The fashion and retail industries are undergoing significant transformation due to the rapid growth of artificial intelligence (AI), especially with the advent of 3D body scanning and avatar creation technology. By enabling customers to see how clothes fits their virtual self, these solutions enhance customization, increase fit precision, and lower the number of returns for products. The virtual shopping experience is further improved by combining the use of AI with augmented reality (AR) and virtual reality (VR), allowing for interactive, real-time try-ons. According to recent study, there is a lot of interest in using AI for virtual fashion. Systems that offer contact-free measurements, realistic avatar creation, and mobile-based scanning are available. On the basis of unique body data, generative AI also helps designers create personalized ensembles. While customers and fashion designers alike gain from these developments, problems including data privacy, scanner precision, and system cost continue to prevent widespread application. Despite these problems, the technology has revolutionary potential. It supports sustainable fashion methods, improves client involvement, and fits completely with new digital commerce models like the Metaverse. Overall, by developing more intelligent, engaging, and user-friendly retail experiences, AI-driven body scanning and avatar technologies are pushing the path of personalized online shopping.