ZQ Magazine - Issue 12 / July • August 2023

M A G A Z I N E

AMAZON'S SALES TRAJECTORY IN PERSONAL CARE

Learn about Amazon's growth in the Health & Personal Care space between 2022 and 2023

AI & CONSUMER SHOPPING HABITS

Discover predictions relating to consumer shopping behaviors and the introduction of new AI technology

CONTENTS Table of

BrandHighlights

This issue features AN Skin & Beauty, Gonesh, AlloyGator, and Hyalogic

Learn about Amazon's growth in the Health & Personal Care space between 2022 and 2023

ZQUARED101

Discover predictions relating to consumer shopping behaviors and the introduction of new AI tech

Check out upcoming significant dates that are likely to impact e-commerce sales

Explore ZQUARED's culture, values, team, history, and more in the ZQ 101 section

ZQUAREDLean

At ZQUARED, Lean is a way of life; Explore the Lean philosophy and the latest ZQ Lean improvements

JoinOurTeam

Help ZQUARED continue to grow as the industry's leading e-commerce investment partner!

GetinTouch

We provide comprehensive e-commerce solutions; contact us to multiply your brand's success

Letterfromthe CEO

Baseball, beach vacations, cookouts, and lots of family time are just a few of the activities that have been keeping our team busy when we ’ re not at the office. Inside of headquarters, we ’ ve kept our agendas full and our gears turning, making lots of positive progress.

School’s release has brought us the opportunity to work with two new interns. We’re excited to have them engaged in special projects to help both our team and our Brand Partners. Providing opportunities for future leaders is also rewarding

At ZQUARED, we ’ re focused on people first The relational investments we make both inside and outside of our building is what gets us up in the morning We’re so grateful for the connections we ’ ve made, and find immense value in each one

Zach Cornett

Co-Founder&CEO,ZQUARED

OUR OUR

BRANDS BRANDS 5

BRAND HIGHLIGHTS

AN Skin & Beauty

Beauty&PersonalCare

FounderAshleyNordmanisanenergetic momtrepreneur,CEO,skinexpert, healthjunkie,andsocialmedia influencerwholauncheda medicalgradeskincarecompany.

Gonesh

Home&Kitchen

GoneshIncensehasawidevarietyof scentsandusesHighCharcoalforthe highestqualityburn.Afamily-owned companyfoundedin1923,Goneshis availableinstoresacrosstheglobe.

AlloyGator

Automotive

Since2010,AlloyGatorhasgained78 partnersandtrademarksworldwide,34 distributorsaroundtheglobe,and boastsmorethan4,000,000wheels protectedbytheirproducts.

Hyalogic

Beauty&PersonalCare

Morethantwodecadesago,Hyalogic®

wasthefirsttocreateafulllineof supplementsandskincareproductsusing HighMolecularWeightHyaluronicAcid; theyhavereceivedmorethan30awards.

IINFORMATIONAL NFORMATIONAL

RESOURCES RESOURCES

health& personal care

ECOMMERCE CONTINUES TO BOOM

Health and personal care products – such as beauty, medicine, and hygiene - have long been a brickand-mortar retail stronghold Yet, as more consumers turn online for their shopping needs, physical retail dominance in this category is beginning to slip. Amazon, the world’s predominant e-commerce marketplace, is expected to overtake Walmart in health and personal care sales for the first time this year

The shift in consumer preference coincides with growing online shopping trends This year, Insider Intelligence analysts predict online shopping to grow 9.3%, reaching $1.14 trillion in sales – constituting 15 6% of all U S retail sales

More specifically, health and personal care products is expected to make up 18.9% of U.S. e-commerce sales (totaling $130 5 billion), and grow a further 17 5% in 2024 Cosmetic and beauty products – a prominent subcategory within health and personal products – is predicted to grow 13.6% (reaching $18 4 billion) by the end of the year

Studies conducted by PYMNTS e-commerce analysts reaffirm shoppers' shifting preferences. According to surveys, 39% of shoppers are likely to purchase health and beauty products online

Traditionally, grocery shoppers would purchase health and personal products while at the grocery store – like Walmart or Target. However, surveys indicated that less than half of retail shoppers are now purchasing personal and healthcare products while at the grocery store

Next year, the Health & Personal Care products category is predicted to overtake Food & Beverage as the top category on Amazon marketplace

This data marks a remarkable shift in consumer behavior over the last four years, underscoring a growing preference amongst consumers to shop online rather than visit physical retailers

Since 2019, Walmart steadily accounted for roughly 6.4% of health and personal care sales in the U S , a figure which recently dipped to 6 1% in 2023 Four years ago, Amazon accounted for just over 2% of health and personal care sales, but this figure has since tripled Amazon is expected to overtake Walmart in this category next year

Each company is seemingly carving out its own subcategory within health and personal care products

Walmart continues to appeal to budget shoppers; 80% of its “beauty” subcategory products sell for under $10 Meanwhile, Amazon preferences high-end beauty products, targeting luxury shoppers willing to spend upwards of $100 on products such as body creams and lotions

The data and shift in consumer preferences reaffirms Amazon’s growing dominance in retail and the growing importance for sellers, especially those operating in high-growth categories like health and personal care, to make the most of selling online

TheZQUAREDAdvantage

Working with experienced e-commerce consultancies, like ZQUARED, helps businesses stay ahead of the curve as the market shifts quickly towards online shopping

ZQUARED has targeted experience working with the Health & Personal care industry, and can help ensure that listings are search-engine optimized, maintain a competitive minimum advertised pricing, and streamline warehouse operations to cut operational costs

To learn more about how ZQUARED can help your brand, email us at partners@zquared com

Developments in A.I. technology – like Amazon’s Alexa - are poised to reshape e-commerce and consumer behavior. As a result, online sellers will need to adapt to new product search methods powered by A.I. to stay ahead of the trend.

“You will never go to a search site again, you will never go to a productivity site, you’ll never go to Amazon again,” said Bill Gates at a recent start-up conference discussing the possibilities of A.I. voice assistants.

That doesn’t mean shoppers won’t continue to shop on Amazon and other ecommerce marketplaces Rather, Gates explains that A I assistants will browse these marketplaces and purchase products for users through voice commands, a service known as “voice shopping ”

Amazon is already spearheading efforts to capitalize on this breakthrough technology and has launched their own version of voice shopping through its A.I. voice assistant, Alexa By issuing verbal commands to Alexa, Amazon shoppers can browse for items, add orders to their Amazon cart, and even check on delivery status

However, Amazon’s competitors are hot on their heels TikTok recently announced their own plan to launch a voice shopping A.I. assistant with the hopes of expanding their social-media driven e-commerce infrastructure Traditional tech giants, such as Google, also continue to develop their Google Assistant to process shopping needs

These companies are investing heavily in A I and voice shopping technology because market data indicates a growing trend.

Analysts at ReadyCloud found that voice shopping would reach nearly $20 billion in sales by the end of 2022, rising from $2 billion reported in 2018 Their surveys found 71% of consumers prefer voice searches rather than manual queries, and 60% of U.S. online shoppers make daily or weekly purchases through voice assistants

More generally, heavy dependence on mobile devices is considered to be a positive indicator for the future of A I -led voice shopping Sales derived from smart phones and speakers – the technology primarily used for voice shopping – is predicted to nearly double from $360 billion in 2021 to $710 billion in 2025 Even today, an estimated 73% of all e-commerce sales were purchased through mobile devices.

Convenience and personalization are key to the rising popularity of voice shopping: A I assistants have the potential to curate experiences specific to each shopper’s needs while simultaneously expediting the shopping experience overall

The rise of voice shopping presents new challenges for online sellers looking to adapt their marketing strategies Today, maximizing search engine optimization (SEO) of product listings by using highly-searched keywords is essential to ensure products rank on busy marketplaces, like Amazon As A I -led product searches become more popular, utilizing new keywords specific to the A I shopping experience will be crucial for sellers looking to make the most of the voice shopping platform

How ZQUARED Can Help

ZQUARED is committed to keeping our Brand Partners up to date on market trends and shifts, ensuring their content, processes, and systems are optimized for peak performance across e-commerce channels.

We specialize in search engine optimization, which plays a pivotal role in ranking and visibility across the web. As the consumer behavior moves towards voice shopping, utilizing expert research and implementation techniques for your listings across platforms will be key in continued success.

To learn more about how ZQUARED can help your brand, email us at partners@zquared.com

DATES TO WATCH OUT FOR PRIMEDAY

Prime Day is a highly significant event for online brands. It offers increased visibility and exposure to a massive audience, including millions of Amazon Prime members. Participating brands can experience a surge in sales, leading to a significant boost in revenue. It also presents an opportunity to attract new customers and strengthen loyalty among existing ones. Moreover, the data and insights gathered during Prime Day can inform future marketing strategies and product development.

LABORDAY

Labor Day marks the end of the summer season, which can lead to increased online shopping as people seek deals and discounts. Second, brands can leverage the holiday spirit and patriotic themes to create compelling marketing campaigns and promotions. Third, Labor Day weekend often extends into a long weekend, providing more leisure time for potential customers to browse and shop online. Finally, brands can use Labor Day as an opportunity to show appreciation for their employees and highlight their commitment to fair labor practices, resonating with socially-conscious consumers.

COMMUNITY COMMUNITY

ZQ 101

Foundedin2010,ZQUARED is a leading e-commerce partner.

Ranked as a top 100 AMAZON SELLER with over 85k reviews and a 100% positivity rate, ZQUARED's core team has more than50ofyearscollectiveexperience.

OURPURPOSE

ZQUARED invests in brands who sell on online marketplaces and are poised and ready for growth.

WE-COMMERCE

Putting the " we " in e-commerce

At ZQUARED, we understand the opportunities, risks, and challenges of selling online With over 50 years of combined e-commerce sales experience, our primary goal is helping you multiply your success by serving as an extension of your team to maximize results From distribution to advertising strategies, we have solutions proven to grow your brand

YOU GROW, WE GROW

Built on the belief that all boats rise with the tide, our services are based on this principle. ZQUARED invests time, money, effort, and energy into brands poised for success with the expectation of a worthwhile result- beacause we go all-in, growing together and winning. when you win.

OUR MISSION

Our mission is to invest in brands who sell on online marketplaces and are poised and ready for growth by forming partnerships built on trust and rooted in relationship to maximize value and achieve results.

OUR VALUES

UNPARALLELED CULTURE

ZQUARED'S motto is "we-not-me", and we strive to build an unparalleled culture by incorporating this attitude into every aspect of our workplace , Our team is built on trust as well as excellent communication and a service-based mindset to get the job done

FIRST-RATE EXECUTION

We strive to provide unmatched quality when servicing each of our Brand Partners By intentionally being proactive, prepared, and in constant pursuit of improvement, our promise hinges on delivering top-quality results in all aspects of our work

ENTHUSIASM

Our partnerships are more than transactions - we invest in people and brands who share our drive and enthusiasm, deepening partner relations while collaborating to execute expert-level growth strategies.

OUR HISTORY

With more than a decade of experience, we've learned what it takes to win in the most competitive e-marketplaces: ultimately, people matter more than products, and investing in people first leads to growth and profitable brands. Originally named Advantage Nutrition, ZQUARED brothers and co-founders Chad and Zach Cornett set out to establish a brick-and-mortar retail company with an emphasis on health and wellness. They pivoted when they realized e-tail, particularly Amazon, was taking off, recognizing brands needed help navigating the ever changing e-commerce landscape.

2010

2011

Charlie Meyer was ZQUARED's first official hire, and he's been with us ever since. Our people are our foundation.

ZQUARED has moved three times since leaving the original spot in Chad's basement, doubling it's footprint with each move and growing to a staff of 40+.

Inc. recognizes ZQUARED as one of the fastest growing privately-held companies in the United States, while the St. Louis Business Journal names ZQUARED on it's "Fast 50" list.

2014 2019 2021

ZQUARED hires Jeff Bush as President, positioning the company for continued growth.

MEET THE MEET THE

OUR COMPANY

A united team is always behind something big. We work hard, laugh a lot, push the brainstorming boundaries, and have the best holiday parties in town.

OUR CULTURE

Founded by brothers, ZQUARED's roots as a family-oriented company run deep. Our "we-not-me" team works together to achieve common goals while supporting one another individually, both professionally and personally. We intentionally invest in what matters most, and our people are our greatest investment.

OUR CORE

Meet the people at ZQUARED and share the vision and values of our community. We're propelled by the idea that results are driven by relationships, diligence and enthusiasm.

GET TO KNOW US

TTEAM EAM

CONTACT US

BRAD IGNASH

Prior to assuming the role of Brand Manager, Brad joined ZQUARED in 2017 as Advertising Manager His extensive experience in the analytics realm uniquely positions him to drive brand revenue growth Today, he collaborates with our brands to develop and implement strategic growth plans Brad works closely with ZQUARED’s cross-functional teams, including advertising, content, inventory and logistics, to provide guidance and support

L E A N

At ZQUARED, Lean has become a way of life. We don't simply strive to be Lean at work anymore. As a team, we have adopted the mindset of getting "two percent better" every day in all aspects of our lives - which, over time, has added up to profound changes.

WHAT IS LEAN?

LEAN

ZQUARED LEAN

1 OnePieceFlow

Setting up your daily processes so that each step connects to the previous one can save time and energy. Begin making efforts to avoid any form of backtracking, and focus on a continual workflow without interruptions. Step 1 should seamlessly lead to step 2, which flows into step 3, and so on.

2 FixWhatBugsYou

A critical component of the Lean mentality is addressing the little things that irritate

you and potentially slow you down. For example, at home, where do yoou keep your favorite coffee mug? Is it conveniently stowed in the cabinet by the coffee pot, or do you have to walk to the other side of the kitchen to find your cup? Fix what bugs you!

3 EliminateWaste

Are you spending your time, energy, or money on things that boil down to a waste of time in the long run? Are there things you can outsource, reconfigure, or eliminate altogether to improve efficiency?

Look for ways to "cut the fat" and eliminate the tasks and items that are wasting your resources

OVER-PROCESSING

THE 8 WASTES OF LEAN DR. DEMING'S 14 POINTS

The over-processing waste in the context of lean refers to any unnecessary or excessive processing activities that do not contribute value to the final product or service It involves spending more time, resources, or effort than required to achieve the desired outcome Examples of over-processing waste include conducting redundant inspections, adding unnecessary features to a product, creating overly complex documentation, implementing excessive approval processes, and maintaining redundant inventory levels By eliminating overprocessing wastes, organizations can streamline their operations, reduce costs, improve efficiency, and enhance customer satisfaction by focusing on valueadded activities.

Along with Lean, Dr. W. Edwards Deming's 14 points have become an everyday guideline for us at ZQUARED to follow. The 14 points are a set of principles for effective management that have been widely adopted in many organizations around the world. These points provide ZQUARED with a framework for improving the quality of our products and services, increasing customer satisfaction, and enhances the performance of employees. By implementing Dr. Deming's 14 points,

ZQUARED has created a culture of continuous improvement that focuses on reducing waste, improving efficiency, and increasing productivity. This focus results in cost savings, increased revenue, and improved competitiveness in the market for ZQUARED and our Brand Partners. The implementation of these points promotes employee engagement, fosters individual ownership, and encourages collaboration and teamwork.

JOIN OUR TEAM

We'relookingfor enthusiasticteamplayersto helpuscontinuebuildingthe industry'sleading investment-minded e-commercepartner.

WAREHOUSE ASSOCIATE

If you're interested in joining our fun, unique, and energetic warehouse team, we are actively seeking hardworking Warehouse Associates. Job responsibilities include preparing customer orders, receiving, and counting incoming products, and inventory reallocation. Must be able to lift up to 45 lbs routinely throughout the workday.