When Joresa Blount worked as a corporate employee at Nordstrom, there was one seemingly unsolvable problem on everyone’s minds: returns. 

While Nordstrom’s brick and mortar locations had try-on rooms for shoppers, the growing number of people buying and returning products online led to difficulties tracking sales for the company’s bottom line – if a customer purchased the same t-shirt in two sizes with the intention of returning one of them, the system had no way of knowing and counted the purchase of two t-shirts as a sale. 

“There weren’t a lot of players at the time that were trying to solve the problem of retail returns,” Blount said. “It is part of the journey of delivery and getting a product to you that is both painful for the retailer and painful for the shopper. Nobody wants to deal with returns.”

Fashion as we know it today is sitting at an inflection point: the industry is basking in the rapid consumer adoption of e-commerce (which reached more than $1 trillion in sales in 2022 according to Comscore), allowing companies to sell more merchandise to more people all over the world. 

However, that same rapid adoption has exacerbated long-neglected issues in the fashion industry. Making clothing contributes more to global emissions than aviation and shipping combined, and the World Bank predicts global sales of clothing will increase by 65% in 2030. More than 75% of the textiles we wear in the U.S. end up in the landfill, according to the Environmental Protection Agency. 

The Los Angeles Business Journal spoke to founders of nascent fashion tech companies about how technology has worsened fashion’s sustainability image, and how technology can try to fix it.

Making e-commerce fashion-friendly

When Blount began thinking about the returns problem, her goal was to “create a SaaS product that is going to also be tackling the problem with returns – why people return, how do we reduce it, how do we keep things out of landfills, how do we help the retailers save money.”

Blount founded Burbank-based GoFlyy in 2019. The company is currently testing a software product that will allow consumers to receive two sizes of the same piece of clothing at a fraction of the cost without it being counted as a full purchase for the retailer. GoFlyy has worked with clothing rental platform Armoire, Cerritos-based fashion company Revolve Group, and even some floral brands on providing same-day delivery.

Returns don’t make the process of mitigating climate change easier – 15% to 30% of clothing bought online is returned, contributing to shipping emissions and preventing retailers from re-selling the item at full price.

To combat returns, Hollywood-based Ai.Fashion Inc. is taking a different approach. The company was cofounded in 2023 by artist and programmer Daniel Citron. Armed with $4.1 million in seed and accelerator money, the company is a combination of a modeling agency and generative AI fashion startup.

“Very rarely do you go to a website for clothing and be able to see products that are actually showcased in the sizing that fits for you,” Citron said. “And as a result, you often get the clothing and it doesn’t quite fit.”

The company scouts models that aren’t found at traditional modeling agencies – these are people who have disabilities, or different proportions, who live outside of model hubs like New York City or Los Angeles. After taking their measurements and photos, fashion brands can use AI to generate their products on these models instead of photographing every piece. 

“It’s cutting the costs pretty dramatically for those fashion brands over their traditional processes right now while also increasing their conversion because of the fact that they can just simply showcase to their customers their products in better and in different ways,” Citron said.

Jeans brand Levi Strauss & Co. came under fire in 2023 for announcing its partnership with Lalaland.ai, a company that creates AI fashion models. Levi claimed that the partnership would increase diversity by allowing shoppers to see how a piece of clothing could look on several different body types. Citron said Ai.Fashion is different because it uses real humans who receive credit and finances for their appearances. But the technology is still in its early stages and comes with its own risks.

“I think the hard part is that it really does come down to accuracy, if the clothing does not fit in the way that it should,” Citron said. “If it’s not an accurate representation of how that clothing is actually going to look or what the fabric is going to look like, then you run the risk of potentially increasing your return rate.” 

Scaling down production

Ramin Ahmari’s approach is different: just don’t make more clothes than needed. 

Ahmari founded Finesse, a downtown Los Angeles clothing brand in 2019. It has raised more than $56 million. The company uses artificial intelligence to determine what designs of clothing to create, whether it be leather micro shorts, fur-trimmed chaps or satin bustiers. Another algorithm determines how many of each piece to produce.

“To date, we have never discarded a garment because of overproduction,” Ahmari said. “I will say, that might get a little bit harder with scale.”

Unlike most fashion companies, Finesse doesn’t have a buying and merchandizing department sifting through white-label clothing items and ordering a specific amount. The company produces its clothes primarily in China, India and Turkey and recently opened a brick and mortar store in downtown L.A. at The Bloc.

“This industry is one of the worst polluters in the world because everyone is essentially just spray painting the market and hoping that something sells,” said Ahmari. “And if it sells, great, produce more of it, right? And that model is an incredibly wasteful model that is not just terrible for the environment, but it’s also just a bad business model.”

Of course, Finesse is still creating fashion that is built on the whims of trends. But it’s part of the growing wave of companies receiving venture funding to solve for the rapid adoption of e-commerce – Finesse has the fourth largest funding raise in the global fashion technology sector of all time, according to Pitchbook. And that niche is growing, receiving $82 million in venture funding. 

“If we want to talk about the things that end up in a landfill, (e-commerce) just contributes to this really evil cycle that can be hurtful in so many ways, financially, environmentally,” Blount said.