e.l.f. Beauty is intensifying its focus on Generation Z consumers as it reshapes its brand portfolio to align with shifting beauty preferences and digital buying behaviors. Central to that strategy is its $1 billion acquisition of Rhode, the skincare brand founded by Hailey Bieber, which has built a strong following among younger shoppers through social media and direct-to-consumer engagement.
The deal includes $800 million in cash and stock at closing, with an additional $200 million tied to performance milestones over three years, according to e.l.f. Beauty’s official announcement. The acquisition reflects the company’s broader ambition to scale culturally resonant brands that connect with digitally native audiences while expanding into prestige categories.
CEO Tarang Amin has emphasized that the company intends to build brands that “disrupt norms, shape culture and connect communities,” positioning e.l.f. not just as a cosmetics company but as a multi-brand beauty platform aligned with emerging consumer values.
Betting on Cultural Relevance and Community
Gen Z’s purchasing habits differ significantly from previous generations. Social discovery often precedes retail browsing, and brand affinity is increasingly tied to authenticity, community, and shared identity. Platforms such as TikTok and Instagram serve as both media channels and storefronts, reshaping how beauty products gain traction.
Rhode’s growth illustrates this shift. The brand leaned heavily on digital storytelling, minimalist packaging, and creator-driven marketing to cultivate a loyal base. Its strong direct-to-consumer roots and recent expansion into Sephora retail locations mark a strategic blend of digital virality and brick-and-mortar credibility.
For e.l.f., the acquisition strengthens its presence in prestige skincare while reinforcing its reputation for nimble, digital-first marketing. The company has historically outperformed many legacy beauty competitors by capitalizing on viral campaigns and affordable pricing. Adding Rhode extends that strategy into higher price tiers without abandoning its Gen Z appeal.
Retail Expansion Meets Digital Momentum
The Rhode acquisition also underscores the importance of omnichannel distribution in modern beauty. While digitally native brands often begin with direct-to-consumer models, long-term scale typically requires retail partnerships. Rhode’s expansion into Sephora locations in North America and the U.K. signals the next phase of growth: pairing online engagement with physical retail visibility.
Retail media networks are playing an increasing role in this strategy. As beauty brands compete for digital shelf space within retailer ecosystems, advertising within retail platforms has become critical for product discovery and conversion. According to Insider Intelligence, U.S. retail media ad spending is projected to surpass $100 billion in the coming years, highlighting the channel’s growing importance in consumer packaged goods and beauty.
For brands targeting Gen Z, success requires integration across social commerce, retailer platforms, influencer partnerships, and in-store experience.
Blending Mass Appeal with Prestige Positioning
e.l.f. Beauty has built its reputation on affordable, accessible cosmetics. However, acquiring Rhode signals a deliberate move to balance mass accessibility with premium positioning. The strategy mirrors broader trends in the beauty industry, where companies seek portfolio diversification to mitigate category volatility and expand margins.
By operating across price points and consumer segments, e.l.f. can capture both entry-level beauty shoppers and consumers trading up for specialized skincare products. This hybrid approach aligns with Gen Z’s spending behavior, which often blends value purchases with selective splurges on culturally relevant brands.
The Competitive Landscape Ahead
The beauty industry remains highly competitive, with established global players and fast-moving indie brands competing for digital attention and retail shelf space. For e.l.f., sustaining momentum will depend on preserving Rhode’s cultural authenticity while leveraging operational scale.
Gen Z’s influence is expected to grow as the generation enters peak earning years. Their preferences for transparency, inclusivity, and social engagement are reshaping marketing strategies across retail sectors.
As beauty increasingly intersects with commerce media, data analytics, and influencer ecosystems, companies that combine strong brand narratives with disciplined operational execution are likely to lead.
e.l.f. Beauty’s expanded Gen Z strategy represents a calculated bet that cultural alignment, community building, and omnichannel retail execution will define the next era of growth in the global beauty market.
More about Gen Z:
Staff Report
Staff Report
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