LP Magazine

JUL-AUG 2019

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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T he extent to which retail investigations have been transformed by analytics is a good reflection of just how quickly things move in a technology age. We're not so many years removed from when we were introduced to the idea, and now it's hard to think of managing loss prevention without it. "I really can't imagine a world of AP without data analytics," said Nathan Bandaries, a twenty-six-year LP veteran who manages the fight against organized retail crime for Safeway in the Denver area. Abraham Gonzalez, CFI, LPC, fraud mitigation manager at Bloomingdale's, agreed: "Analytics are starting to consume how you conduct every investigation." Data analytics act as a force multiplier, providing visibility where actual eyeballs have previously been needed. For example, Gonzalez noted that pass-off cases, in which an associate slides merchandise to a coconspirator, would typically be difficult without physically witnessing the hand-off, and many other schemes have been just as reliant on someone being at a station to view it. "Now, transaction times, when they begin and end, how many items are cancelled or line voided during the transaction, and noting when it's outside the normal range—now you have data analytics that let you see it." LP teams are increasingly getting used to this new way of "seeing" theft and conducting investigations. In interviews with LP leaders, the consensus view was that, as an industry, we are getting better and more comfortable with investigative analytics; data analytics are generating a rising share of cases taken up by AP investigators; education is improving, leading to more savvy professionals; and we're capturing more data points, which is letting us be more predictive. Analytics have also been key to burnishing LP's image, transcending the security guard stereotype and providing a platform for LP to better partner with other functions. The relationship with technology vendors is also in a positive cycle, experts believe. For example, video can now yield actionable data with analytics while returning fewer false positives, so retailers are spending less energy and gaining greater trust in the data. And as retailers place greater confidence in the technology, technology companies are willing to invest more in building better, easier-to-use LP tools, which spurs even more trust in, and greater reliance on, analytics. Home Depot is among leading retailers upping their investment in analytics to better leverage the power to identify problems, combat theft and organized retail crime (ORC), and identify opportunities to improve the business through more predictive modeling. "On the reactive side, we spend time reverse engineering how one person caused a problem and recreating it to see who else may be engaged in the same activity. Because if one person is using an opening to commit a bad act, then chances are that others are too," explained Nate Cunningham, director of AP forensics at the nation's largest home improvement retailer. "And we run proactive patterns on data, looking for ways people may be taking advantage. And sometimes you miss, and sometimes you hit, which then allows you to create an ongoing alert for that activity." A critical part of driving effective investigations through data analytics is, well, data. The more, the better, according to Scott Pethuyne, senior manager for asset protection at Designer Brands. "We're either doing everything exactly right, or we're collecting data," Pethuyne explained during a presentation at the 2019 NRF Protect conference in Anaheim. As Home Depot has undergone some data infrastructure transition in recent months, this has made more data available for data analysts on its AP forensics team—but it's not a process that retailers "complete," suggested Cunningham. "We're always adding new data," he said. "It's a never-ending process, especially as new information is collected and Analytics have also been key to burnishing LP's image, transcending the security guard stereotype and providing a platform for LP to better partner with other functions. Scott Pethuyne Abraham Gonzalez Nate Cunningham 16 JULY–AUGUST 2019 | LOSSPREVENTIONMEDIA.COM ANALYTICS IS NOT JUST A NUMBER'S GAME

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