Online fashion retailers are increasingly using artificial intelligence to tackle the costly issue of clothing returns, with up to 30% of purchases being sent back due to sizing problems. A study by McKinsey estimates that each return costs between$21 and$46, significantly affecting profit margins. Many customers order multiple sizes and return those that don't fit, creating logistical headaches for retailers.

To address this, companies are adopting AI-driven sizing tools. French start-up Fringuant, for instance, uses an algorithm that analyses a shopper's height, weight, and a quick selfie to predict the best size. Zalando, a German e-commerce giant, has also implemented its own AI-powered tool that guides customers by comparing their body shape with garment dimensions. These technologies are already helping some brands reduce return rates significantly.

Beyond sizing, AI is also improving warehouse operations to prevent shipping mistakes. Smart cameras on order pickers' trolleys at logistics firms help ensure the right product is selected, while AI-equipped robots track stock levels, reducing errors that lead to returns. As online shopping continues to grow, retailers hope these innovations will streamline processes and boost efficiency.