TESTING VIRTUAL PLANOGRAMS IN REAL LIFE, Tom McCann of Staples

In May 2007, Staples undertook a large, in-store, SKU rationalization test for one of its key product categories: 3 ring binders. Over the course of the next twelve months, they spent $100,000 testing planogram varriations to see which one would produce the most binder sales.

To validate the results of the test, in January 2008 they launched a validation study of virtual planogram technology using the in-store binder test as the control.

The result? The virtual planogram test completely mirrored the results of the in-store test, but it only took a few months and $20,000 to complete -- a fraction of the in-store test's time and cost.

In both tests, the planogram that had the least number of SKUs but the greatest number of facings performed the best for Staples. But in addition to being more cost effective, the virtual planogram test also yielded a lot of data on customers' browsing and buying habits that is still be evaluated by the company.

During this Wednesday afternoon breakout session, McCann was quick to point out that virtual planograms will not work for all products, since the virtual environment doesn't have the imersive quality of lighting, sounds, smells and personal interaction that you get in an actual in-store experience, but for the right products it can make a lot of sense.