The Interview: COCOON co-founder and CEO Ceanne Fernandes-Wong
With social events firmly back on the agenda for the summer, a boom in fashion rental is expected. Post lockdown consumers have changed their habits and are looking for ways to enjoy fashion (and their new-found freedoms) while respecting their planet and their bank balances. Born just before the pandemic struck in 2019 by Ceanne Fernandes-Wong, COCOON is aiming revolutionise how we consume luxury handbags with a flexible membership model that allows its community to rent out a rotating line-up of the latest styles from Chanel to Dior, Gucci and more.
Fernandes-Wong is an expert in the field of resale and rental (and handbags), with a CV that takes in senior roles at YNAP's off-price site The Outnet and at luxury resale giant Vestiaire Collective. She tells us what it has been like running the business during the pandemic, why she believes the subscription model is the right route for her business and her ambitions plans for growth.
You have a very interesting background in online and fashion taking in names such as The Outnet and Vestiaire Collective to name just a couple. Was it always in the game plan to eventually set up your own enterprise?
Yes, from very early on in my career it was always my goal. In terms of my background, I’d worked in the industry for years and knew that the excess and consumption path that the fashion industry was on wasn’t where I wanted to be. The continuous cycle to produce more and sell more doesn’t align to my personal values. After spending a few years working in the pre-owned space, I decided to build on that experience and educate myself, so I did a course in sustainability. The aim was to take that knowledge and combine it with my previous experience in fashion-tech. I was introduced to my co-founder Matt Heiman just as he was really starting to formulate the idea for COCOON. It was immediately something I was interested in given my background in disruptive fashion-tech businesses and interest in sustainability. The rest is history!
Your career has always had a slant on technology and sustainability, so it’s probably no surprise that that’s what your own business had at its core, but it’s a very interesting business model, can you explain it to us please?
We’re building THE go-to platform for handbag subscription, leading the revolution for how people access, purchase and resell luxury bags. With our 360-circular approach, we want to reduce the environmental and societal impact of unnecessary fashion consumption while empowering women to look and feel their best with access to over 35 brands including Prada, Fendi and Gucci.
In terms of our subscription model, we offer three different membership plans to choose from. Additionally, customers can also purchase the styles they can't live without or sell their pre-loved luxury bags directly to COCOON in exchange for membership credit.
What was it about the subscription model that felt so right for the luxury handbag space? Rather than, say, ad hoc rentals?
Subscription is powerful in that we’re able to build deeper ongoing relationships through multiple touchpoints with our members over time and we use this information to guide business decisions. With subscription, versus a one-time option, our members get to think of our collection as an extension of their wardrobes. Whether a work bag or a holiday tote, it’s a smarter way to tap into variety.
You are dropping new product on the site (be it vintage or new season) all the time to keep the offer fresh, where are the bags sourced from?
The collection includes new season styles, forever classics, and limited-edition vintage bags from the best luxury brands. We have a variety of supply relationships in place with different partners so that we can source the best bags for our members. We look forward to working with bigger fashion players in new ways in the future and we are excited about some of the conversations we are currently having.
At the beginning, how did you go about establishing a customer base for the service?
Initially the focus was building a strong product and membership experience, then tapping into industry insiders and gatekeepers who were key in helping us to develop trust, and then from there, building on that through a mix of channels, including great press, strong influencers and advocates and a strong social presence.
What makes a successful business is the combination of a great idea, killer execution and great timing. We’re seeing evolving attitudes towards access and ownership, and consumers are looking for more responsible, less wasteful ways to enjoy fashion. Despite our size, we’ve been able to play a significant role in the mindset shift in the space we operate in, and this is something we’re very proud of.
Can you give us some insight into typical customer behaviour, if there is such a thing? Do customers tend to gravitate towards the same brand, do they like to mix things up, are they renting for everyday use or special occasions for instance?
Our members range in age from 18 to 65, however almost 60% of our members are young millennials aged 25-34. They are savvy and informed - they appreciate the incredible selection, convenience and value that COCOON offers. Deluxe membership is our most popular plan, offering access to the full COCOON collection, with styles valued up to £3k.
We find that members get more adventurous over time, as they become comfortable with the service and realise the benefits of being able to experiment with different brands and styles whenever they want. They enjoy having the option to tap into the latest trends or try something out of their comfort zone. With social calendars in full swing, we’re seeing about 25% of our members swapping for a new style weekly.
Have you found that customers rent a bag from a brand and then go on to buy into that brand for a new product?
Absolutely, a COCOON membership is a great way to “test drive” bags you might be interested in purchasing, so that you can make a much more informed investment decision. We have an amazing range of brands and styles in the collection, and we can understand when a member falls for a style and doesn’t want to part ways.
You have a resale service on the site, was that there from the start or was it introduced due to demand from customers?
Yes, members and non-members can inquire about purchasing anything in the COCOON collection and this was an option from day one. Members can also shop the COCOON ReSale edit of classic, vintage and limited edition vintage bags that you would be hard-pressed to find anywhere else. We’ve expanded our ReSale offer in line with customer demand as our business has grown. COCOON is truly THE go-to destination for all of your handbag needs.
You set the business up in 2019 and then obviously the pandemic struck, what were the challenges for you getting a start-up established at that particular time?
Understandably, each lockdown affected bag needs. Challenges came from all angles, but we remained operational throughout and we were able to accommodate our members’ shifting priorities.
We hit the ground running when we launched, so the pandemic gave us an opportunity to pause and put pen to paper (digitally) on all the ideas that we had bouncing around. It was an innovative time and we worked on several new initiatives, and emerged with a much better business proposition and experience for our members. Additionally with our subscription model, recurring subscription revenue meant that we were able to continue to grow the platform throughout the pandemic.
With the easing of various lockdowns, we saw a huge spike in engagement with members (both new and long-standing) swapping much more frequently with all of their changing bag needs. The growth we’ve seen shows us how much the desire for circular recommerce models is continuing to increase and our current focus is keeping up with demand while continuing to offer our members the best quality and standard of experience.
Events are set to be back with a vengeance this summer, as is travel, I imagine this must be set to spark a further boom in rental for you?
Absolutely. We’ve seen growing demand for clutch and evening bags in line with spring wedding season, and we’ve also noticed a spike in beach totes and basket bags as members prepare for summer holidays and city breaks. That’s the beauty of our diverse and growing collection, we have styles available for any and every occasion.
The UK does seem to have been blazing a trail in the rental space at the moment, why do you think so many interesting start-ups are coming from this country?
UK consumers are becoming more comfortable with the idea of a ‘divided wardrobe’, made up of items that you purchase new, and items that you acquire through circular recommerce models. The pandemic has only accelerated this thinking – consumers have had time to rethink their wardrobe needs as well as their relationship with what they own vs access. They have become increasingly savvy about how they spend their money, and interested in sustainable consumer opportunities and living out their values.
More so than ever, the desire for handbags in the circular space - where consumers can tap into a wide range of brands and styles in a more sustainable way and without the significant financial outlay of a new bag - is a no-brainer.
Would you consider adding different product to the site or will you be sticking with bags for the foreseeable future?
Focusing on luxury handbags allows us to be experts in the space, and we’re able to provide leadership and direction so our members can browse with full confidence in our edit. Plus, our members aren’t asking for other categories - they’re asking for more bags! We have an ambitious growth strategy for the next 5-10 years, including, at some point, international expansion.
Ceanne Fernandes-Wong was a speaker at this week's Retail Week Live event in London.