Returns are eating into fashion retailer profits, and the industry is reaching for a fix that sits at the intersection of AI and the fitting room. Virtual try-on kiosks are shifting from novelty into standard retail technology, with grocery giants and startups betting that a more accurate preview will convince shoppers to keep what they buy.
The stakes are concrete. The 2025 Retail Returns Landscape report from the National Retail Federation estimated 19.3% of online sales would be returned in 2025. Every one of those returns costs the retailer money.
How Virtual Try-On Technology Works
A virtual try-on lets a shopper see how an item of clothing would look on their own body before buying. Early experiments date to the 1990s, but the output was not realistic enough to be commercially viable, according to Photta.
AI has changed the math. The startup Catches claims it can now show users how pieces would look on them with “mirror-like realism,” per CNBC. That jump in fidelity is what makes the current wave of retail technology news feel different from previous attempts.
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Why It Matters for Retailer Margins
Returns are not just an inconvenience. They are a profit problem.
“Figuring out how to proactively use returns and then how to minimize them can be a meaningful driver of business and profitability,” Guggenheim Senior Managing Director Simeon Siegel told CNBC.
When a virtual try-on helps a shopper pick the right size the first time, the retailer avoids the warehouse labor, shipping cost and markdown risk tied to processing that return. That is the business case driving investment across technology in retail right now.
How Big the Virtual Try-On Market Is Getting
A 2024 market analysis from Grand View Research put concrete numbers on the opportunity.
“The global virtual try-on market size was valued at USD 9.2 billion in 2023 and is projected to grow from USD 18.1 billion in 2026 to USD 46.4 billion by 2030, at a CAGR of 26.4% from 2024 to 2030. The market in North America dominated with a revenue share of 31.0% in 2023.”
That compound growth rate reflects how quickly fashion brands and retailers are moving to deploy the technology in both apps and physical stores.
Where Virtual Try-On Kiosks Are Showing Up Now
The clearest sign the tech is leaving the lab is in-store deployment. UK supermarket chain Tesco, which owns the F&F clothing brand, recently rolled out an “F&F Clothing service hub” at its Sandhurst location that features a virtual fitting kiosk for customers to digitally try on the clothes.
The experimental offering will help the chain decide whether to expand the initiative. For anyone curious about where fitting rooms are headed, if it works, the kiosk could join self-checkout and smart carts as a standard fixture of the modern shopping trip.
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