NEW YORK — The company name might be E.L.F. for eyes, lips and face, but it aims to use the power of the mouth to drive growth.

This story first appeared in the January 22, 2010 issue of WWD. Subscribe Today.

Word-of-mouth is the marketing vehicle that has made the six-year-old beauty company a factor in the mass cosmetics universe — even though most sales are produced online.

The value brand’s products also are heralded through social networking and electronic media, including tweets on Twitter (E.L.F. has more than 42,000 followers on its three accounts), Facebook fan pages in the U.S. and U.K. with more than 44,000 fans combined, YouTube videos and hundreds of bloggers.

Additionally, E.L.F. recently launched a new look to its Web site that makes it easier to navigate. “E.L.F. is definitely one of the leaders in mass cosmetics in social networking,” said Ted Rubin, E.L.F.’s chief marketing officer and a frequent speaker on the topic.

While continuing to utilize electronic communications, the company is netting more interest from brick-and-mortar stores. The brand is in about 10,000 drugstore, food and mass retailers. Company chief executive officer and founder Joseph Shamah said a successful test with Target during the holidays last year has resulted in the chain rolling out a four-foot section to 600 stores in March. The section will include the line’s core products priced at $1, but also a new upscale effort under the Studio banner priced up to $6.

“We created a buzz at Target. What we bring to Target that helps us stand out [from competition] is we are a complete makeup line right down to our tools,” said Shamah. “We have good prices on products you’d expect to cost more. It fits with Target’s expect more, pay less position.”

Shamah does hope further success at Target will provide a “snowball” effect for other chains to add E.L.F., but he prefers slow and controlled growth so the company doesn’t lose touch with its customers. The brand also is available internationally in markets such as the United Kingdom, India, South America and New Zealand.

The Studio line came out of interest from shoppers to get the same E.L.F. quality in slightly snazzier packing and more sophisticated products. With influences from Nars Cosmetics and other premium lines, E.L.F.’s creative director and makeup artist Achelle Dunaway created the Studio collection. Examples of stepped-up items include a mineral-infused face primer and a high-definition makeup.

Also included in the line are six shades of blush, a lip stain, a minty gloss, a two-in-one conditioning gloss and a single eye shadow. Pricing is between $3 and $6. Plans call for adding 30 stockkeeping units to the current 60 for 2010. “We want to play off the prestige lines, but bring the same quality at a value price,” said Dunaway while demonstrating the items.

Also new from E.L.F. for 2010 is a collection of hand sanitizers priced at $4. A final component in the E.L.F. line is a tween-teen collection called Sugar Kiss available to retailers and online.

Whether supporting in store or e-commerce, the company believes in communication. There are company produced videos and consumer segments aired on YouTube. For example, more than 6,000 people have hit upon a YouTube video of E.L.F.’s Dunaway performing a makeover on pop star Priscilla Renea. Almost another 6,000 viewed Dunaway discussing under-eye concealer.

The company has several unique promotions planned, including: become a fan on Facebook and win a brush collection; a new face of E.L.F. contest; a sweepstakes linked to the debut of the upcoming film “Dear John”; makeup-at-home parties staged by bloggers, and a clever emergency kit of cosmetics distributed in upscale hotels. “We really know our customers and we communicate with them personally,” said Rubin. “Social media is all about women and E.L.F. is about women. Women like to communicate. For us, our communication and our cheap-chic positioning — which is growing because of the economy — is like the perfect storm. Women don’t need to give up beauty. They can buy E.L.F.”

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