There are a number of commonalities between ELF and Celsius which make the companies so successful. Three factors that are similar between them which I can see are,
- Social media and influencer strategy
- Excellent product placement and distribution
- Youth appeal
Starting with social media, they know which influencers to go with for getting customers and the strategy is wildly effective versus legacy retailers and competitors. For example Celsius has Jake Paul, the Youtuber turned boxer who has a huge following on social media in addition to selling pay per view boxing.
This ad on Instagram is brilliant, https://www.instagram.com/p/CyyWsMVO-eA/
Every boxing match he has showcases Celsius at the prefight and post fight conferences. Additionally Celsius is advertised in the center of the ring each time. Since he’s the biggest name in Youtube boxing he can call the shots of showing Celsius everywhere.
ELF has Snookie onboard who is popular from the Jersey Shore TV series. https://www.youtube.com/watch?v=z96ke9kjV-Y
They have her recommending the products in different channels, along with other influencers. Their latest earnings report showcased some of these videos.
On product placement I decided to do some research today when I was shopping. Found the skin care section and ELF is the very first brand you see in front going through the store!
Maybelline which is the most recognized brand according to research, is on the opposite wall, so you would have to turn your back to find it while walking by. How they got the best product placement I’m not even sure but that’s amazing.
Later I stopped by Royal Farms to get gas. Was looking for Celsius. There’s three fridges of energy drinks and Celsius in the center fridge at eye level. You cannot miss it there. It was half sold out, along with Monster above which was somewhat sold out. Redbull seems fully populated, or maybe not sold as much. On a previous visit, the Celsius area was also sold out, so it seems to be moving fast.
Lastly on youth appeal both of these brands are crushing it. Celsius had a couple conferences between earnings where they talked about this younger consumer.
The consumer uses Celsius like one would drink a coffee. Often alongside or after a meal, and as a regular drink rather then as purely a stimulant. They have research that people who are not energy drinkers are more likely to try Celsius.
For ELF their ads really appeal to youth. They are one of the most recognized brands among teenagers. There were more details about this in the latest earnings report.
I recently watched this documentary about the Juul e-cigarette company which got in a ton of trouble by advertising to youth. What I noticed is how similar the ads look to ELF ads, but the best part with ELF is the products are actually good for them! So there is no worry about using fun loving youth in the ads which appeal.
I believe these companies expertise in marketing is a competitive advantage. They have found out how to use social media like legacy companies cannot. They both get the best product placement above bigger competitors, and younger customers can potentially drive loyal customers for a generation.