One of the things to keep in mind is the impact on the shopping experience for customers.
And again, if you've got a chain of stores, and this has happened some in my community, where one store is locking stuff up and another store isn't, customers might stop going to the stores that are locking things up because you have to spend more time waiting for somebody to come unlock the cabinet so you can get what you want.
And they might just view it as a hassle.You know, if you're pushing a stroller at the same time, you don't necessarily want to have that extra burden.
So what that means is there are stores and some communities that are less likely to be able to stay afloat.
Welcome to Retail Gets Real, where we hear from retail's most fascinating leaders about the industry that impacts everyone, everywhere, every day.
I'm Bill Thorne from the National Retail Federation, and on today's very special episode, we're talking with the representative of Maryland's 4th Congressional District, Congressman Glenn Ivey, and Head of Government Relations at JCPenney, Angela Hoffman.
We're going to talk to them about organized retail crime, what it's like to collaborate with law enforcement, prosecutors and the retail industry and the Combating Organized Retail Crime Act.
Congressman Glenn Ivey, Angela Hoffman, welcome to Retail Gets Real.
Thanks for having me.Thank you so much.
Organized retail crime is a really big issue for not just retailers, but for society in general.What's going on?What's happening?Why is it happening?Where is it happening?How often is it happening?And what are we doing to help mitigate the problem?
But sometimes it's really interesting to me, and we were just talking about this the other day in the office, is how we define ORC.What is ORC, organized retail crime?
So I'm going to throw that first to you, Congressman Ivey, and then, Angela, I'm going to come back to you and talk to you a little bit about what the retail industry is facing in this regard.
Yeah, I mean, I think there's a lot of imagery with respect to individual shoplifters and the like.You know, somebody's stealing this item or that item or something.But I think that's kind of evolved over time now.
We've got groups of people and, you know, I think the big changes come because now everybody has a camera. These stores have cameras and sometimes the people who are in the stores videotape them with their cell phones.
But you see, you know, organized groups of people coming in and clearing out a store in some instances.That's one version.That's sort of the smash and grab scenario.But the stuff that's more sophisticated and ongoing, I think, has been
a particular interest of mine dating back to when I was the state's attorney in Prince George's County.We had professional theft, basically, where you had groups of people who would travel up and down the region of the eastern seaboard here.
They'd steal the items from one area, say in Maryland.Frequently, they would try and sell them or fence them in Virginia or D.C.Over time, that's evolved to sales online and other approaches like that.So it's grown.
And the problem is it's become a bigger and bigger problem that has made it hard for local prosecutors to address the concern because frequently you might arrest somebody in one of those instances and you might not know that that individual has been involved in
other thefts up and down the coast or throughout a different region.And so my thought was that it made sense to try and get a federal perspective brought to bear on this.FBI and federal prosecutors were necessary.
Angela, so how big of an issue has ORC become for JCPenney?I mean, we know it's big for the industry, but specifically for a brand, how big is it?
Well, I would say ever since I started in this role, it has been one of the top issues.
In fact, the first call I took my first week on the job was from one of our teammates that was working a big case, where for the first time, we had an aggregation statute on the books.
And for the first time, we were able to identify a group that had been working between multiple jurisdictions in a state, also brought in other retailers.
So this has been something where we've been coordinating across the country because these cases are sophisticated.And I'm going to use that word sophisticated. They know exactly the jurisdictions to hop between.They know the gaps in law enforcement.
And often they're not just, as the congressman mentioned, they're working regionally, they're working between states.Could be as innocuous as buying online in one state, picking up in another, and then fencing in another.
So they are very well coordinated.Well, the optimal issue here is they convert these products. whatever those products are, to some other cash product for other nefarious deeds.
So it's a continuum of sort of risks for our organization, but it's an area where we work very, very closely with other retailers, law enforcement, and other leaders across the country to try to, again, solve this very sophisticated problem.
Now, it is sophisticated.And so when you look at the history, ORC, Organized Retail Crime, really as a discussion point, you know, where people are identifying it as such, talking to it as a policy issue, as a problem within the communities.
Is ORC new or is this something that's been going on for quite some time?
So it's a great question.I would say we are now able to better identify where ORC is happening as we're starting to again put laws on the books at the state level that allow us to have resources under attorney generals.
We're setting up ORC task force. that allow us to share information, we'll often find that they're not just impacting our organization, they're working others, big and small retailers in a region or type of product line.
So there's that power in collaboration to understand the trends and the categories that they're going after and the means and methods that they're working together to sort of execute these crimes.
So I think we're just seeing more visibility to it and that's why we're so passionate about this opportunity to share more levels at all levels of government and bring those public-private partnerships together.
Congressman, you said as a state's attorney that this is something that you've been working on for quite some time.
Do you think that it has evolved from a point where when you first started addressing the issue, was it considered organized retail crime or was it something else that has kind of evolved into this new descriptor which is allowing people to kind of focus on exactly what the difference is between a smash and grab, shrink, shoplifting?
This is something very different.
Well, I think it's different in a couple of ways.One is the groups that seem to be working on this seem to be bigger and more sophisticated.They seem to have, for example, more reconnaissance in place and figuring out how to target places.
Back when I was handling these kinds of matters, and I'm in the D.C.metropolitan area, I'm right on Prince George's County, which borders D.C., which is a bridge away from Virginia.So
The theft and then going to another state or jurisdiction was easy.So it may be that we had more of it going on in my era.That was 2002 to 2010 than maybe you had in other places.
And we didn't seem to have as many people involved in the effort for a particular, I'll call them a team, criminal enterprise. So it seems to me that that's grown some and that maybe it's expanded to other areas.
It also sounds like, and I'll defer, but the scope of the loss, the magnitude of the loss has gotten bigger too.I mean, I think the losses I'm hearing from some of these retail stores are really eye-popping.
And they've always had the teams in place to try and address theft and focus on loss prevention. But it seems like they may have had to expand some of those teams and they seem to be pretty busy these days too.
So from my perspective, it had hit a point where I thought, you know, it was hard to handle this level of activity when I was state's attorney.And, you know, Prince George's County has my prosecutor's office.We had about 70 lawyers and
The county police department was fairly large and sophisticated, too.But even we were struggling with it then.And so I think it's just gotten harder.And the need for additional resources has gotten bigger.
I want to go in a moment to the Combating Organized Retail Crime Act, Congressman Boudin.
Angela, I want to ask you first, I mean, you've spent a great deal of time, you, Penny's and others with other brands, you know, to connect the dots for law enforcement, prosecutors, for elected officials on a municipal, state and federal level.
Can you talk about those conversations, how those have evolved and what successes you've seen?
So, you know, one of the areas I keep mentioning is I'm very focused on partnership and where we've seen sort of the abilities to get ahead of and bring some of these more nefarious groups to task is where we've been able to put new laws on the book, but also educate what those laws are, right?
It's not just theft.It could be the aggregation takes it up to a felony charge or a RICO statute and the ability to bring those cases together.We spent a lot of time with our investigators
putting all the pieces together, laying out the case, talking to our other investigators, so we also present the right case, which I think is a big change on this as well.That is one, but education is a big piece too.
Knowing that there may be a repeat offender coming in, so partnership with law enforcement officials, also key.
We know they're stretched, they have so much going on, so many of our organizations also put resources into those investigations and helping build the case as well.
Congressman, first, let me say thank you on behalf of the National Retail Federation and our members and the industry for being a co-sponsor of the Combating Organized Retail Crime Act, which we call, as everything in Washington is called by an acronym, SOCORCA.
Can you talk to us a little bit about what that bill does and why did you sign on as a co-sponsor?
To me, the benefit is the coordination, because as we were saying a minute ago, A lot of times you'll have these criminal acts going on in different jurisdictions.
Sometimes there are challenges in making sure that law enforcement in one area understands what's going on as opposed to what's going on in other places as well.
Because if you can put the bigger picture together, not only does it make for the opportunity to have bigger prosecutions and more effective prosecutions,
But I think sometimes what you run into is judges and juries might not take it so seriously if it's just a single event and not that much was taken.
If you can show that it's an ongoing criminal enterprise and that tens of thousands, hundreds of thousands of dollars have been lost due to these particular groups and their activities, I think it makes for stronger cases.
I think it leads to judges being more serious about them, especially when you get to a sentencing phase.So it's important to not just treat these as misdemeanors, one offs.
This isn't, you know, the high school senior decides, you know, he wanted this pair of jeans and really, really had to have them. It'll never happen again kind of deal.
It's a different situation and I think it needs the upgrade in reconnaissance and information that the bill would provide.
And I think federalizing it makes sense to I've got colleagues who are want to be careful about over federalizing criminal activity.I get that. Not everything needs to be a federal kind.Not everything needs to be in federal court.
But there are advantages for serious cases, you know, when you take them to federal court from a prosecution standpoint.So I like those two aspects that it brings to bear.
Now, Angela, you all have again, you've been a big supporter of Corka.And I guess the question would be, you know, why you believe this bill is really important for the industry.
Well, I think there's two reasons for that.One, we're already seeing where we're able to aggregate, bring together teams.We are getting prosecutions on the book.It does work when we come together.
Number two, there's a really interesting piece to it as well that allows us to kind of look at trends.So who would imagine in some cases in retail, this not just hits, could be a denim, could be a jewelry, could hit.
Baby clothes could hit baby formula.When you see those trends and spikes, it allows us to also communicate to see what's happening in those sort of areas that are being targeted.
It also gives us visibility because this happens throughout the supply chain.So the ability to work with even what happens at a port to a rail line, to the infrastructure that gets the product delivered to the doorstep.
All of those components have also been targeted by organized retail crime.
So it doesn't just operate in a silo, but it allows us to bring in all the entities to help us better understand, again, the sophistication of the organization, and most importantly, our ability to get to sort of the head of the stake and be able to focus our efforts right there.
So I'd be interested in both of y'all's opinion of this.So much of the recognition by the public as it relates to organized retail crime has come through basically social media.
It's the people that are in the store and they're able to capture this as it's happening and then posting it and it gets a lot of pickup.Do you find this good? or bad.
Is this helpful or harmful in terms of your efforts to address the issue and to bring people together?Congressman, I'll start with you.
I mean, I think it's a mix.I mean, because on the one hand, a lot of times they have those flash mob things that clearly are a major problem, especially for those individual retail stores that get hit with that kind of thing.
Sometimes they can essentially get wiped out from an inventory standpoint.And both of them need to be addressed.I don't mean to say that one doesn't matter. because they both do.
But from a federal coordination standpoint, probably the organized crime piece is categorically different than what you frequently see on these internet phone recordings.Yeah.Angela, any thoughts on that?
It's a great question.I think It doesn't really identify what's going on in the organized retail crime, as the Congressman said.
But when you walk in and you see all the products locked up and you have to wait for someone to come in and unlock those things for a tube of toothpaste or another product that you want, I think people start asking the question, like, why is this happening in those categories?
If you walk in and you're a mom and you need baby formula and it's not there, you want to know why that's happening.
So I think that's been more of the sort of drivers on the communication that have been sort of helpful in combating organized retail crime.
And on that point, I mean, one of the things to keep in mind is the impact on the shopping experience for customers.
And again, if you've got a chain of stores, and this has happened some in my community, where one store is locking stuff up and another store isn't,
Customers might stop going to the stores that are locking things up because you have to spend more time waiting for somebody to come unlock the cabinet so you can get what you want.And they might just view it as a hassle.
You know, if you're pushing a stroller at the same time, you don't necessarily want to have that extra burden.So what that means is there are stores and some communities that are less likely to be able to stay afloat because of that.
Not only are they getting hit by the theft piece, but customers are starting to self-select and go to other places.So you can have a dual effect that's negative for a specific community.
When you look at some places, let's say like grocery stores, I know that's not necessarily what we're talking about here, but you got very close margins for a lot of these retail stores.
Food deserts, everybody's heard those, but you've got other kinds of deserts too, drugstores.How far do you have to go to get to your drugstore so you can buy the medicine that you need for mom or pick up your prescriptions.
Those are things that are impacted too.
Yeah, it's amazing to me sometimes when you read some of the editorial comments or how people respond to going into a store and seeing a product behind plexiglass and blaming the retailer saying, you know, why are you doing this?
you're ruining my experience.The retailers don't want to do it.You know, it's it to your point, Congressman.I mean, it really inspires people to go somewhere else because it's easier to buy product there.
And I think people forget that store owners don't do it because they want to do it and they do it because they have to do it.
And to your point, Angela, if you do go into some of these stores, you will see where the plexiglass is and you will know where the opportunities lies for these organized retail crime gangs.
And I think that's a critical point, right?
So we are committed to creating shopping experiences that are just rewarding for our customers, where they're welcome to find their products, their services, and the services and apparel that meet their unique needs.
And you wanna make every one of those shopping experiences count.
So that's what makes this, I think, so important in our mind, again, for our associates and for our customers and our communities, getting our hands around this is just a critical issue.
Yeah, it really is.Well, I'm not going to take much more of your time.
I do want to say, though, that I think that the issue itself is not going to go away unless we have people like Congressman Ivey and we have retailers like Angela's retailer, her personally and her engagement that will help get this across the line.
Something has to be done.We can't just wait and hope that it goes away.It's not going to get any better.And there are ways to mitigate it.And I think Corka is one of those ways.And thank you, Congressman Ivey, for your support of that. My pleasure.
And thank you, Congressman Anne Angela, for being a guest on Retail Gets Real.And thanks for joining us today.Thank you.Thank you.And thank you all for listening to another episode of Retail Gets Real.
You can find more information about this episode at RetailGetsReal.com.I'm Bill Thorne.This is Retail Gets Real.Thanks again for listening.Until next time.
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