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How Eleven made a comeback The Business of Beauty, BoF Professional

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NEW YORK, United States – While other beauty brands begged teenagers TikTok makers to post about their products, Elf Cosmetics had a different kind of partner in mind.

In May, Eleven teamed up with Chipotle to create a virtual ball for the millions of teens across the country who would miss theirs due to the pandemic. The brand has released a limited edition Elf x Chipotle prom kit as a tie-in. The ‘ultimate burrito-inspired’ makeup came in a crumpled silver zipper box that looks like a burrito wrap with a menu and a $ 15 gift card for Chipotle.

The unconventional offering was the latest in a series of viral hits for Kory Marchisotto’s cosmetics label, which last year took part in a mission to empower teens around the brand.

“There have been two brands in the press that have crushed it on TikTok – Elf and Chipotle. We kept seeing these two names together all the time … and then I finally hit it, ”Marchisotto said.

Even two years ago, the idea that Elf would emerge as one of the hottest brands on Gen Z’s favorite social media platform was hard to imagine. The 16-year-old brand drove the 2015 and 2016 makeup boom with its ultra-cheap color cosmetics. But sales increased as consumers turned their attention to skin care. The company just risked becoming another drugstore makeup brand.

In February 2019, Eleven said it would close its 22 stores and refocus on e-commerce, as well as wholesale accounts like Ulta and Target. The brand has also streamlined its product launches, going from a peak of 130 items per year to about 80, said Chief Executive Tarang Amin. The packaging went from black to lighter colors because a “sea of ​​black” did not work in a physical retail environment.

Amin faced a challenge: getting people excited about a brand in a very busy market – amidst a slow makeup industry in general.

“It was a rough awakening,” said Amin. “It seemed dead in many ways, but it was a great opportunity for us to step back and really take a look at our strategy.”

In the past 18 months, Amin and Marchisotto have invested heavily in TikTok, emphasizing their low prices and their cruelty. In the long run, the goal is to create or buy brands that will appeal to these customers as they get older and richer. In February, Eleven acquired W3II People, which sells clean products at a slightly higher price. And earlier this month, the company said it was developing a new brand with singer Alicia Keys launching next year. The line will be ‘leading with skincare’ and categorized as ‘entry-level prestige,’ said Amin.

How did Eleven get back on top? Below, Marchisotto and Amin describe how they brought the business of mass store closings to TikTok thrills.

Let consumers tell you what they want about your brand

Traditionally, executives sit in a meeting room and decide which products to promote and how to sell them. The company typically selects what it thinks are the best features – from a color trend to a hero ingredient to a current influencer – and highlights them through marketing visuals and messaging.

Eleven did the exact opposite.

‘[Other brands] do it in reverse. They start with, “Who is my brand?” and then “What do I think my brand is?” – and then let me impose that vision on other people, “Marchisotto said.

Feedback from young customers tended to focus on Elf’s price and his promise to offer cruelty-free products, meaning older content that didn’t communicate these values ​​was obsolete.

“All those things are not what we decided was great about our brand, it is what they told us about our brand,” said Marchisotto. “Every piece of content we created is built on the back of something they told us.”

Invest in TikTok

Marchisotto attributed much of Elf’s renewed brand awareness among teens to the social media platform. The company has made significant investments in TikTok since last fall, before most mainstream beauty labels even had an account on the app.

In late July, there was a “Magic Act” TikTok challenge encouraging users to submit content using Elf’s Poreless Putty Primer. The special # ElfMagicAct hashtag has gained a billion views in three days. On August 5, the hashtag had over two billion views and more than 750,000 pieces of user-generated content were posted with #ElfMagicAct.

Group photo of Ride or Die Lip Balm in all shades Source: Courtesy Eleven

Eleven’s first “Eyes Lips Face” challenge on TikTok has been viewed more than six billion times on the platform since its launch in October. Eleven had created an original piece of music, integral to the success of a challenge that went viral on TikTok, for both programs. For this challenge, against the background of the song “Eyes Lips Face”, created with the sick Wayno and Holla FyeSixWun, people were encouraged to use upload videos highlighting their eyes, lips and faces (the acronym of the Brand).

TikTok’s future may be uncertain as President Trump threatens to ban the platform in the U.S., but it’s still where teens and early twenties spend a disproportionate amount of their time. And as Instagram’s new short-form video competitor Reels start to gain traction, it’s fair to assume Eleven will be there.

Create lifelong customers

A slightly more expensive brand targeting slightly older customers could help isolate Elf from just the latest Tiktok craze.

It is also the second popular Gen Z-centric brand in the past month to reveal that it was creating a new label to increase reach. In July, Morphe tapped Charli and Dixie D’Amelio as the faces of his new ‘sub-brand’ Morphe 2, a more natural counterpart designed to catch a younger client than the mainline of bold makeup that resonates with a more mature (mid-twenties) audience. Eleven does the reverse.

‘[E.l.f. is] look into potentially playing with a new, older consumer group, ”said Marjolein Jonker, consumer practice manager at Kearney, a strategy and management consultancy.

Eleven’s research found that 39-year-old Keys addresses both Gen Z and their parents. A higher price and emphasis on skin and wellness could also appeal to an older and richer audience. The new brand can also serve as a way to maintain Elf’s current customer base once they can spend more on their beauty routines.

“Eleven can keep them [younger customers] around, instead of acting on a different brand they [E.l.f.] don’t own it, ”added Jonker.

Creating a completely separate brand works in Elf’s favor. It would be just as challenging to get a customer used to paying $ 5 to spend four times that amount on one item as it would be to convince someone who buys on the higher side to pay prestige prices for an Eleven- product.

The challenge is to grow new labels without sacrificing momentum with the core brand, said Matt Katz, a managing partner at consulting firm SSA & Company.

“You don’t want to do five to twenty percent growth and make it two [to] 7 percent growth in companies with twice as much overhead, “said Katz. “I still think there is still huge room for this business to grow.”

THIS WEEK IN BEAUTY

L’Oréal’s US workers say they fear losing their jobs if they don’t return to the office now. The cosmetics giant, that reopened its offices in New York with a 50 percent capacity on August 3, access to workers’ medical records and is reportedly requested add them to a “non-compliant” list if they want to keep working remotely.

L’Oréal also reported a greater than expected decline in sales in the second quarter. Sales amounted to € 5.85 billion ($ 6.90 billion) for the period April through June, down 18.8 percent on a comparable basis.

Fenty Skin products are already resold at a huge price increase. Some of the skincare line offers launched on July 31 are as high as $ 500.

Edgewell acquires the Cremo care brand for $ 235 million. The personal care group had previously tried – and failed – to buy Harry’s start-up Harry’s in February this year.

Addison Rae is the newest TikTok star in the cosmetics industry. Item Beauty launches August 11 with a handful of products including lip gloss, mascara and brushes.

British beauty trade groups are raising £ 55,000 ($ 72,000) in 24 hours to support hard-hit beauty salon workers. Beauty Backed’s fundraiser and petition were launched due to a lack of public support for the £ 28 billion beauty sector.

The clean makeup brand Saie secures seed funding led by Unilever Ventures. Other investors include Gwyneth Paltrow and Westman Atelier.

Tatcha uses Animal Crossing: New Horizons to release its newest product. The Japanese skincare brand launches a pop-up “island” in honor of his new rice cleaner, complete with a treasure hunt and tours led by founder Vicky Tsai.

Lockdown led to the rebirth of press studs. The home treatment first became popular in the 1980s has had a makeover because the pandemic and economic uncertainty keep some customers away from the nail salon.