Skip to main content

​
Understanding Virtual Try-On ROI

ROI (Return on Investment) measures the financial benefit of virtual try-on compared to its cost. Most stores see 5-10x ROI within the first month.

​
ROI Formula

ROI = (Total Benefit - Total Cost) / Total Cost × 100
Example:
  • Total Benefit: $5,000
  • Total Cost: $500
  • ROI: (5,000−5,000 - 500) / $500 × 100 = 900% ROI (or 9x return)
Even conservative estimates typically show 500-1000% ROI (5-10x return) for virtual try-on.

​
Components of ROI

​
Total Benefit

1. Increased Revenue from Conversion Lift 2. Cost Savings from Reduced Returns 3. Increased Average Order Value 4. Improved Customer Lifetime Value

​
Total Cost

1. Looksy Subscription (99−99-169/month) 2. Implementation Time (minimal, usually 1-2 hours) 3. Ongoing Management (minimal, 1-2 hours/month)

​
Step-by-Step ROI Calculation

​
Step 1: Calculate Revenue Impact

Formula: 
Revenue Impact = (Orders with Try-On - Expected Orders without Try-On) × AOV
Example calculation: Your store metrics:
  • Monthly product page visitors: 10,000
  • Baseline conversion rate: 2% (without try-on)
  • Try-on engagement rate: 35% (3,500 use try-on)
  • Try-on conversion rate: 3% (25% lift)
  • Average order value: $75
Orders without try-on:
  • Non-try-on visitors: 6,500
  • Expected orders: 6,500 × 2% = 130 orders
Orders with try-on:
  • Try-on users: 3,500
  • Orders: 3,500 × 3% = 105 orders
Total orders: 130 + 105 = 235 orders Baseline orders (without feature): 10,000 × 2% = 200 orders Additional orders: 235 - 200 = 35 orders Revenue impact: 35 × 75=∗∗75 = **2,625/month**
Use your Looksy dashboard to get actual conversion rate lift instead of estimating.

​
Step 2: Calculate Return Reduction Savings

Formula: 
Return Savings = Returns Prevented × (Cost per Return)
Example calculation: Your store metrics:
  • Monthly orders: 235
  • Baseline return rate: 25%
  • Return rate with try-on: 18% (28% reduction)
  • Cost per return: $20 (shipping + processing + devaluation)
Returns without try-on:
  • Expected returns: 235 × 25% = 59 returns
Returns with try-on:
  • Try-on orders: 105
  • Returns: 105 × 18% = 19 returns
  • Non-try-on orders: 130
  • Returns: 130 × 25% = 33 returns
  • Total returns: 52 returns
Returns prevented: 59 - 52 = 7 returns Cost savings: 7 × 20=∗∗20 = **140/month**

​
Step 3: Calculate Total Benefit

Total Benefit = Revenue Impact + Return Savings
              = $2,625 + $140
              = $2,765/month

​
Step 4: Calculate Total Cost

Looksy subscription: $29/month (Starter plan) One-time setup:
  • Implementation time: 1 hour @ 50/hour=50/hour = 50
  • Amortized over 12 months: 50/12=50 / 12 = 4.17/month
Monthly management:
  • Monitoring and optimization: 1 hour @ 50/hour=50/hour = 50/month
Total monthly cost: 99+99 + 4.17 + 50=∗∗50 = **153.17/month**
Most stores don’t count internal time as a cost since setup is minimal. This calculation is conservative.

​
Step 5: Calculate ROI

ROI = ($2,765 - $153.17) / $153.17 × 100
    = $2,611.83 / $153.17 × 100
    = 1,705% ROI (or 17x return)
Annual impact:
  • Monthly profit: $2,611.83
  • Annual profit: 2,611.83×12=∗∗2,611.83 × 12 = **31,342/year**

​
ROI Calculator Template

​
Use This Spreadsheet Formula

Inputs:
  • A1: Monthly visitors
  • A2: Baseline conversion rate (%)
  • A3: Try-on engagement rate (%)
  • A4: Conversion rate lift (%)
  • A5: Average order value ($)
  • A6: Baseline return rate (%)
  • A7: Return rate reduction (%)
  • A8: Cost per return ($)
  • A9: Monthly Looksy cost ($)
Calculations: Additional orders per month: 
=(A1 * A3 * (A2 * (1 + A4))) - (A1 * A2)
Revenue impact: 
=Additional_Orders * A5
Returns prevented: 
=(A1 * A2 * A6) - (A1 * A2 * (A6 * (1 - A7)))
Return savings: 
=Returns_Prevented * A8
Total benefit: 
=Revenue_Impact + Return_Savings
ROI: 
=(Total_Benefit - A9) / A9 * 100
Download our ROI calculator spreadsheet from the Looksy dashboard for easy calculation.

​
ROI by Store Size

​
Small Store (< 10K monthly visitors)

Typical metrics:
  • Visitors: 5,000/month
  • Baseline conversion: 2%
  • Try-on lift: 15%
  • AOV: $60
  • Looksy cost: $29/month
Typical ROI: 500-800% (5-8x) Monthly profit: 400−400-700 Annual profit: 4,800−4,800-8,400

​
Mid-Size Store (10K-50K monthly visitors)

Typical metrics:
  • Visitors: 25,000/month
  • Baseline conversion: 2.5%
  • Try-on lift: 18%
  • AOV: $75
  • Looksy cost: $79/month
Typical ROI: 800-1,200% (8-12x) Monthly profit: 2,000−2,000-3,000 Annual profit: 24,000−24,000-36,000

​
Large Store (50K+ monthly visitors)

Typical metrics:
  • Visitors: 100,000/month
  • Baseline conversion: 3%
  • Try-on lift: 20%
  • AOV: $85
  • Looksy cost: $169/month
Typical ROI: 1,000-1,500% (10-15x) Monthly profit: 5,000−5,000-7,500 Annual profit: 60,000−60,000-90,000
Virtual try-on typically becomes more profitable as store size increases due to fixed costs.

​
Hidden Benefits (Not in ROI Calculation)

Beyond direct financial ROI, virtual try-on provides:

​
Brand Perception

  • Innovation signal: Shows you’re a modern, tech-forward brand
  • Customer experience: Differentiates from competitors
  • Trust building: Demonstrates commitment to customer satisfaction
Value: Hard to quantify, but significant for brand building

​
Marketing Content

  • Social sharing: Customers share try-on results
  • User-generated content: Real customers using your products
  • Viral potential: Unique feature worth talking about
Value: Free marketing and word-of-mouth

​
Customer Data

  • Engagement insights: Which products generate most interest
  • Preference data: What styles resonate with customers
  • Behavioral patterns: How customers interact with products
Value: Informs product development and inventory decisions

​
Competitive Advantage

  • First-mover advantage: Many competitors don’t offer try-on yet
  • Barrier to switching: Customers prefer stores with try-on
  • Market positioning: Premium, innovative brand perception
Value: Increased market share and customer loyalty

​
Improving Your ROI

​
Strategies to Maximize Returns

Current: 30% engagement Target: 45% engagementHow:
  • Optimize button placement (above the fold)
  • Make button more prominent (larger, contrasting color)
  • Add messaging: “See it on you in seconds”
  • Promote feature on homepage and emails
Impact: 50% more try-ons → 50% more additional revenue
Current: 50 products enabled Target: 200 products enabledHow:
  • Enable entire collections at once
  • Focus on products with good images
  • Test new categories (activewear, outerwear)
Impact: 4x more products → 2-3x more revenue (not all products perform equally)
Current: Mixed image quality Target: All images meet standardsHow:
  • Audit product images for quality
  • Re-shoot or edit low-quality images
  • Remove busy backgrounds
  • Improve lighting
Impact: 10-20% higher conversion rate on improved products
Current: Lower mobile engagement than desktop Target: Equal or higher mobile engagementHow:
  • Use sticky mobile button
  • Ensure fast mobile page speed
  • Simplify mobile upload flow
  • Test on real devices
Impact: 20-30% more try-ons from mobile (70% of traffic)
Current: Passive discovery Target: Active promotionHow:
  • Homepage banner: “Try clothes on virtually”
  • Email campaigns featuring try-on
  • Social media posts demonstrating feature
  • Abandoned cart emails: “Still unsure? Try On”
Impact: 20-40% increase in awareness and usage

​
Payback Period

​
How Long Until You Break Even?

Typical payback period: Less than 1 month Example:
  • Looksy cost: $29/month
  • Monthly benefit: $2,765
  • Monthly profit: $2,666
Payback time: 99/99 / 2,765 (daily benefit) = 1.1 days
Most stores recover their investment in the first week, then profit for the rest of the month.

​
Long-Term ROI

​
Compounding Benefits Over Time

Month 1-3: Initial impact
  • Immediate conversion lift
  • Return reduction starts
  • ROI: 5-8x
Month 4-6: Optimization
  • Higher engagement as awareness grows
  • Better product selection
  • Improved images
  • ROI: 8-12x
Month 7-12: Maturity
  • Expanded product coverage
  • Refined strategy
  • Customer expectations set
  • ROI: 10-15x
Year 2+: Long-term value
  • Competitive advantage solidified
  • Customer loyalty increased
  • Brand perception improved
  • ROI continues growing

​
Reporting ROI to Stakeholders

​
Monthly ROI Report Template

Executive Summary:
  • Total ROI: X%
  • Monthly profit: $X
  • Projected annual impact: $X
Key Metrics:
  • Try-on engagement: X%
  • Conversion rate lift: X%
  • Additional orders: X
  • Revenue impact: $X
  • Return reduction: X%
  • Cost savings: $X
Trends:
  • Month-over-month growth
  • Top performing products
  • Optimization opportunities
Recommendations:
  • Actions to increase ROI
  • Products to enable next
  • Marketing initiatives
Use Looksy’s automated monthly report feature to generate this report automatically.

​
Common ROI Questions

Possible causes:
  • Low engagement (button not visible)
  • Poor image quality (inaccurate results)
  • Small sample size (wait longer for data)
  • Low baseline conversion (try-on can’t fix other issues)
Solution: Review optimization strategies above and implement improvements.
Yes, use the formulas above with estimated metrics. Most stores see 15-20% conversion lift and 20-30% return reduction. Use conservative estimates.
ROI may be higher during peak seasons (holidays, back-to-school) due to increased traffic and higher purchase intent. Track ROI by season for accurate comparison.
It depends on your accounting. For ROI presented to executives, include all costs. For quick calculations, you can exclude minimal internal time.

​
Next Steps

ROI Calculator Tool

Use our interactive ROI calculator

Dashboard Overview

Track your actual ROI in real-time

Increase Conversions

Strategies to maximize revenue impact

Case Studies

See real merchant ROI examples