Bath & Body Works Targets College Bookstores to Attract Young Shoppers

A New Approach to Reaching Gen-Z Shoppers

Bath & Body Works, a well-known name in the beauty and personal care industry, is taking a bold step by expanding its reach into college campuses across the United States. This move marks a significant shift in the company's business strategy as it aims to attract younger consumers, particularly Gen-Z shoppers.

The company has partnered with major bookstore operators such as Barnes & Noble and Follett Corp to establish retail spaces within approximately 600 campus bookstores. These locations will offer popular products like fragrances, candles, and other items that have become staples of the brand. Universities involved in this initiative include George Washington University, Boston College, and Vanderbilt University, among others.

This partnership represents the first time that Bath & Body Works will sell its products outside of its own stores. However, according to CEO Daniel Heaf, this is just the beginning. "The idea of being either a wholesale brand or a direct-to-consumer brand is over," he said. Heaf emphasized that third-party distribution will play a crucial role in the company’s future growth.

Targeting Gen-Z: A Strategic Move

For Heaf, who took the helm in May after a challenging period for the company, focusing on Gen-Z is a top priority. The company's stock had fallen significantly, losing 24% over the last two years and closing at $28.93 on Tuesday. This decline led to the company's removal from the S&P 500 index, which highlights the need for a strategic shift.

College bookstores present an ideal opportunity for Bath & Body Works to connect with younger buyers without making substantial capital investments. According to Jaime Katz, an analyst at Morningstar, these locations can serve as a testing ground for understanding what younger consumers want. "It's a way to keep the conversation going with teen girls while they're not living with their parents anymore, not going to their usual places anymore," she explained.

An April survey by Piper Sandler revealed that fragrance sales among teens increased by 22% compared to the same period last year, making it the fastest-growing segment in the beauty industry for this demographic. This data underscores the potential of targeting Gen-Z through innovative strategies.

Lessons from Past Experiences

Heaf brings a wealth of experience from his previous roles at Nike, where he oversaw the direct-to-consumer business. Under former CEO John Donahoe, Nike focused heavily on this model, which ultimately led to a reevaluation of its retail relationships. Despite the challenges, analysts believe the failure was more about product innovation than Heaf's efforts, and his reputation as an innovator remains intact.

Katz sees potential in Bath & Body Works' current stock price of $29, citing strong operating margins and limited exposure to tariffs. However, she also notes that one of the company's challenges is effectively communicating the breadth of its product line, which includes everything from soaps to lip balms to wallflowers.

Future Plans and Marketing Strategies

In response to these challenges, Heaf has hinted at streamlining the product offerings to focus on the strongest sellers and enhancing the company's digital presence. While the company currently spends 3% to 4% of its revenue on marketing, Heaf plans to concentrate on fewer, but more impactful, campaigns to boost brand awareness.

"Think about a video on Instagram that tells a story about the product," he said. "Building awareness leads to a delay in purchase, because you're capturing a new consumer. But it works. I've seen it work."

This approach reflects a broader trend in the industry, where storytelling and engagement are becoming essential tools for connecting with younger audiences. By leveraging social media platforms and creating compelling content, Bath & Body Works aims to not only maintain its relevance but also drive long-term growth in a competitive market.