The influence of AI on fashion: Addressing return challenges

Abstract

The fashion industry faces ongoing challenges driven by rapidly shifting consumer preferences and operational complexities. Among the most critical issues is the high rate of product returns, often fueled by “bracketing” behavior—where consumers purchase multiple sizes or styles with the intent to return most items. Nearly one-third of clothing purchases are returned, frequently resulting in waste rather than resale. This teaching case examines how artificial intelligence (AI) is being applied to mitigate return rates, enhance operational efficiency, and support sustainable practices. Through real-world examples from fashion tech providers and brands, students will explore the strategic use of AI in fashion retail and develop analytical skills to evaluate its impact on business performance and customer experience.