As the world becomes increasingly digitalized and interconnected, companies are faced with collecting and managing vast amounts of consumer information. In order to be successful in today’s business world, a company must utilize a variety of information management strategies to effectively collect, analyze, and protect customer data. Businesses must engage in environmental scanning, or the gathering and analyzing information from their external environment. A business can then utilize this information and strategically plan for the future to increase their profitability and avoid issues (Albright 40). By interacting with customers, and monitoring changing social trends a business can successfully identify and target current consumer needs and preferences. Without a thoughtful and thorough environmental scan a business can misread market ques and misinterpret customer attitudes, leading to negative, and potentially devastating consequences for a company’s success. This was the case with the start up Bodega AI, Inc. The aim of this case study is two pronged: to examine Bodega AI, Inc.’s successful use of information management strategies, as well as explore how a lack of comprehensive environmental scanning led to Bodega AI, Inc. misreading ques from their consumer base leading to choices that damaged their brand.

Company Overview

                On September 13, 2017, Bodega Al, Inc. published it’s first blog post introducing the company to the market. What Bodega offered was part product, part service. They created a large cabinet that they referred to as “small, automated stores” (Bodega AI, Inc.), filled with convenience items. While the idea seems simple (basically a large vending machine), it includes items other than food and drinks such as medicine, deodorant, shampoo, cleaning supplies, office supplies, etc. Bodega’s stated their goal was to place them in offices, apartment building, college campuses and gyms (Bodega AI, Inc), to “bring the relevant slice of a store, right to where you live and work” (Bodega AI, Inc). The consumer downloads an app, which then allows them to open the cabinet and take any items needed. The transaction is monitored by cameras inside the cabinet that record the item taken, and the customer’s credit card is automatically charged.

Use of Technology

                Bodega’s use of technology to appeal to it’s target consumer base is beneficial for the consumer and for the company. Their website shows young professionals and college students using their service. An easy to use app is a smart choice to attract a youthful, tech savvy demographic. The app provides the convenience of hitting a button to open the store and complete a paperless transaction. Customers can then monitor their purchases within the app. Bodega utilizes the “infuse and augment” strategy outlined by Ofek, Ellie and Wathieu in the article, “Are You Ignoring Trends That Could Shake Up Your Business?” by taking the traditional idea of a vending machine and augmenting it to include popular technological trends. Bodega utilizes technology to provide the convenience of online shopping with the immediacy of going to a store and buying a needed item.

                The app also allows Bodega to gather information regarding customer preferences in a specific locale. By monitoring the products bought at each store, Bodega can analyze consumer trends based on the location and ensure that popular items are consistently stocked. Bodega can also use this information to anticipate what other items might be popular in a specific location. The data collected can therefore be transformed into decision-ready information (Lord 264), allowing the company to quickly respond to changing demographics around each store and adjust the products being stocked. This data can be used to assess what types of locations (apartment buildings, office buildings, etc.) are most successful, allowing the company to create a strategic plan for expansion.

                Bodega’s website creates an easy interface between the customer and the company. The website primarily relies on videos and images to communicate information to the visitor, making it an engaging experience for the visitor. The site also offers a blog, enabling the company to directly reach consumers with news and updates. It includes a comments section so the consumer can also directly communicate and interact with the company. By creating a platform for consumers to express opinions and ask questions, the company can gather valuable customer preference data in real time. This immediate customer feedback can allow the company to address questions, comments and concerns quickly.

Management of Customer Data

                Located on Bodega’s website is an easily accessible and comprehensive Privacy Policy, clearly detailing how customer data is used. The document clearly informs the customer that personal, credit card, demographic, and computer hardware and software information will be collected. Once collected, the policy explains that the information is used to “operate [Bodega’s] website(s) and deliver the services…requested” (Bodega AI, Inc). It goes on to detail when and why Bodega may release customer information, as well as who it may release this information to.

                From an information management standpoint, Bodega’s Privacy Policy is ethically sound. Their policy would fall under the “Stakeholder Theory” identified by Greenaway et al (587). According to this theory, the company understands that the customer has valuable information, and the company has a certain amount of responsibility to protect that information and their customer’s privacy (Greenaway et al. 587). The relationship between providing and collecting information is therefore mutually beneficial for the company and for the consumer; the company will profit from providing products that target their customers’ needs, and customers will receive better products.

               Bodega’s business strategy relies on collecting customer information so they can stock each store with goods tailored for a specific demographic. Therefore, maintaining customer confidence by protecting personal information is paramount. Bodega does so by refusing to sell information to third parties, and only releasing information to “trusted partners”. These partners are prohibited from using this information except to provide services to Bodega (Bodega AI, Inc). The Privacy Policy goes beyond bare bones legal requirements and actively protects customer privacy, while still allowing Bodega to collect information and use it to provide better services for their customers.

Information Management Issue

                The same day that Bodega published their first blog, an article profiling the company was released on www.fastcompany.com by Elizabeth Segran. The coinciding releases point to the company’s belief that their brand would be well received, and Bodega was likely trying to capitalize on the article’s publicity. However, the opposite occurred. In the article by Segran, she points out, “The major downside to this concept – should it take off – is that it would put a lot of mom-and-pop stores out of business. In fact, replacing that beloved institution seems explicit in the very name of [Bodega’s] venture, a Spanish term synonymous with the tiny stores that dot urban landscapes and are commonly run by people originally from Latin America or Asia” (Segran). After Segran’s article was published the backlash was immediate. The comments section of Bodega’s blog began receiving negative feedback as dozens of negative articles began flooding the internet. Major news outlets such as CNN, The Washington Post and The New York Times picked up on the story, and Bodega was suddenly being accused of racial insensitivity and cultural misappropriation.

                Bodega attempted to address the controversy by publishing a follow-up post on their blog the same day. In doing so, they were attempting to use their blog as a platform to directly communicate with consumers and explain the company’s strategy behind the choice of name and general business practices. They clearly stated that, “Challenging the urban corner store is not and has never been our goal” (Bodega AI, Inc) and that the name “Bodega” was chosen in admiration of traditional small corner stores. The post went on to explain that the company had conducted “some homework” regarding the name to see how the public would react, but conceded that, “it’s clear that we may not have been asking the right questions of the right people” (Bodega AI, Inc).

                Bodega’s PR disaster resulted from a lack of thorough and thoughtful environmental scanning. As explained by Kendra Albright in her article, “Environmental Scanning: Radar for Success”, environmental scanning is “the internal communication of external information about issues that may potentially influence an organization’s decision-making process” (40). By gathering and analyzing information from the external environment, a company can better recognize and avoid potential pitfalls, such as a PR crisis due to poor marketing choices. Bodega’s mistake was that it did not properly scan the social environment outside of the organization, so it failed to recognize that it’s choice of name would conflict with prevailing social attitudes and offend consumers. The market research that Bodega conducted is not publicly available, but it can be assumed that the information gathered was either incomplete, of poor quality, or the analysis of the information led to incorrect conclusions. Regardless of which situation occurred, a lack of information management expertise led to poor internal decision making by Bodega, and ultimately devastated the brand’s public image.

Recommendations

                Following the view of Chun Wei Choo in his article, “The Intelligent Organization”, companies are not static fortressed, they are influenced by their external environment and must evolve to survive and prosper. After the failure of Bodega’s initial launch, it would be advisable to take inventory of the negative commentary received in articles and on social media and analyze the true concentration of the criticism. At the heart of the back lash was not the business concept of providing mini stores filled with convenience items in public spaces. The criticism was directed at the perception that the business intended to use technology and convenience to corner the market and drive middle class, minority owned shops out of business; and to add insult to injury, the company named themselves after the very businesses they were trying to replace. Bodega’s best course of action would be to adjust their marketing strategy in response to negative customer feedback. Bodega should use the “counteract and reaffirm” strategy explored in Ofek, Elie and Wathieu’s previously mentioned article. This strategy involves, “developing products or services that…allow consumers to oppose – or at least temporarily escape from – the aspects of a trend they view as negative” (128). This would involve rebranding and emphasizing that the company’s aim is to enrich the communities where it operates, rather than tear down local businesses. The company could do so by stocking locally made products or donating part of the proceeds from each individual store to a charity within the local community. This would counteract the perception of the company as a faceless silicon valley upstart, and integrate it as a member of the community that has a vested interest in the success of the local economy and the people that live there.

Conclusion

                Bodega succeeded in many areas of information management. The company’s choice to take advantage of popular technological trends made their service convenient for their core demographic of college students and young, urban professionals. The use of smart technology within the device and the app allowed the company to track purchases, providing them with key information regarding their target market’s preferences. This data, if analyzed successfully, could steer the company’s future strategies by helping the company anticipate the customer needs for each store location.

                The company provided information to their customers through their website in an engaging way. The use of video, pictures, and text kept the visitor interested while also providing information about the company. The inclusion of a blog and multiple social media links created a platform for the company to directly interact with their customers. These interactions would have provided another source of customer information that Bodega could have been used for strategic business planning.

                Bodega also had a comprehensive Privacy Policy that balance the businesses needs to gather and use customer information, as well as the customer’s desire for privacy and security. This approach reflected an understanding that obtaining customer information was crucial to their business model, so providing privacy assurances was crucial for customers to feel comfortable releasing this information.

                Unfortunately, one major misstep seems to have led to Bodega’s downfall. Their website is still up, however no posts to their blog or any social media accounts have occurred since September 13, 2017. It is unclear if the stores they opened are still operating, but expansion of the existing brand seems unlikely based on the negative public response, and the company’s silence since September. Bodega’s major PR mistake could have been avoided had their environmental scanning of the social environment been correct. If they had collected quality data that was correctly interpreted, they likely would have anticipated the negative public reaction and attempted to right the ship. Bodega serves as a prime example of how crucial information management is for any business attempting to navigate the constantly shifting markets of the modern economy.