Joshua Warren  0:06  
If you are selling high theft items, and you have a high risk store, so you have a store where like, wow, these are getting stolen like crazy, move those to a buy online pick up in store only model or a special order model and run those special orders through your website or through a mobile app, something like that. Because that allows you to kind of control that purchase a little bit more. So working with a retailer that has basically moved all of those items into a locked back room. And you either have to ask an associate if you want to buy it in the store. Or you can just pull out your phone places store pickup order, go to the store, pickup counter that way it's someone out there where it's easy to smash and grab. And by funneling you through the mile mark pickup in store process again, they're getting that additional,

Darin Newbold  0:47  
all the information Yeah.

All right, and welcome once again to Commerce Today. My name is Darren Newbold. And as always, Josh is here with me as my co host on Commerce Today. And we have got what is maybe just a little bit of a downer subject could be, but it is very interesting. And I almost feel like there should be the nightly news theme going on right now. Because I feel like hey, this is all about omni channel strategies to combat retail theft. And it's a deep dive into that loss prevention and the stories that we pulled from and grabbed some information on our well. Nothing short of very interesting, Josh, tell us some more. Yeah,

Joshua Warren  1:35  
yeah, as we go live today, on August 23. Just yesterday, Dick's Sporting Goods put out their quarterly financial results. And we'll link to the story about this because it's what caught my eye is their sales are up, they're actually about 4% up and yet their stock kind of plummeted, because their profits were down 23%. So they sold more, but they didn't make nearly as much money.

Darin Newbold  2:00  
And what is that all about? I mean, that's, that's harsh. So all right. What are they saying about it?

Joshua Warren  2:07  
Yeah, so they didn't beat around the bush, they are the first retailer to just outright say that entire drop was due to organized retail theft,

Darin Newbold  2:16  
man, and in a Dick's Sporting Goods. How are they doing this? Because I know I have worked retail in the past. And I happened to work at a what is considered a very high end electronics retailer. We won't say the name, but they happen to be labeled as a fruit. And it was not uncommon. It wasn't all all the time. But for people to come in and you know, yank something off of a table and just go and as employees, we were told, hey, just let it happen. We had security there and stuff. But what's happened in at Dick's Sporting Goods and maybe even some of these other places? Yeah,

Joshua Warren  2:52  
yeah. So I mean, Dick's they've lowered their forecasts for the entire year financially by 12%. Due to in store theft. Earlier this year, target also revised their estimates, so they expect to lose half a billion dollars to theft. And it's really a combination. It's it's different types of theft. Some of it is almost closer to fraud, as far as you know, buying a more expensive item, but putting the less expensive barcode on it. There's some challenges around self checkout with that. I know that Target's been hit with some people that have done that. Then there's, you know, just flat out shoplifting and organized crime. Yeah,

Darin Newbold  3:31  
well, and I hadn't even in all of this, I hadn't even thought about the whole putting a different barcode on it. Yeah, we're

Joshua Warren  3:36  
not giving people ideas.

Darin Newbold  3:42  
About to say, Maybe we better not go into deep because I was gonna ask the question, well, how do you do that?

Joshua Warren  3:46  
Well, let me get my label.

Darin Newbold  3:48  
We'll pass on that one, folks, you'll have to figure that one out on your own. However,

Joshua Warren  3:52  
when you ask a good question about dicks. And to me thinking about them like and thinking about the fruit vendor. Things that have serial numbers, especially if you can track the serial numbers in your systems, that's a lot harder to steal and fence. But if it is a and I have to apologize, I are off to apologize. I haven't bought a baseball glove in a long time. But let's say there's some super high end 150 $200 baseball glove or even $200 pair of shoes, they don't have serial numbers on them. So once they get out of that store, it's really hard to prove that that's the item that was stolen and it's a lot easier for them to fence so to a criminal you go into a place like Dick's Sporting Goods. You see all those things that you know don't have serial numbers and it's like a kid in a candy store.

Darin Newbold  4:38  
Well in one of the articles that you shared was talking about I can't remember if it was Lowe's or Home Depot. It may have been home depot doesn't matter is one of the homebuilding big box stores. But one of the things they did to combat this is they basically made it so that their power tools would not turn on until they'd been scanned. I thought that was brilliant. But okay, we've kind of hit on this current landscape. And we do want to talk about that. This range is anywhere from, as Josh was saying that just, you know, small theft, petty theft to large scale theft. But one of the things that they've been talking that's being talked about is, is this almost the smash and grabs in these packs of people just showing up, and mobs I guess, kind of the end just showing up upwards of 30 people attacking a store all at the same time, just going after it. So these are the kind of that this is what where we're at in some areas. Now, some is not as bad. And there's even some concerns around whether this is economically related or not. And you can go back and forth on that. And it's great topic for the political year that we have right now. But that is not part of our Commerce Today. So let's, let's turn this to our Commerce Today. And and what's e commerce? What can e commerce do? What's our role in that theft and prevention? Josh?

Joshua Warren  5:59  
Yeah, well, one of the things that I've seen is that smaller retailers, they have a harder time dealing with this, because they just don't have the data if your target. So we were talking before the show that, you know, target is known for their just log loss prevention amazingness. And they even have systems, they almost have a CRM for their shoplifters. And they use this to track and wait until you have stolen enough to be considered a felony, before they turn it over the police, especially in jurisdictions that are refusing to prosecute these smaller thefts. Well, if you're a small retailer, first of all, you may not have, you may just have one off thefts, you may never hit that felony level. You don't have a CRM, just for your loss prevention. And you just don't have enough, you don't have that same like nationwide data, you can tap into to say, hey, our inventory is always off on these three items. We think these three items are our highest left items, we want to take some special precautions around those. And that's where I really think ecommerce and omni channel can help. And I think the biggest thing to do and skipping ahead a little bit in our plan, but biggest thing is that Combined view of the customer, like we talked about that as it allows you to serve the customer better. But it also allows you to detect theft a lot faster and to kind of see trends in your products of Where are you getting hit with the most fraud and the most theft.

Darin Newbold  7:22  
So so how you mean helped me? And I'm sure this is probably in a previous episode. And so I'm supposed to remember this, but I'm not at the moment. And for those of you out there that are right there with me, you'll thank me for this. Tell me about this Combined view helped me remind me on how are you meaning is this is this the E commerce view of a customer as well as a in store view of the customer? Is that

Joshua Warren  7:41  
correct? Correct. And really being able to tie those two together. So kind of a best in class omni channel setup that we've implemented for some of our clients is you're able to within your ecommerce system, view the in store purchases of a customer and then even from the cash register. You can view their online purchases and really what that means is the data from your in store POS the data from your E commerce platform, it's they're talking to each other, they're integrated.

Darin Newbold  8:08  
How do they Well, that's a different topic I did always question is, well, how do they connect them?

Joshua Warren  8:15  
And the easiest way you know those loyalty programs there's there's other sneakier ways, but that's the simplest one we usually tell the stores who we are

Darin Newbold  8:25  
exactly, yeah. Well, what about what about something that's become becoming quite popular and it started I shouldn't say it started with with COVID. But it definitely gained popularity with COVID to the whole the purpose the buy online pick up in store does that? Does that help? Does that make it better for thieves?

Joshua Warren  8:45  
It is different and new, like all technologies so I think it can both this can actually help you reduce theft and detect theft faster, but you have to have really good policies and procedures we recommend to the retailers we work with that you set $1 threshold or maybe you even do this for all orders where you say hey, I need to see your driver's license maybe even I'm gonna key in your driver's license number showing that I checked your ID your ID matches the name on the order that type of thing because there is there's fraud and theft even around purpose of basically stealing other people's orders because I've walked into stores before you can see all the orders that are ready for pickup right behind the counter and in a lot of stores make it easier for their employees real big ticket that says you know this order is waiting for pickup from Joshua W so I could just walk up and say hey, I'm Joshua W busy store associate they don't check an ID I just got somebody else's purchase.

Darin Newbold  9:40  
All right, so now I'm gonna go around the stores and look for her Joshua W whose purpose was skip that so all right. Validating ID that's obviously that's obviously important. What other things from the E commerce role, and even even maybe helping that retailer beyond just understanding their customer is their cause. There's also theft even on E commerce as well. Just different and it happens and looks and feels differently. But I guess it seems to be that it would be, theoretically be harder. Do you think on an E commerce versus in in a store where

Speaker 2  10:19  
hey, I can just go and grab it, I see what I want. And I can theoretically in grab, if I can run faster than the security person or whatever. Now, am I going to get caught because of cameras and other things? Yes, possibly. But it's just different different because you could have a stolen credit card that you pass online and use to place an order. So there's other ways we also see,

Joshua Warren  10:41  
basically, at larger scales, you start seeing people abusing coupon codes, or even abusing gift cards. If you have a way to use a gift card you buy online, like an E gift card, if you can use that in the store. We have seen cases where very smart criminals figure out ways to buy those e gift cards that aren't actually a valid payment method. Like they will use some sort of whether it's a stolen credit card, whatever it is something then in a day or two, that payment gets reversed. Well, they've already printed out that E gift card gone to the store purchase searches for

Darin Newbold  11:14  
stuff. Interesting. Interesting. Okay. Well, Josh, what else can we do? What else can our listeners do to help protect themselves in this crazy world?

Joshua Warren  11:25  
Yeah, definitely. Policies and procedures, kind of the standard approach to loss prevention, things that we've done is, you know, requiring and then even considering validating employee ID numbers, when you mark an order is picked. And when you mark an order is collected, because the other part of this, and these financial reports they always refer to to shrink and shrink is not just customers stealing from you, it's also employees. And so you always have to think you know, you, you trust your employees, you want to treat them like family. But you also have to realize every once in a while there might be a bad apple that gets in there. And you need to, again, basically just collect this data and feed it into a system where you're actually able to track it, watch it, analyze it, have somebody actually looking at it, which is the amount of data that we collect, especially in an omni channel transaction, like a buy online, pick up in store, we can have everything from a picture of that person's face from when they picked up their order down to the IP address that they placed the order from, they placed it from their phone, then we probably have all the specs on their phone can figure out all sorts of stuff. If we're using Facebook or meta then marketing and promoting that way, well maybe even have their Facebook profile, social media dislikes, everything. So there's a lot of information you can have and kind of apply to with a loss prevention mindset. I think a lot of the omni channel retailers out there, all this data is in different systems, no one's looking at it. No one's bringing it all together.

Darin Newbold  12:58  
So I got two questions. One is kind of part of the articles and the things that I was reading. What about the other side of this? What about the prevention or the protection around selling stolen goods? So you know, one of the things that I thought was crazy, is laundry detergent is one of the items that is often stolen, especially in organized crime. And the reason it is a reason that there was a whole list of them but the reason that is because they can they can offload it fast make money quick, it's a it's a quick turn. But a lot of times they're dumping it almost back into the same system that is going to be resold that in maybe not in the target or whatever but maybe in a second third tier type of a retail establishment is there and I know we didn't buy this off here, Josh but is or what can we do on that with woman

Joshua Warren  13:57  
you got to be careful. If you are especially my first thought was a large retailer since we're not naming names, I'll say a large retailer that is the type of Mart they're kind of known for. They allow so many different people to sell on their website now through their marketplace. And so it would not surprise me if there was organized crime out there stealing laundry detergent from their stores and then going and listing it right back on their website cheaper than that stores price so they're the ones that are getting sold and moving it that way and

Darin Newbold  14:31  
we think about just the simplicity of it they were talking about the simplicity of eBay and put it out there or even the you know, Amazon stores that can be built up and your Mart solution as well. I mean all of those that that they've done that to encourage obviously the opportunities for people to to sell stuff but it's like guys this it how do you know that the laundry detergent or the allergy medicine that you want. And all of a sudden, it's at this screaming deal. And you say, Wow, I'm gonna buy a couple of them or, or more, that it's not stolen.

Joshua Warren  15:12  
Yeah. And that's where as a consumer, I think there's things that brands can do and things that consumers can do. And as a consumer, look to see who you're buying from. If you're looking on Amazon, and there's a price that is way too good to be true, and you look at who's actually selling it, even if it's a shipped by Amazon versus sold by, and it's a name you've never heard of, and they have no feedback and they're brand new on Amazon might be a little sketchy might be it's like they say there's no such thing as a free lunch. Like if the deal seems too good to be true, probably is probably, but then also not to turn us into commerce politics today. But even though we were talking about some TSA policies before the show, and it's a similar vein for the buyers in the marketplaces of know your customers, and really get ID when someone goes to set up a new account to sell on Amazon to sell on eBay, if you're going to operate some type of marketplace, I didn't know more and more, especially DTC brands had been launching these secondhand marketplaces to like sell the used, I'm thinking of baby clothing. Again, there's one that sells kind of, you can sell your used clothing from that brand to other people that want to buy it. One of the things they do is in addition to verifying who you are, and wanting to verify your identity, they actually match up what you're selling to what you bought from them. So if you suddenly have 1000s of dollars of baby clothes to sell on their platform, and you've bought one thing from them, then they know somebody might be a little off here. That makes sense. That makes a lot of sense. All right. Well, this really kind of puts together a whole lot of things. It definitely opened my eyes to some some challenges. Josh, from your perspective, kind of closing this up, what

Darin Newbold  16:54  
are what are the key takeaways for our for our listeners, for the merchants out there that that either they're worried about this? Or they've seen it? Or both? And and some last last things. last thoughts? Yeah,

Joshua Warren  17:06  
so one thing I forgot to mention is if you are selling high theft items, and you have a high risk store, so you have a store where like, wow, these are getting stolen like crazy, move those to a buy online, pick up in store only model or a special order model, and run those special orders through your website or through a mobile app, something like that. Because that allows you to kind of control that purchase a little bit more. So working with a retailer that has basically moved all of those items into a locked back room. And you either have to ask an associate if you want to buy it in store, or you can just pull out your phone, place those store pickup order, go to the store pickup counter. But that way it's it's not out there where it's easy to smash and grab. And by funneling you through the buy online pick up in store process, again, they're getting that additional data,

Darin Newbold  17:52  
all the information. Yeah. And I've even I've even heard of stores doing that, where they may have, you know, a tablet of some variety there that if someone didn't have a phone or whatever, that the store associate could walk them through the purchase. So it was truly still an online purchase in that you could avoid that. Interesting. All right, any last things, otherwise, we'll, we'll wrap a bow on this.

Joshua Warren  18:14  
I think that the like so many of the things we talked about with omni channel, it really comes down to getting all of your data, all your systems talking to each other well, and then getting your departments talking to each other and making sure that ecommerce store operations, loss prevention are all talking to each other and have a unified view of this data.

Darin Newbold  18:33  
And one thing, my second question, I forgot to ask it, but this adds on to it. And we can continue this in another episode if we need to. Because we've talked about AI before, but what about how, how can AI help in bringing a lot of that data and a lot of that information

Joshua Warren  18:47  
together? Oh, there's some cool stuff with that. And I will just tease it up and say that AI is really good at spotting trends and spotting when trends suddenly change. And so if all the sudden in your store data, it's saying, Wow, we sold 5000 times the amount of laundry detergent last week as usual, or our inventory counts were off by 5000 times and laundry detergents. Then, you know, okay, I've got an organized crime ring targeting my store. And then that's where again, kind of the different departments talking to each other, talking to your local police can really help and other retailers in your area and basically saying, Hey, this is what we're seeing. We think there might be an organized group operating here. How can we work together to track this down?

Darin Newbold  19:29  
All right, so some simple things, sometimes just locking things up and having a hopeless type of solution. Sometimes just staying a part of your community and knowing what's going on and making sure you know, the local, local law enforcement and other things in the areas where we're excited. We're always excited to hear from you. So if you have questions or thoughts or insights or your even your own experiences in this, we would love to hear from them. You can see that on on our site for Commerce Today and where we where you listen to this podcast and And with that we'll call it a day so tallyho and have a great rest of your day

Transcribed by https://otter.ai