AI transforms online shopping by reducing costly clothing returns through innovative sizing tools and warehouse automation.
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The booming e-commerce industry faces a growing challenge: high return rates on clothing purchases.
Consumers frequently order multiple sizes or styles, try them at home, and return most of their selections—a practice known as “bracketing.”
According to a 2024 McKinsey study, up to 30 percent of online fashion purchases are returned, with each package costing between $21 and $46 in shipping, processing, and resale preparation.
These costs severely impact profit margins and sustainability efforts.
To combat this issue, online shopping giants are turning to artificial intelligence (AI) to minimize returns and improve the shopping experience.
AI-powered solutions—including innovative sizing tools, automated warehouse management, and inventory tracking—are effective strategies for reducing return rates and operational inefficiencies.
AI-Powered Sizing Tools Help Shoppers Find the Perfect Fit
One of the leading causes of returns is incorrect sizing, accounting for 70 percent of all fashion returns. AI-driven sizing tools are emerging as a key solution to this problem.
French-based startup Fringuant has developed an AI-powered algorithm that predicts the best clothing size for a shopper based on a quick selfie, height, and weight data.
The company’s CEO, Zoe Tournant, explains how their system works:
“With the selfie, we detect age and gender, which helps refine the image of the customer’s body fed into our AI model. Within seconds, the system determines whether a jumper will fit perfectly on the shoulders or if there may be a sizing issue around the hips for trousers.”
The company, which works with 20 fashion brands, including luxury label Maje, claims its technology has significantly reduced client return rates.
Retail giants are also investing in similar AI tools.
Zalando, a German e-commerce leader, acquired Swiss startup Fision in 2020 to enhance its size-prediction capabilities.
Since July 2023, Zalando has introduced an AI-driven sizing tool that asks shoppers to take two full-body photos in fitted clothing.
The AI then matches the customer’s body shape with garment specifications to recommend the most accurate size.
By providing customers with personalized, data-driven size recommendations, retailers aim to reduce the need for bracketing, save costs, and improve customer satisfaction.
AI Improves Order Accuracy and Warehouse Efficiency
Beyond sizing, AI is critical in order fulfilment and warehouse operations, another major factor in return rates.
Incorrect shipments—wrong sizes, colours, or items—lead to costly returns that AI is now helping to prevent.
At ID Logistics, an AI-powered system is transforming warehouse management.
The company’s smart cameras, embedded in warehouse trolleys, instantly verify whether the correct item, colour, and size have been picked before shipment.
If a mistake is detected, the system alerts the worker immediately, preventing incorrect shipments before they even leave the facility.
“In less than two years, this camera technology has reduced incorrect shipments by 90 percent,” says Ludovic Lamaud, Director of Development and Innovation at ID Logistics.
Additionally, autonomous AI-driven robots are being used for inventory management.
These robots scan warehouse shelves overnight, processing between 6,000 and 30,000 pallets per session, ensuring accurate stock levels.
This prevents stock mismatches and order errors, further reducing unnecessary returns.
“The right stock prevents preparation errors and therefore returns,” Lamaud emphasizes, highlighting how AI is revolutionizing inventory control in e-commerce logistics.
Consumer Benefits: How AI Enhances the Online Shopping Experience
While AI-driven solutions provide cost savings for retailers, they also greatly benefit consumers by making online shopping more convenient and reliable.
- Fewer Frustrating Returns – Shoppers no longer need to order multiple sizes, leading to less hassle and faster purchases.
- Improved Confidence in Online Shopping – Accurate AI-based recommendations reduce the uncertainty of buying clothes online.
- Better Fit, Better Comfort – More precise size matches mean fewer disappointments and a higher chance of purchase satisfaction.
- Faster Shipping and Fewer Delays – AI improves order accuracy and inventory tracking, meaning fewer mix-ups and quicker deliveries.
Challenges and Limitations of AI in E-Commerce
Despite its potential, AI-driven sizing and logistics technologies still face challenges.
- Privacy Concerns – AI-powered sizing tools require shoppers to upload body images, raising questions about data security and personal privacy.
- Accuracy Limitations – AI improves sizing predictions but cannot fully account for fabric stretch, personal fit preferences, or brand variations. Some customers may still experience sizing mismatches.
- High Implementation Costs – Small and mid-sized retailers may struggle to afford AI-driven solutions, as initial investments in AI training models and warehouse automation can be costly.
“AI has helped us reduce returns significantly, improving our margins and customer experience,” says a senior executive from a major online retailer. “But it is not a perfect system. Fit preferences vary, and we must still address how brands interpret sizing differently.”
The Future of AI in Online Shopping
The integration of AI into e-commerce operations is transforming how retailers and consumers approach online fashion shopping.
By enhancing size accuracy, improving warehouse logistics, and reducing human error, AI is improving the online retail experience.
However, as technology continues to evolve, retailers will need to balance innovation with consumer trust.
Addressing privacy concerns, improving AI’s ability to predict personal fit preferences, and making these solutions accessible to smaller businesses will ensure AI’s long-term success in reducing returns.
For now, the message is clear: AI is no longer a futuristic concept—it is actively redefining how we shop online, reducing waste, and making fashion retail brighter than ever before.
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