Bodega. The Story That Just Won’t Go Away

What’s in a name?

Two ex-Googlers are learning the answer to that question…the hard way.

Paul McDonald and Ashwath Rajan are the founders of Bodega, a recently launched San Francisco-based startup that installs convenience store kiosks in apartment buildings, gyms, campuses and other locations.

The kiosks, which vary in size depending on location and use case, enable users to access the contents via a smartphone app that provides a security code and charges the user for goods removed from the kiosk.

It’s a neat idea: bring the convenience store into the same building as the customers, increasing convenience in the process. The company adjusts the item mix in each “bodega” by using data gleaned from purchases.

The problem wasn’t so much the idea as the commercial launch. An otherwise innocuous feature article on September 13 by Fast Company described the startup’s concept and kiosk plan. In the process of researching the concept, the story’s author, Elizabeth Segran, interviewed Frank Garcia, the chairman of the New York State Coalition of Hispanic Chamber of Commerce, who referred to the use of the Bodega name as “offensive…and disrespecting [to] all the mom-and-pop bodega owners that started these businesses in the ‘60s and ‘70s.”

Well, it’s Crisis Communication 101, which is, you see something blowing up, you don’t let it take on a life of its own.

That negative initial reaction underscored the potential for negative economic impacts on the well-known immigrant business institution of the corner convenience store bodega.

The social media feeding frenzy began immediately. Within hours of the original story, the number of articles, tweets, posts and other social media responses grew exponentially, as the graph below illustrates.

An analysis of the content generated by all this social activity shows an initial positive response, followed by an overwhelming negative response within just two days from the Fast Company article.

As marketing consultant Neil Cohen pointed out after reading the Fast Company article, “These guys should change the name. Frankly, they need adult supervision.”

NewsCenter.io had an in-depth interview with public relations expert Deb Gabor, CEO of Sol Marketing, a brand strategy consultancy, about the launch fiasco and company response.

Deb Gabor, CEO of Sol Marketing

What do you think these guys did wrong?

There’s room for a product offering like this, but they went to market with a message of ‘We aim to kill the mom-and-pop shop, this social institution that you know and love.”

Going to market with “we’re going to kill this social institution” is not going to resonate with consumers.

You might say that to an investor audience, but still it isn’t a very positive message.

There’s a lot of room in the food industry for different business models, with new ways to have meals delivered and prepared, so we’re seeing a lot of disruption in the industry.

When you go to market and mess up your message, because of the Internet you are in market one minute and the next thing you know, your business is “hashtag this.” You get instant feedback from your audience, and a brand can take on a life of its own if you don’t lock it down.

If they would have come out and said “We want to eliminate tacky vending machines,” no one would have cared, right?

Right, consumers don’t have an emotional bond with the vending machine category.

The positioning for these guys was that there was no positioning.

I don’t know if it was just a lack of humility by the ex-Googlers, but it is a narrative of the Silicon Valley “bro” culture killing the cultural institutions that we know and love, and these guys stepped right into it.

What should these guys have done immediately after the social wave started?

Well, it’s Crisis Communication 101, which is, you see something blowing up, you don’t let it take on a life of its own. You proactively apologize to people you may have hurt, communicate what you’re going to do to remedy it, your specific steps and how you’re going to hold yourselves accountable for it.

The interesting thing is if you have enough positive brand equity on your side, you can weather these storms, but I’m curious if this little company has enough to make it through this.

My gut tells me it probably isn’t going to have that much lasting impact because we all have such short-term memories and have moved on to other things.

What would you advise them to do right now, today?

I would advise them very quickly to go back and be more thoughtful and deliberate about their message and make it consumer-focused. I would also make their brand message indelibly intertwined with the company and hold company personnel accountable.

Also, find someone who has successfully introduced a consumer brand and who understands the importance of consumers to a successful brand launch.

Do you think they should change their name?

Their logo incorporated the convention of the “bodega cat.” Had they paired the bodega name with a positive, forward brand message that was about how their service benefits customers, I don’t think other people would have gotten so upset about it.

I’m taking a wait-and-see attitude about it, because I believe people have mostly moved on.

The founders should relaunch in other areas with a retooled brand message and give it another go. I don’t think it’s a bad business idea, I just think the initial launch was poorly executed.

In my analysis at this point, the jury is still out on whether “any publicity is good publicity.”