AI Virtual Try-Ons Target the $850 Billion Return Problem in Fashion
Fashion retailers are facing a crisis: in 2025, 19.3% of online retail sales—$849.9 billion—were returned, with Gen Z shoppers averaging eight returns per person. This trend, dubbed the industry’s “silent killer,” has driven brands to seek solutions. AI virtual try-on tools, now advanced enough to meaningfully impact margins, are emerging as a key answer.
Startups like Catches are leveraging generative AI to address the core issue of fit uncertainty, which accounts for most returns. The technology allows customers to visualize how clothes will drape and move on their bodies, reducing the likelihood of purchasing the wrong size. By simulating fabric physics and body interactions, these tools bridge the gap between online shopping and in-store experiences.
Early adopters, including luxury brand Amiri, are testing the technology to cut returns and improve conversion rates. Retailers are increasingly recognizing that AI isn’t just a convenience—it’s a financial necessity. With returns costing more to process than refunds, brands must act.
Catches’ Realistic Virtual Try-Ons Offer a New Fit Solution for Luxury Brands
Catches, a startup backed by LVMH’s Antoine Arnault, has developed a platform that creates “digital twins” of users to simulate how clothes will fit. Unlike earlier virtual try-on models that prioritized visual appeal over accuracy, Catches incorporates fabric physics and body movement to mimic real-world interactions. The tool, launched on Amiri’s website, aims to reduce returns by giving shoppers confidence in their purchases.
The startup’s approach hinges on a confluence of technologies, including Nvidia’s CUDA platform, which enables realistic visuals to run efficiently in the cloud. Voyce, Catches’ founder, argues that the timing is perfect: the cost of delivering high-quality virtual try-ons has dropped enough to justify investment. The platform’s potential to cut returns by 20-30 times is a major selling point for luxury brands, which can afford to lose less margin per sale.
However, Catches’ focus on high-end markets means it hasn’t yet quantified the exact impact on return rates. The startup’s success will depend on proving that its technology can consistently deliver results, even as competitors like ASOS and Zara experiment with similar tools.
Industry-Wide Shifts as AI and Policy Tactics Battle the Return Crisis
Beyond AI, retailers are testing hybrid strategies to tackle returns. Zara’s introduction of return fees and virtual try-ons helped protect margins, while ASOS partnered with AIUTA to offer size guidance across diverse body types. Shopify integrated Genlook’s AI tool to reduce sizing doubts, and tech giants like Amazon and Adobe are expanding virtual try-ons through their platforms.
These efforts signal a shift toward combining technology with policy to manage costs. The NRF highlights that 82% of consumers consider free returns essential, yet the financial burden is unsustainable. Brands like ASOS have seen profitability improve with reduced return rates, but the challenge remains: how to balance customer expectations with profitability.
While AI tools can minimize returns, they cannot replace the tactile experience of shopping. Analysts caution that AI is not a silver bullet. While it addresses fit, retailers must also focus on inventory management, fraud prevention, and customer targeting.
Conclusion
AI virtual try-ons are reshaping the fashion industry, offering a path to reduce returns and stabilize margins. Yet, their success hinges on proving their effectiveness and aligning with brand values. As the industry navigates this transformation, the tension between technological advancement and consumer expectations will determine which retailers thrive.
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