Dive Brief:
- Bath & Body Works executives highlighted loyalty as a bright spot that could help improve performance in the coming year despite a continued sales decline, they said speaking on a Q4 2024 earnings call Thursday.
- Active loyalty membership rose 6% year over year to about 39 million in fourth quarter 2024, according to CEO Gina Boswell. About 80% of the retailer’s sales come from loyalty members, who have increased spend, trips, cross-channel purchases and higher retention rates than non-members.
- “Additionally, our reward redemption rate is increasing, which is driving flywheel behavior and deepening brand connectivity, reflecting the strength and appeal of the loyalty program,” Boswell said during the call. “And we have planned enhancements to the program in 2025, which we expect will excite customers and drive further improvements to redemption.”
Dive Insight:
Bath & Body Works is balancing customer experience with cost cutting as the retailer pursues sales growth.
Net sales fell 4.3% year over year to $2.8 billion in the fourth quarter, according to a company earnings report. Net sales fell 1.6% to $7.3 billion for fiscal 2024 as a whole. However, the retailer expects net sales to grow 1% to 3% in fiscal 2025.
Bath & Body Works is making cuts as well. The company generated $155 million in incremental cost savings in 2024, bringing its total to $300 million in over two years, according to Boswell.
These cuts were designed to drive efficiency without affecting anything that could negatively affect the store experience, according to Eva Boratto, CFO at Bath & Body Works. The company is looking for ways to cut “the non-value piece” without intruding on elements that affect customers.
“We want to maintain that great customer experience that we have,” Boratto said. “So we'll continue to look for efficiencies and we'll have more to come.”
Bath & Body Works’ three-pronged growth strategy, focusing on marketing, loyalty and technology, helped the retailer achieve record customer retention rates and improve its ability to attract new customers, but there is still more work to be done, according to Boswell.
“Our technology roadmap remains on track as we enhance our systems and put in place foundational tools to enable more personalization and seamless customer engagement to drive long-term growth,” Boswell said during the call.
