Jared Richardson:

Welcome, everybody, top of the hour, and thank you so much for joining our webinar today. My name's Jared Richardson with LVT. I am joined in the studio by Matt Kelly. He's our SVP of business and marketing development, and we have two very special guests. Really the three people out of the four people on the Mount Rushmore of AP and LP in addition to Matt, but I wanted to start with Jason Davies. He's one of the founding members in the VP of CLEAR. Jason, good morning, good afternoon. How are you?

Jason Davies:

Good morning. Pleasure to be here, honored. Thank you.

Jared Richardson:

Excellent. Thank you. And of course, an AP/LP veteran, Mike Lamb joining us as well. Mike, how are you doing?

Mike Lamb:

Doing quite well, Jared. Thank you for asking. I do want to take just one moment and dedicate my portion of today's podcast to a dear friend and neighbor that I lost yesterday, Jack Moore, after a courageous battle with cancer. He fought the horrible disease bravely and courageously, and let's just hope that we continue to do research and ultimately find a cure for this horrible, horrible ailment. But it's a pleasure to be with you otherwise, always a joy to be with the LVT team, and always a pleasure to be alongside Jason as well.

Jared Richardson:

Certainly. Our thoughts with the Moore family today, and I agree with you, Mike, in continuing to look at and funding cancer research. It's super important. I want to talk today, switching gears, where we're really focusing our efforts on today is taking back extreme stores, overcoming ORC. And we know, and we've seen some of the patterns and behaviors, Matt, since COVID and really even a little bit before COVID, but what we've really seen is a massive uptick in violence. Recent reports saying that ORC offenders have become more violent to the tune of 81%, 67% more violence at retail locations compared from 2023 to 2022. And when you look at the numbers of stores closing and brands affected, we are really in the midst of yet another epidemic when it comes to retail violence and ORC and crime.

‍Matt Kelley:

Absolutely.

Jared Richardson:

Yeah. And so we wanted to get on this call today, really give some answers and help retailers through the system, and we've brought on our two experts too, Mike and Jason, to really guide the conversation. So let's start with that. Gentlemen, you've just heard the stats and the numbers on the increases in retail violence and what we're seeing on crime, but I need your help to really help us and connect it. For those of you that have gone in and done site visits, Mike, what are some of the things that you've seen recently that has really just kind of taken you back?

Mike Lamb:

Well, as a few people know, I was with Kroger for two stints and following my first retirement, which was during the COVID year, November of 2020, I was out of retailing for about 18, 20 months. And then I returned to the Kroger company in May of 2022. And what I can tell you is in just that short period of time, the post-COVID period of those 18 to 20 months, I had never in my career quite with witnessed anything like just the epidemic growth of one ORC, and then secondarily and arguably more importantly, the violence associated with it.

As you and I have talked a few times offline, Matt and Jared, I was out in the back Northwest market with the organization, and there wasn't a single store that we walked into in this troubled market that we didn't just see blatant theft with an overwhelming sense of entitlement that it's mine and you can't have it. And in fact, we were losing the source to be quite candid. So that's when we dubbed this whole notion of extreme stores. And so more importantly, it's what you do about them. But I think there's a variety of reasons too as to why we may be seeing such an increase in theft and in the violence. And I know we'll talk about that during the course of the podcast.

Jared Richardson:

And Jason, as part of CLEAR and as somebody that gets to talk to both law enforcement members and retailers on a daily basis, what are some of your people telling you about what they're experiencing?

Jason Davies:

Well, first of all, I mean to Mike's point, we saw some of this coming pre-COVID. We saw whether it was lax legislation being passed by the states, whether it was bail reform, we saw the amount of ORC theft and recidivist theft start to climb, starting really in 2017. Then with the Defund the Police activities, once again, more legislation being passed, and then the uniqueness of the pandemic, allowing the recidivist, the criminal to be anonymous with the wearing of masks and hoods. We saw them more emboldened and emblazoned by what they could do in a store.

Our members of CLEAR and even the companies that I have worked for are all seeing triple-digit increases in crimes against associates, crimes against customers. We also saw what was, some say, vigilantism within some of our stores where we have customers that were just getting fed up. What we are seeing today is the shoplifters are social engineering, both our associates, our staff in our stores, our customers, to basically look the other way to not get involved, to not even report. So it's imperative that retailers and workers and other training bodies that are out there really, really teach and equip their members to deal with this type of social engineering, this violence that's in their stores. We are not going to see any changes anytime soon in legislation that's going to curve that activity.

Jared Richardson:

And then now let's talk about the fallout from those behaviors. And Mike, you talked about going into the Pacific Northwest market and seeing this stuff firsthand. What's the impact on employees, on shoppers, on revenue, on tax revenue for communities? I mean, obviously it's a ripple effect, correct?

Mike Lamb:

Oh, absolutely, Jared. What I will tell you in the course of the week that we spent out, and this was the Portland market, just to be clear, but this sense of it's mine and you can't have it back was just overwhelming. And when you think about the ramifications, there are many. We saw store teams. We saw store leadership teams completely frustrated. And just the depth and impact on the morale that it had in the store was quite amazing. They felt helpless in terms of what they could do. They knew there was a sense of potential violence associated with this activity. And so it was really the timing was arguably past due. And I credit the Kroger company for the work that was stood up following the visits that we made in terms of not only trying to initially treat the symptom but also ultimately try to cure the disease.

And there's a lot of reasons behind it. We saw, to no one's surprise, it's ever been in the Portland and Seattle markets, a high degree of homelessness and drug affliction associated with the homelessness. And I recently had attended an event where I heard an expert speak on homelessness, and he talked about the impact for the chronic homeless relative to the risk and liability on retailing. And unfortunately, I saw it firsthand. We affectionately dubbed this lady, Annie. I was with a whole group of store executives walking into the entrance of one of the stores out there. And she, in the course of our entry, was leaving with a full cart of product, unpaid for, clearly unpaid for. All the EAS systems went off. I mean, all the proverbial signals, product was not even bagged, et cetera. And we approached her simply in an effort to say, "Just leave the cart," right?

And I never quite witnessed the exchange that I personally had with her on this sense of desperation. And it was in the cart, and it was at the door. And in her mind it was hers at all costs, whether she was going to bring harm to someone else or whether we were going to bring potential harm to her, which we weren't by the way, of course. But she ultimately looked at me and said, "Take one of a step, and I'll tase you." I was an old guy that's been around forever. I didn't want to prove she had a taser. And in that moment, she grabbed the one bag that was like a canvas bag and ran out the door with it, and I stood there just in complete amazement by what I had witnessed. And then another case example that really I think underpins this point was we had this video of this lady walking in, obviously to some extent, emotionally disturbed clearly by her actions. She walked to an end cap of wine and was just simply throwing it up and down the aisle ways. Now, imagine you're working in that store. Imagine you're trying to shop in that store. This was truly a case of we had to do something to take the stores back. And there's a lot of reasons for this activity, and our podcast probably isn't lengthy enough, certainly isn't lengthy enough to go over those. But we knew we had to take some extreme measures because these were what we dubbed as extreme stores. And for the Kroger company, we actually created that fifth layer of risk for the stores that fit this criteria. But it permeates, and it creates morale issues, turnover issues, and certainly profitability. So one, would you want to shop in that store? Would you want to work in those types of stores? I think the short answer is no.

And then two stores are in the business of making money, right? They're not nonprofits. So it was having an enormous impact on profits, so that's kind of setting up what the problem was. And it's not limited to just those cities. I think most of the viewers on this podcast know where they are, the Seattles, the Portlands, the Los Angeles, the San Franciscos, et cetera, where you've got this subset of stores that it's businesses unusual. And you have to take, I think, significant steps, collaborative steps in order to really begin to get to the point that you can create this impression of control and effectively mitigate this problem. And it takes a village, which I know perhaps we'll talk about what some of those steps are, but I was stunned. I'd never seen anything quite like it in my four decades of retailing.

Jared Richardson:

And speaking of mitigating the issue, one of the responses that we saw from that corporation, Mike, was elevated security measures inside and outside the store, and also this concept of zone five. And I'm hoping that you can talk us through what was done, what worked, and what the response has been.

Mike Lamb:

Yeah, we tried to keep it simple, right? Because what's simple typically gets done, but we essentially broke it down into two parts, secure the perimeter, right? Secure the perimeter of the store, and that was from the front door all the way into the mayor's office, if I'm honest. So you're looking at zones, what? Three, four, and five. And then protect the store. So within the store, what steps would we take or would the Kroger company take strategically to get after this problem? So that was the foundation of this effort that was launched in the Portland market. And from what I hear, it's been extraordinarily successful. We had to deploy what we called elite guards. Elite guards. These men and women were equipped with everything that we felt was essential for them to, one, do their jobs. And then secondarily, as I've mentioned earlier, create this impression of control.

We didn't want to lock up everything in the store, but everything that leaves the store is going out a door, either a back door, a side door or a front door. So we secured all the entrances in a way that we felt was appropriate. We had key stakeholders that went with us on this journey. Legal, of course, who helped us with post orders, what we wanted our guards to do, what we wanted these elite guards to not do. So we spent weeks and weeks making sure we had that right for our good customers, and we had that right for our associates. And then secondarily, great work by the leadership team of the Fred Meyer division, meeting with the mayor, meeting with the chief of police, literally a press conference on the doorsteps of the building to talk about the collaborative effort.

Many retailers were pulling out of markets like San Francisco and Portland. And if you've read any articles, you know who they are. Obviously, as we've discussed earlier, Fred Meyer offers a big tax revenue stream for the city. And this was really stood up as we want to stay, but for us to stay, you have to help us stay. It has to be a collaborative effort, and we can beat this thing. So I won't discuss Kroger's specifics except to say it was twofold. Secure the perimeter to protect the store. And one of the key steps on securing the perimeter was to get a guard at every door, and have specific guard protocols. We literally had a three-page guard protocol in working with legal. We also worked cross-functionally with teams like corporate affairs who helped facilitate a lot of these meetings.

So as I mentioned earlier, it does take an effort, but here's the good news, Jared and Matt, it can be done. It can be done. And further, I would say the good news is you look at most organizations, be they large or small, there's only a subset of stores typically that fit this criteria, but that small subset of stores is creating a massive challenge for the organization. There's brand risk associated with safety, and we can go on and on, and I know I'm preaching to the choir relative to the audience that we have on, but I was very proud of the work that the Kroger leadership team did all the way up to the CEO of the organization to say, "We are invested in this city, in this market, we're going to make the investment stay, but it's going to take a collaborative effort for us to accomplish that both internally and externally."

Matt Kelley:

So Mike, I do have a follow-up question to that. And it's interesting you mentioned safety there at the end of your response, but how do you strike that balance between trying to protect the assets in the store and safety when you're locking down a store like that as it relates to the physical security measures you're taking? Because if you introduce friction into the bad actor's experience, oftentimes that can go sideways, and there could be some risk exposure there inside the store to the customers and to the associates. So as you were walking through with the leadership there, how did you articulate how you're going to strike that balance?

Mike Lamb:

Well, as with any company, and Matt, I know where you've worked, you know where I've been, associates take this stuff personally, right? And so we had to balance this notion of, look, there is nothing. There's absolutely nothing in this store that is more important than your personal safety. We do not want you to engage in any way. We are putting into place a strategy that we will execute that will allow you to do what you do. And that is to sell groceries, sell products to our customers. So we had to really emphasize this message of don't personally get involved. And then we also had to tell them, trust what we're doing because we recognize perhaps it's overdue, but we're going to put things in place that are going to make you feel better, make our customers feel better, and ultimately make everybody feel better that we're going after this problem in a very meaningful way.

And I must say we had overwhelmingly positive feedback from customers and from associates. And Matt, this was a little bit about fighting fire with fire. You run into some of these people and God bless them, but the only thing they know is we are going to match their aggressiveness to a reasonable level that will curtail this aggressive and violent behavior to the extent that we mitigate it effectively. So we had these guards and today equipped with body cams, tasers, and Kevlar gear. It was really designed to be, and I hate to say this, but I will, don't mess with me. I'm the last person. If you have any degree of rational thinking that you're going to try to conflict with, because everything else was failing. Our own people get knocked down at the door, ill-equipped guards being just simply ran over. We knew we had to do something different.

The company made that commitment, we did do that, and it's made a wonderful difference in what we've seen in those stores. And that program is being expanded in that company in Kroger's. And thank goodness, as I mentioned earlier, we don't have 2,000 of these, but where we have that problem, this program is now expanding because we've seen it prove its worth or they have now since I'm an alumni. But always safety, Matt, let me be clear, profit over safety. I recently attended the FMI Conference in Dallas, and every year, they poll the attendees on what is top of mind for you in terms of priorities. It's always been shrink and shrinkage and loss. This past year, it was associate and customer safety. And that's one of the reasons why I'm still hanging around doing the work I'm doing. There's a lot that has been done, but there's a whole lot more that needs to be done in that space. And that's why I tip my hat to someone like Jason and the great work that's being done at CLEAR because it takes this collaboration between law enforcement and the private sector.

Matt Kelley:

And so Jason, I want to ask you a question, as Mike walked through all of those measures that he was taking in the Pacific Northwest, how important is it to law enforcement to know that the community and especially the businesses in that community are taking those types of measures to do their part versus relying on local law enforcement to be the first responder to any time an event happens?

Jason Davies:

Yeah. Well, I mean, I can talk to the Pacific Northwest and also the Northeast running the ORC team and AP team at Rite Aid. We had the same issues, but in this case, when we first got in, law enforcement wasn't even responding to our calls. So we had to go in, we created a team just to go in and liaise with law enforcement, liaise with community members, councilmen and women, the mayor's office to let them understand our plight. But what we were willing to do to help them help us, and I'll use NYPD for instance, our special operations teams, while your store AP is doing their jobs, the ORCMs are doing their jobs, we had a team that just worked primarily with law enforcement day in and day out, utilizing technology, artificial intelligence to identify where that activity was happening and actually target the violent recidivists.

This was done in combination with a change out in how the stores reported crime. This time, you have to keep in mind that we were operating 2000 plus stores. We had stores that had no merchandise on the shelves because as soon as the trucks showed up, if they were able to get it out of the trucks and into the store, it was being stolen or they were just stealing it right off the back of the trucks. So at first, we had pushed back from law enforcement. We don't have time to work on retail theft, but we started really, really getting involved in the community and at their community relations meetings, and they saw that we were an active partner. They saw that we were bringing technology to bear, bringing bodies into the field to help them do their jobs as well.

And we started out with three precincts. Within a year to 12 months, we had 47 precincts, and now it is a city-wide initiative for NYPD utilizing these special operations teams to go after the hardened recidivists. So yeah, I mean, they need to know that we're there to help them, that we have the technology and the resources to help them as well. We're starting to see these agencies now create more of their own RRC task forces. So I think a culmination of all the retailers working together, sharing, communicating intelligence has really shown law enforcement and the DA and state attorney's offices that we're not willing to play this anymore. We are going after these bad guys, and we are going to demand their assistance.

Jared Richardson:

These cross-functional partnerships like you mentioned too, Jason, are working. We saw Portland police communicating, helping plan directly with the AP/LP leaders of stores in that market. And we saw the division and president too come and say that the results have been overwhelming, 80% reduction in items having to be recovered, but one of the things that really stands out from this example to me is they did a press conference announcing all these changes. The mayor of the city of Portland, the chief of police right there with AP/LP leaders and leadership with the store inside the store talking about these changes and highlighting why it's a community issue. And speaking of community, Jason, going back to you too, when we dive into these cross-functional partnerships, we have the internal teams and the external teams, and it seems like that really the focus that you're just hitting on is we need to continue to improve these external teams and understand who else needs to be invited to the table.

Jason Davies:

Yeah, absolutely. I mean, first of all, we start with our retail counterparts. Over the years, at least from an ORC standpoint, we've unsilent ourselves. We now work hand-in-hand closely with our brothers and at our other retailers out there, where before we were competing teams. We share triaged intelligence, we conduct mobile stationary surveillance together, we share learnings. We ensure that everybody is aware of active trends, and then that also transitions into the ORCAs. We now have cross retailers working with the ORCAs to not just disseminate information and intelligence, actionable intelligence to their members, but also to train law enforcement and train other retailers because not everybody has an ORC team, not everybody has a large assets protection team with robust, large budgets. So we're able to fill the gap there.

And then from a law enforcement standpoint, I think a majority of the retailers today do an amazing job of cultivating and maintaining relationships with law enforcement from a CLEAR aspect and other ORCA aspects. We're doing as much as we can to teach and train law enforcement, to teach and train the DAs, the state attorneys, the attorney general's offices, even now manufacturers because that's part of an external partnership that hasn't been exploited as much as it should. We need our manufacturers to work these cases with us so they can understand how to protect the product before it even leaves their factories. City hall, it's not uncommon to see 3, 4, 5, 6 retailers sitting in a mayor's office discussing strategy, discussing impact to business and community.

And then of course, the business improvement districts, if you are not utilizing those relationships to help put you in front of the right individuals, and that could be a DA, it could be another councilman or woman and the mayor's office, they're there every day in the trenches with us identifying where can we move next to try and get legislation changed, try and get the right spotlight put on an issue. And then of course, lawmakers, myself and other directors have sat down with governor's offices to discuss current legislation and the impact on the community. And I'll use California for instance, Governor Newsom, the $300 million that was given to law enforcement to combat organized crime and to create the new CHP offices. That directly was due to the involvement of the retailers discussing our plight.

Jared Richardson:

You call out building some of these partnerships and how people on the call can kind of begin to have these conversation discussions. I think one of the other interesting things that I heard was case management and documentation. When it comes to collecting data and sharing that data, how critically important is that as we evolve this process?

Jason Davies:

Yes. So from an intelligence aspect, and I've said this for three years, data is gold if it's triaged and it's understandable and you can use it to prosecute. Unfortunately, with today's environment, our staff and our stores, they're already taxed on ours. We have less associates in our stores than we've ever had before. So getting them to actually fill out incident reports can be a challenge, but they have to be able to link their activity of doing that to the success of increasing sales through not losing merchandise. So the training there is extremely important. The software or technology that the retailers use is extremely important.

Because at the end of the day, somebody has to sit before an investigator with an agency, a DA, or a state attorney, and convince them that they need to work this case. And I'd rather be able to work a case from identification to closure in a month instead of a year because I don't have the proper data coming in. And that includes other technology that enhances that information. I can have all the case reports on an activity for a group of individuals, but if I don't have quality facial shots, if I don't have LPR data, if I don't have imagery from outside the stores to capture the cars, and it makes it much harder for us to get a full prosecution. And ultimately, at the end of the day, all of this should complement the investigative process for us to identify the individuals that are creating the demand.

Jared Richardson:

Matt, something that we deal with too with Access Task Force, something that LVT is really proud to partner with, and I'm curious what the feedback has been when you begin to have these conversations at the community level.

Matt Kelley:

Yeah, I think the recognition, and I think Jason hit on a little bit, is it comes down to communication. And the recognition that we got in those two cities was really eye opening in that collaborative process and knowing that the community is being supported by the retailers in that community to do everything they can to make them more safe and secure was really important. And if you talk to a patrol officer and they see the mitigation tactics that a retailer takes, they're very appreciative, and oftentimes that frees up their time to go do actual police work instead of responding constantly to calls for service at retailers. And that is recognized all the way through the chiefs of police, the mayors, city councils, even the CEOs of counties and things like that. So it's incumbent on the retailers to communicate what they're doing, have strong relationships, and have that partnership where they can make a phone call, bring them on site, show them the realities of what's happening, but then also what they're doing to try to mitigate that, to drive those collaborative partnerships.

Jared Richardson:

A good reminder for our audience too, we'll be taking questions, but if at any point you have a question, utilize the Q&A feature in the Zoom webinar. I'm monitoring. We're all monitoring here in the room, and we'll just interject to our experts if you have a question, so please ask away. I want to move on to this technological ecosystem, something that Matt and I have talked quite a lot about, but Jason, I wanted to bring this up. We've got all these solutions out there in the market, all these companies like ours that want to offer some sort of solution to a problem, and there are a lot of systems, there are a lot of integrations out there. What are some of the things that you see from a technological investment opportunity and what are brands doing correctly, and what are brands doing maybe or could improve a little bit at?

Jason Davies:

Well, I think we have to first emphasize that it's vital for collective success, that any collaborative ecosystem enhances technology, relationships, and strategy. So some of the things that we're seeing today, whether it's from an artificial intelligence standpoint, is how we triage data. So we have retailers out there that are utilizing both homegrown AI and also service provider AI to do this. And without going into different programs, how quickly can I identify trends, specific suspects, potential target locations, instead of being 30, 45 days behind? Today, we're in an environment where we need to know right now. Sometimes not even tomorrow, I need to know today. So we're starting to see more of a push to true real time intelligence, an intelligence that's been triaged and has taken human error out of it through AI.

The next piece is LPR. Once again, we have individuals that are concealing their faces, concealing their identities. They're exiting the stores. We're getting their vehicles. We're getting their tags, which gives us an investigative process to follow. We're providing that to law enforcement. We're working those leads, where before, you'd had to rely on hopefully an associate being able to look through a window because, of course, from a safety standpoint, we never want them going outside the building to obtain a tag. And is it going to be an accurate tag? And that one employee is not going to be at the six or seven stores or picking up a phone saying, "Hey, look out for this car," because they have a job to do. When we have LPR, we're able to track activity not just at our locations, but other retailers, other businesses, and then when we're working with law enforcement, identify routes of travel and potential fencing locations or storage locations for that merchandise.

The next piece is enhanced camera systems. We're seeing it both hardwired and external, whether that's mobile or used through Wi-Fi systems. That's making our jobs a lot easier in capturing the full incident and that we're then able to provide to law enforcement and also our investigative counterparts of other retailers to identify the true scope of activity. I think what we're seeing with machine learning and the creation of bots, and that's another piece. With online, fencing of merchandise, whether that's Facebook Marketplace, Amazon, whatever it may be, we've got retailers that have created bots and are scraping for all different types of information, but clearly to identify targets, individuals for us to take a look at to see if they're purchasing stolen merchandise. So I think if I was to pick the top two, it would be the artificial intelligence to really, really triage intelligence and then LPR data.

Jared Richardson:

Mike, you've heard the word collective ecosystem thrown around a lot. You talk about speaking on it, about conferences or hearing people talk about it. And with all this different technology, whether it be MSUs or cartwheel lockers, I'm just curious what market leaders are doing that you truly believe in?

Mike Lamb:

Well, let me first begin by saying give some context to this term ecosystem. In late 2019, just ahead of the COVID year and into the COVID year, Mark Stinde had stepped into the role as I was retiring, and he and I sat down and we had a discussion to say, "Kroger probably has somewhere in the neighborhood of 25 to 30 solution providers, strategic partners that the company has invested in because we believe they bring a value, but there was a missing element." And the missing element was they are disparate, they sit in silos, they don't necessarily talk to one another. So this notion of ecosystem was a phrase that he and I coined back in 2019, and I don't say that self-servingly I'm just saying it because that was the genesis of this conversation.

So we had two separate meetings. One in a few months after I retired that I went back to Cincinnati to attend, where we brought in some 30 solution providers and said, "What if? What if we had the ability to stitch these solutions together in a way that would benefit the business and would benefit the solution provider as well?" So that began a journey that continues today at the Kroger company. And every conference I go to, every podcast I'm on, the buzzword is ecosystem, and it should be. Underpinning ecosystem is machine learning, AI. But I wouldn't necessarily put two or three solutions in a box, live view technologies. It's not a commercial. It's just a fact. The work that we did at Kroger across the 25 or 30 solutions providers that came to the table was always the first to say, how can we do this? How can we lead forward to assist you in doing this?

Other great solutions like locking carts at the door, perhaps the best lens that Kroger had on habitual theft because these folks were stealing cartloads. I mean, they weren't putting down their pants, they were stealing 30 cartons of Tide in one push out. So how do you take that and how do you link it with something like facial recognition? And then how do you allow that to talk to the live view tower in the parking lot that then to Jason's point can pick up the license plate? I've listened to these attorneys generals speak, and what they say is, "We're dedicated to help and we will help, but you've got to make it easier for us to get it right versus wrong." We just don't have the resources for you to come in and say, "I have a problem, help me fix it." But to the extent that you are leveraging this technology piece, and you're integrating it and intersecting it in a way that expedites the case, puts it in a box, puts a nice little piece of wrapping on it, then you take it to the prosecuting folks and you jump over the hurdle.

The other thing it does, many states now are passing legislation where they cluster multiple thefts by these groups, and therefore it constitutes a felony offense. So this notion of ecosystem, I've said this many times is like the 1960s race to the moon. The big question is who gets there first? And the second question is, why can't we all get there together? And I think one of the sticking points today, particularly in larger companies, and we love them to death, but our legal partners in privacy and data governance are somewhat reluctant to share, right? The one little mistake against the 100 that goes well oftentimes results in them saying, "No, we can't do it." I think we have to push back as an industry to say, "An ecosystem should serve the greater good of all, not to the benefit of one specific retailer," but I think it's truly going to be transformational once we get it figured out.

And I think there's progress being made there, but candidly today, I think there's more discussion than there is reality, but everything that becomes a reality starts with a conversation. But ecosystem goes back four years now, and it's a labor of love. Jason and I talked about this yesterday. I think as AP practitioners, big companies, small companies, medium-sized companies, you can't walk away on the first no. I mean, when your organization says, "Well, there are risks associated with this." I think you have to go back and say, "Yeah, but the rewards if we measure this right and do it right are going to greatly overshadow the risk." And set aside theft for a moment, an ORC, it's problematic, it's creating profit drain, but look at what we're seeing with violence in retail, particularly in the grocery vertical, the number of active assailants. And this is a public fact, so I'm happy sharing it on this podcast. I was at Kroger for the first time for around four years, about four years.

I think we had two active assailants, and that's two too many. But neither were mass casualties, not minimizing either one of them. They were egregious acts. I was gone for 18 months and the company experienced five and more than one was a mass casualty event where folks, for whatever reason, which will never make sense, come in with a firearm and create destruction in a store. So I think ecosystem can play a massive role in that. If you think about license plate recognition, you think about facial recognition. How do you stand up a formidable front against the active assailant events that are occurring in America today? I think technology with AI, and I think about a lot of the solutions that are out there today are going to play an integral role in helping us get better and better at that. I think we all know too that seconds will save lives, but it does take a village and it does take collaboration.

Yesterday's word was I don't have to be faster than Jason, I just have to be faster than the bear. I think we have to get over that mantra as a retailing community and say, "How do we all come together here for the greater good?" And particularly as it relates to life safety because there should be no element of competition of me being better than Jason with technology that'll help serve for a safer shopping experience, and quite frankly, a safer country because these same events are happening at bars, are happening at theaters, are happening in any public setting. So I think ecosystem is... I think it's going to be significant, and I think it's going to take a little work to get it where we need it to be. And again, candidly, that's one of the reasons I'm still hanging around. I have a massive passion for it.

Matt Kelley:

Yeah. I think, Mike, along those same sentiments is the internal conversations we're hearing from our customers is not what is the cost of doing this, but what is the cost of not doing this? And I think those are where you're starting to see the conversations change from really looking at it from a safety standpoint rather than a dollars and cents and how we're going to mitigate theft.

Mike Lamb:

Absolutely. Absolutely. And I tip my hat to companies and its public news like TGAX, who is equipping folks with body cams in an effort to ensure that they try to do everything possible to protect the safety of customers and their associates. So hopefully, we're going to continue to see technology play a bigger role there.

Jared Richardson:

Quick reminder, if you do have any questions for Mike, Jason, Matt, or myself, please utilize the Q&A. Matt, I just wanted to go back to you as somebody that regularly interacts with our customers or even people in the field who's doing site visits, what are some of the things that you're seeing? What are some of the wins that people are experiencing? What are some of the asks that they're coming back to you with as well?

Matt Kelley:

Yeah. I think a lot of it boils down to what Jason and Mike have already said is how are you working with other solution providers to help us get better data, more actionable data, tell a more compelling story across multiple different locations or multiple different geographies so that we can be better armed as we go into our C-level meetings to try to make investments. So I think that's where we as solution providers can do a better job of helping our customers tell a story. And I think a lot of that starts with understanding the customer, listening to them and helping them craft that message.

Jared Richardson:

Excellent. And we got a question that just came in. What are some of the ways that you've been able to accelerate responses to potential incidents when you spot them outside of the store? Jason, Mike, Matt, one of you want to take that?

Matt Kelley:

Yeah, I think some of that... Oh, go ahead, Jason.

Jason Davies:

No, I think accelerated response. So from a law enforcement standpoint, it's rebuilding that relationship and that understanding, so you know what your response time's going to be. I think far too often, mostly because we're stretched thin, we don't take the time to cultivate and strengthen those relationships, especially in some of our hard hit markets. So that's key before the incident ever even occurs and ensure that the reporting verbally over the phone is understood, they're using the right keywords, and that goes to training. From a technology standpoint, if we're going to have technology outside our stores, how is that being monitored? Is it being monitored by a human being or is it being monitored by a system, artificial intelligence? And what does the reporting cadence look like on that? So part of that is just by actually, once again, before you have the incidents, go through pre-training, go through the what if scenarios and how can you handle those more efficiently. And then once again, for a brand impact, get back to business as usual.

Jared Richardson:

Go ahead, Mike.

Mike Lamb:

Let me just build for a second here. On the theft side, and as we protect profits, I think Jason's comments are spot on. As you think about active assailants, what case management system do you have? If you're equipped with stores, teams, and many retailers I understand or not, but whether it's management or whether it's store AP teams that are inputting information on potentially violent offenders such that upon the return of this individual, there's a notification that you're dealing with the person that has exhibited violence in the past and therefore has a propensity to exhibit it in the future. And if you have the means and wherewithal to look at technology, I know that facial recognition plays a big piece there. You get a violent offender, they have exhibited violence in the course of a theft previously, that person's enrolled in a facial matching technology. The moment they walk through the door, you can alert the store that this person has a propensity for violence.

And then you build your steps around how you safeguard against that, whether that's dial 911, whether that's simply avoiding the conflict because it's not worth the risk. I think technology and the weaving technology with a case management system perhaps is a very powerful one-two punch on early alerting. And then as you think about active assailant, Kroger and its threat management team led by Frank Patercity, who I think is one of the best in the industry, if not the best, train, train, train on avoid, deny, defend or run, hide, fight, whatever your program is such that in the face of an act of assailant, your associates are very well trained. They know what to do to hopefully avoid becoming a victim. And again, it goes back to every door and exit as well. No blocked exits, right? So it's a unique time in retail again, where you're having the blended conversation on protecting profit through theft mitigation, and then you're trying to keep violence egregious violence down in the stores, often associated with theft and sometimes not. But either way, it's equally threatening.

‍Jared Richardson:

Matt, another question that I think you have a lot of experience with is how do you help. And you kind of touched on this a minute ago, but how do you help justify getting additional budget for new tools? If corporate comes to you and they want to say, "How much theft did we prevent? How can we understand the ROI of a particular solution?" What are some of the base marks there that we need to be concerned about?

Matt Kelley:

Well, I think really as you go walking into the C-level meetings to try through the strategic planning process to try to get dollars allocated, it's really understanding what upstream and downstream impacts there are. You don't need to focus on a single metric, for example, in the retail space as product gets stolen, that impacts on shelf availability, that impacts labor metrics, that impacts all the way up through the supply chain. So I think really just having a holistic view of the business and your business acumen for the people who are making those pitches is really important to understand how the business operates and be able to stitch together all the data points and understand that upstream and downstream impacts are important.

Jared Richardson:

Excellent. Hey, final thoughts as we come to time here on the webinar. Jason, I'd love to just start with you as somebody that's got a lot of experience on the front lines of collaboration between law enforcement and retail. We're seeing high turnover in both of these areas. I've heard from law enforcement investigators that they've lost a lot of great detectives or police officers because they feel like their hands are kind of tied when it comes to what they can do in certain jurisdictions. But I mean, what's kind of your takeaway or your call to action for both parties as we move forward in this new reality?

Jason Davies:

Yeah. Well, I think we're seeing both in the retail and law enforcement world, people leaving that space due to the legislation that has been passed. So I think one of the call to actions is if you've got a government relations or government affairs department in your company, you need to be best friends with that individual, teach and train on ORC on violence in stores. Because in many companies, some of those folks don't have any experience. I can tell you, coming from Rite Aid, we rate government relations person who was a pharmacist and had no experience in the AP world, but was, when I got there, dealing with asset protection issues and ORC issues. So going in and teaching and training him on legislation and what we do and then assisting that individual in day-to-day activities towards the legislation piece was critical to some of our successes.

So if you're not doing that as a retailer, as a director, as an investigations or AP manager, I'd highly suggest that you do. The second piece, which is I think more difficult for some of our companies, is we bring a lot of tax revenue to cities and states, and our voices should be heard a lot louder than they have been in the state capitals and also in DC. So I'd like to see more retailers standing up and being heard on the impacts of legislation. I think without it, we can talk about adding all the technology we want to store. It's not going to change anything, and we're going to continue to see law enforcement leave the profession. It'll be harder for us to staff our stores. And then of course, once again, it impacts our brand because our customers aren't getting the service that they deserve.

Jared Richardson:

Mike, over to you. What's kind of your message to retailers, to community members as we look for a temporary solution and a long-term one?

Mike Lamb:

Well, I would say, first of all, discussions like today and just being very open and candid about where we've been, where we are, and where we need to go. If I used one word that I think would be the most meaningful in my opinion, it would be collaboration. Whether that's collaboration internally with your various departments that support your organization, be they legal or corporate affairs, or public relations or human resources, or your senior management teams. I think AP today needs an insatiable appetite towards technology and AI. Don't fear failure. If you fail though, fail fast. I sort of had a mantra that I kept throughout my years of retailing. I think there's four principles. Expect to win, right? Expect to win this. Everybody should be optimistic. Take it personally, right? If your business is having a significant drain on its shrink or it's got safety issues, if you lead that organization, take it personally.

Thirdly, take a swing and search for yourself. Don't be a wallflower. AP leaders are paid to have a voice and you should express that opinion. And along those lines, be relevant. Be relevant. Go out there and contribute, and don't walk away on the first no. And then Matt talked about how do you get funding for something like a capital project that you believe will bring value? That's just the beginning. How do you track it going forward? I can tell you through my own personal failures that oftentimes we stand up a good technology, but we lack the ability, effort, or energy, maybe all three, to really package it and show and demonstrate to the business this investment is working. And it's working, and we're seeing the ROI and to the extent necessary, we need to expand it. And I think that's a big challenge today that solution providers and AP organizations together should work on.

How do I create the C-suite friendly dashboard that if I'm standing up at me as a solution? I'm carefully tracking at me. Leading indicators like Matt referenced, that are maybe more holistic. They could affect inventory integrity, they could affect shrink, they could affect so many other things, labor productivity, and then lagging indicators. Are you seeing a result of less activity, it's bad activity, and can you measure that in the financials? And I don't know that we do a great job of that today, and maybe I'm speaking more personally, but I think those are the keys, but I'm very optimistic about the collaboration. I see how retailers are coming together, and it's not where we are, but it's where we're going.

Jared Richardson:

Love that. Well, hey, thank you so much. Jason, really quick, how can people on this webinar connect with you or ask you any additional questions?

Jason Davies:

They can reach me through clearusa.org and any of the other counterparts that are there. They can also stay tuned on LinkedIn for our next conference for 2025, which we're looking forward to. 

We'll be announcing a location very, very soon on that. But either LinkedIn or through CLEAR, I'm always available to answer questions and provide guidance or connections to law enforcement or other retailers.

Jared Richardson:

Excellent. And Mike, how do we tap into your experience?

Mike Lamb:

Well, I think LinkedIn is probably the best vehicle. I'm no longer in the public sector. I do have a little consulting business that I run, but I think the best way to link up is through LinkedIn itself, but I'm always open for feedback. I think what you realize in this business is you never stop learning, right? So it's not about me disseminating knowledge, it's also hearing it and sharing it, but LinkedIn is probably the best recourse.

Jared Richardson:

Great. And you can connect with Matt and I at lvt.com. You can read more about extreme stores and the playbook on how to take them back at elevate.lvt.com. Lots of other really great thought leadership content for retail leaders on that site as well. We publish new content every week, and it's just a place for us to come share ideas and concepts. So highly encourage you to visit elevate.lvt.com. Thank you so much to our panelists today. Thanks, Matt, for joining me in the studio. And thank you all for attending our webinar, and we'll see you on the next one.