Costume company works with Snap Inc.

A bit of technology could help. For the first time, costume company Disguise Inc. is partnering with Snapchat owner Snap Inc. on an augmented-reality lens. The lens lets users try on costumes virtually and then order them directly from their phone. Snapchat users take a full-body photo and then browse Disguise’s Snapchat store for costumes. Users can “try on” using an AR filter that shows how the costume would look on their person.

Snapchat’s AR lenses have a history of going viral — the company only started baking in ecommerce this year — but technology is also increasingly considered a way to reduce purchase returns and the greenhouse-gas emissions that come with them. As ecommerce becomes more common, especially for clothing, “returning is a huge problem,” says Andrew Lipsman, an analyst specializing in retail at consultancy Insider Intelligence.

Returns equal 17% of retail sales

Last year, American shoppers returned $761 billion worth of goods, or nearly 17% of all retail sales, according to NRF. In ecommerce, where consumers don’t generally have the option of trying before they buy, return rates can exceed 20%.

The transportation and logistics industry is already the biggest contributor to carbon dioxide emissions in the U.S., accounting for 27% of total emissions in 2020. Fashion, too, has a big footprint, accounting for up to 10% of global carbon dioxide output — more than international flights and shipping combined. The more parcels sent back to merchants, the greater those emissions.

Snap may have helped normalize AR, but it’s far from alone in applying the technology to shopping. Canadian retailer Shopify also lets shoppers try things on virtually, and companies that include Amazon.com Inc. (No. 1 in the 2022 Digital Commerce 360 Top 1000 database), IKEA Group, and Walmart Inc. (No. 2) are experimenting with letting customers use AR shopping tools. For example, consumers can see how an armchair might look in their living rooms before buying.

AR makes consumers less likely to return products

Beyond making ecommerce more convenient, the efforts appear to have potential. Roughly two-thirds of consumers who used AR technology to guide their shopping decision were less likely to return their purchase. That’s according to a recent survey conducted by market research firm Alter Agents, which polled more than 4,000 shoppers in the US, the UK, France and Saudi Arabia. The survey didn’t specify which products participants bought. However, industry experts say virtual try-ons work best for cosmetics now, while apparel and furniture are still tricky.

Lipsman is among those skeptical about the technology’s readiness, particularly after he failed to find a suitable couch using AR. But embracing augmented reality is “directionally right” in the search for solutions that could reduce carbon emissions caused by frequent returns, he says. “In the long term, it could be significant if it becomes useful to consumers and if it becomes a normal and routine part of how they shop.”