Inside Beauty’s Biggest Disruptor | Case study

In 2004, the idea of ​​selling $1 lipstick online was radical.

But months after its founding, Elf was changing the way consumers thought about beauty by doing just that. Co-founders Joey and Alan Shamah’s proposition to make affordable but quality makeup for every eye, lip and face – elf – paid off. Shoppers realized they didn’t have to spend more than $10 on makeup, and they certainly didn’t have to go to stores to find their favorite new products. As for having to ask a store associate for information about a pencil or eyeshadow, forget it — consumers could just read reviews or see the ratings on

The buzz surrounding Elf was building and could be found in all corners of the internet, from DailyCandy to YouTube. Those who know, knew. In its first year, the brand generated $1.5 million in sales with an internal team of just seven. In 2016, Elf went public and was valued at $1.1 billion.

“So many of [the] The story of the brand kind of happened by accident,” said Venette Ho, managing director, global head of beauty and personal care at Financo Raymond James. “But [E.l.f.] they tapped into something before the rest of the beauty industry recognized it, which was the power of digital and virality. And from there, it changed the beauty industry forever.”

With rapid 26-week product sales and digital savvy, it got bigger: By 2016, it had 22 retail stores and a number of partnerships in the US with Target, Walmart and others.

But Elf’s rocket ship began to slow when mega-influencer brands like Huda Beauty and Kylie Cosmetics emerged along with a new class of digital disruptors like Glossier. In 2018, the company reported that annual net sales were down 3% year over year. Investors such as Marathon Partners Equity Management have openly pointed to Elf’s share price, which has fallen 51 percent since its New York Stock Exchange IPO, and questioned the company’s leadership.

Tarang Amin, chairman, president and CEO of Elf, having joined the company in 2014, has decided to close all of the brand’s stores in 2019 to focus on its national retailers and digital footprint. Many in the beauty industry thought Elf’s moment might be over.

At the same time, Elf put the pieces into a strategy called “Project Unicorn,” which repackages products to make them easier for customers to find on store shelves. It also worked to fit more items on those shelves. Project Unicorn also focused on hero products or key items that could be used to create category franchises in concealers, brushes and more. Amin recognized that the company needed to be more forceful about its proposition—it didn’t have a formal marketing department at the time—and redirected the $16 million it spent in stores each year to awareness.

Fast forward four years, and Elf has made a hard-to-believe comeback. For the nine-month period ended December 31, 2022, the company reached $95.5 million in earnings on $391 million in net sales, marking its 16th consecutive quarter of sales growth. Also in 2022, the brand surpassed 91-year-old Revlon to become the fourth-largest mass-produced company in the US by sales, according to market research firm Nielsen.

But how did Elf do it?

This case study reveals the pillars underpinning Elf’s strategy that other beauty companies can adapt for their own businesses, whether in recovery or growth. Elf became one of the fastest-growing and most profitable businesses in beauty, overhauling its product offering to be even more accessible and relevant in mass and prestige categories, and expanding an aggressive first-release marketing and social media strategy. The company also held true to its digital roots, allowing its community to drive both sales and conversions. in 2023, Elf made her TV debut at the Super Bowl with a product that was a fan favorite on TikTok. Operationally, he relied on the right team – a team that was able to make and execute decisions, regardless of risk.

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