The cosmetics industry is tough to break in to and when it first launched in June 2004, E.L.F. Cosmetics faced some serious obstacles. Joseph Shamah, CEO, said the company didn’t initially launch as an e-commerce venture— instead it was a new cosmetics brand. (E.L.F. stands for Eyes, Lips, Face.)
When it first took the brand to market, E.L.F. used a public relations firm to get the product out to magazines and in the public eye. The company was still having a problem with getting product in retail stores.
“It was the same story from most magazines in the early days,” said Shamah. “Everyone loved the product and pricing, but, as one magazine editor put it, how could a magazine write about E.L.F. products if they couldn’t tell their readers where to buy it.”
Launching an E-commerce Site
The company realized it had two choices: quickly find a national distributor to get the product into retail stores — and compete against rich brands like Cover Girl, Revlon and Maybelline—or it could launch its own e-commerce Web site.
The company decided to turn the existing E.L.F. Web site into an e-commerce site. According to Shamah, it didn’t take long to realize that this was a viable business opportunity they could manage.
 On the E.L.F. Web site, shoppers can use live chat for customer service issues or to chat with a professional makeup artist.
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Fast-forward five years and E.L.F. Cosmetics has successfully pushed into the retail market, but the largest part of the business is still online sales through the Web site.
Elements of a Successful E-commerce Business
When E.L.F. first invested in an e-commerce site, Shamah knew they’d need more than just the basics, like a shopping cart and hosting provider. At launch the company used an affiliate program, and now, with Commission Junction as the affiliate partner, Shamah said that their affiliate relationship has been a big boost for conversions.
In 2007, after seeing growth in its e-commerce business, E.L.F. opted to invest heavily in e-mail marketing. “We had an e-mail database of approximately a million people to work with, and we started segmenting the list based on who our buyers and members were,” said Shamah. “Once we segmented the list we marketed differently to those subscribers who opened the e-mail and clicked and those who didn’t.”
In two years E.L.F. has more than doubled its subscriber list and the company continues to use e-mail marketing as a key conversion tool. The company’s weekly e-mail marketing campaigns are its strongest promotion.
The E.L.F. brand was mainly built on positive word-of-mouth marketing, which is also a big part of its e-mail marketing campaigns. For example, subscribers on E.L.F.’s mailing list can earn points by referring friends. Shamah said that this promotion is extremely successful and to date, more that 500,000 friend referrals have come back to the E.L.F. site to make a purchase.
Using On-site Live Chat to Boost Customer Service
Live chat is another e-commerce solution that has been positive for E.L.F. The company initially used BoldChat to assist with customer service issues.
“Having the business grow steadily, year-over-year, meant we really had to roll with the punches as they came,” said Shamah. “One of the biggest challenges we had was customer service. When you go from 300 orders a day to 3,000, there are going to be hiccups along the way.”
Shamah said that the company beefed up its customer service team to handle e-mails, and they also invested in a new phone system. “When someone introduced me to BoldChat I thought this would be a great way to offer real-time assistance to our customers,” he said.
Using BoldChat, one E.L.F. customer-service rep can provide live assistance to multiple customers at the same time. For nearly no upfront cost, Shamah said that BoldChat has been a big boost to customer service efficiency.
Fun, Shopping-focused Apps Build Loyalty
After seeing how well on-site chat worked for its customer service reps, the company decided to use the software to enhance its customers’ on-site shopping experience. Each product page on the E.L.F. site now hosts a chat now button that lets customers connect with the company’s in-house professional makeup artists. It’s a service to customers—they can chat one-on-one about makeup techniques and the different E.L.F. products—but it also boosts sales.
Keeping it fun for customers, the E.L.F. site also offers a virtual makeover lab where shoppers can use models (or upload their own photo) to test-drive how different E.L.F. products match their own skin tone and style.
Using these types of e-commerce apps and solutions are not essential to run the E.L.F. e-commerce business, but they do increase brand loyalty, bring new customers to the Web site and help the company to grow its e-commerce business.
E.L.F. envisions the e-commerce site as the essential help destination for beauty all over the Web—and works toward this by using e-commerce software and solutions that help them give shoppers not only the product, but also tips, knowledge and guidance in one convenient Web site.
Vangie Beal is a veteran online seller and frequent contributor to ECommerce-Guide.com. She is also managing editor of Webopedia.com. You can tweet with her online @AuroraGG.
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