A think tank has predicted that the UK retail sector could be facing its “worst run of health for five years”.

The KPMG/Ipsos Retail Think Tank says the health of Britain’s retail industry had fallen in the second quarter and is likely to drop even further in the third quarter. It says if this were to happen, it would represent three consecutive quarters of negative performance which has not been seen since 2012.

The Retail Think Tank (RTT) produces a retail health index based on aggregate figures for the sector. The index dropped by one point in the second quarter following a drop of one point in the first three months of the year.

The think tank members agreed that margin and costs rather than demand were the main causes of poorer performance in the second quarter, but they foresaw a weakening of demand in the third quarter.

Costs have risen as wages and business rates increase, and margins have been squeezed by heavy competition on the high street.

The index data are for the sector as a whole, (and their accuracy is entirely the responsibility of the retailers providing the figures). The picture for many retailers is more grim than the index suggests.

In June, when sales picked up, Helen Dickinson, chief executive of the British Retail Consortium commented: “Online continues to take the lion’s share of growth, although contribution from stores increased slightly in June as it seems shoppers headed out with specific purchases in mind, rather than just to browse.”

The BRC reported that over the three-months to June, online sales of non-food products grew 8.4% while in-store sales declined 0.7% on a total basis and 1.2% on a like-for-like basis, a better performance than the like-for-like 12-month average decline of 2.0%.

The BRC noted in June that “online sales are still a small proportion of total UK retail sales. Estimates based on Office of National Statistics figures show about 10 per cent of total UK retail sales (food and non-food) are achieved via the internet”.

Nevertheless, Paul Martin, head of retail at KPMG UK, commented: “The industry is undergoing significant structural changes. The retailers succeeding are those embracing change.”

Commenting on how retailers are adapting, Martin Newman, CEO at Practicology, and a member of the RTT, said: “In-store performance has improved, as operators continue to master the blurring of digital and physical retailing to create a seamless shopping experience.”

And Mel Taylor CEO of Omnico, a retail technology company, commented: “The whole of retail is experiencing profound climate change and retailers must use technology to adapt. We are now in the era of compulsive channel-hopping and smartphone use, when a consumer can interact with a brand in more ways than ever – online, through a mobile app, in the store or via social media.

“To thrive in this environment you need the technology to pull all this together so that consumers have the same, high-quality experience irrespective of the channel they are using. A single, cloud-based platform is required, that is far more intelligent with data and will work in the background synchronising all the channels to ensure that as a retailer you deliver on your promises. That means recognizing your customers and their rewards immediately and achieving full visibility and control of stock, irrespective of where it is.”

 

 

 

A course in payment card fraud including 20 lectures with five expert instructors has been found on a Russian online forum, the cybersecurity experts Digital Shadows have reported.

The intensive and exclusive six-week course is offered for just $745 plus $200 for course materials.

“While tutorials and guides have existed for many years, the online course was on a scale and level of professionalism we have not seen before,” the company said in its report,  “Inside Online Carding Courses Designed for Cybercriminals.” It comes “complete with webinars, instructors and reading material.”

The course instructors say they aim to teach the would-be criminal “to become a professional in the world of carding”.

They claim that “with this knowledge, carders can make more than $3,000 a month for 10-12 hours a week of work. Of course, fraudsters who work more than this can reap a higher profit, potentially making $12k a month, based on a standard 40-hour working week,” Digital Shadows reported.

“For each lecture, which lasts between one and two hours, the number of attendees is capped at 15. The course is conducted in Russian, so it is specifically targeted at fraudsters in this geography.”

Retraining is offered every six months for an additional cost.  While the course is advertised in a number of forums, word of mouth is its best marketing tool. Digital Shadows noted that one ad for the course said, “We don’t need PR.”

By scrutinizing guides and courses offered to budding fraudsters, security pros can “see what defenses the carders struggle to bypass, as well as the new tactics they have devised,” Digital Shadows contended.

What does the future hold for retail loss prevention?

A diverse panel of industry leaders will be telling LP professionals their fortunes at the Retail Risk – New York conference on September 14th 2017.

The participants in this crystal ball gazing session will be discussing “Megatrends in Loss Prevention”. Big changes are guaranteed, they will agree.

The five panelists will bring decades of experience and a variety of viewpoints to the question. They are:

Brand L. Elverston, who was until recently Director, Asset Protection Strategic Initiatives at Walmart, and has since launched Elverston LLC Consulting Services with the motto “When traditional simply isn’t working”.

Gregg Smith, Sr. Director, Asset Protection at Five Below, a specialty/variety discount chain that has grown to over 500 stores in 14 years.

Matthew J. Haughton, Assistant Vice President-Corporate Security, L’Oreal USA, who is responsible for protecting his brand’s identity and assets from manufacturing through to retail stores.

Chad MacIntosh, Vice President of LP & Risk Management with the premier department store chain Bloomingdale’s.

And Arditi Halili, Global Loss Prevention analyst, Swarovski, who intriguingly describes her current role as “designing a global data platform from the unknown”.

Chairing the panel, and the conference, will be Chris McDonald, Vice President of Loss Prevention, Compass Group, NAD, who commented, in response to the question:

“There’s a big industry out there. A lot of people think of Loss Prevention just in terms of retail, when there is LP in manufacturing, the hotel industry and more.”

His job with Compass Group, which he joined six years ago, was his first foray into the hospitality sector, he told Retail Risk News. Many LP professionals may follow his lead.

The panel discussion will revolve around a number of talking points:

• What do the panellists see as their main focus today – where do they put their energies?
• How have they seen their roles change in the last 5- 10 years?
• Who are they looking to hire to help them maintain success and what key skills do their teams possess or need to develop?
• What concerns or issues keep them up at night?
• Will data become the most valuable commodity on the planet and the biggest threat to businesses?
• And how will CCTV and other technologies evolve to provide enhanced income streams as well as better protection?

A line-up of other expert LP practitioners will also be speaking at the event which is free and will include a networking lunch.

To register click here…

Alarming numbers of consumers worldwide are risking their health by purchasing counterfeit health and beauty products online, according to a new survey.

The latest counterfeit awareness survey from online brand protection experts Mark Monitor and Clarivate Analytics was conducted in May and a report of the results was released this month.

The report focuses particularly on consumer goods such as makeup, toiletries, medicines, vitamins and supplements. The researchers found that 27% of the 4,401 consumers from 10 countries who took part in the survey had been duped into buying an “imposter good” online such as toiletries, cosmetics and medicines.

16% of the sample had unknowingly bought medicine deemed counterfeit, while counterfeit skincare and haircare products and supplements had been bought by 25%, 22% and 22% respectively. Makeup was cited as the most commonly purchased fake item (32 percent).

Alarmingly, when asked how they identified goods as fake, 34 percent said they had experienced a bad reaction to the product, while 50 percent said bad quality alerted them.

The report quotes the European Commission as the source for an estimate that approximately 100,000 die each year as a result of falsified and counterfeit medicines. In fact the World Health Organisation was the source for this estimate which related to Africa.

The report does not cite any research on mortality or morbidity caused by counterfeit medicines in other parts of the world, but it quotes the US Federal Drug Administration (FDA), as saying that fake drugs “may be contaminated or contain the wrong or no active ingredient. They could have the right active ingredient but at the wrong dose.”

Mark Monitor has previously highlighted the risk of counterfeit electronic goods, such as chargers, bursting into flames and causing house fires.

The latest Mark Monitor report makes no comparisons with its previous surveys of counterfeiting. It couldn’t as the countries in the sample are different.

Their 2105 report was of the US and eight European countries, with 2,000 of the 3,400 respondents being from the US and UK. For their 2016 survey they added 1,000 Chinese consumers. A high proportion of these Chinese shoppers reported buying counterfeit goods, unknowingly and in some cases knowingly.

The 2015 report found that 24% of respondents had purchased counterfeit goods, while the 2017 survey reported that 27% had. But if China had been excluded from the survey the percentage would have been lower.

Overall the survey may suggest a slight improvement in American and European online shoppers’ awareness of the risk of buying counterfeit goods. But the growth in online shopping suggests many brands have yet to stem

Loss prevention executives working for Canada’s biggest retailers met at the first Retail Risk – Toronto conference on 22^nd June. The venue was the spectacular Renaissance Downtown Toronto Hotel, overlooking the Blue Jays Toronto Stadium and a day trip away from the Niagara Falls.

Chairing the event was Rui Rodriguez, National Director Asset Protection, Holt Renfrew, well known to all present as a doyen of Toronto’s LP and risk management professionals.

Corin Dennison, Director Legal & Compliance (Global Investigations), adidas Group (a global sponsor of the Retail Risk conference series), gave the first main presentation of the day. Corin shared insights from his experience of protecting an iconic brand and overseeing a fast growing retail estate of 2,800 stores and corporate locations worldwide.

Next up was Patrick Brophy, eCommerce Specialist at Moneris, a partner with Kount Inc., (another global sponsor of the Retail Risk series). Patrick looked at likely future trends in fraud and payment transactions, underlining the need for merchants to be able to pivot as the threat landscape changes.

He was followed by Ron Kornblum, Director, Corporate Security at Loblaw Companies Limited, Canada’s leading food and pharmacy retailer. In a compelling presentation, Ron shared latest intelligence on organised retail crime and how it is affecting the Canadian market.

Nick Walker, Commercial Director, ai Corporation, (a global sponsor of the conference series) gave a user friendly guide to machine learning and how it can enhance and improve fraud detection.

Carl Boutet, Commercial Lead – Retail, at Genetec, a Canadian firm with a global footprint in the security industry, followed with an overview of how unified security can help retailers tap into new efficiencies.

Lee Jeyes, Director, Loss Prevention, Walmart Canada, gave a millennial’s view of digital disruption and the shape of risk to come. Looking beyond the immediate future Lee advised delegates to get ready for virtual reality. E-commerce, m-commerce and omni-channel are just the start, he warned.

As an example of how rapidly technology is changing he recalled that at school ten years ago he was taught how to make websites, knowledge that is already redundant as websites are now built by apps.

Lee was followed by Paul Bessant, founder of Retail Knowledge, who gave the new live and interactive Retail Risk Global Survey its first outing in Toronto. The third party software enabling respondents to remain anonymous was a welcome innovation here, and delegates were very receptive, commenting that no such benchmarking had been done for the Canadian market. A report based on the findings is now being compiled and will be circulated to all conference delegates.

Finally, former criminal mastermind and world eTheft authority, Tony Sales, spoke to delegates via skype. Tony held their attention in a vice-like grip as he warned them that “data is the new cash” and data theft potentially the greatest risk they face.

The audience voted unanimously to reconvene for another Retail Risk –Toronto next year. “There was lots of enthusiasm and a good day was had by all,” said Paul Bessant.

 

Managers dealing with stock control are surrounded by numbers. But are they making sense of the figures or just staring at code flashing by on a screen?

Retailers wondering “what is the Matrix?” could try asking Eoin O’Neill.

As Business Development Manager, Ireland, OCS Group, Eoin analyses supply chains for many of the world’s largest retailers. In his presentation at the Retail Risk – Dublin conference on 6^th July, he will be helping to crack the inventory code.

Knowing what to look for and how to decipher the raw data of supply chain audits, stock takes and other stock management processes can often mean the difference between profitability and loss, as he explains.

“Very often people have the specific data from the stock takes in front of them, but they don’t use it to see what’s gone wrong.

“Operational losses along the supply chain can be huge. Some of our customers have seven or eight stages from the manufacturer in south East Asia, say, to a distributions centre first in Asia and then in Europe, from there to warehouses in the UK or Ireland and on to the stock room and the shop.

“To err is human and there are humans at each link in the chain.”

OCS is a UK based family owned firm that started out cleaning windows in 1900 and now employs more than 90,000 people worldwide providing total facilities management.

“I always tell people we’re the biggest unknown known,” says Eoin. “Our customers know us, and they include more than half the top 100 retail companies.”

The Group has been growing rapidly as more and more companies realise they are better off outsourcing their stock taking and other aspects of supply chain and facilities management.

Omni-channel makes outsourcing an even better idea, Eoin argues.

“It’s a fabulous concept being able to use your devices to shop but having your stock correct is vital. The worst thing that can happen with omni-channel is for people to lose faith in it.”

He cites the example of an unnamed retailer whose omni-channel presence came to the fore in the last year and a half.

“A huge part of their business is click and collect and they have been struggling to deal with customers who were finding their item was not in stock. It’s only a tiny proportion of customers who were having this experience but customers who have a bad shopping experience are going to tell ten times as many people.

“There was a drop off of 2-3% in online sales and when we crunched the numbers it was very clear it was because of a loss of confidence.

“Retailers have rushed to build huge customer-facing omnichannel infrastructures without addressing the underlying issues of a genuine complete stock management strategy. It’s a rare retailer who has fully realised omni channel promised improvements to inventory turn and efficiency.”

With advances in analysing every part of the inventory chain from technological (RFID and improved Cloud based software), to technique in counting stock and measuring stock levels (through advanced best practice methods) OCS is offering retailers “seamless stock management with accurate data and ‘Real’ stock control”.

Or as Eoin puts it: “We have the ability to decipher the Matrix.”

To secure your free retailer’s pass to the conference go www.retailrisk.com/dublin-booking/

The 2017 Trustwave Global Security Report released this week shows retail still leading other industries in vulnerability to data breaches. However, it reveals improvements in cyber security around e-commerce.

The report shows an increase in the percentage of data breaches affecting POS systems, and a reduction in the percentage of incidents affecting e-commerce systems.

Commenting on the reduction in breaches of e-commerce environments, Lawrence Munro, worldwide VP of Spiderlabs, Trustwave’s “elite team of ethnical hackers, forensic investigators and researchers”, said this would have been partly due to increased use of more secure infrastructure.

“There’s been a shift towards hosting frameworks such as Akamai, the content delivery network, or Cloudflare, the caching reverse proxy service,” he told Retail Risk News.

E-comm players have also been eliminating components with known vulnerabilities, Trustwave comments, adding that in some cases, banks are mandating the changes.

The Trustwave Global Security Report (GSR) comes out annually and is based on data gathered from hundreds of breach investigations and billions of security and compliance events.

Headquartered in Chicago, Trustwave helps businesses fight cybercrime, protect data and reduce security risk, using cloud and managed security services, integrated technologies and a team of security experts, ethical hackers and researchers. The company says more than three million businesses in 96 countries are enrolled in the Trustwave TrustKeeper® cloud platform.

This year the GSR shows some marked improvements in breach detection and handling, particularly by businesses that have invested in cyber security.

Data breach detection times have fallen, and once detected, victims are containing breaches more quickly.

The median number of days from an intrusion to detection of a compromise decreased to 49 days in 2016 from 80.5 days in 2015. Where the incident was detected internally the median was 16 days, compared with 65 for externally detected incidents.

Similarly, internally detected compromises were contained more quickly than externally detected ones.

Where containment occurred after detection, the median time lag from detection to containment was just two days for internally detected breaches compared with 22 days for externally detected breaches.

Trustwave comments that the same tools and techniques which enable businesses to detect breaches on their own or
 in partnership with a security provider often make it possible to respond within days or even minutes of a breach.

Overall, the GSR shows North America and retail lead in data breaches, as in previous years. 49% of data breaches investigated by Trustwave were in North America, while 21% were in Asia-Pacific, 20% in Europe, Middle East and Africa, and 10% in Latin America.

The single largest share of incidents involved the retail industry at 22%, followed closely by food and beverage at nearly 20%. There was a big increase in incidents affecting POS systems while breaches of e-commerce environments fell.

2016 saw incidents affecting POS systems increase to 31% of the total, from 22% in 2015, while incidents affecting e-commerce environments fell to 26% from 38%.

POS breaches were most common in North America, which has been slower than much of the world to adopt the EMV payment card standard.

More than half of the incidents investigated targeted payment card data: Card track (also called magnetic stripe) data, at 33% of incidents, primarily came from POS environments. Card-not-present (CNP) data, at 30%, mostly came from e-commerce transactions. Financial credentials, including account names and passwords for banks and other financial institutions, accounted for 18% of incidents, followed by other targets.

Trustwave found that despite some improvements in cyber security, nearly all web applications still contain vulnerabilities.

99.7% of web applications Trustwave’s application scanning services tested in 2016 included at least one vulnerability, up from 96% in 2013, while the mean number of vulnerabilities detected was 11 per application, down from 14 in 2015.

Lawrence Munro commented: “It all comes down to general hygiene really. We are still seeing the basics going wrong. There is a list of the 10 most commonly exploited vulnerabilities globally across web applications which is commonly used as a baseline. We would normally say those vulnerabilities have to be fixed first, and most of what we saw would have failed that baseline.”

Retailers need to adjust to serving new customers with new expectations. How will the new breed of customers, including the all-important millennials, change the risk profile of retailing and can Loss Prevention professionals meet the challenges?

In his keynote presentation at the Retail Risk – Dublin conference on 6th July, “Creating the Intelligent High Street”, Andy Martin, Business Development Manager, Axis Communications, will be discussing how video analytics can help the industry make the adjustment.

To attend the session, free to all retailers, go to http://www.retailrisk.com/dublin-booking/

Axis invented the first IP camera and are leading developments in network video, audio and access control, while Andy has 25 years experience in retail with a variety of major brands including DSGi, HMV, Fopp and Morrisons, as well as owning and running his own business in the sector.

Andy quotes a statistic that 70% – 75% of UK retailers are now using network video on part or all of their estate, and many now look to progress towards a new phase of ‘interoperability’– linking their IP platforms to audio and access control and to data mining RFID and EAS tagging – enabling retailers to respond to customers better and to identify different types of customer behaviour.

For example, he says, with the right tools a retailer of health and beauty products can now recognise the need to distinguish between customers shopping for high end perfume and cosmetics and those who are simply nipping in for a few toiletries, and offer appropriate levels of service.

Self-check outs have introduced extra challenges for surveillance. Could cameras monitor self-scan of products in the aisles of a store? Andy sees this as an area for development.

“Our cameras are already able to read bar codes and QR codes. There’s no reason why that technology can’t be developed and adapted for a PoS application.  There is already significant development in linking customer analytics to PoS.

“You would still need to be presenting the product to a PoS for the EAS to be captured. If you think of a camera as a small sensor, there’s definitely potential for more applications within retail fixtures and fittings.

Linking IP cameras with smarter tags could offer a new level of security, he suggests.

“Smart shelves and smart tags that create an event alarm are already integrated with our cameras on a fairly simple level, around the EAS system being alerted.

“And we’ve been working with a partner on connecting to a tag that is so smart it talks to the camera all the time about changes in its environment, and that goes with a video case file”.

The challenge of keeping IP cameras cyber secure will also come up for discussion, and Andy sees a big area for debate in the regulations surrounding IP cameras and CCTV in general.

“Cyber security is at the heart of everything we do,” he says. “With the GDPR looming there will be pressure for an improvement in industry standards.”

He also notes there is currently “a massive variance in the way surveillance is regulated across Europe”. Andy suggests CCTV’s increasing importance for national security makes it essential for security integrators to collaborate in ensuring best practice so that responsible deployment of surveillance is not sanctioned.

“We need to be making the job of the police and the biometrics commission and the government agencies who are involved in surveillance easier by sharing best practice and knowledge.”