ZQ Magazine - Issue 13 / September • October 2023

M A G A Z I N E

MOBILE SHOPPING INNOVATIONS SET NEW STANDARDS

Learn how mobile commerce impacts your brand, and what you can do to stay ahead

SUSTAINABILITY + BEAUTY

Get tips on aligning your business strategies to meet growing consumer expectations surrounding sustainability

CONTENTS Table of

LetterfromtheCEO

Co-Founder and CEO Zach Cornett highlights recent updates at headquarters as we approach Q4

MobileShopping

Discover marked shifts in consumer behavior & predictions surrounding mobile shopping

ZQUAREDLean

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

BrandHighlights

This issue features Reptile Systems, Omne Diem, Erickson and Caru

E-CommerceCalendar

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

JoinOurTeam

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

Sustainability+Beauty

Learn about consumer demands and expectations for businesses relating to sustainability

ZQUARED101

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

GetinTouch

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

Letterfromthe CEO

As we enter into the crisp fall season on the heels of the third quarter, we are saying goodbye to our summer interns, welcoming new hires, and gearing up for the holiday season spike.

Over the last several months, we have been actively working to optimize our inventory management channels. As a part of these efforts, we ’ ve hired a new position to assist with analytics and processing An additional set of eyes on the logistics of forecasting, receiving and verifying inventory numbers will ensure accuracy and efficiency for ZQUARED and our Brand Partners

In the spirit of change, one of our favorite sayings around ZQ headquarters is “fix what bugs us, ” always striving to become a little bit better each day. Over time, these little changes bring about big results Our goal in continual improvement is to not only benefit our internal team, but ultimately create positive impacts for our Brand Partners, helping them to reach and exceed their goals on ecommerce channels and beyond

Zach Cornett Co-Founder&CEO,ZQUARED

OUR OUR

BRANDS BRANDS 5

BRAND HIGHLIGHTS

Reptile Systems

Pet AquariumSystems,ReptileSystems’ parentcompany,hasbeenestablishedas worldleadersinaquariumsalttechnology andproductionforoverfiftyyears.

Omne Diem

Supplements

OmneDiemisadvancingintegrative wellnessstrategiesbyproviding innovativedietarysupplementsthat addressunder-servedandemergingneeds.

Fitterfirst Fitness

Fitterfitstisfamily-runbyfounder,Louisandhis wife,Margaret.Theydesignandmanufacture manyoftheirproductsin-house.

Caru Pet

Karu,beloveddogoffoundersPamelaand Adrian,enjoyedamoreplayfulandhealthylife whenswitchingtoahomemadeversionofdog food.HeinspiredthelaunchoftheCarubrand.

IINFORMATIONAL NFORMATIONAL

RESOURCES RESOURCES

sustainability + beauty

sustainability is becoming central to growing the beauty

e-commerce market

The beauty industry – including skincare, fragrance, makeup, and haircare - has long been criticized for its environmental impact, use of toxic chemicals, and non-recyclable materials. However, in recent years, beauty has been undergoing a green movement, known as “sustainable beauty,” with brands taking action to reduce their climate footprint while championing the health of the planet alongside the health of the individual

Although sustainability often comes with front-loaded costs, these businesses are winning over young shoppers who are willing to pay a premium for environmentally-friendly brands Yet the preference isn’t limited to Gen Zers and Millennials

According to surveys conducted by NIQ, nearly half of all consumers are likely to choose a brand if it has health benefits for them as well as the planet. The same survey found that 69 percent of consumers said sustainability has become more important to them over the last two years In particular, Gen Z and Millennials indicate they will conduct extensive research on product sustainability before purchasing

Research suggests there is both an ethical and competitive reason to “ go green ” and capitalize on this rapidly growing preference Simple choices can improve sustainability: use eco-friendly materials for packaging that are either biodegradable or recyclable – glass, cardboard, and bamboo are popular choices; utilize a minimalist design to reduce unnecessary material; prioritize reusable packaging for products like lotions and makeup.

While reducing waste might come with front-loaded costs, there is potential for long-term financial gain Sustainable beauty brands can solidify their customer base and increase repeat buyers by creating a culture centered on values. This choice often wins over Gen Z and Millennial shoppers who are more likely to shop for brands with which they feel ethically connected

Major e-commerce marketplaces – like Amazon - are beginning to prioritize sustainable products, which can help soften the blow of added production costs Amazon offers a “Climate Pledge Friendly Badge” listed below the product title and rating stars, allowing these products to appear in special sustainable product searches

Although “going green ” is becoming an increasingly important branding strategy, companies need to be careful to substantiate their environmental claims or risk their reputation Various certifications like Amazon’s or FDA certifications like “cruelty-free” improve branding but come with strict qualifications. If a company is accused of “greenwashing” – falsely claiming environmental standards – they can quickly lose customers Surveys have found that 77 percent of consumers would stop buying products from brands guilty of greenwashing

Businesses that make environmental sustainability central to their mission have a major opportunity at hand: embed ethics into their business model, become leaders in environmental responsibility, and connect with a wide audience who cares – and will pay more – to support brands that are dedicated to protecting their health and the planet

TheZQUAREDAdvantage

With extensive experience working with large brands in the Beauty & Personal space, ZQUARED brings invaluable strategic experience to your business Our team can help you stay ahead of the curve as market demands shift

Additionally, we optimize your listings across major e-commerce platforms, maintain 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

mobile shopping innovation could

set new standards

in 2023. Within this rapidly expanding market, shopping by mobile device – a trend known as “m-commerce” –is set to become the standard shopping method. E-commerce giants, such as Amazon and Walmart, are spearheading m-commerce innovation: capitalizing on shopping trends, creating convenient and customizable experiences, and solidifying their online dominance.

M-commerce was responsible for $415 billion of e-commerce sales last year. There are nearly 7 billion smart phones in circulation, and the average person spends over three hours a day on their mobile devices. 60 percent of shoppers use mobile devices to complete purchases regularly; Gen Zers and Millennials are likely to shop online at least once per day. The potential of m-commerce is clear for any online seller, especially given new developments in artificial intelligence (A.I.) and augmented reality.

The rise of A.I. looks destined to revolutionize online shopping. “Voice shopping” allows users to issue voice commands to popular A.I. assistants, like Amazon’s Alexa, to search for products online and make purchases. A.I. assistants allow busy shoppers to login securely, search for products, and complete checkout while hardly looking at their device.

Mobile payment integration, like Apple Pay, Google Pay, and PayPal, further creates a seamless mobile shopping experience, which data suggests leads to fewer abandoned carts at checkout.

Voice shopping is expected to grow tenfold, from $2 billion in sales in 2018 to $20 billion by the end of 2023. 71% of online shoppers in the U.S. already prefer voice searches, and 60% make daily or weekly purchases through voice assistants.

M-commerce convenience is set for further improvements through breakthroughs in augmented reality, which can address a long-standing issue for many e-commerce sellers: product returns.

An estimated 18 percent of all online purchases are returned, a figure that rises to nearly 30 percent in the apparel industry Augmented reality creates a semi-virtual reality viewed through a screen, allowing users to “try on ” clothes, makeup, or even see how furniture would look in a home before purchasing The concept is already being employed by Walmart In 2022, Walmart launched “Zeekit” allowing users to try on clothes virtually before buying.

Convenience is key to e-commerce, which makes the prospect of integrating quick, seamless, and satisfying shopping experiences into mobile devices a potential bar-setting standard Unsurprisingly, the traditional giants of e-commerce – Amazon and Walmart – are at the forefront of these developments, spearheading voice shopping and augmented reality capabilities Couple m-commerce innovations with 1-2 day benchmark delivery services, and these e-commerce leaders could consolidate the market even further.

Handheld digital technology revolutionized how many live life, including how people shop Digital innovations, like A I voice assistants, integrated payment methods, and augmented reality, will likely continue to develop and result in more people turning to mobile devices for their shopping needs Tracking digital developments is critical for e-commerce businesses looking to take advantage of shopper trends and behaviors

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 consumer behavior moves towards mobile 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

E-COMMERCE CALENDAR E-COMMERCE CALENDAR

DATES TO WATCH OUT FOR 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.

HALLOWEEN

Halloween presents a valuable opportunity for businesses to boost their sales and engage with customers creatively. To prepare their brand for Halloween, e-commerce sellers should focus on thematic marketing campaigns, incorporating spooky visuals, and tailoring product offerings to fit the season. Leveraging social media, email marketing, and targeted promotions will help create a strong brand presence and capitalize on the festive spirit, driving increased traffic and revenue for their online stores.

COMMUNITY COMMUNITY

ZQ 101

Founded in 2010, 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

JESSY WATKINS

As ZQUARED’s Brand Content Associate, Jessy is responsible for the content creation process from start to finish. Most recently, Jessy has enjoyed utilizing the Brand Stories feature to improve our Brand Partners’ branding on Amazon Jessy currently lives with her husband and two children in Chapin, SC. When she's not on the soccer field or driving her kids to and from activities, she enjoys baking and designing custom cakes and cookies

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

THE 8 WASTES OF LEAN

Defects negatively impact time, money, and resources Some potential defect examples include lack of proper documentation of procedures and standards, lack of thorough quality control, or large variances in inventory throughout a warehouse. To mitigate the risks of encountering defects, being able to detect issues quickly and design processes to eliminate them is crucial. If you find a particular process with a recurring defect, redesign your standardized process so that you reach your desired outcomes easier and without errors

DR. DEMING'S 14 POINTS

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.