Walk through almost any shopping mall in America, and there’s a good chance you’ll detect a Bath & Body Works store before you even see it.The scent of candles, hand soaps, and body sprays often drifts into the hallway, drawing shoppers inside. For many customers, signature fragrances such as Japanese Cherry Blossom, Warm Vanilla Sugar, and Mahogany Teakwood aren’t just products — they’re reminders of high school trips to the mall, holiday shopping traditions, or favorite gifts from friends and family.That familiarity has helped make Bath & Body Works one of retail’s most recognizable brands. While many mall chains have struggled with declining traffic over the years, the retailer has maintained an unusually loyal customer base by convincing shoppers to return again and again for new seasonal scents, limited-edition collections, and familiar favorites they simply don’t want to run out of.That loyalty has become increasingly valuable as consumers grow more selective about discretionary spending. But shoppers’ connection to Bath & Body Works is far from accidental. Bath & Body Works is working to regain its momentumBath & Body Works’ latest earnings show both the strength of the brand and the work that still lies ahead.For the first quarter of fiscal 2025, Bath & Body Works reported net sales of $1.4 billion, which beat analysts’ expectations. Related: Sephora copies a Walmart move shoppers loveAlthough CEO Daniel Heaf acknowledged that the company is making progress, he said it isn’t satisfied with where the business stands.”Our first-quarter results exceeded guidance, but remain below the standard our brand is capable of delivering. That reality reinforces the urgency with which we are executing the Consumer First Formula,” Heaf told investors.That “Consumer First Formula” has become the company’s roadmap for improving everything from product innovation to marketing and customer engagement. But behind the scenes, another formula has quietly become one of Bath & Body Works’ biggest competitive advantages.
Bath & Body Works’ Consumer First Formula aims to enhance customer engagement.Shutterstock
Bath & Body Works’ biggest strength starts in its fragrance labUnlike many retailers that rely heavily on outside suppliers to develop products, Bath & Body Works has invested for decades in creating fragrances that customers can’t find anywhere else.According to a New York Times report, the company develops hundreds of proprietary scents each year through an extensive fragrance creation process.Its Ohio-based fragrance operation allows Bath & Body Works to rapidly develop, test, and refine new products while maintaining tight control over quality and consistency.That in-house expertise helps explain why shoppers often develop unusually strong attachments to specific scents.A favorite fragrance isn’t easily replaced by a competing retailer because there often isn’t a true substitute. If someone loves Champagne Toast or Eucalyptus Spearmint, they’re likely returning to Bath & Body Works.The strategy also fuels the company’s constant stream of seasonal launches. Every fall brings pumpkin-inspired collections. Winter introduces holiday fragrances. Spring and summer deliver fresh florals, tropical blends, and fruity scents that give customers a reason to visit stores repeatedly throughout the year.Why the strategy matters for shoppers and investorsBath & Body Works isn’t just selling soap or candles. It’s selling familiarity, emotion, and personal preference. That’s an important distinction at a time when consumers are increasingly pulling back on discretionary purchases. While shoppers may postpone buying apparel or home décor, they may still indulge in relatively affordable luxuries like hand soap that make everyday routines feel a little more enjoyable.More Retail:Costco sees major shift in member behaviorRetail chain shuts all locations as legal changes hit industryCostco makes major investment in online shopping for membersIn that regard, the company’s fragrance expertise gives it a competitive edge that goes beyond pricing. Rather than competing on discounts, Bath & Body Works encourages customers to build habits around products they genuinely enjoy using. Once someone finds a signature scent they love, they’re more likely to return when it’s time to restock.That, combined with an immersive store experience, is likely to keep customers happy.”When you go into a second- or third-tier mall, a lot of stores look very gloomy or down on their luck. Bath & Body Works, though, stands out: It’s a shiny beacon that draws customers in,” Neil Saunders, managing director at GlobalData Retail, told The Washington Post.John Morris, a senior analyst at D.A. Davidson, also explained to The Post why the brand works so well. “Bath & Body Works has found a way to get everyone into its stores, teens up to baby boomers.” If the company continues to work on customer-focused initiatives while creating new signature scents, it could truly set the stage for success in today’s environment.Related: Big changes could be in store for Costco