E.l.f.’s Loyalty Squad Fuels Digital Surge

E.l.f. Beauty’s loyalty program is feeding its massive digital growth, with the beauty company’s loyalty members driving nearly 80% of sales on its e-commerce site. 

There are around 3.9 million members in e.l.f.’s Beauty Squad program, which is up 25% from last year, according to the company. These members deliver higher average order values and purchase more frequently, as well have stronger retention rates. 

The consumers are also, SVP and CFO Mandy Fields noted on a call with investors, “a rich source of first-party data.”

• Related: How Yesway Is Redefining Loyalty 

The beauty company reported stellar sales in the first quarter, growing 76% vs. the prior year period to reach $216 million. In addition to strong performance on its owned e-commerce site, e.l.f. reported a halo effect of its digital efforts on its retail sales, including Amazon and retail dot-coms. 

Digital sales drove 18% of e.l.f.’s total sales in Q1, up from 14% in the prior-year period, and the company is bullish on growth and whitespaces in skincare, color cosmetics, and international markets.    

It’s not just loyalty, however, that’s propelling digital growth: A social commerce pioneer, e.l.f. tallied a record traffic spike during the launch hour of a limited edition collaboration with beauty content creator Mikayla Nogueira. The product sold out in 18 minutes on Elfcosmetics.com — also a record — and nearly three-quarters of purchasers were new, marketing its highest new purchaser rate on an innovation product in the last two years. 

The company plans to grow its offering of digital and video content to further this momentum.  

E.l.f. is transitioning its ERP to SAP, which company leaders previously shared as expecting to occur next year. In touting the resiliency of its supply chain as a key factor in success, Amin noted e.l.f. is taking steps to diversify its suppliers, including adding operations in Thailand and exploring other regions. 

“Over time, really from a business continuity standpoint, we’re going to be in a position where if anything happened in China, we have the vast majority of our production that could also be sourced elsewhere,” said CEO Tarang Amin. “But we love what we continue to see in terms of our operating advantage and the investments we’re also making to improve our distribution capability and infrastructure.”