Exclusive Interview with Zmags’ CEO Michael Schreck

Every once in a while we’re fortunate enough here at Zippycart to snag some quality time with a leading figure in the world of ecommerce. Today we’re presenting a special interview that we had recently with Zmags’ CEO Michael Schreck. He gave us the inside story on Zmags and their new product “Commerce Pro.”

Q. You were recently appointed as CEO – how did that come about? What attracted you most to Zmags?

My own personal iPad epiphany drove me to connect with Zmags Corporation (Zmags). On day 1 with my shiny new iPad, I was navigating around Flipboard and the WSJ and experienced my first compelling online advertisement (no, dancing babies do not qualify as compelling). I couldn’t believe it. Finally the content, the navigation, and seamless ability to respond to a call to action, could all co-exist simultaneously in a rich media environment. All my beliefs about the future of mobile marketing seemed to finally be possible and available. I wanted to be part of that future.

When I co-founded m-Qube in 2001 (where we accomplished many amazing things and the company was acquired by VeriSign for $250MM) it became abundantly clear that wireless carriers’ platforms and handset limitations at the time would constrict our ability to execute our full vision. I had been waiting for a dynamic new platform to unleash the creativity of the world’s marketers and a signal that the time had arrived.  The iPad was the signal. I wanted to be part of that transformation in marketing. I began searching for a company that truly got it – that understood that rich media and these new devices were offering a new way to market…to market the “possible.”

When I experienced my first Zmag, I saw the potential. I was instantly intrigued by what the company was trying to do for its 3,000 global brands; icons like Lenovo, Ralph Lauren, Lexus, Dick’s Sporting Goods and thousands of other leading brands. The Zmags platform offered marketers the brilliance they customarily accomplished offline—but now across virtually any online or mobile device—that was a revelation. Helping leading global brands to better convert and leverage offline skills to drive online engagement and purchases across mobile devices and social media was something I knew I had to be a part of.

And as you know, the Company just launched the first e-commerce engine integrated directly inside this rich digital experience called CommercePro. Some of the top retailers/brands in the world have quickly adopted the solution from Express to Jenny Craig to Laura Ashley. They understand that a truly engaging experience results in improved conversion rates and larger order sizes. For the first time, there are significant impulse purchases happening online thanks to CommercePro.

Q. What is one thing that e-commerce retailers are not paying attention to that CommercePro can help them take advantage of to drive sales?

I think there are two profound trends that major retailers/brands need to be extraordinarily sensitive to:

1. E-Commerce, as we know it today, commoditizes and homogenizes previously profitable customers.
2. Truly leveraging the art of off-line merchandising and engagement will determine long-term winners and losers in the future of online commerce (f-commerce, e-commerce and mobile commerce). Most retail online sites habitually condition shoppers to search for discounts and promotions, lack an ability to drive impulse purchasing, and fall far short of a comparable in-store experience. The core of web shopping was designed by non-retail techies (often in their early twenties) who had little or no interest in designing a channel that would engage “power shoppers”, merchandise brilliantly, or offer a truly personalized shopping experience. As larger and larger percentages of retail dollars come through the online channels, retailers need to adapt now before they permanently condition massive swaths of profitable customers to become “bargain shoppers” or “task-only shoppers” and lose their accompanying margins forever.

Further, retailers must offer online the “ideal personalized shopping experience” that they work so hard to provide consistently offline. When I walk around a leading retailer’s offline store, there are so many cues that encourage me to stay longer, browse and ultimately buy more. This is exactly what is missing online. Retailers and brands are creating very “standard issue” e-commerce sites (particularly parroting Amazon) because they feel they have to. But competing with a retailer with 2-3% margins feels like a fool’s errand. At its core, personalized merchandising is virtually absent online.

CommercePro solves for both of these challenges. First, it is designed to offer a different path and experience for certain segments of a site’s traffic. Its focus is on the most profitable customers who are seeking engagement and merchandising and enjoy that experience. Second, the digital experience inside CommercePro can be customized and curated (and constantly optimized) leveraging a retailer’s off-line merchandising assets and strategies. Finally, retailers can be consistent across their channels and procure the increased conversions, order sizes, and margins that correlate with such effective cross-channel merchandising.

Q. What is one thing that you want people to know about CommercePro that they might not realize from reading the promotional material? What’s the heart and soul of this product, to you?

Because CommercePro is the first digital interactive experience available with an integrated e-commerce engine, there are no words yet in our common vocabulary to fully describe the Zmags experience. Thus, we tend to refer to it as an “interactive catalog experience” – but it’s so much more than a digital version of a paper catalog. While the user feels that he/she is in control of the experience with the dynamic interface, it is truly the retailer’s direction that guides the interaction between user and products and user and brand. Much like Cyrano de Bergerac, the retailer can orchestrate an outcome without making it obvious who is pulling the strings.

Q. How is the business/retail climate different now? What about today’s marketplace makes it ripe for CommercePro?

The tablet and social media phenomena have forced retailers to accelerate their marketing agendas at a rate previously unheard of. Smartphones, iPads, Groupon, Facebook, to name only a few, are now a permanent consideration for marketers and have arisen virtually overnight. Marketing organizations were already resource constrained as they battled with how the web and offline channels should align (which now seems like the easy part of the challenge).

That is where CommercePro comes in. Our over 3,000 global customers wanted one solution that could help them address all these new channels simultaneously. CommercePro provides the functionality to deliver an interactive digital experience across virtually all devices seamlessly (without significant IT requirements). We can have a leading brand up and running in a few weeks. We can port a merchandised experience to the iPad, Facebook, and the web all from our SaaS solution today.

Q. Which kinds of online businesses are most well-suited to CommercePro – how can businesses of all kind leverage CommercePro?

The core market for CommercePro is principally retailers and brand owners who have 1) an e-commerce store 2) a print catalog/circular 3) brick & mortar locations and/or 4) a product line that is sold through other retailers. Aligning all these channels with a consistent merchandised experience is critical and CommercePro makes that easy.

One of our most prominent conversations right now with global brands is around Facebook commerce.  Retailers have spent months (sometimes years) collecting thousands of “fans” in the social network. Yet very few are able to turn those fans into buyers – and even fewer without leaving the Facebook environment. One example of how CommercePro is changing the face of interactive shopping is through Facebook – our customers can embed a fully functioning digital Zmag right into their fan pages. And their fans can become buyers with a few simple clicks. As far as I can tell, that means that virtually every leading brand out there can leverage CommercePro.

Q. Is there anything you’d like to leave our readers with in terms of advice or insight into how to succeed in e-commerce or business in general?

Something I’ve said for years about the offline world continues to be even truer in the online and mobile realms. “It’s all and always about (understanding) the customer, stupid.” What have you done today to delight your customer and how do you know? Ensuring that your culture believes this, is empowered to do this, and most importantly has consistent metrics to track it. We tend to use the Net Promoter Score as our core metric for internal and external customer measurement and in so doing are constantly learning about how we please (and sometimes displease) our clients.

Q. What is a typical day like at Zmags? You have offices in multiple different time zones, how does that affect things?

Even though we have 3,000 brands as customers, we are still a young company striving to keep up with our growth. Because our teams are distributed nearly equally between Boston, Copenhagen and London, each office feels more like a “start-up” in its intensity and collegiality (it is hard to “hide” in an office of only 40-50 teammates). I like that a lot. The downside of course, is we have to travel more, use video conferencing and FaceTime a lot, etc. When we get it right, we effectively have a company that is operating virtually 24×7 somewhere in the world—which is exciting from a productivity point of view. We also benefit from a broader set of cultures, languages, disciplines, and experiences. Cross-functional teams are a part of the daily diet, which means we’re all learning globally all the time. In our new Boston office, we have a large Chinese orchestral gong that is “rocked” whenever we do something that delights a customer. It can be awfully loud….but we want everyone to know when we have made a difference for a customer.

Q. If Zmags was a dog, what kind of dog would it be and why?

I’d say we’re a Labernard – a combination of two great dogs, where the end result is a beautiful hybrid. It’s the best of both animals – the energy and beauty of the Labrador with the protective qualities of a St. Bernard. I like to think we are extraordinarily energetic in innovating with and yet fully protective of our clients. Hopefully, we exhibit the traits of this “gentle giant” of a dog.