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When Dial Corp. announced the acquisition of Freeman Cosmetics earlier this month, it was a big step out of the mundane bar-soap aisle into the sweetly scented air of the bath and body section.

The marketer, however, is merely following a path already being trod by its mass-market retail customers, who are embracing new or expanded store departments dedicated to products positioned as a cut above Dial soap.

Playing off the success of The Limited's 1,000-store, $1 billion-a-year Bath & Body Works unit, such retailers as Kmart Corp.; Sears, Roebuck & Co.; Target Stores; and Wal-Mart Stores have been establishing sections of their own.

Supermarkets now are hopping into the tub, too. Following Virginia-based Ukrops' development of expanded bath and body sections last year, Rochester, N.Y.-based Wegmans has rolled out expanded bath and body departments in some stores.

In April, the nation's largest supermarket retailer, Kroger Co., put a bath and body department in its newest store in Cincinnati, near its headquarters.


Driving the interest are big growth prospects. Salomon Smith Barney projects 20% annual growth for the next several years in bath and body sales at mass-market stores -- numbers that package-goods marketers don't dare even dream about in most categories.

New product activity in the category also has exploded, with more than 1,100 bath and body offerings in 1997, more than triple the number six years ago, according to consultancy Marketing Intelligence.

"It's a lifestyle issue . . . and it goes across a number of different categories," said Dave Medina, category manager for bath and body products at Ukrops, which now has expanded sections to about half of its stores. "People are working harder, so it makes their play time more important, too. . . . It's their way of rewarding themselves."

The heavily scented soaps, gels and lotions that populate the sections, along with loofah sponges, luxuriant brushes and massagers, are slower movers than such health and beauty staples as Colgate toothpaste or Dial soap, Mr. Medina said. But they offer higher margins in a category where shoppers aren't as price-sensitive.

That would seem to leave room for heavily advertised brands, but the major health and beauty aids players have been largely missing from the bath/body boom so far.

Bath & Body Works, the most successful retail player with the concept, sells only private-label products. And Coty's Healing Garden, Sarah Michaels and the San Francisco Soap Co., three of the leading mass-market lines, do little advertising.


Without strong entries into the bath and body segment soon, such mass-market personal care marketers as Procter & Gamble Co. and Unilever could find themselves losing business to the private-label and specialty companies, said Burt Flickinger, a consultant with Reach Marketing.

Indeed, the growing wave of bath and body competition may have contributed to the overall decline of mass-market cosmetics and fragrances in recent years, a P&G spokeswoman said.

But, she added, the new emphasis mass merchandisers and supermarkets are giving to bath and body departments "continues to make it more acceptable for the prestige consumer to look at mass," she said. "Obviously, there are more products at mass, and that means we need to have innovative, superior products so when the consumer comes to mass, they're going to be choosing us."

Still, P&G hasn't tailored specific products toward the new bath and body sections.


Rival Unilever has taken a clear step toward the bath and body section with its Pond's facial skincare brand, which earlier this year got a new hand and body care line backed by $20 million to $25 million in marketing support and including such products as aromatherapy bath capsules and Peppermint foot lotion.

Ogilvy & Mather Worldwide, New York, is handling the advertising.

Mass-market retailers, however, appear reluctant to fill bath and body sections with the same old brand names. Although Kroger's section includes offerings from Dial Corp.'s Nature's Accent brand, Unilever's new Pond's products remain in the adjacent beauty aids aisle.

Ukrops has moved all its bar soaps into the bath and body section but relies on the specialty brands to create the department's identity.


The Dial launch of Nature's Accents -- soaps, gels, fragrances and candles -- was one of the first from a mainstream soap marketer, and the brand is now in more than 3,000 Kmart and Wal-Mart stores.

Dial launched its first print ads for the line from DDB Needham Worldwide, New York, in June issues of Cosmopolitan, Glamour, Mademoiselle, Seventeen and People.

Dial projects Nature's Accents will become a $70 million to $100 million brand by 2000.

And, with Freeman Cosmetics, whose strength lies primarily in its drugstore distribution, Dial is aiming to expand its bath and body potential. Drugstores have yet to jump on the bath and body boutique concept, but Freeman has introduced several offerings within the past year, including a line of botanical shampoos and aromatherapy products that could be easily adapted to the concept.


The Freeman acquisition "will really be able to strengthen our position in that natural personal-care segment," a Dial spokeswoman said, "and their expertise will help us grow Nature's Accents."

Freeman also has been an exception to the bath and body segment's low-budget marketing rule, backing its launch of new aromatherapy bath and body products last year with a $5 million to $7 million print ad campaign from WPA Communications, Santa Monica, Calif.

But Ukrops' Mr. Medina, who usually looks for strong marketing support from manufacturers, isn't sure the category needs much ad spending, at least not beyond ads in women's magazines.

"It doesn't take a lot to explain what [these products] do," he said, adding that a strong new-product pipeline, packaging and in-store marketing may be more important.

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