You’ve Got A Mole Giving Away Your Sensitive Data

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

Retailers everywhere are losing sensitive information to their competitors every day. It’s not because some hacker has compromised the corporate database or because some corporate espionage team has gone dumpster diving after a corporate meeting. No, the people responsible for this breach are actually your own customers.

The kicker is that most retailers don’t even know it’s happening. I’m talking about your closest competitors having access to some of your customer profiles (at a much deeper level than what you probably are aware of), the purchase patterns of those customers and the amount they are spending on each visit. And you have no idea. Sound scary? It is.

One source of this information is Blippy, a new social media sharing site that allows users to post information about their purchases and easily follow their friends’ purchases. The way it works is that users tie a specific credit card to the Blippy service and then every purchase they make with that credit card is automatically posted to the Blippy site. These updates create a Twitter-like stream that other people (presumably your friends) can follow.

The Blippy site has generated quite a buzz in the last few weeks, with people debating whether or not such information should be shared. Many Baby Boomers and Gen-Xers who struggle to understand Twitter are really lost when it comes to Blippy.

“Why on earth would people want to share this type of information?” is a common question, as is the comment, “That is the stupidest idea I have ever heard. No one will use it.” It remains to be seen whether Blippy will have any staying power, but The Washington Post reported that, within the first day of the site being open to the public (after a short private beta), more than a million dollars worth of transactions had been posted.

An interesting—but scary—side effect of the site is that it allows anyone to search for the name of a retailer and discover all of the Blippy transactions for that retailer. So, if I want to learn more about one of my competitor's business, I simply type its name into the Blippy search box. I can see a timeline of when customers made their purchases and how much they spent. I can then dig further and find out what other purchases people have made with their “Blippy Card.”

As an example, if I do a quick search for one of my company’s direct restaurant competitors, I can easily identify one of that chain’s heavy users. Here is what I am able to find out:

The customer eats at this competitor’s restaurant at least a couple of times a week (in many cases, a couple of times a day). His average transaction is $7.25. He has also download dozens of iPhone apps in the last month, likes music by Norah Jones and rents mostly dramas on Netflix. I also notice that this person spends about $65 every couple of weeks at an Ethiopian restaurant. There is even a picture of this person, so I know what he looks like.The customer eats at this competitor’s restaurant at least a couple of times a week (in many cases, a couple of times a day). His average transaction is $7.25. He has also download dozens of iPhone apps in the last month, likes music by Norah Jones and rents mostly dramas on Netflix. I also notice that this person spends about $65 every couple of weeks at an Ethiopian restaurant. There is even a picture of this person, so I know what he looks like.

I’m “just the IT guy," but that seems like some pretty nice information about my competitor's business and about one of its most active customers. It seems like this information could be used to improve a company’s positioning with its competitors. But, more importantly, are your competitors using the information to better maneuver themselves around your business?

When I brought this question to Joel Bulger, the vice president of Marketing at Moe’s Southwest Grill, he said: “I guess what I’m not getting is, what is in it for the user to sign up? I don’t see any sort of 'carrot.' With the cost of getting consumer purchase information/patterns at an all-time high for marketers, I’m not sure why people would volunteer their information without any sort of compensation.”

As Facebook Founder Mark Zuckerberg has been quoted saying: “Privacy is no longer a social norm.” The same people who are OK posting pictures and videos of their drunken weekend on Facebook for the world to see (even their current or potential employers) don’t feel that it’s a big deal to share their purchases. In fact, it’s quite the contrary: They want their friends to know exactly what they're buying, and they want their friends to reciprocate. It's a form of social intimacy that might be akin to swapping private stories with your buddies at a neighborhood bar.

I also don’t believe that people think about the possibility of marketers looking at this information. Rather, I think many people are using this service as sort of a brag book for their friends. Some observers have suggested that people might use the Blippy site to set up false personas, potentially to impress people. Some guy might, for example, invite a woman he's interested in to join his circle. He then uses his Blippy Card to buy an expensive suit, Mercedes-Benz keychains, The Vegetarian's Guide To Improving The Planet's Ecology and Why Women Really Should Be On A Pedestal. Meanwhile, he'd use another card or cash to buy fast-food hamburgers, cigarettes, cheap beer and porn.

I am surprised at how little attention this approach has generated with retailers. If Blippy does take off, retailers are going to have to learn to deal with what has traditionally been closely held information becoming widely available. I think that gut reactions will be along the lines of, “How can I get this shut off?” or “Who gave the credit card companies permission to provide my data?”

But let’s not forget that one of the site's original goals is for people to share with their friends what they like and what they purchase. One person in a circle of friends who makes a purchase from a retailer may persuade dozens of other people to make a purchase from the same place. So each Blippy purchase is essentially a mini-endorsement for your brand. More importantly, this endorsement is coming from people who consumers trust--namely, their friends.

It remains to be seen whether Blippy will become a huge success or crash and burn. Arguably, the amount of data on the site is currently small. Some retailers may only have a dozen or so transactions, while others have hundreds or thousands. Obviously, smaller sample sets do not provide significant insight into a company. But if this site continues to grow, so will the value of the data it holds.

What do you think? Love it or hate it, I’d love to gain some additional perspectives. Leave a comment, or E-mail me at [email protected].

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