Selling Feeling Over Features: How Coyuchi Converts AI Search Traffic into Premium Buyers

0:00The initial UGC got amazing click-through rates, but then someone got to the website and it was pure sticker shock. What started as a boutique for sustainable home goods has exploded into Koyuchi, a multi-million dollar organic home and lifestyle empire defined by premium bedding and closed loop circular design. Acquisition via LLMs is our literal fastest growing channel of customer acquisition. Today, Koyuchi's president breaks down exactly how she transitioned a heritage 90s brand into a digital powerhouse using new channels and the future of agentic strategies. Vicky, welcome. Thanks so much, Adam.

0:39Thanks for having me. This brand's been around quite a while. Yes. It feels very modern and new age, but the history goes back to 1991. Correct. So how did this get started? Koyuchi was founded in 1991, basically on this premise of having organic textiles. And it was before the word organic was mainstream in any way. And it was before there was even any certifications for what organic really means. So our founder was down in Mexico. She was a weaver herself and enjoyed going down to Mexico and seeing other women weave. It's where she found a special strain of cotton that is more brown in color than what we think of as traditional sort of white cotton.

1:22And they had an Aztec name for that type of cotton, and it was called Coyuchi cotton, or the translation is coyote cotton, apparently. So that was her sort of inspiration to start this brand. But it really started from a place of loving weaving and wanting to use organic fibers for two reasons. One, because it felt like the most natural way of weaving. It's what she was observing down in Mexico. But two, her passion back then was really around the earth and saving the earth and water savings in particular. And so by definition, organic farming, whether it's your food or your textiles, you're not putting any chemicals or pesticides into the crop, nor are you putting it anywhere into any of the product, which means you don't then need water to wash it all off.

2:10So she started from a passionate place of water, but that has obviously grown and everyone has started to realize the actual health benefits beyond helping the earth, just the health benefits of using organic materials, eating organic foods. And it's something that Koyushi has been doing for 35 years. Yeah. And I would say that this idea of having organic bedding, sustainable bedding, I mean, it's relatively in vogue now, but we're sitting here in 2026. Back in the 90s, it would have been hard to generate the kind of traction that you would need as a business. So what was the first 10 years like?

2:47She had a store in a little town outside of San Francisco called Point Ray Station, where she sold these goods that were crafted around the world. But really, that first customer was someone that they themselves were obsessed and researching organic. The key, though, was that the products were super high quality and they would wear beautifully because they were natural. So instead of having something that had a chemical dye or a chemical finish that made it seem soft that then washed off, you know, after five washes, this was a product with staying power. And so it just started to get really local traction.

3:26And then for the first not only 10 but 20 years of the company essentially was a wholesale business. So Koyuchi was in boutiques all around San Francisco and then started to go more nationwide, landing eventually in places like ABC Home and Carpet in New York City. And then it started to be carried by some of the luxury retailers. So Bloomingdale's and, you know, Saks, etc. And so it was a very, no pun intended, organic growth via, you know, that one store in Point Reyes station and wholesale accounts for its first 20 years of life. Talk to me a little bit about the link between GOT certification and Koyuchi and what it actually means to be GOT certified.

4:10Good question. So people throw around the word organic quite a bit. And there are different forms of organic. There's also things that we might hear in the market like Okotex as something that shows that something is safe. So when something is certified organic, which again, this came years after Koyuchi actually existed, it truly means that there is no harsh chemicals and no pesticides anywhere throughout the process. And it's something that is difficult to do, actually, but it differs from something like Okotex that says, okay, you have your fibers, you made your product. We are going to test it at the end and make sure that it doesn't have anything harmful in it.

4:52But it doesn't mean that those chemicals and chemical processing weren't used all along the way, that the pesticides weren't used in the farms, that, you know, is not helping with biodiversity. So when something has got certified organic, which all of Koichi's products are, it means there's no pesticides from the fields all the way through the entire production process. There's no harsh chemicals entering that process. And so in the end, you have an actual certifiable organic product. How educated is the customer in this regard, specifically around bedding? When I meet someone today, the first thing they say to me is, I understand why my strawberries should be organic, but why does it matter if my bedding is organic?

5:33They knew the harmful impacts of non-organic and of pesticides in our environment. I don't even know if they knew about the harmful impact of it on their skin. I think we had a very environmentally conscious consumer initially, and that consumer has stayed with Koyuchi. I have to say I've worked at many, many brands. Customer retention is always something that I study and this company has the strongest customer retention I've seen of any brand I've ever worked for. Beyond that, when we fast forward to now and where we are today and kind of the rebirth and rejuvenation, the answer to your question is no.

6:09People don't understand why or if they should be sleeping on organic sheets. We focus a lot more these days on storytelling and helping a customer understand how they want to feel and helping a customer understand the downstream impacts and the benefits of organic. So we talked to her about what she cares about, whether it's breathability, whether it's having a super soft experience, whether it's something that is going to be high quality and it's going to last for generations. we hook her with the outcome of organic and then later explain how we get there. And the reason we're able to deliver on this promise is because these are organic sheets or organic towels.

6:51So today it's a little bit more education, but it's paying off because it's allowing us to get outside of that smaller bubble of humans that happen to already know why they should be sleeping on organic textiles. In an industry that I would think is pretty hyper-tactile in that customers want to touch, see, feel bedding before they purchase it. That's the stuff they're going to be sleeping in, obviously. How do you communicate that online? So we have transitioned to now e-commerce is over 80 % of our revenue. We still have that one store in Point Reyes Station with a lovely group of women working there.

7:29And then we're still in 200 plus actually specialty retailers across the country. But again, e-commerce is where we do the majority of our sales, the vast majority. So for us, you brought up the tactile experience. It's been a lot of explaining how this thing might feel. And so we will use as descriptive language as we can. So we will talk about our flannel as it's like cashmere for your bed because it truly is that soft. or we'll talk about our sateen sheets as petal-like softness. And we'll show you a visual of that rose petal so you can get a sense of what should I expect. I think we've built a lot of trust, which has been exciting.

8:11We launched our first mattress two years ago. And many of us had trepidation around this because we were like, okay, it's one thing to not be able to touch a sheet. It's another thing to not be able to lay down and test out a mattress. But I think because of the trust we had built, It's done amazing. I mean, we did over a million dollars on that mattress just in our first year and have since launched a second mattress. That's fantastic. Also, you had a couple of trailblazers already in the mix with mattresses that probably paved the way for this industry. And I would say reduced the risk of launching into this category, not knowing how customers would behave.

8:46Yeah, it was super helpful. And I think for us, the risk was just we are textiles. And so can we sell a mattress that feels like something that, of course, it's related, but it's something that we had never done before. You came to Koyuchi after gigs at Girlfriend Collective, Parachute, Amex. The list is long. We won't touch on all of them. It's varied, yeah. But how did you come to Koyuchi and what skills have you brought over? My former mentors called and said, you know, we have an opportunity at Koyuchi and we think that you're the right fit. And so that's what sort of brought me over to Koyuchi.

9:25But the opportunity was, I think, twofold. It was one to really give new life and new birth to this brand that had been around for 35 years and really, again, introduce it to the modern consumer. And then obviously just a little bit of like inserting some operational excellence into the building. So it just felt like there was an opportunity to really turn things around and grow something, even though it wasn't from scratch. It was like a rebirth of the brand. You've said before that data can inform who your customer is or who the ideal client profile or ICP is, but empathy is going to be why they actually purchase.

10:02So how do you garner or manufacture empathy strategically when you're thinking about customer acquisition? It's a little bit of storytelling, honestly, is where it comes from and really connecting with the customer and what he or she is feeling in that moment. Right. So it might be that they want to feel like they're having just this luxurious, magical experience. Right. So when I think about meta creative testing, you know, one of our key headlines is just 100 percent organic French linen. That's it. Like, and so that headline in and of itself, it exudes this feeling in a customer that is, yes, like, I want that.

10:46Whatever that is, it sounds serene. It sounds luxurious. It sounds amazing. So that might work. But a different thing that might work in terms of empathy is, you know, the safest way for your baby to sleep, right? So I think when it comes to empathy, it's just meeting the customer where they are and a little bit of, you know, projecting what they might want to feel and connecting with them on that, on those terms. So I can say to you, we sell organic bedsheets. It's probably not going to do it for you, right? But if I talk to you about having the most restorative rest or having towels that are going to keep your skin clean after your clean skincare, that's a different kind of message.

11:31And that's how we bring that empathy and all the way forward. I think you would need to have these messages so dialed in because it's such a premium price product. You can't just hang your hat on organic. or comfortable, right? You have to create this list of features that bring the customer to a point where they're happy to spend that money, right? Because you're not, I mean, you're not shying away from the price. You're out there. You're saying we are a premium brand. This is where we play. Yeah. So customers who are spending that kind of money, they got to understand. Yeah. Right? Honestly, that's where a lot of customer testimonials come into place.

12:07Things like that you just read. Like I've had these things for 10 years. I've had these towels for 10 years. I've had these sheets for 10 years. But no, we can't shy away. I think there was a point when I first joined Koyuchi where there was a lot of UGC that was in our medic campaigns, right? And we still have a lot of UGC and it's working very well for us. But that's because we've taken a different approach to the UGC. But the initial UGC was around like, look how cute these sheets are. And it got amazing click-through rates because the sheets were cute. But then someone got to the website and it was pure sticker shock.

12:41Like, wait, what? These sheets that you just told me were so cute cost$678, right? So it was an instant bounce. And so now that's where, you know, we don't shy away from the premium quality that we're delivering. We don't shy away from telling you that it's not easy to deliver a certified organic product. We're doing it from the most authentic place that we can. But again, we're talking to you about the benefits. It's do you want to wake up restored? Do you want to not be inhaling microplastics when you're sleeping? Do you want to be treating your skin in a way where it's not absorbing any chemicals at all?

13:22And something that's beautifully aesthetic and is going to last. And that lasting softness is another big part of this. Again, like if you've ever gotten amazing towels that feel so soft, slippery even, And maybe like they don't dry you off. And then 10 washes later, they feel like sandpaper. That was an artificial chemical softener put on there. When you just have organic cotton, it will be soft. And then it will get softer with every single wash. And so that's the storytelling that we have to do in UGC and elsewhere to really help people understand. Earlier this year, there was a big partnership announcement between Apple and Google.

13:56Google Gemini now is Apple's default search and discovery AI tool. So how has that changed the search and discovery process for you, thinking about customer acquisition, thinking about narrative, storytelling, brand positioning? So for us, we have noticed that, you know, acquisition via LLMs, whether, you know, ChatGPT, Claude, whatever you want to say, is our literal fastest growing channel of customer acquisition when we ask in our how did you hear about a survey. So fastest growing by far. I think it starts with a strong baseline. And again, this is where Koyuchi has had an advantage because we've been around a long time.

14:40And for better or for worse, we've been very single note. And so we had a lot of organic and natural baseline that we could leverage when AI and LLMs came onto the scene, right? Because we legitimately had been written up numerous, numerous, numerous times about having the best organic textiles in the home market. So that works for our advantage. So these tools are pulling from existing content that was already in the ecosystem. Existing content that's been out there for years, which has been amazing for us. Now, we obviously have to keep it up because this is on everyone else's radar. So we have a lovely PR and affiliate team that we're working with, and they do a really nice job of saying, you know, there's this, this, this opportunity, but these two are really highly cited by LLM.

15:24So, you know, especially if it's something like they want a free$4 ,000 mattress. It's like, okay, should we do that? If it's highly cited by an LLM, we'll go ahead and we'll do it. I literally approved one this morning. So that's one way of like keeping it going. You have to keep feeding the beast, for lack of a better word. So that's one thing. AEO or any other acronym that you want to use for it that has to do with AI is not all that different from SEO. AEO being? Agentic. Agentic. Yes. Engine optimization. Okay. Instead of SEO, which is search engine optimization. And there's like a thousand other acronyms out there for it.

16:01Sure. But it really isn't that dissimilar to SEO. So technical things on the back end, things like having the right schema set up so that, you know, these LLMs can read what's on your website and understand what you sell, what the description is, what the benefit is, what are the frequently asked questions and what are the answers. There's a lot of just sort of tactical and technical setup that you should find a way to get an audit done of your site. And we've done that. We've had quite a handful of audits done on our site. And so we're consistently implementing new things on the back end just to make sure that our site is fully readable by LLMs and all of these agentic engines.

16:46So it's a journey for sure. And I think much like SEO, it's not a one and done process. I think we just learned of a new type of schema that's come out that we're going to start populating and making sure that our site is set up properly so that it can be read. And it's just really about discovery. But we're not yet at a place where we're thinking of these channels as direct paid acquisition. This is more of a flooding the content sort of a strategy. I think it is still content. You know, chat GBT ads are on the scene. This is very recent. Very recent. We are not live. So it's something we'll explore over time.

17:28But I think, yeah, for now, it's much, much more of a content play and then just making sure that your site is set up properly. This is a really big paradigm shift. I think beyond what people even realize. Like the idea that now AI sits between brand and consumer. It's not Google search that, I mean, it is, but it isn't. It's these AI, these LLMs that are sitting in between. This is, I would think, a massive departure from how consumers have been engaging and searching and discovering brands online. Oh, for sure. I mean, I expect five years from now. If I look at our marketing spend, right, it is no secret that the vast majority of it is going to meta and to Google.

18:13And if I fast forward out five years, I do expect that a very substantial amount of spend will have shifted into what we think of now as AI ads, right? Just to show up where the consumer is, I think more and more the consumer is landing there. They're interacting with Gemini. They're interacting in ChatGPT. They're sourcing information there. And so it does just make sense for a brand to be present at the place that someone is looking for information. It's no different, right, than what has been happening and what we're used to for the last 20 years, which is I'm looking for information on Google.

18:50So let me make sure that my brand shows up on Google. So if someone says, I want really soft, healthy, sustainable sheets, Koyuchi shows up. Well, if they say that in ChatGPT, we want to show up there as well. What about Reddit? How do you think about Reddit? Is that a place where you are grabbing and eliciting customer feedback? Is it a place where you can actually acquire customers? How do you think about the channel? It's a new thing for us. So I talked about our, how did you hear about a survey? And, you know, we have all the usual suspects there, including actually we had chat GPT, LLMs, whatever, as a bucket.

19:31And we see the growth happening there. But then we have like other. And when we looked at people who were checking the other category, more than anything else, they were talking about Reddit, of a place that they had discovered Koyuchi. And we're not, we are not active on Reddit. And so we were like, oh, wow, okay, we should really start to pay attention here. And so going back to customer retention, being a strong suit of Koyuchi's, it's worked to our benefit because what we found is that there were people talking about us in Reddit when, you know, there's a subreddit around betting and someone says, what are the best sheets out there?

20:05We had numerous customers that were promoting us. And so that was wonderful and felt very good. But it did lead us to say, well, maybe we should consider that as another advertising channel. So we're dipping our toes in Reddit now, seeing really positive response around just being present with ads in your most traditional like advertising sense. But I think a conversation we've been having is how much can we or should we be participating in the conversation that's happening there? I think, you know, authenticity is one of our core values. So we never want to come off as like the pushy salesperson in Reddit.

20:41But I do think where I see a future for us is in the education, right? Because greenwashing is a thing in many, many sectors, but bedding is one of them. And so I think there might be an opportunity for us to participate via educational, you know, did you know content on Reddit in very relevant conversations if people are really looking to have that healthy lifestyle and make sure that they're not bringing toxins. into their home. Do you have people internally from the team that are in Reddit monitoring this activity? Not yet. And so that's the thing that we're really thinking about staffing into.

21:21We have a monitoring tool. And so inevitably, we get these pings of like, you know, Koyuchi is trending. Koyuchi is trending. And literally nine and a half times out of 10, the place where it's trending is on Reddit. So it feels like it's someplace that would make sense for us to, again, just participate in the conversation beyond just the ads. that we are running right now. I just wanted to ask you quickly about the Full Circle Blanket Initiative. Yeah. Talk to me a little bit about that. I mentioned our second home renewed program where consumers, again, can send their products back into Koyuchi and then we find a second home for them.

21:57Well, not all products are quite in the best shape where they can find a second home and where we can resell them. And so one of the key benefits of not only organic materials, but what we refer to as single source sort of non-blended materials, if you have a cotton sweater, right, is you can literally take that cotton sweater apart and then you can sew it into something new. And so that's actually the case with Koyuchi products because they are not blends. They're a single source organic cotton. We can take the fibers out and make them into something new. And so we did that with a full circle blanket.

22:33So we used all of the products that had been sent back into Koyuchi that couldn't be resold. Maybe they had a stain or they had, you know, something that made them not resellable, took them apart and turned them into a net new blanket, which is pretty cool. And then something else we did that I thought was fun was we had quilts that were sitting in our second home renewed warehouse. So people had set in back quilts or sometimes we'll get a quilt that, you know, might have a slight defect from the manufacturer so we can't sell it. And so it goes to the second home program. And we were sitting on this stack of quilts.

23:05They were our Manzanita quilt. And I was like, guys, what if we made a quilted jacket out of these? Like, yeah, we can resell them as quilts, but there's a lot of them. Like, what if we did something different with them? And so we found a designer in New York, her name's Batsheva, and we literally sent her quilts. We sent her shams, sent her some sheets for lining and all from our second home program. And she made like 65 quilted, unique quilted jackets out of those quilts. So we are always looking for things that can be done with these materials, keeping them out of landfill and even those that can't really go into and be resold.

23:46So if anyone has ideas, we're all ears. What's it been like for you personally working for a brand that has this broader mission of sustainability, truly organic products being manufactured that have real staying power? Do you feel personally aligned more so than you have in the past with what you've been working on? For sure. I mean, honestly, even when I came to Koyuchi, I didn't necessarily know why I should be buying organic sheets, right? And I think one of the key things was that it was a big opportunity when I came to the brand was the actual marketing and beyond the marketing in terms of messaging, because we've talked about helping someone understand what this is feeling like, what the tactile sensation is.

24:27It was making people understand that this could also be extremely beautiful. I think that when the brand of, you know, however many years back was hyper focused on organic, it was about saving water and saving the earth. and the visuals were a little bit of an afterthought. It also was a wholesale brand for, again, 20 years. And so, you know, a little bit of my background coming from Amex, coming from Girlfriend, coming from Parachute was sometimes pictures tell a thousand words. And if we can just make this visually look as luxurious as the product truly is, that could be the unlock to growing this brand.

25:09And so I joined Cuyucci two and a half years ago And the way that we've transformed the visual representation of the brand is something that I'm super proud of. We already had amazing products. Like I didn't have to worry about that part. It was really like the marketing of it all that was the key unlock to growing the brand. So I think for me, it's been personally fulfilling to come and have like a little road of that like turnaround story of taking a brand that's been around for 35 years and making it feel hip and modern again. And again, the fact that we're acquiring customers all the way from 18 to 65 years old is amazing.

25:50So it's a feel good moment for me in my career. Let's talk a little bit about customer retention, which you said you've never seen this kind of retention in any D2C brand before. I saw some customers talking about and bragging about how they've had the same sets of sheets for north of 10 years. That's wild, first of all. Is it a double-edged sword because they're buying sheets once that last 10 to 15 years? And so ultimately, you'd want them to rebuy sheets and repurchase? Yeah, that can be tricky. Totally. I mean, first of all, you're dealing with sheets and towels, which someone doesn't need to buy every month to begin with, right?