This quote from Fashion Network was from just 2019, alongside other news of e.l.f.’s CFO stepping down and store closures. So how did they go from falling sales to 16 consecutive quarters of net sales growth?
A Brief Overview – What is e.l.f. Cosmetics famous for?
e.l.f. Cosmetics, short for eyes. lips. face., was founded in 2004 by Joseph Shamah and Scott Vincent Borba. They are known for their extremely affordable prices for vegan and cruelty-free products that rival high-end beauty brands, with their most expensive product being a brush set for $50. Other products are priced as low as $3.
As stated by the brand, they “believe in a world where everyone can own their beauty, without compromise.” This includes compromise in pricing. The brand’s messaging is simple – they believe in equality, and that every person should have the opportunity to look their best for less.
According to Kyra’s 2022 Gen Z State of Beauty Report, e.l.f. Cosmetics was rated the top beauty brand among Gen Z. Let’s find out why…
e.l.f Cosmetics Growth Approach
e.l.f. Cosmetics’ strategy is rooted in 3 pillars – value proposition, innovation, and community engagement. The brand has only raised its prices twice in its nearly 20-year history, and even then it only raised the prices on some products, keeping cult favorites like the eyebrow pencil at its well-known price of $3. Not only that, but they refuse to be known for cheap products only. Their foundational values in innovation show in the phenomenon of the e.l.f. dupes and viral favorites (like the e.l.f. TikTok foundation or the e.l.f. Putty primer) products that are ranked higher by consumers than leading luxury brands.
However, where e.l.f. Cosmetics consistently thrives is in community engagement. Those 16 consecutive quarters of growth have been fueled by their community efforts, particularly in their early adoption and domination of TikTok.
Gen Z’s Beauty Brand: How e.l.f. Cosmetics mastered the power of community
Piper Sandler’s survey in Fall 2022 included 14,500 teens, and it concluded that “e.l.f. remains the dominant player at No. 1 for both average and upper income females.” The brand is practically synonymous with the young generation, with a 16% leading market share among Gen Z Americans. This is no accident. The brand identified Gen Z’s purchasing power early on and has been using direct strategies to maintain its position and continue to grow its cult following along with revenue.
Let’s explore the pillars of their success.
Community Engagement and Understanding
The definition of community-led growth is “a go-to-market strategy in which companies place value beyond their product or service and focus on building consumer relationships, brand loyalty, trust, and advocacy”. E.l.f cosmetics understands that in order to do this successfully they have to embody their values, invest in community management and engagement, and have a deep understanding of their consumers’ interests and language.
Ekta Chopra, e.l.f.’s Chief Digital Officer, stated, “We are where Gen Z is, and we don’t just show up, we show up bold… We are very good at looking for signals and jumping in — we don’t wait, we don’t dwell, we don’t have a lot of red tape.”
The brand was one of the first to get on TikTok and BeReal, and they did that because their community told them about it. They are not afraid to make moves because they know that their customers will lead the way.
But how do they maintain a level of quick reactivity to their consumer?
Data Tracking
E.l.f.’s pulse on consumer behavior and consumer sentiment is no accident. The brand uses a diverse number of data inputs to build a data management system that it can then apply to the consumer experience. Pairing this with a tech and future-driven mindset allows them to stay steps ahead of their competitors.
E.l.f. takes an omnichannel approach – observing consumer behavior in great detail to then build them a better experience, reminding them when they are out of products or targeting specific consumer groups.
The brand even has a private Facebook group for loyal customers that it can lean on for honest feedback that it can use alongside the data approach.
Social Media Positioning
The brand has been shameless in its approach to creating a digital experience dripping in brand personality for its community. The e.l.f. cosmetics TikTok account alone boasts over 720K followers and 13.5 million likes. This is partly due to creating the most viral campaign in TikTok history.
How e.l.f. Cosmetics created the most influential campaign on TikTok
E.lf. sought out a way to engage Gen Z on the app in a disruptive and new way. So, they created the e.l.f. TikTok song, an original song called #eyeslipsface that was then shared to TikTok, and creators were encouraged to use it in their videos. The song quickly gained momentum and the campaign totaled 7 billion views, among many other record-breaking achievements…
e.l.f. was the first brand to release an original song on the platform, and this campaign became the template case study for brands everywhere looking to make a big entrance on the platform.
What can be learned from e.l.f’s approach?
- Identify your target audience and be unafraid to make bold moves towards them.
All of e.l.f’s efforts came from being extremely clear on who they were targeting. They didn’t just target Gen Z, they became the brand embodiment of the generation. This allows them to identify what channels they should invest in, hone their brand voice, adjust their copy and imagery, and even choose what products to launch and how.
- Understand where your audience is spending time (for example: completely digitally) and focus efforts there.
E.l.f. Certainly didn’t invest their marketing budget into Facebook. They knew TikTok was the major platform used by Gen Z and therefore they spent their time there. Additionally, they use their audience behavior to explore other channels and mediums like BeReal and NFTs.
- Treat your brand as a personality and use that in the ways you engage with your audience.
One of the key pieces of e.l.f.’s success came from them being extremely authentic and unapologetic in who they are as a brand. This is especially hard to do if there are pieces of your brand that may rub some people the wrong way. E.l.f. is loud, they are daring, and they know it. They don’t shy away from that, but lean into it knowing it is a magnet to their ideal consumer.
- Utilize data to understand your consumers’ behavior and optimize their experience using it.
It may sound like warm and fuzzies, but the brand utilized multiple data inputs and a comprehensive look at that data to know exactly what their consumers reacted to, what their buying behavior was, ect. And even further, they used that information to build the digital experience for them.
- Keep a pulse on your audience’s sentiments through social listening and engagement.
This may be through using social listening tools, engaging in the comment section, creating facebook groups or discord channels, or a multitude of other efforts to connect with your audience. However, remembering to listen to the crowd and not just talk at it is crucial. Otherwise, you will miss nuances, community jokes, and opportunities to further their trust in you.
E.l.f. Cosmetics’ strategy is rooted in community growth, and they understood the efforts that must be taken to get this right. What they have now achieved is the ultimate growth loop, with consumers turned brand ambassadors that create content about them without being prompted. Plus, based on their TikTok account, it looks like they are having a lot of fun while doing it.
If you are looking for a team of experts that can help you crush growth, we’re here to help.
