Staples' Evolution

The office giant used Waltham, Massachusetts-based Affinnova's innovative software to redesign and relaunch its paper brand

By Jessie Scanlon

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In 2007, Staples (SPLS) realized it needed to take a new look at paper. The branded product is an important part of the company's office supplies category, which accounts for 41.8% of sales. But two industry trends were complicating purchases. First, products had become machine-specific—some were designed for copiers, say, while others worked best in laser printers. Second, paper was being further balkanized by eco-labeling that reported its percentage of recycled content. "We wanted to make the shopping experience easy, and to do that we had to fundamentally rethink the packaging and the makeup of the line itself," says Andrew Schneider, Staples' director of strategic planning.

Typically, what would have happened next was this: A Staples brand manager would convene and observe focus groups to learn how and why customers decide what to buy, to come up with new approaches. The brand team would then decide which of those ideas seemed the most promising and would develop test products to show consumers in an online survey or in Staples' retail lab at its head office in Framingham, Mass.

This time, though, Staples hired Affinnova, a Waltham (Mass.)-based company that has helped Procter & Gamble (PG), Wal-Mart (WMT), Capital One (COF), and dozens of other companies reevaluate their products. Affinnova's strength is geeky software developed in the late 1990s by Kamal Malek and Noubar Afeyan, both engineers trained at the Massachusetts Institute of Technology. Malek is Affinnova's chief technology officer, while Afeyan is co-founder of Flagship Ventures, a venture capital firm that backed the startup in 2000.

Affinnova's premise is that over time, consumer markets evolve much like the natural world: Strong products survive while weak ones die out. Its software, a "genetic algorithm" called IDDEA, essentially simulates evolution, creating generation after generation of possible products or packaging until the strongest possible design emerges. It's not truly design by machine—human designers choose what's going to be tested and consumers then select their favorite options from each generation, thereby determining which survive—but the software is able to process and analyze these preferences in a way no focus group could.

Helping Staples Sell Paper

Affinnova set up a panel of 750 consumers across the country who, over the course of a week, participated in a 20-minute study of Staples' paper line. Each was shown a screen of three possible packaging designs and asked to select their favorite. The software analyzed their choices in real time, and presented three new designs. "In total, we put 22,000 choices in front of consumers for the Staples test," says Steve Lamoureux, Affinnova chief marketing officer. By looking at selections over multiple generations and across the whole panel, the software identified preference patterns—a tendency toward a certain color or font or wording—and ultimately identified the top concepts.