Skin hydration is best locked in while the skin is still slightly damp, within two to three minutes of towel-drying. At this point the outer skin layer is permeable and occlusive ingredients in moisturiser can seal water in. Waiting until the skin is fully dry reduces effectiveness significantly.
For dry skin on the body, ceramide-based or shea butter creams applied while damp work better than light lotions. Fragrance in body moisturisers is a common cause of skin irritation. If you notice itching or redness, switching to a fragrance-free formulation is the first step.