is currently the director of digital operations for this very magazine. Shamapande is a director at Pricewaterhouse Coopers specializing in retail and LP consulting. And Swansick joined the Oregon Department of Justice as an investigator.

As mentioned, virtually every article published in the magazine is educational in some form. One of the early educational articles that stands out is a two-part discussion by Walter Palmer in the September–October and November–December 2005 issues entitled “Selling Your Proposal to Senior LPM 15yrs 11Executives.” Palmer discussed the importance of aligning to corporate strategy, mastering the ins and outs of ROI calculations, creating positive emotions, using statistics effectively, and citing proven research. He further talked about presentation and creating a call to action.

And no discussion of people and the LP industry would be complete without discussing the need for improved diversity. It can be argued that the subject is still the elephant in the room and needs to get better. Over the years the magazine has recognized this and pushed for improvement. Mimi Welch, a noted consultant and diversity educator, wrote a column on diversity in the majority of the issues for the first five years. The column began under the title Women in LP. Welch wrote extensively about women’s issues, their challenges in the LP field, and how to improve the balance in our industry. After two years, she changed the title of her column to Diversity in LP and broadened her focus beyond gender to include all aspects of diversity, including color, background, diversity of thought, and the value that diversity brings to a team. Welch returned for this fifteenth anniversary issue with a contribution in this issue.

In his November–December 2013 Parting Words column, Jim Lee talked about the progress of diversity in the LP industry, the need to set directional goals (not numeric), looking at diversity as a business improvement strategy, creating forums such as diversity councils, and making sure that each candidate pool contained qualified diversity individuals. He went on to call out thirteen women in senior LP positions at that time, but noted the need for continued improvement in all facets of diversity. But that’s getting ahead of ourselves.

I hope you have enjoyed this overview of the first five years of the magazine. It was hard to include everything, but I hope I’ve given you a good taste of the beginning years, emerging LP trends, and the magazine’s contribution to the industry. We will continue the journey in the next two issues. Many, if not all, of the articles mentioned are available on the magazine’s website. If not,PDFs are available by contacting editor (at) LPportal (dot) com.

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