Zmags CEO Talks Future of E-Commerce and Marketing (Think iPad, Not Amazon)

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still under development, that renders splashy photos of models and merchandise on the iPad—similar to glossy, high-end paper catalogs—and lets you scroll through products, change colors, see prices, and add things to your check-out cart just by swiping your fingers. “You can touch it, you can move it, you can just twirl it and merchandise it, and pick the color you want without opening a new window,” he says. “It becomes more frictionless commerce.”

That all sounds (and looks) impressive, but there’s already plenty of competition in digital catalogs and commerce software. What else differentiates Zmags?

As Schreck tells it, the company is working on better targeting and analytics capabilities that should be ready in the fourth quarter of 2012. For example, he says, the analytics tools will use heat maps to show catalog makers where people were looking and swiping on the screen, how long they stayed on each page, and so forth. The information could be used to help design more effective catalogs, down to the level of whether models in the photos should look at the camera versus the product, he says.

Zmags is also looking to incorporate data and inferences about shoppers, such as whether they have a wedding (or other event) coming up, and how much time they have to shop. Presumably that could help determine what images and products get displayed to the consumer. Schreck says analytics and rendering tools are part of Zmags’ acquisition strategy this year and next, so stay tuned for more on that.

And other business strategy elements coming down the pike? “We’re doing a lot of partner deals for the first time,” Schreck says. He wouldn’t say much more about that, but I gathered that it involves working with big agencies and platform providers interested in using Zmags for rich media and interactive visuals on top of what they already do. Those partnerships would be complementary to Zmags’ customer relationships with big brands. Lastly, Schreck hinted that the company will raise more growth equity funding later this year. (In January, Zmags announced a $7 million financing round from Square 1 Bank, OpenView Venture Partners, and Northcap Partners; that round roughly doubled the company’s funding to date.)

With those nuts and bolts out of the way, I wanted to push on where Zmags fits into the broader e-commerce and marketing picture. Take Demandware, a recent Boston tech IPO and an innovator in brand retail across Web and mobile. “Their principles are similar to ours,” Schreck says. But he adds, “Our view on that is people are going to continue to invest materially in the website to constantly improve it. But I don’t see, in the short term anyway, what the breakthrough on that is. I see incremental improvement. And that incremental improvement, as Demandware demonstrated, is critical. But none of that feels like exponential change.”

He’s basically saying websites for brand marketing and commerce have played out. Amazon.com won, at least for now. “Our bottom line is, … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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