Bath & Body Works Going Multi-Channel Route
By George Anderson
Bath & Body Works, the 1,600-store division of Limited Brands, figured it was time it had an online store.
“Our customers were telling us strongly they wanted an e-commerce site, and we felt like we’ve gotten to a point in our brand, which is 15 years old, to do that,” said the company’s chief executive Neil Fiske to USA Today.
Up until last week when it went live with its e-commerce function, the Bath & Body Works’ web site (www.bathandbodyworks.com)
was for information purposes only.
The new site offers customers the opportunity to buy Bath & Body Works’ personal care items, such as shower gels, fragrances, lotions and hair care products online.
Bath & Body Works generates nearly 40 percent of Limited Brands’ operating profit through the sale of its personal care products. Mr. Fiske estimates sales of these items will grow an additional 14 percent this year.
The web site includes a number of special features intended to appeal to shoppers.
Customer and Pre-packaged Gift Sets
For example, customers will be able to create custom gift sets in addition to prepackaged offerings by mixing and matching items.
Online Only Items
Customers disappointed in the past by a decision to discontinue a favorite fragrance will be able in the future to go to Bath & Body Works online “classics” section and buy items that are no longer sold in stores.
Shop by Customer Criteria
Shoppers will be able to shop for products based on a variety of pre-established criteria, including solutions to personal issues such as finding lip balms for dry lips.
John Morris, a retail analyst at Harris Nesbitt, believes the retail chain is on the right track with its move into online selling. “We view this strategy positively, given Bath & Body Works’ status as a gifting destination and the expectation that we will see growth in overall Internet sales due to higher gas and oil prices.”
GSI Commerce is handling order fulfillment and customer service for the Bath & Body Works Web site.
Moderator’s Comment: What is your reaction to Bath & Body Works’ decision to expand beyond a stores-only approach to selling goods? In the area of
personal care products, what company is doing the best job of selling online and/or through catalogs?
In addition to going online for the first time, Bath & Body Works is looking to establish a stronger presence for itself this Christmas holiday season
with a mailing of 10 million gift guides to consumers. USA Today reports, “The guide is the first step toward a full-blown catalog, another new direction for the retailer,
planned for spring.” –
George Anderson – Moderator
My first reaction to the site was quite positive. My second echoed Mark’s comment about new customers. I wouldn’t feel comfortable ordering many of the products either for myself or as a gift unless I had seen and smelled them first. Not the sort of lines you can buy without any firsthand knowledge. Perhaps one way to attract new customers would be to offer extremely reasonable (even free?) sampler packs. Some of the other products looked interesting and suitable as gifts, however, and I would certainly consider having a closer look next time I need to send something.
In addition to monitoring the online activities to ensure that the brand image is upheld, the function of the online store needs to be integrated into their current front office functions. Customers don’t distinguish between an online and physical store – they assume it’s the same company. They expect that a clerk in the store and someone handling the internet portion of their order can answer the same questions about products, deliveries, exchanges, or invoice issues. If that integration doesn’t occur and consumers are unhappy with the online experience, they will stop shopping at the physical stores as well.
B&BW’s move to multichannel retailing is a natural step. The character of its brand and the dollar density of its line are nicely matched for home delivery, whether ordered through internet or catalog. Limited’s multichannel experience with Victoria’s Secret is surely an advantage here. And outsourcing fulfillment to an experienced partner eliminates an area of uncertainty that has felled lesser startup virtual stores.
If there is a caveat here, it is that Bath & Body Works should maintain close control over its brand image and customer service standards. The first 6 months or year will set the tone for the company with its existing and new customers. I’d advocate keeping GSI on a tight leash and monitor its customer service performance closely.
Finally, B&BW should be thoughtful about how it measures success as it enters the multichannel realm. Adding online and/or catalog capabilities is not like building another store. It should make certain that present store managers’ incentives are aligned with the multichannel goals and begin to measure success in terms of Customer Relationship Management goals.
This is a great move for Bath & Body Works as the holiday buying season approaches. BBW has built up quite a fan base and those fans have strong preferences for particular fragrance groups and products that the retailer offers. Their online play will allow men to put sets together for their sig others without going in their sometimes claustrophobic stores. They need only look at what is on the bathroom counter and click away. The custom gift set idea is tailor-made for their product and their customer.
If the GSI arrangement means Bath & Body Works will make no capital investment in fulfillment software, warehouse, etc. and GSI will staff all related functions, then this will probably be a winner for both companies. As long as Bath & Body Works keeps the cost of internet customer acquisition under control, this may be profitable almost immediately. Limited can generate customer e-mail address lists at a very reasonable cost using all its divisions’ in-store traffic. It’s hard to sell private label personal care items via the internet, unless the customers have already sampled the items first, since color, texture, and fragrance can’t easily be experienced online. For people who haven’t got ready access to the stores, it may be worthwhile to start a low-cost sampling program. The great thing for the company is that private label beauty aids have excellent gross margins and, once a customer buys something she likes, she’s likely to repeat the purchase.