Need to Know
- E.l.f Cosmetics increased sales by 4.2% per user by using AI-driven personalization.
- The shift has also resulted in an increased click-through rate of 18%.
- Customers appreciate personalization: 63% say they want recommendations on potential purchases.
- 93% of businesses with advanced personalization strategies have increased their revenue.
E.l.f. Cosmetics (short for “eyes, lips, face”) is an American cosmetics brand based in California. In a 2019 effort to increase focus on online sales, e.l.f. closed all of its 22 stores and doubled its e-commerce and digital spend from 6% of net sales to 12%.
In a recent report, e.l.f. revealed that after adding product recommendations to item pages, revenue per user increased 4.2%.
The beauty brand began its personalization efforts by using “heat mapping” to understand consumer behavior on its site. After learning that customers prefer to jump directly into product categories, rather than browsing landing pages, they revised their homepage to feature categories, such as “skincare” or “makeup” instead. Return customers were then exposed to more specific categories such as “cleansers” or “face masks”.
The shift has resulted in a nearly 18% increase in click-through rate.
Another example of personalization used by e.l.f. was the addition of a “You May Love” section of recommended products, which has resulted in a 23% growth in click-through.
The brand has also created 75 unique customer segments to target niche groups. For example, customers who frequently visit the website but have never made a purchase may be targeted with a special three-day sale that would show a discount off a category they had been browsing, like cleansers or makeup brushes. The website will also recommend additional products tailored to match those segmented items.
According to Shana Rungsarangnont, e.l.f.’s digital product manager, “No group is too small to target. If something is even 2% of your total traffic, personalization can pay off.”
Not only is personalization effective, customers appear to want it as well: 63% of consumers say they are interested in personalized recommendations.
Rungsarangnont noted that selling makeup and beauty products online can be challenging given that customers can’t test and feel the product. Explains Ben Malki, director of customer success at Dynamic Yield, which enabled the personalization, “When you think about personalization, it’s taking a more human approach to what people are doing on a website.”
And it seems to be working. In 2018, 93% of businesses with advanced personalized strategies increased their revenue.