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e.l.f. Beauty’s Growth Formula: TikTok, Clean Products and a Clear Brand Mission

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As many brands continue to “pivot” and find ways to evolve their businesses amid the chaos that is the COVID-19 pandemic, e.l.f. Beauty is riding high on seven consecutive quarters of net sales growth.

During its Q2 2021 results call, e.l.f. Beauty leadership reported 7% year-over-year net sales growth, largely driven by the company’s “strength in digital” during the pandemic. Although the retailer already had a strong digital heritage that supported data-driven innovation and risk taking, e.l.f. Beauty invested heavily in bolstering its digital capabilities even further as more consumers shopped direct via the company’s online properties.

While the investment amounts have been significant, they were what allowed the business to monitor, understand and respond to new consumer needs during its most crucial time as a business. After all, the company wasn’t just adapting to the pandemic — it also was establishing itself as a new, expanded organization, according to Gayitri Budhraja, VP of Brand for e.l.f. Beauty. In 2020, the company evolved from e.l.f. Cosmetics to e.l.f. Beauty and added two new brands, W3LL PEOPLE and Keys Soulcare, to its portfolio. Below, Budhraja shares:

  • What 2020 has taught the e.l.f. Beauty team;
  • How the company’s success with TikTok has inspired more marketing experiments; and
  • How the emphasis on “clean beauty” is driving product and brand innovation.

Retail TouchPoints (RTP): COVID-19 has turned the cosmetics category upside down. How is e.l.f. Beauty aiming to track, adapt and respond to ever-changing consumer behaviors and market conditions?

Gayitri Budhraja: Our success continues to be built off data, insight and genuine relationships with our passionate consumers — listening, responding to their needs and inviting them to be part of our brand narrative.

While the cosmetics category is down, e.l.f. continues to outpace category trends by leaning into our superpowers, which are even more relevant in today’s environment — delivering premium quality products at an unbelievable price that are vegan and cruelty-free. Our product development pipeline is stacked with innovation that excites, is consumer-centric and fuels the Holy Grail franchises we have successfully built.

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On top of this, our marketing is bold and imaginative — our distinct advantages are our e.l.f. speed and renegade spirit. We have been relentless in our efforts to meet our consumers where they are, and with ideas that are purpose-driven and with cultural relevance. All of this has continued to fuel our performance in this uncertain period.

RTP: Digital has been a clear area of investment for all retailers over the past year, including e.l.f. Beauty. What bold moves have made a tangible impact for the business?

Budhraja: Many don’t realize this, but e.l.f. is a 16-year-old brand. We started as the “OG” digital disruptor and elfcosmetics.com is still the number-one mass ecommerce cosmetics site.

One of the boldest moves we took from a digital perspective was how we launched on TikTok in October 2019. Our entry into this platform did not happen by chance — we wanted to be where Gen Z was playing and saw a robust organic presence behind #elfcosmetics, reaffirming the affinity for our brand on this platform.

We led with a first-ever idea that neither a beauty brand had done before, nor had TikTok ever seen. We created an original music composition built off what e.l.f. stands for as a brand, being for every eye, lip and face, and launched it as a hashtag challenge, #eyeslipsface.

Within three days, we crossed over one billion views, the song itself became a viral hit on Spotify, and to date we have garnered over 6.7 billion views with 1.6 million people creating videos with this song. Since #eyeslipsface, we have launched multiple hashtag challenges, our own brand channel @elfyeah, and recently Eyes.Lips.Famous., a first-ever TikTok reality show. In November 2020, e.l.f. was named the number-two favorite cosmetics brand among teens in Piper Sandler’s 40th Semi-Annual Teen Survey, up from number four a year ago.

TikTok continues to be a great way to galvanize Gen Z and build awareness among other growing cohorts on the platform. We will continue to lead with insight, a first-ever mentality and a pipeline of innovative activations planned. And while TikTok remains a great way to reach Gen Z, we are expanding our footprint on key platforms including Instagram, YouTube, Snapchat and Pinterest.

We also continuously seek new digital frontiers to reach new consumer audiences, in a platform-native way. As an example, we have seen video gaming become increasingly popular amid stay-at-home orders — we just entered this space through a collaboration with Twitch star Loserfruit (or LuFu). We are working together to feed her passion to support other female gamers in this male-dominated space, by integrating and engaging her followers with content designed to be positive and uplifting while promoting on-trend cosmetic and skincare products. Lufu also will use her status to introduce e.l.f. products to her male fans.

RTP: What are some new things that you learned about your consumer’s needs and expectations during the pandemic?

Budhraja: We have seen a tremendous appetite for skincare and continue to expand our innovation in this realm. While we believe the color cosmetics category will return to growth given the major role cosmetics play in consumer self-expression, skincare consumption is currently outpacing color SKUs. We are seeing the lines across health, wellness and beauty blurring even more, and have launched products that are multi-category, such as our Full Spectrum CBD Collection, to meet the needs and desires of our consumers.

RTP: We’re seeing a great emphasis on clean and ethical products. How will e.l.f. Beauty address this reality in 2021?

Budhraja: While cruelty-free has always been one of our leading values, we’ve increasingly leaned into our commitment to clean products with our acquisition of pioneering clean beauty brand W3LL PEOPLE earlier in 2020. As we strive to make clean beauty more inclusive and accessible, we’ve launched a W3LL PEOPLE brand recharge and 360-degree marketing plan to highlight the brand and its impressive collection of 40 EWG VERIFIED products. The plan will be centered around the brand vision, “because all people can be well people.” With consumers becoming increasingly conscious of the ingredients in their products, we’re proud to announce that six of W3LL PEOPLE’s best-selling SKUs are now featured in all Ulta Beauty stores as part of Ulta’s Conscious Beauty program, an initiative to provide consumers greater choices and transparency in clean beauty.

RTP: In what other ways is the e.l.f. Beauty portfolio evolving?

Budhraja: This year, we transitioned from a single brand to a multi-brand house, growing our e.l.f. Beauty portfolio with strategic extensions that support our purpose. In addition to raising the standard for high-performance, plant-powered, cruelty-free cosmetics with W3LL People, we recently launched Keys Soulcare, our new lifestyle beauty brand with Alicia Keys, that aims to share the soul of beauty through content, conversation and community.

Similar to e.l.f. Cosmetics, which was a digitally native brand, we launched Keys Soulcare online first, with a rich editorial site and weekly email newsletter. We felt it was important to lead with community and content first, and build a passionate following around the concept of “soulcare.” The community we are building is incredibly powerful and spirit-lifting. With our social engagement outpacing benchmark performance, we are seeing that now, more than ever, the world is craving a brand that is blending skincare and wellness.

RTP: 2020 has been a time of learning for many businesses. What lessons will guide e.l.f. Beauty’s strategy going forward?

Budhraja: Over the past six months, we’ve uncovered three strengths that will continue to fuel our strategic focus:

  1. The strength of our brand proposition, making the best of beauty accessible to every eye, lip and face;
  2. The strength of our digital ecosystem; and
  3. The strength of our purpose-driven values.

We know our consumers want a brand that stands for something and has clear purpose. They also demand authenticity and transparency. For us at e.l.f., we have been living our purpose as a natural extension of our values and will continue to do so.

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