Nuuly does it: How technology is weaving sustainability into the future of retail
Matt A.V. Chaban
Senior Editor, Transform
Urban Outfitter’s rental business, Nuuly, shows how being cloud-first also means being sustainability-first, with the agility and insights going green requires.
They say black never goes out of style. It’s something the team at Nuuly, URBN’s digital rental and resale business, know well. And it’s not just true of the company’s garments but their gadgets, too.
“I was having an offhand conversation with a UX designer recently,” Rebecca Sandercock, Nuuly’s strategy and insights manager, recalled in a recent interview from the company’s sunny, South Philly headquarters. “The designer was talking about how we had chosen dark mode for a number of interfaces internally because it actually saves so much on electrical output. They had the data to back that decision up, but more importantly, it’s just the kind of thing everyone is thinking about all the time here.”
Of course most every business is thinking about sustainability in some way these days. What makes Nuuly stand out is how quickly it can act, thanks in large part to the technology platform that’s made the entire enterprise possible.
“We’re kind of sustainable by our very nature,” Kim Gallagher, Nuuly’s director of marketing and customer success, said.
While she meant the rental and resale business, which helps customers buy fewer clothes and sees Nuuly items worn many times by many people—Gallagher could just as well have been referring to the sustainability inherent in, and enabled by, cloud computing.
There are the obvious, and oft-cited, advantages, such as how centralized data centers can operate more efficiently (some have been carbon neutral since the beginning). Yet there are even more subtle yet substantial benefits. In a marketplace and climate that are both changing faster and faster, sustainability requires a certain amount of agility. Such adaptability and scalability are intrinsic to the cloud technology that threads its way throughout Nuuly.
It turns out that being cloud native also means being sustainability native—as well as growth native. Since its 2019 launch, Nuuly’s net sales have risen roughly 6x over the first three fiscal years.
Cloud fits any situation
When URBN was developing Nuuly—launching in just 10 months—it chose to create everything from scratch on Google Cloud. Despite being part of a larger organization with decades of history and expertise, the company recognized the limitations presented by legacy systems and, more importantly, the necessity of building a wholly new platform that could be fully responsive.
The company has to react not only to new fashion trends but, crucially, the changing behaviors of customers. And not just their evolving tastes but also shopping habits, delivery preferences, unexpected customer service requests—is this a pattern, or a stain?—and social media chatter.
The pressure for a successful launch was high. The URBN portfolio, which also includes Urban Outfitters, Anthropologie, and Free People, had to keep evolving to satisfy a new generation of shopper who exists in an increasingly crowded and demanding digital marketplace.
The cloud’s responsiveness has thus proven its worth in creating a financially sustainable business as well as an environmentally sustainable one. Those even go hand in hand, as Gallagher points out: “Every customer who keeps renting is one who isn’t buying more occasion-specific clothes that go unworn most of the time.”
Dr. Alan Rosenwinkel, director of data science at URBN, had heard from his team about one garment that has become an emblem for the power of the platform. “It had been rented 25 different times before someone loved it enough to buy it and keep it forever,” he explained. (It’s also an emblem of the power of the cloud, that they would have the data awareness to track a single item so closely.)
It’s a new way of shopping made possible by a new way of computing. As one writer for Business Insider cheered, Nuuly “completely cured my addiction to fast-fashion.”
It makes for a healthy business, too. Sales for fiscal year 2019 exceeded $8 million and surpassed $24 million in 2020—one of the few URBN segments to grow during a tough year for fashion—and reached $47 million in 2021. The subscriber base had grown to 51,000 at the end of January.
Agility drives sustainability drives agility
For digital retailers to achieve such customer enthusiasm often relies as much on how the clothes get there as how they look. And those deliveries turn out to be a prime example of where Nuuly’s sustainability and technology meet.
For now, all shipping is handled through a state-of-the-art distribution center in Bucks County on the Philadelphia outskirts. Garments are shipped six-at-a-time, in fully reusable packaging, using ground transportation to keep the carbon footprint to a minimum. In certain limited geographic areas, shipments were sometimes taking longer than the two to five days most members would find acceptable.
“If we were an older company or weren’t set up from a technology perspective to be agile, we might have just said, ‘All right, we’re going to just go to three-day shipping for everyone,’” Rosenwinkel said. “That would drive up the cost, and the environmental impact. But we were able to be more strategic and more targeted about it.”
By regularly analyzing customer sentiment and retention data through BigQuery and Cloud Composer, and tying those to historical shipping times, Nuuly has been able to understand how shipping speed impacts its customers. Using a custom-built order management system, deliveries can be automatically adjusted to arrive more quickly, particularly when certain regions or days of the week are proving difficult to reach customers in time. These accelerated deliveries, like all Nuuly shipments, are made via UPS’s Carbon Offset program.
“Because we have the data, and the platforms to analyze it all,” Rosenwinkel said, “we’re delivering faster with the bare minimum impact on cost and emissions.”
It’s just one example of how modern retailers must juggle so many demands from consumers, workers, suppliers, and even regulators. Adding sustainability to that mix could be seen as a burden, but Nuuly shows how the right technology can lead to a holistic approach that makes all those interests work together even better.
And it allows for more opportunities and more kinds of sustainability, reaching from the designer’s atelier to the customer’s doorstep.
Sustainable details at every level
Back at the distribution center, workers can experience sustainability in a different way, as data is leveraged to enhance their well-being.
All workers are equipped with customized Android devices that help guide order tracking and fulfillment, plus cleaning, repairs, and reselling of garments as needs change throughout their lifecycle. Yet the insights go even deeper. The data science team has closely analyzed routes and repetitive motions for workers to keep their strenuous jobs as low-impact as the company’s broader environmental footprint.
“Through machine learning, we estimate we’ll be able to save our workers over 300,000 miles of steps over a five year period,” Rosenwinkel said. That’s enough walking to circumnavigate the globe 12.5 times.
The company has also applied ingenuity to one of the most notorious aspects of digital retail: packaging. Made from 100% post-consumer recycled materials like plastic bottles, Nuuly’s reusable carriers require no disposable bags or hangers to send goods back and forth. And once the packages have reached their end of life, the team is working with designers on ways to repurpose them into items that can then be offered for rental or sale on Nuuly.
“We’re really looking at the circular economy from every angle,” Gallagher said. “It’s built into the business.”
That includes not just the research the team did on-site at the Dry Cleaning & Laundry Institute—”We went to laundry school,” Gallagher jokes—but the digital tools that take those lessons even further. The team is always looking for ways to optimize fabric care, both to cut down on chemicals and water usage and extend the life of a garment. By analyzing the lifespan of every item, Nuuly not only makes them last longer but can identify problems faster. Employees even use custom apps to mark stains and damage so repair teams can more easily identify and fix the issues.
With its meticulous inventory tracking, Nuuly can even take marginal items, like a white gown or jeans with a small stain, and turn them into a custom dye job or an upcycling opportunity with a partner. These reworked items are then inserted back into the Nuuly Rent inventory as part of a growing collection of one-of-a-kind pieces, called Re_Nuuly.
Other services have launched quickly and easily thanks to the company’s cloud-enabled backend. Wanting to encourage more community and more reuse, the company created Nuuly Thrift. Debuting last fall after just a year in development, the team built everything from new interfaces to an evolved point of sale system.
It’s enabled Nuuly to offer many garments for rent or sale simultaneously, with “truly real-time inventories,” Rosenwinkel said. “So when it’s gone on one site, it shows up as gone on every site—no more surprises.”
Except for the good kind.
“I like to think we’re helping our customers think about ownership in a completely new way,” Sandercock said. “Once they run out of a use for a garment, they can offer it back, and sell it, and someone else will get to enjoy it and give it a new life. And Nuuly, we get to keep it in the community and keep it in the ecosystem, which is really cool—we’re taking extended responsibility over what happens to the clothing we create.”