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Brand Deep DivesDecember 16, 2021

How e.l.f. Championed Affordability & Came Out On Top

December 16, 2021
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Cory Schröder
Senior Content Marketing Manager

High-quality cosmetics are supposed to be expensive, right? Well, not according to e.l.f. cosmetics.

Short for EyesLipsFace, e.l.f. is an American beauty brand that’s well-known for its top-quality yet highly-affordable products. Founded in 2004 by makeup enthusiasts Joseph Shamah and Scott Vincent Borba, e.l.f. is a vegan, cruelty-free makeup brand that’s taken the world by storm.

With most of the brand’s products ranging from $3-$10, e.l.f. believes that high-quality products shouldn’t have to be incredibly expensive. In other words, e.l.f. wants you to “be extra without paying extra”. At the end of the day, this brand’s mission is simple: to provide equal access to the best of beauty.

So, how did e.l.f. go from a two-person brainstorming session to a publicly-traded beauty powerhouse? And what can you learn from this brand’s approach to success? Our deep dive will reveal the answers.

e.l.f.’s Journey to Success

Source: Beauty Brains Blush

When Joseph Shamah met Scott Vincent Borba at a party in 2002, the former was a 23-year-old NYU student and the latter a 31-year-old LA beauty industry veteran. Though their backgrounds were admittedly quite different, the men saw an opportunity and shared a dream: to launch an inexpensive, high-quality cosmetics line for women.

In a 2006 interview with CNN, Borba explained the duo’s interest in the market saying that “the idea for the company came from driving by 99-cent stores in Los Angeles, California, and seeing BMWs and Mercedes in the parking lot.” Inside these stores were “women with obviously expensive tastes buying bargain-price cosmetics.”

Borba continued, saying:

"I saw all these women with Louis Vuitton purses, and they were just buying truckloads of lip balms and nail polishes, and I thought there's a major market here."

And they were right — there was definitely a great deal of money to be made “helping women look good for less.”

Within a few months, the pair had drawn up a business plan and, e.l.f. was officially launched in 2004. Part of said business plan included partnering with factories that understood and agreed with the brand’s philosophy — “to meld women's inner and outer beauty, to make the products effective as well as inexpensive.”

By teaming up with suppliers that believed in e.l.f.’s vision, they were able to keep costs low from the start — which helped them remain true to their overarching mission in the coming years.

Within its first year, e.l.f. revamped its website from a product showcase to a fully-functional e-commerce website — thus allowing the brand to be featured in big-time magazines like Glamour, which resulted in a huge increase in sales.

In 2007, the brand launched its blog, which focused on beauty tips, advice, and even mentioned celebrity sightings. Furthermore, all e.l.f. landing pages had a “Chat Now” button, which allowed consumers to chat directly with one of the brand’s in-house professional MUAs.

The 2007 website also offered a “virtual makeover lab”, which made it possible for customers to digitally test out e.l.f. products on models or their own uploaded photo. But it didn’t end there — e.l.f. created a real community for its customers where each user could make a personal profile, comment on blog posts, chat with other customers, and access e.l.f.’s extensive beauty encyclopedia.

Customers could also create a “beauty profile”, which e.l.f. then used to recommend products based on each customers’ individual hair and eye color, skin type, and beauty regimen.

By 2011, the e.l.f. community had grown to “include over 2 million members and (had) become a global source for savvy beauty consumers looking for superior quality cosmetics, professional expert tips, and valuable feedback.”

Using the website, e.l.f. community members could share tips, watch educational videos, and learn new makeup techniques — making it a hub of knowledge and camaraderie.

In 2011, the brand boasted three distinct makeup lines: e.l.f. Studio, e.l.f. Minerals, and e.l.f. Essentials.

Source: A Beauty Edit

e.l.f. Studio was the more expensive makeup line created for professional makeup artists (MUAs) and consumers. Though the Studio products did cost more money, they allowed the brand to cater to a more demanding clientele.

Next, there was the e.l.f. Minerals, which consisted of makeup made from all-natural, mineral-based ingredients. Offering everything from face power to hydrating creams, e.l.f. Minerals were a bit more expensive than e.l.f.’s everyday products, but still didn’t break the bank.

Finally, there was e.l.f. Essentials, which was — arguably — the brand’s most well-known line. The Essentials line included everyday makeup at a lower price than the brand’s other two lines. Indeed, most items cost $3 — making good on their brand promise to be affordable and accessible to all consumers.

After 2011, e.l.f. placed much less focus on separating out its three product lines — instead, choosing to group products based on their respective categories and collections. While e.l.f. offered just 13 products at its launch, the brand has since developed more than 300.

From skin-care to makeup to professional tools, e.l.f. sells its products to a wide and varied target audience. Everyone from Gen Z to women in their 40s and 50s are part of e.l.f.’s target demographic — made possible by the brand’s wide variety of products and collections.

In 2021, the website still offers each visitor the opportunity to chat with a “Beauty Advisor”, providing prompts informed by their FAQs, as well as tutorials, lookbooks, quick tips, guides, and finders.

Furthermore, each website visitor is also invited to join the e.l.f. Beauty Squad, where members earn exclusive rewards, receive free products and shipping, and have early access to new products. Though the brand still operated its blog back in 2018, it has since moved its community-building activities to social media platforms.

With 355k followers on TikTok, 5.8 million followers on Instagram, 106k subscribers on YouTube, the brand now effectively builds connections with consumers of all ages and genders through dynamic social media content.

Add in mega-successful brand partnerships with the likes of big-name brands like Chipotle and celebrities like Tove Lo, and you’ll understand why e.l.f. has raked in revenue upwards of $318.1 million in 2021.

So, what can you learn from this highly successful cosmetics brand? Let’s discuss.

3 Lessons to Learn from e.l.f.

Source: Vogue Business

Having been around for almost 20 years, there’s a good deal we can learn from e.l.f. From building community to sticking to one’s brand mission, e.l.f. provides some great lessons.

1. Create A Community & Reward Engagement

Back when e.l.f. was still a relatively young brand, the founders made a genius move — they created a community for their customers. For many years, the e.l.f. website functioned as a hub of knowledge and a place to meet like-minded people — which incentivized customers to remain loyal to the brand.

While this community-based framework has now migrated to the brand’s social media platforms like YouTube and Instagram, it remains an integral part of e.l.f.’s success.

In addition to creating a community, e.l.f. also understands the importance of rewarding loyalty. The e.l.f. Beauty Squad, a loyalty program that rewards customers with free products and gifts, encourages customers to heavily engage with the brand.

Based on the number of points one earns, customers receive a wide variety of perks, gifts, and exclusive offers. And the more points earned, the better the rewards. With 2.1 million members as of November 2020, it seems to be working quite well despite the upheaval caused by the Covid-19 pandemic.

According to CEO Tanrang Amin in an interview with Vogue Business, Beauty Squad membership was up roughly 40% year on year and drove 70% of online sales, with members “purchasing more frequently and at higher order values than other consumers.”

The Takeaway: This kind of setup is a very effective way to encourage customers to spend more money with your brand — as they view making purchases as a means to a very exciting end.

By creating a community and offering rewards for loyalty, you show your customers that their business matters to you and that you’re dedicated to ensuring they remain happy.

2. Adapt to Consumers’ Needs

When the pandemic first reared its ugly head in early 2020, many people thought it would be over within a few months.

So, when the changes it brought on were still in effect by the end of the year, smart brands like e.l.f. knew it was time to make some big changes or risk ruin. Thus, the brand expertly adapted its strategy to meet customer needs.

Noting a 60% surge in website traffic during the pandemic, e.l.f. stepped up its customer service offerings in a big way. Building on its existing AI-driven chat feature, e.l.f. launched a new live chat feature in November 2020.

The new live chat allowed consumers to converse directly e.l.f.’s experts via video, phone, or chat — which was made possible by reallocating their top resource: store associates and MUAs. Instead of working the counters at e.l.f. brick-and-mortar shops, e.l.f. employees now offered their services digitally.

Of this strategy, Amin explained:

“(We were) looking at the current reality of people’s behaviour changing and saying, how can we adapt to that?”

Furthermore, the brand listened to consumer feedback and saw the emerging trend of category-blurring. After all, why can’t a concealer cover blemishes and hydrate? By focusing on shifting consumer needs and behavior, e.l.f. was able to meet and exceed consumer expectations at an incredibly difficult time.

The Takeaway: You may have years of experience as a brand or marketing manager, but you’ll never beat customer data. Smart brands listen to their customers’ feedback and adapt to their changing needs.

The pandemic is an extreme example of this, but, as we all know, consumer behavior changed almost overnight. And brands who weren’t willing or able to move with the times got left behind.

The moral of the story? Listen to your customers, they’ll tell you what they want.

3. Put Your Money Where Your Mouth Is

e.l.f. claims to be a brand that “stands with every eye, lip, face and paw.” On the website’s e.l.f. Cares page, the brand’s purpose is stated as such:

“We are committed to creating a culture internally – and in the world around us – where all individuals are encouraged to express their truest selves, are empowered to succeed and where we do the right thing for people, the planet and animals.”

In many ways, this is a bold statement. And because it’s bold, it’s also risky. But in this realm, e.l.f. excels by putting their money where their mouth is. The brand uses its website and large social media platforms to vocally support movements such as International Women’s Day, Pride, and Project Unicorn.

In support of social justice movements, the brand provides extensive resource pages for their Black Lives Matter and Stop AAPI Hate campaigns. e.l.f. goes the extra mile to stick to its guns and be a vocal supporter of causes that matter to the brand — not just for its customers but for its employees as well.

The Takeaway: Being committed to providing a safe, inclusive workplace and community is something that makes e.l.f. a real stand-out in the beauty industry. No matter what causes and movements your brand stands behind, it’s important that you communicate your position clearly.

Modern consumers want to know that their values are supported by the brands they patronize — so be loud and proud with the causes that matter to you.

Final Thoughts

e.l.f. started as a small brand with a big dream. But thanks to passion, expert leadership, and enviable adaptability, it’s become a real force to be reckoned with in the beauty industry.

And if you’re looking to follow in e.l.f.’s footsteps, you’ll need access to advanced consumer insights. For this, we recommend trying out brand tracking.

With reliable data straight from the source, aka your target audiences, you’ll be in a position to make smarter marketing decisions and strengthen your brand strategy. Sounds pretty good to us!

Brand Deep Dives
Brand Strategy

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