How e.l.f. Cosmetics leveraged Ordergroove Promotions Suite to unlock 62% recurring revenue growth

While most beauty brands promise either cruelty-free, high quality, or affordable products, e.l.f. Cosmetics has made waves for embracing all three ever since they came on the DTC beauty scene back in 2004.

Today, e.l.f. continues to rank as the number one beauty brand among U.S. teens, owing much of their popularity to their daring approach to digital transformation. They made the strategic decision to close their physical stores in 2019 reallocated funds to its digital operations, partnering with Ordergroove to launch their subscriber experience shortly thereafter — and they haven’t looked back since.

Most recently, e.l.f. combined the power of Ordergroove’s Promotion Suite with flexible subscriber experiences to attract more subscribers than ever — and keep them coming back with perks and savings that get better and better over time.

Let’s take a look at how they got there by using Ordergroove’s platform to maximize profitable growth — and ensure they have the flexibility they need to move at the speed of culture when consumer trends and preferences change on a dime.

A tiered promotion structure skyrockets subscriber base growth and average order value

Having gone from disruptor to beauty space incumbent, even overtaking established brands like Revlon by US sales in recent years, e.l.f. knew their highly engaged audience would translate into explosive subscription growth with the right promotional strategy.

Eager to take a bolder approach than a standard subscribe to save offer, e.l.f. launched an innovative tiered promotion structure with Ordergroove’s strategic partnership in July 2023 to convert new site visitors and existing customers into subscribers — and reward existing subscribers for sticking around for even more purchases with their brand.

With the new tiered structure, subscribers would get free shipping and 15% off their first order — and the longer they subscribed, the more they saved with 20% off their second order, and 25% off their third order.

It wasn’t long before their bold approach to subscription promotions produced explosive growth. Within just two weeks of revamping the offer on their product pages to highlight the subscriber benefits and cost savings from the new tiered promotion structure, e.l.f. saw their second highest peak in subscription enrollment — second only to their viral 40% off $30 Friends & Family sale in 2023.

The new tiered promotions were already compelling, but e.l.f. took it to the next level by expanding the number of products eligible for subscriptions — and maximizing Ordergroove Promotion Suite’s ability to easily set promotions for different product groups — to set themselves up for their strongest recurring revenue year in company history.

Applying their increasing discount promotion structure on a wider range of fan-favorite products rapidly grew their total subscribers by a whopping 235% year-over-year from 2022 to 2023 — but it also made each of those subscribers more valuable to the business.

Thanks to their Ordergroove-powered subscription discount structure, e.l.f. unlocked 81% higher AOV in just three months between February 2024 and April 2024 and 62% recurring revenue growth year-over-year from 2022 to 2023 — plus a 29% increase in the number of items in each subscription order during the same one year period — laying a strong foundation for a dialed-in, loyal community they can rely on through future trend cycles.

The winning combo for retention: A frictionless subscriber experience and a world class loyalty program

To give subscribers unmatched flexibility and prevent churn due to product overstock, e.l.f. also uses Ordergroove to power a frictionless subscriber experience where shoppers can choose a delivery frequency that best meets their needs no matter where they are in the customer journey, from the product page to the shopping cart — to the user-friendly subscriber dashboard where upcoming orders can be self-managed any time.

Allowing subscribers to set their own order frequency and easily adjust their upcoming orders, by keeping the same product or by swapping in new ones, has reduced e.l.f.’s monthly subscriber churn rate by 33% over FY 2023. And with subscription purchases unlocking an extra 250 points through e.l.f.’s industry-leading omnichannel Beauty Squad program, there’s added incentive for customers to increase their subscription purchases.

By taking advantage of Ordergroove’s unique ability to integrate innovative promotion strategies, customized subscription management experiences, and retention rewards, e.l.f has built frictionless relationships with their customers — and making life easier for customers has paid off for e.l.f. with profitable growth.

Taking over the beauty category with subscription-driven recurring revenue

With the beauty market expected to reach $580B by 2027, countless new DTC brands and investors are betting on subscriptions each year. Brands like e.l.f. prove that bold, differentiating choices are the key to staying in the game — and coming out on top — in both the short and long-term.

For brands that move at the speed of culture, a tech stack that fosters innovation and agility without ever stifling it is mission critical — and with trends changing at a breakneck pace, Ordergroove’s flexibility ensures e.l.f. can keep up.

Thanks to the success of their tiered promotions structure on an expanded range of subscription-eligible products, coupled with stronger retention among their growing subscriber base, e.l.f.’s business is earning more recurring revenue than ever throughout the year — and especially during the winter holiday shopping rush when industry competition reaches a fever pitch, determining which brands sink or swim.

With Ordergroove’s Promotion Suite, bringing holiday strategies to life is one less thing to worry about during the most hectic time of year. Capitalizing on seasonality and higher demand during the holidays produced 282% recurring revenue growth between Q1 2023 and Q1 2024, — and empowering them to take bigger risks as they explore initiatives like subscription bundles and organic social campaigns to drive even more attention towards their subscription offering.

Fueled by their subscription growth, e.l.f. continues to expand their footprint in the beauty category even further by acquiring two brands — Naturium and Well People — both of which also use Ordergroove to power their subscriber experiences.

Of their many growth opportunities, subscriptions are a continued part of e.l.f’s strategy as it expands its online presence in the beauty industry.