In retail, there’s a need for speed.
At least, according to E.l.f. Beauty chief financial officer and president John Bailey.
“Speed is literally the most important characteristic that will define a company in today’s new retail environment,” Bailey said. “If you don’t have product cycles that are less than six months and an ability to react to customer feedback in 24 hours, you should take a look at your business and figure out ways you can get faster.”
Bailey was on the E.l.f. team that took the mass-market beauty company public last September. Since then, E.l.f.’s growth has skyrocketed. For fiscal year 2016, sales were up 20 percent. For fiscal 2017, they’re projected to be up by as much as 28 percent.
E.l.f. makes makeup, skin-care and beauty tools that cost an average of $3. The company’s products are geared toward beauty enthusiasts — consumers who just cannot seem to get enough beauty — and originated on E.l.f.’s web site before moving into Target and Wal-Mart, as well as freestanding E.l.f. stores.
“She literally cannot get enough product,” Bailey said of the brand’s shoppers. “I don’t know how many lipsticks you need, but God bless you.”
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Speed is one of the ways E.l.f. keeps the demand up as the company looks to satisfy a customer that is constantly looking for beauty innovation.
“For us, we’re trying to stay in front of her and innovation is a constant,” Bailey said. “This is a brand that was able to bring ideas to the marketplace in as little as 20 weeks, leverage a direct dialogue with their consumer base immediately into an innovation process, and have that innovation process look as incredibly robust.”
On average, E.l.f. launches one new product a week.
One of the ways E.l.f. engages with its customers is via its web site, which has more than 130,000 customer reviews, which the company seems to take seriously. Bailey cited an example of E.l.f.’s Micellar Water launch, which didn’t rake in rave reviews. In response, Elf reformulated and relaunched a modified product 12 weeks later — it also sent handwritten notes to the people who left negative reviews to let them know the product had changed.
E.l.f.’s influencer strategy ranges from trips to collaborations — but centers around social media stars who are authentic supporters of the brand, Bailey said. “Some recent studies have shown that some bigger-name influencers are now getting influenced by smaller influencers,” he added, as to why the brand doesn’t focus specifically on the influencers with the most followers.