Evan Schuman's StorefrontBacktalk

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.