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Nuuly, the Urban Outfitters-owned clothing rental market, has become a favorite of Gen Z and millennial shoppers. Under the "NuulyHaul" hashtag on TikTok, there are nearly 12,000 videos showcasing monthly hauls of the platform’s more than 25,000 items.
According to Urban Outfitter’s recent earnings report from May, Nuuly has 380,000 active subscribers. And in Q1 FY2026, Nuuly’s customer base grew by 53% year-over-year (roughly 40,000 new customers), helping the platform increase revenue by 60% to $124.4 million.
With its customer base steadily growing, Kim Gallagher, Nuuly’s executive director of marketing and customer success, and her team are able to use real-time insights, such as customer feedback and popular product searches, to inform larger company decisions.
“What we find is it really creates alignment across the company on where we need to focus,” she said. “We sit together and we prioritize initiatives in a data-based way of where we think our focus should be.”
Product discovery
Gallagher’s team stays in tune with customer pain points through customer surveys and focus groups. One of those pain points? Discoverability.
“We started to talk to customers to get a better sense of what they mean when they say, ‘what I want isn’t available,’” she said. “What we learned is that some product is more important than others, like having an occasion dress available might be more important than something that you could trade a little bit more easily, like a pair of shorts, but also that the customer was saying availability. Sometimes it was because we weren’t doing everything we could to make sure that she was seeing all the product that we have.”
Gallagher’s team used this insight to establish Nuuly’s “shops,” landing pages that focus on a specific type of clothing, like for a wedding or travel.
Faster returns
Nuuly subscribers can place their next order once the previous order has been returned. Gallagher said her team saw a lag in communication once returns were received, which ate away time in a customer’s subscription. With these insights, Nuuly developed a new feature that enabled faster communication, and faster orders.
“Utilization of that feature is so high,” Gallagher said. “It probably sounds like a crazy feature if you’re not a renter, but it was so intuitive to people. I was even surprised at how high the adoption was, but I think that just goes to show that really focusing on things that are very specific pain points in your business can have a pretty big effect.”
Customer retention
Pausing or canceling a subscription isn’t uncommon for Nuuly users and is often due to a customer’s finances or travel schedule. Gallagher said the majority of customers resubscribe, so her team wanted to make cancellation easy.
“We really wanted to make sure that was not a friction point because nobody likes when it’s a pain to cancel a subscription. You will never go back.” Gallagher said. “People really do come back to Nuuly because [cancellation is] not an issue. But there’s certain times a year where the business slows down, so summer is one of those times. We see this every year when people go on vacations.”
While Nuuly deals with a lot of seasonality, it hasn’t impacted growth.
“Q1 is really high, Q2 generally slows down, Q3 goes up again, and then holiday is actually not as busy for us as retail,” she continued. “We pick up a lot in January, so we have a little bit of a seasonal nuance, but year over year, we’re still seeing great growth.”