How e.l.f Beauty Doubled Down on Customer Experience With 1st-Party Data
As consumers flocked online during the COVID-19 pandemic, brands stopped competing on cost and convenience. Instead, they learned firsthand how important customer experience — particularly personalized customer experience — is to staying competitive.
While in-store shopping is sure to rebound as the pandemic recedes, U.S. e-commerce sales are still predicted to grow by 13.7% in 2021 — shattering pre-pandemic expectations and building on their massive 33.6% surge in 2020. And it’s the brands that understand today’s experience economy that will reap the rewards.
In our recent webinar — Transforming to a Direct-to-Consumer Organization — e.l.f. Beauty shared why its focus on customer experience was so vital to its continued success throughout the pandemic — and how the brand delivered exceptional CX by assembling, analyzing and activating first-party data.
Navigating a Shifting Consumer Landscape
e.l.f. — which stands for eyes, lips, face — is a Calforina-based cosmetics company that specializes in clean and cruelty-free makeup. The brand has long been consumer-first, selling its products online in addition to brick-and-mortar locations. But COVID-19 resulted in a 60% increase in new customers shopping on its website, driving e.l.f. to redouble its digital efforts.
“During the pandemic in 2020, we had a huge influx of shoppers coming online to our e-commerce channels,” said Director of Global CRM & Customer Growth Brigitte Barron. “So a few things became more important than ever for us, and that was first-party data collection, our loyalty program, and just focusing on how we can make our digital shopping experience better across our site and our app.”
With consumers stuck indoors, e.l.f. wanted to make sure online shoppers received the types of personalized customer experiences that drive brand loyalty. But that meant understanding exactly what its customers wanted and which strategies would ensure customer satisfaction — a difficult task if customer data is siloed and inaccessible.
“We had a ton of consumer data … and we just had our data in a lot of different systems and reported in a lot of places,” Barron said. “To really get to that next level, we had to bring all that data together in one system to unlock more opportunities and more insights.”
That’s when the brand set out to find a customer data platform (CDP) that could help it overcome its data fragmentation challenges, extract valuable customer insights, and use them to orchestrate personalized experiences across all its brand touchpoints.
Closing the Customer Experience Gap
e.l.f. brought together a cross-functional team — including stakeholders from customer relationship management, e-commerce, data analytics and paid media — to select its CDP. The brand wanted the best of both worlds — cutting-edge technical capabilities and intuitive, easy-to-use tools.
“This was a big factor that influenced us while we were evaluating different technology,” Barron said. “We wanted to strike the right balance and not sacrifice anything from a data management or an identity resolution perspective to have this business user-friendly tool and vice versa.”
That’s why e.l.f. chose ActionIQ.
“In the past we thought about what data was available to us and how we could use that in the market,” Barron said. “We wanted to reverse that way of thinking to instead, ‘what problems are we facing? Who are we trying to reach?’ And then using our tool, which is really more flexible than what we had in the past, to solution on that and model out the audiences that would solve the use case.”
This meant looking beyond surface-level KPIs and drilling down into individual customer behaviors.
“We really want to look at customer lifetime value, purchase frequency and test versus control group behavior so that we can see if these efforts are having a long-term impact on our customers,” Barron said.
e.l.f.’s investment in ActionIQ not only supported its increased focus on direct-to-consumer strategy, it also helped the brand prepare for the future of data-driven business.
“First-party data is critical for so many reasons, but I think an obvious one … is everyone knows eventually we’re going to have third-party cookies going away,” Barron said. “Having successful paid media campaigns is going to depend on having that quality first-party data.”
Even more importantly, ActionIQ helped the brand better know its customers and inform its decision-making.
“For us, other first-party data points that are really critical in beauty are things like skin type, knowing skin concerns, makeup routine preferences and skill level, a consumer’s preferred shopping channel and so on,” Barron said. “So these are all obviously essential for personalization and serving really strong dynamic product recommendations, but also every data point that we have really helps us model our customer database. And so what I mean by that is, if we’re trying to model a specific consumer behavior and we want to see how many customers might act the same, the more data points we have, the more accurately we can do this.”
Transforming Customer Insights Into Action
e.l.f. used ActionIQ to centralize and democratize customer data, enabling the brand to develop a more effective, personalized customer journey for each person and implement predictive models.
“Having the right technology in place to be able to spot trends in the data and pull insights, plus the right technology to activate quickly across channels, I think is the foundation of everything,” Barron said. “And I’m lucky that e.l.f. is an organization that understands this and champions this, because one piece really doesn’t work without the other. So if you’re doing a ton of analysis, but it’s a huge manual effort to pull that in and activate it across your marketing channels, it really doesn’t work.”
The brand is now able to create and target more complex audiences that would have previously required IT assistance or SQL knowledge, empowering business users to capitalize on market opportunities quickly across paid media, email and other channels.
“A huge value driver … is just the ability to create these multi-channel customer journeys,” Barron said. “I think traditionally in the past a lot of CRM campaigns lived in a silo through email or another channel.”
Whether it’s new customer onboarding, replenishment, churn prevention or another use case, e.l.f. now has the tools it needs to not only rethink today’s customer journeys based on accurate, accessible data — but take action on these insights across all channels, both online and offline.
And while the brand is optimizing for its target audience in the here and now, it’s also looking ahead to how it can drive results with prospective customers and predict their customer behavior.
“We’re really relying heavily on the ability to create our own predictive models that we use to identify new target audiences and predict these customer behaviors, like when someone’s due to repurchase, or if they’re highly discount-sensitive or likely to buy a certain product category,” Barron said. “With that, we can move away from having static criteria trigger these communications and move more toward this predictive timing. And at the same time, we can still use our CDP to effectively track the more static KPIs in our segments like our recency frequency, monetary RFM and lifecycle segments to get that health check on the overall customer database.”
Achieving CX Success
e.l.f’s No. 1 priority, especially during the pandemic, was identifying what its customers wanted from the brand and prioritizing everything that would improve the digital shopping experience.
“The CDP for us has unlocked a ton of new opportunities already,” Barron said. “And I think we’re just getting started — we have a lot of runway ahead of us.”
The brand leaned into DTC by prioritizing its digital customer experience strategy, doubling down on driving interest in its loyalty program — the e.l.f. Beauty Squad — and delivering personalized customer experiences tailored to its target audiences.
And now e.l.f. can move forward confident in its data-driven decisions, all while unburdening its IT and data analytics teams from time-consuming ad hoc requests.
“I think a huge benefit for me as a business user has been the flexibility and the user-friendly capabilities of the tool that’ve allowed me to not rely so much on data analysts or our IT team,” Barron said. “I quickly have been able to dive into things like, ‘what products are driving new customer acquisition versus our retained customer purchases? Is that our new launches versus our core products?’ And we can really break down the different factors that high-value customers have in common more easily than we could before.”
The e.l.f. Beauty Squad now boasts more than 2 million members — a 40% year-over-year increase — and is responsible for 70% of online sales. The brand itself ended Q4 2021 with a 24% increase in net sales when compared to the previous year’s fourth quarter.
Check out the full webinar featuring e.l.f. Beauty to learn more about how the brand revamped its CX strategy using ActionIQ.
Download our 2021 CDP Market Guide to learn how the right CDP can help you enhance and expand revenue streams, drive operational efficiency and improve customer experience.