Solving Fashion's $849 Billion Problem: AI Puts You In The Dress

Fashion e-commerce has a hidden killer: returns. The U.S. National Retail Federation estimated that 15.8% of annual retail sales were returned in 2025, totaling $849.9 billion. For online sales, that number jumped to 19.3%. Gen Z is driving this trend, with shoppers aged 18 to 30 averaging nearly eight online returns per person last year.

Goog solved search. Amazon solved logistics. Now AI is solving the "will this fit?" question.

The Technology is Actually Sophisticated

Catches has developed a platform that allows users to create a "digital twin" to try on clothes virtually with what it calls "mirror-like realism." Unlike other models that Voyce says "just look pretty," the Catches platform incorporates the physics of fabric texture and how material interacts with a moving body.

The Market Validation

Shopify has integrated startup Genlook's AI virtual try-on app into its commerce platform, which it says "removes sizing doubts, boosts buyer confidence and drives higher conversion rates while reducing costly returns." Catches projects that its app can drive a 10% increase in conversions and a 20- to 30-times return on investment for brand partners. It focuses on luxury brands because of their higher price point. The startup hasn't yet put a number on how much returns might decline with the use of its platform, but targets "massive reductions."

Giant Companies Are Moving

Tech giants like Amazon, Adobe, and Google have also created virtual try-ons in various shapes and forms, partnering with major brands to roll out the technology. From April 30, Google's virtual try-on tech can be accessed directly within product search results across Google platforms.

My Take: Virtual try-on is the perfect enterprise AI application: narrow domain, massive economic incentive ($850B in annual waste), defensible technology (physics simulation + digital twins), and immediate ROI measurement. Unlike autonomous vehicles or general-purpose robots, you know within 30 days if the technology works (did conversion rates go up? did returns go down?). The startups (Catches, Genlook) are winning because they moved fast and focused; the giants are winning because they have scale and distribution. This is what the boring, profitable AI economy looks like.

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