The 30 year old brand made its mark with hand soap, sanitizer, and candles.
In a dying mall in New York’s Hudson Valley, all the department store anchors are gone; Dick’s Sporting Goods is the biggest store now. The carpeted interior of the mall is eerily quiet, with empty, barred storefronts everywhere.
But at noon on December 4, Bath & Body Works was abuzz. After all, it was Candle Day, the scented sale bacchanalia it holds the first week of every December. I was hoping to pick up a “Fresh Balsam” candle, which smells like 10,000 Christmas trees were crammed into a glass jar. The store was teeming with about a dozen masked people, many carrying the cardboard crates the store provides for lugging around bulky candles. I can tell you from experience that you can smell the fragrances through a mask just fine. A salesperson told me seven people were lined up to get in when the store opened at 6 am.
On Candle Day, Bath & Body Works’ famous $24.50 three-wicks, in scents like “Twisted Peppermint” and “Champagne Toast,” are offered for about 60 percent off — $9.95 this year. Candle Day lasted a full weekend in stores this year, but just one day online. Historically, fans load up their online carts the night before and click “buy” as soon as the sale hits. True diehards show up in person to try to maximize their hauls.
Many retailers have struggled in 2020, but Bath & Body Works is thriving. By the end of October, it racked up $3.7 billion in sales, which is up almost 20 percent compared to its sales by the same time last year. It did that despite its over 1,600 stores being closed for weeks, followed by occupancy limits imposed on shoppers for Covid safety reasons. For context, beauty retailer Ulta saw its sales decrease by 20 percent for the first nine months of this year compared to the same period in 2019.
Since its founding in 1990, Bath & Body Works has been a perennial favorite. But this year in particular, the devotion is striking. It has a foundation of built-up good will and loyalty coupled with a lack of any similar close competitors. It also has a savvy discounting strategy, like Candle Day, that constantly drives customers to stores looking for deals. And crucially in 2020, it has the sheer luck of selling the very things that people are craving during this pandemic: cozy candles, hand soap, and sanitizer.
“They have items that are very broad penetration, which means many, many people are willing to buy that,” says Barbara Kahn, a professor of marketing at Wharton. “It’s in a sweet spot. And then when you add on top of it a good price in a time when people are obviously facing some big economic difficulties, that’s a very good strategy.”
A pandemic purchasing powerhouse
Marcy Alvarez, who lives in El Paso, Texas, was one of the pre-dawn line waiters, showing up outside her local store by 4:15 for the 5 am opening. The store was only allowing 25 people in at a time, and she wanted to be in the first group. She’s been to three consecutive annual Candle Days and knows the ropes. The 28-year-old is a bartender who’s been out of work since March because of the pandemic and the mother to a young son. Her husband is a frontline health care worker. Alvarez says she doesn’t leave the house much lately, but she made an exception for Candle Day on December 4.
“If I can have one thing this year, let me have Candle Day, you know?” Alvarez said on a call.
During this pandemic, people are buying things that make themselves feel more comfortable in their homes, that provide a means for self-care, or that they hope will keep the virus at bay. Candles obviously fit the bill here, at a price point that’s considerably cheaper than a new couch. And why wash your hands 20 times a day with utilitarian hand soap from Target or use dodgy no-name sanitizer, when you can scrub with “Frosted Moscow Mule” and carry “Sunshine & Lemons” sanitizer gel on an anthropomorphic avocado keychain? (Plus, if you can smell a candle, that’s one more sign you may not have Covid.)
Bath & Body Works’ CEO Andrew Meslow said on an earnings call in November, “There has been, understandably, a lot of attention paid to the tremendous growth that we’re seeing in our soap and sanitizer business and we certainly count ourselves fortunate to be a major player in that category…” Soap sales made up about a quarter of the brand’s sales this year, up from the mid-teens.
Candles have generally been selling great all over since the pandemic started. An analyst at Kline Group, a market research company, wrote in a report in August, “Home scent products, notably candles, have become a category of comfort and escapism for housebound consumers in 2020, moving from a desirable purchase to a quarantine essential.” Kline notes that Bath & Body Works is a top-five home fragrance seller, along with brands like Glade, Febreze, and Yankee Candle.
So it’s fortuitous that Bath & Body Works sells these things, yes, but the retailer has also spent decades building a model that ensures people are continually buying them.
“The once-a-year event means the absolute best prices for customers on the largest selection of highly coveted candles – customers prep and plan (some even dress up) and they have adopted this day as part of their annual Christmas traditions,” a Bath & Body Works spokesperson said in an email. The event has been around for seven years.
The scent of success
Alvarez, for one, bought 20 candles this year, her biggest haul ever. She burns different seasonal candles most evenings and estimates that she spends about $500 a year at Bath & Body Works. (Her husband loves the body washes, too.) She collects the brand’s coupons and carefully strategizes how to shop to maximize her discounts. She recalls waiting in line for an hour during her first Candle Day, but was in and out quickly this year thanks to a pared-down Covid-19 crowd. But that’s not to imply this Candle Day was a bust — online, the brand’s website crashed on and off through the day, as virtual customers flooded the site.
Bath & Body Works was founded in 1990 and is a part of L Brands, the company that includes Victoria’s Secret and which used to own The Limited, Express, Lane Bryant, Abercrombie & Fitch, Henri Bendel, and others. L Brands was founded by Les Wexner, who stepped down as CEO amid questions around his long business relationship with the late accused sex trafficker Jeffrey Epstein.
The diminished company is now down to Victoria’s Secret and Bath & Body Works. Victoria’s Secret was formerly the powerhouse earner, but it canceled its televised fashion show last November and closed about a quarter of its stores as its hypersexualized selling tactics have become offensive and outdated. L Brands tried to sell Victoria’s Secret to a private equity firm, but the deal fell apart early in the pandemic. Bath & Body Works, growing consistently for years, is now the crown jewel.
As Racked chronicled in a 2014 feature on the brand, Bath & Body Works has tinkered with its selling model through the years, bringing third party brands in and offering more complex fragrances. White Barn, a more sophisticated and mature in-house brand, has been incorporated into the overall collection; some stores have Bath & Body Works and White Barn shops side by side.
If you’ve never been in a Bath & Body Works store or can’t quite recall the assault on your nostrils when walking past one in a mall, the store sells scents. A lot of them — in lotions, hand soaps, sanitizers, home fragrance plug-ins, and candles. (Alvarez’s favorite, for instance, is “Watermelon Lemonade.”) The names are whimsical, the packaging is colorful, the salespeople are friendly. The stores are not chic or cool. They’re warm, inviting, and a little overstimulating.
There are classic fragrances that are always there, but much like a sneaker company or Supreme, Bath & Body Works trafficks in drops and limited edition scents too. Khiem Tran, 33, is a recent convert to the brand, having been introduced to its candles by an ex-partner three years ago. (He has since turned his roommate onto them.) His most prized candle now is “Pistachio Ice Cream,” a retired scent that he only burns sparingly.
Tran lined up at 4:15 am at his local store in Richmond, Virginia on Candle Day, after having made a reconnoitering trip earlier in the week to make a list of his must-haves. His roommate was interested in online-only exclusive scents, so she was on her computer early. During his shopping trip, he says at one point a clerk screamed out, “Just found some more ‘Sweater Weather,’ who wants it?” He picked up seven candles, but didn’t get everything he wanted.
“I wasn’t able to get the Blueberry Maple Pancake, which I know is like a really hot ticket item,” he said on a call.
How Bath & Body Works uses deals to keep people coming back
The brand has the advantage of being a trusted, known entity, with plenty of reasons for spontaneous trips. “[Bath & Body Works] has the consistency and nostalgia and the brand identity, but also innovation and newness,” says Kahn, the Wharton professor.
Then there are the discounts and freebies. Both Alvarez and Tran, the two Candle Day early risers I spoke to, stacked some of the many deals Bath & Body Works constantly offers on top of their candle discounts. Alvarez says she gets emails daily or more frequently from the brand. This year it offered $10 off a $40 purchase that coincided with Candle Day. Thanks to friends and family, she had four of these, which the store let her use by ringing her haul up as four separate purchases. Tran also used a few of these coupons, plus got a free product. As for me, “Fresh Balsam” was sold out. As I was lamenting the lack of the piney candle I wanted, the salesperson recommended that I buy another scent and come back in at a later date to exchange it for the one I wanted once it was restocked.
Using discounting is tricky in retail. If brands do it too often — as has been the case at struggling stores like The Gap and J. Crew — it can be a sign of desperation and can lead to a degraded or cheapened perception of a brand’s image. It also makes customers never want to pay full price if they know that eventually it will be 40 percent off. The flip side of this, as Khan pointed out, is what JC Penney did a few years ago. It took away sales and implemented an “everyday low price strategy. The mistake is they didn’t give people a reason to come into the store.” She explains that you “need a trigger to initiate the shopping trip.”
Bath & Body Works walks this line perfectly. Alvarez says she’s never paid full price for a candle. The store discounts a lot, but in a way that allows people to gamify it. It’s never just only flat sales. It’s Candle Day, or a free lotion with a purchase, or a “Buy 3, Get 2 Free” deal. It brings people in, and they inevitably buy more than what the promotion is offering. Tran said he made sure to buy at least five candles so that the discount would kick in. He says of Bath & Body Works’ appeal, “The coupons definitely play a factor.”
How long can Bath & Body Works reign?
There are plenty of places that sell inexpensive candles and lotions. But none of them do it quite like Bath & Body Works does, and in as many places as it does. Khiem says he tried Yankee Candle, a similar price point, but wasn’t impressed. Alvarez tried to support some smaller brands but says the scents weren’t consistent.
“[Bath & Body Works] are working on a strategy of accessibility and low price,” says Kahn. “It’s kind of like a candy shop. Scent is a dimension that people relate to on a sensual level. So it’s fun. It’s pleasurable. And that’s where you get fierce loyalty.”
But this is not guaranteed forever. The majority of Bath & Body Works stores are in malls. Department stores are dying, taking malls along with them. By some estimates, 25 percent could close by 2025. If the malls that house its stores start closing, Bath & Body Works is going to have to invest in real estate elsewhere.
Then there’s e-commerce. During this year, Bath & Body Works’ online sales increased by 138 percent due to the pandemic. It takes different skills, warehousing, tech, transportation, and fulfillment capabilities to be a good and efficient e-tailer. Candle Day did not go smoothly online. The site crashed multiple times, and there have been complaints on forums like Reddit’s r/bathandbodyworks from customers with confirmed orders getting messages that they weren’t going to be fulfilled due to products selling out. Plus, selling scents through a computer is a different proposition. It’s one thing to read a description of the abstract fragrance “Party Dress” and another to stick your nose in and really experience it.
But for now, Bath & Body Works keeps collecting fans. Alvarez says she convinced a friend to get up early to hit up Candle Day with her. “She told me, ‘I want to experience a Candle Day in all of its glory with you, but I’m only going to get maybe five or six.’ She walked out with 16.”
Author: Cheryl Wischhover