Fashion Retailers Embrace AI Virtual Try-On Technology to Cut Returns Fashion retailers are increasingly integrating AI-powered virtual try-on tools into their digital strategies to address the persistent issue of high product return rates, according to a report by CNBC published on April 5, 2026. The shift is driven by the need to reduce the financial burden of returns, which have long been a significant challenge for the industry. Startups such as Catches, along with major platforms like Shopify and Google, are leveraging generative AI and advanced fabric physics simulations to create realistic virtual fitting experiences for customers. These tools aim to bridge the gap between online shopping and in-store try-ons by allowing shoppers to visualize how garments would fit and look on their bodies without physically purchasing the item. The National Retail Federation (NRF) reported that in 2025, approximately 15.8% of retail sales—amounting to $849.9 billion—were attributed to returns. This figure highlights the scale of the problem, as returns not only incur direct costs for retailers but also strain supply chains and logistics operations. By offering virtual try-on capabilities, retailers hope to mitigate these issues by increasing customer confidence in their purchases. The technology simulates how clothing items would drape, stretch, and move on a virtual avatar, taking into account factors such as body shape, posture, and fabric properties. This level of realism is achieved through generative AI models trained on vast datasets of human body measurements and material behaviors. The adoption of these tools is part of a broader trend toward digital innovation in retail.#national_retail_federation #cnbc #shopify #fashion_retailers #ai_virtual_try_on
