DTC Briefing: How E.l.f Cosmetics uses collaborations with brands like Stanley and Liquid Death to generate DTC buzz

In a sea of companies vying for cultural cachet through collaborations, where deodorant brands are doing Erewhon smoothies, and sleep brands are partnering with fast-food chains, E.l.f’s partnerships still stand out for their ingenuity and the powerful flywheel they’ve created. Even as other companies like Crocs have built their brands around kitschy, unexpected collaborations, E.l.f still manages to make headlines for unusual pairings like a “corpse paint” partnership with Liquid Death. The company’s CEO Tarang Amin described this collaboration as “record-breaking” during the company’s fiscal first-quarter earnings call in August. 

“We believe our marketing engine is best-in-class in creating culturally relevant output,” Amin said in August. Collaborations are just one part of E.l.f’s marketing strategy; the company runs a wide variety of campaigns that often take a humorous angle to pop culture or social trends. One recent campaign, called “dupe that,” encouraged other brands to “dupe” E.l.f’s brand values. But all of this output has been critical to fueling eye-popping sales growth. Sales at the parent company, E.l.f Beauty, were up 50% year-over-year during its first-quarter earnings, though the company issued conservative guidance for the rest of the year. The 20-year-old company has also reported 22 consecutive quarters of sales growth. 

E.l.f’s collaboration strategy is indicative of what it takes for both established brands and young startups to get customers coming back to their DTC channels. In recent years, inflation has made shoppers pickier than ever. In turn, many DTC brands are rethinking their marketing strategies, with some undergoing brand refreshes or trying to hone in on what exactly makes them different. For E.l.f, it’s an unorthodox marketing engine that continuously pushes itself to find new ways to build buzz, participate in cultural conversations, and generate headlines, all while keeping its DTC channel top of mind. 

Neiv Toledano, senior manager of brand marketing at E.l.f, said that “with all of our collaborations, what we’re really trying to do is get in front of new audiences [and] mega eyeballs, and solidify ourselves as a brand rooted in culture.” 

Toledano said that most of the collaborations are exclusives to E.l.f’s DTC website; that’s a byproduct of the fact that most of these collections have very limited quantities, so it’s easier for E.l.f to control the flow of product on its own website. E.l.f has a retail presence in 14 countries, and its retail partners in the U.S. include Target, Ulta Beauty, Walmart and Walgreens, among others. However, E.l.f will sometimes make these collaborations available to retailers on a case-by-case basis; a 2022 collaboration with Dunkin’ was available in Ulta Beauty stores, for example. 

As such, E.l.f tries to find ways to take advantage of the fact that these collaborations result in a ton of eyeballs on its website. It has a series of products it will recommend to customers if the collaboration has already sold out by the time customers get to E.l.f’s website. And it sometimes makes a certain product within these collaborations an exclusive for members of its loyalty program, called Beauty Squad. 

Toledano acknowledged that “there is so much saturation” when it comes to product collaborations. So, E.l.f tries to stand apart in a few ways. One, Toledano said, is that her team consistently asks itself, “What’s the E.l.f twist on this?” when deciding what collaborations to pursue. At the most basic level, that means that E.l.f won’t do a collaboration that just involves slapping a logo on existing product. But Toledano also wants something that “gets people to stop and stare.” 

Another way that E.l.f tries to stand apart with its collaborations, Toledano said, is that the brand tries to keep them rooted in some insight that reflects how their customers are currently behaving and what they are interested in. A recent collaboration with Tinder, for example, centered around the idea of creating a kit that would help people feel their best before a first date. 

Before pursuing the Stanley product collaboration, E.l.f did an Instagram giveaway with the brand that generated around 60,000 entries. That was a proof point that helped convince E.l.f that its customers were already interested in Stanley products, and would probably be interested in an E.l.f-Stanley team up. E.l.f also regularly polls its Instagram followers around what product collaborations.

Jessica Ramirez, senior research analyst at Jane Hali and Associates, said that in general, E.l.f’s is a brand that, through its marketing, has established a “good sense of what is going on in the macro environment.” She also said that a key driver of E.l.f’s success has been its affordable price points, which have helped endear the brand to a Gen Z audience. Most of its blushes and lip products come in at under $10. “You are not breaking the bank with any of their product,” she said, which also makes it easier to convince shoppers to take a chance on one of its wackier products, like the Liquid Death collaboration. 

“Collaborations are truly a huge part of our brand strategy,” Toledano said. “All of these different initiatives are just a great way for us to… create things that are beyond lipstick, something that makes you feel, something that makes you laugh.”

What I’m reading

• The RealReal has a new CEO, its second in two years. Rati Sahi Levesque, formerly the company’s president and chief operating officer, is taking over the top job at the resale company, effective immediately. 
• Sneaker brand Skechers is on a tear, reporting during its third-quarter earnings on Thursday that sales were up 16% year-over-year to $2.35 billion. Results were driven by a 9.6% increase in DTC sales and a 21% increase in wholesale sales, respectively.
• How DTC jewelry brands like Dorsey, Mejuri and more are shaking up marketing strategies in the space, with a focus on lab-grown diamonds and more affordable price points to attract Gen Z.

What we’ve covered

• Why brands like Naadam are investing in out-of-home this holiday season. 
• How Brompton Bicycles is courting Gen Z with exclusive colorways and collaborations. 
• TikTok is going all-in on live selling this holiday season, working to educate brands on best practices.

Correction: This article has been updated to clarify which product sold out on E.l.f Cosmetics’ website.