27-year-old organic bedding retailer Coyuchi is not new to retail. But over the past few years it has increasingly focused on e-commerce, CEO Eileen Mockus told Internet Retailer at the National Retailer Federation 2019 conference in New York City.
Those efforts have paid off: E-commerce is now “hands down the dominant channel of the business,” she said.
However, this hasn’t always been the case. When Mockus took over as CEO in 2013, wholesale was the main portion of the business, she said. She focused on growing the company’s e-commerce business, which launched in 2011.
Besides consumer shopping habits shifting more online, Coyuchi wanted to be in control of its brand messaging. Rather than relying on a sales clerk or a limited amount of space on its packaging, Coyuchi can explain what makes its products better online, Mockus said.
Today, online sales via Coyuchi.com represent 70% of its annual business, Mockus said. The remaining 30% is via its one store in Point Reyes Station, California, wholesale partners, including Bloomingdales and small boutiques, and online sellers, including wedding registry site Zola, home furnishings giant Wayfair (No. 13 in the Internet Retailer 2018 Top 1000) and Amazon (No. 1).
Coyuchi’s products are sourced and made of organic cotton, and it works to follow fair trade and global organic textile standards. Its website outlines Coyuchi’s values, environmental and social initiatives, standards and certifications, and production. It also has a blog to tell its brand story.
The retailer also maintains consistent pricing across all of its channels so as not to cut off any growth, she said.
Store sales are still an important part of the Coyuchi business, and the online business helps support the stores, she said. “A customer walks into a store knowing Coyuchi, versus in the past having to tell our story on our behalf,” Mockus said.
Coyuchi’s total sales have been linear throughout its lifetime, and that growth is now driven by e-commerce. “We have very strong stable year-over-year growth,” Mockus said. “If we were a traditional retailer, they would be kissing the ground we walked on, but we are not.”
Competition in online bedding
Over the past few years, several digitally native, vertically integrated bed sheet retailers have launched including Brooklinen (No. 489) and Boll & Branch.
Coyuchi works to differentiate itself by touting its longevity and experience in the category and selling more than bed sheets. Mockus said shoppers want to find a brand they love and trust and continue shopping with them, instead of finding all of those products across different sites.
Coyuchi sells 1,200 SKUs of textiles including mattresses, duvet covers, quilts, blankets, baby bedding, towels, shower curtains, bathroom rugs, table linens, throw pillows and even apparel. “We want to provide that complete solution,” Mockus said.
Coyuchi’s revenue is evenly spread out across the categories, she said, but a shopper’s first purchase is typically sheets or towels.
“We don’t look at shoppers and think we got to sell them a sheet set, we want to sell them the brand,” Mockus said.
Coyuchi’s average basket online is 1.5 items. Because Coyuchi’s products are higher end, and shoppers don’t update these products often, Mockus benchmarks its success with average lifetime value (which she said is high) compared with repeat order rates.
“In terms of lifetime value, we want to see the customer coming back,” Mockus said. “We know you don’t necessarily buy home textiles every year. If we look at it year over year, we are all right, but if we look at it over several years, it gets better every year. And that is an advantage of having that track record for such a long time.”
Because shoppers may not need to reorder textiles frequently but may like to buy something new, the retailer introduced a new subscription program called “Coyuchi for Life” in 2017. Shoppers buy sheets or towels at about 15% off and pay in installments for a period of time they select, such as six months, one year or two years. At the end of that period, shoppers return the product and buy another one. Depending on the condition of the returned product, Coyuchi may restore and then resell the used products in its store at 40% off the original or recycle the material to then make new products.
While sheets and towels may not be the standard items for a subscription service, Mockus said this helps satisfy a shopper’s want for something new. The program has so far been a success with a high customer retention rate and customer feedback, Mockus said without revealing more. It is looking to expand its assortment.
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