Subscriptions have been around in one form or other since newspapers and milkmen began offering their services – probably long before. However, the model has changed dramatically over the years and along with it the average subscriber profile. 28% of UK customers consider it important for an online retailer to offer a subscription service. Today we look at Cocoon, a London-based circular high-end bag subscription service and their use of the subscriptions business model.
You can learn more about Cocoon in the RetailX Podcast, and more about the subscriptions market in our latest SubX Subscriptions Report 2023.
Cocoon’s membership models include monthly, quarterly or flexible, enabling members to swap bags at different times, make fewer or increased swaps, or keep bags for anything from a week up to three months. Different bags have different values, so the membership options adjust accordingly.
Designer handbags are durable, well made and designed to last. How do you differentiate yourself when everything is increasing so much? For us, the focus is less on price point, but more on quality, and desirability. And so we have purposely focused on brands that we know will last.
One main focus for the company is longevity. We have a very strict set of rules around what types of bags we purchase, what we don’t, and what we don’t include in our collection and what fabrics we avoid because we’re thinking about how we have longevity. Cocoon has continued to be successful because as a brand we’ve remained focused.
– Ceanne Fernandes-Wong, co-founder, Cocoon speaking on RetailX podcast
Cocoon subscriptions cost £79 for premium membership and £99 for deluxe membership. Premium membership gives you access to bags up to £1,500. “So in a year, if you’re changing every month you’re looking at access to roughly £25k worth of handbags.” Deluxe membership gives the customer access to high-end bags worth from £1,500 to £3,500.
Turnaround time on rentals is key to the business model, so one of the company’s core KPIs is its utilisation rate. Cocoon owns all the bags on its books and once a bag has been rented and returned, it is closely inspected to ensure that it is the same one that was sent out. Its condition is assessed against existing photographs and it is cleaned ready to be rented again.
Part of the reason for doing handbags was their universal nature. You can be someone whose size changes over their 20s, 30s and 40s, and you can be whatever gender you want. A bag is a bag.
– Ceanne Fernandes-Wong, co-founder, Cocoon
