Insight Flash: What Consumer Edge Data Reveals About Rhode’s Audience, and Where E.L.F Could Take Them Next
Last week, beauty brand E.L.F announced plans to acquire celebrity-led clean skincare label Rhode in a landmark deal worth $1 billion in cash and stock. Rhode, founded in 2022 by Hailey Bieber, has rapidly amassed a loyal following among Gen-Z shoppers who value its effective, minimalist product line – with growth aided in no small part by slick marketing campaigns and its founder’s powerful social media presence.
Until now, Rhode has thrived as a digital-native, DTC-only brand, with plans announced just last week to finally enter retail distribution through Sephora, beginning this Autumn. By contrast, a large percentage of E.L.F’s sales are made through retail, meaning it has valuable domain expertise that could help Rhode rapidly scale in this new channel. The brands also appeal to different customer segments – with Rhode skewing younger and wealthier, and E.L.F catering to a broader base – opening opportunities for expansion to new audiences for both banners.
Using CE US cohort data, we break down the customer demographics of each brand and also use cross-shop analysis – a powerful tool for uncovering partnership opportunities, M&A targets, optimal store site selection, and more – to determine which retailers might be best suited to a Rhode rollout under E.L.F’s stewardship.
Key Insights on the E.L.F. Rhode Acquisition
Demographic data shows Rhode’s customer base skews young and affluent, with over-exposure to Gen-Z/young millennials and $150K+ earners, while E.L.F’s is more evenly distributed across age and income groups.
Cross-shop analysis reveals that Rhode customers are more likely than E.L.F shoppers to shop at key retailers like Target, Sephora, Ulta, TJ Maxx, and Nordstrom, potentially highlighting opportunities to E.L.F to leverage its retail expertise in bringing Rhode to new distribution channels with eager customers.
A Closer Look at Customer Demographics
Using CE’s US Cohort data, we examined Rhode and E.L.F’s exposure to different age and income groups – each brand’s “brand-to-industry index” (charts below) indicates the degree to which the brand is over- or under-exposed to a demographic segment versus the Beauty industry as a whole – finding that:
- Age: Rhode shoppers skew significantly younger than the beauty industry as a whole, with brand-to-panel indices of 2x and 1.4x for the 18-24 (Gen Z) and 25-34 (Gen-Z/Millennial) age groups respectively. By contrast, E.L.F has a more even exposure across age groups, with a slight over-index to shoppers under 55.
- Income: Rhode customers are also more affluent than average beauty shoppers, with a brand-to-panel index of 1.6x to the highest-income group ($150K+) and under-exposure to the lowest income brackets. As with age, E.L.F’s customer base is fairly uniformly distributed across income groups, with only a very slight over-indexing to the $150K+ bracket.
Cross-Shop Behavior Highlights Potential Distribution Opportunities
We also used CE Cohort data to examine cross-shop behavior between Rhode/E.L.F customers and key retailers (i.e. the percentage of Rhode/E.L.F shoppers who also made a purchase at the retailer over the past twelve months), finding that:
- Rhode shoppers are significantly more likely than E.L.F customers to shop at Target (84% overlap for Rhode vs. 69% for E.L.F), Sephora (68% vs. 36%), Ulta (55% vs. 49%), TJ Maxx (42% vs. 35%) and Nordstrom (33% vs. 13%).
- These gaps may suggest opportunities for E.L.F. to bring Rhode into stores where its target customers are already highly active—particularly Target, Sephora, and Nordstrom—while leveraging its own operational scale and relationships to optimize performance.
E.L.F’s $1B acquisition of Rhode signals more than just a bold move into clean skincare—it’s a strategic play to capture a younger, more affluent consumer while expanding its influence across premium retail channels. With distinct but complementary customer bases and clear alignment in cross-shop behavior, the deal offers a blueprint for synergistic growth. By applying its proven retail expertise to Rhode’s digitally native brand, E.L.F is poised to unlock new distribution opportunities, deepen customer engagement, and cement its role as a leader in the evolving beauty landscape.
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