At the heart of E.l.f Cosmetics’ e-commerce strategy is its popular loyalty program, Beauty Squad. But even a strong strategy needs to be updated occasionally.
The Beauty Squad has over 4.5 million members, with enrollment growing 30% year-over-year. Loyalty members drive almost 80% of the brand’s sales on ElfCosmetics.com and 95% of the brand’s app transactions. Overall, members have a 166% higher lifetime value than non-members. But as E.l.f. Cosmetics evolves, streamlining its efforts and developments is a focus. In August 2022, the company wanted to combine its team’s disparate capabilities, like personalization and communications, to create a cohesive consumer journey within its own E.l.f. Cosmetics app.
The loyalty program has gone through various iterations since its introduction in 2016. What started off as a rudimentary offering evolved to allow services like scanning store receipts to receive points and redeeming awards for store gift cards. The program is now in what Ekta Chopra, chief digital officer at E.l.f Beauty, called phase five. In this phase, the brand is taking its consumer insights about where and how customers shop, trying to gamify the experience, and offering a more holistic shopping journey that incorporates multiple touch points.
After the loyalty program’s implementation, E.l.f Cosmetics experienced a 125% increase in monthly active app users between March 2023 and October 2023, compared to the previous year. During the same period, E.l.f Cosmetics experienced a 76% increase in average monthly loyalty engagement and a 77% increase in average conversion rates across automated communications.
Chopra said her team thinks about strategy, but the execution of those strategies can have limitations. As such, E.l.f. Cosmetics turned to cloud-based software company Braze to help optimize and analyze its consumer journeys and implement its loyalty plans. The beauty company also turned to Braze’s ecosystem of tech partners called Braze Alloys, engaging Stitch to implement the technical changes to its Beauty Squad.
By working with Braze, E.l.f Cosmetics increased first-party data collection and expanded its communication channels beyond email, introducing additional touchpoints like push notifications. First-party data included the typical basic demographics, like age, but also a shopper’s specific beauty information. That included skin type, plus preferences for what products they like, where they like to shop and how they redeem rewards.
“The more granularly we understand our consumers, the better we can serve them. It’s our job to make sure that we’re not intruding or filling up their mailboxes with information that they’re not going to [positively] react to,” said Chopra.
E.l.f. also began incorporating loyalty milestones, such as birthdays and available rewards, into its app and website. Soon, they’ll also be included in SMS text messages and Braze Content Cards. Content Cards are a proprietary user experience feature that can be embedded into the E.l.f Cosmetics app. Displayed in a message inbox, carousel or banner on the app, they encourage customers to opt into communication channels or view additional offers, for example. SMS text messages and Content Cards are currently being tested by E.l.f. Cosmetics.
“When [thinking about] omnichannel, the interoperability of those channels is important. You don’t want to send a load of stuff in different channels,” said James Manderson, svp of customer success at Braze. “It’s about what the right message is for the right person, within the right context, and also what happens in [in-app] and out of [the app].”
To further engage loyal customers, E.l.f. introduced gamification elements like badging, scavenger hunts and AR/VR into their campaigns. In Sept. 2023, Sephora also introduced gaming concepts to its Sephora Insider Rewards program. This included a feature called “Beauty Insider Challenges,” a first-of-its-kind approach for the beauty retailer. Challenges comprise tasks that require purchases and tasks that do not, and are available to all membership tiers. Gaming is not new for E.l.f Cosmetics, which has also invested in Roblox, Twitch and other gaming concepts.
“Gamification aligns with what our Gen-Z [customers] relate to,” said Chopra. It’s the aspiration that, if they do something, they can win something or get rewarded. … We want to make sure gamers have the same feeling, so they come to our loyalty program and it feels fun.”
