'Silent killers': How AI start-ups are trying to solve one of the retail industry's biggest problems
AI start-ups tackle retail's costly returns issue.

AI start-ups are increasingly addressing the retail industry's significant returns problem by offering virtual try-on technologies that allow customers to visualize clothing fit and style before purchasing. This innovation comes as online returns have surged, with the U.S. National Retail Federation reporting that 19.3% of online sales were returned in 2025, leading to substantial financial losses for retailers. Companies like Catches and ASOS are at the forefront of this shift, aiming to improve profitability through enhanced customer experiences and reduced return rates.
Key Takeaways
- 1.
Online returns accounted for 19.3% of sales in 2025, totaling $849.9 billion.
- 2.
Catches' platform projects a 10% increase in conversions for brands using its virtual try-on technology.
- 3.
ASOS reported a 160 basis point reduction in its returns rate through virtual try-ons.
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