- Fashion Nova sparked outrage after it sent customers an alert encouraging them to spend their stimulus checks on its site.
- The move came a day before new data showed that an unprecedented 22 million people filed for unemployment benefits in the last month.
- However, the attempt to bring in sales might not be surprising considering the fact that retail sales in the U.S. dropped by 8.7% in March, with clothing stores specifically seeing a 50.5% drop.
- While Americans can choose to spend their stimulus checks however they please, early data shows that most are using it on basics like food and gas.
Fast-fashion retailer Fashion Nova was slammed by Twitter users Wednesday after sending email and text alerts that encouraged people to spend their government-issued stimulus checks on its latest sale.
Many of the company’s loyal customers who have signed up for notifications received an alert that reads: “When That Stimulus Deposit Hits…Save Up To 80% OFF SITEWIDE. Use Code: STAYIN80. Shop ASAP.”
That message left several customers stunned, with many taking to Twitter to remind the brand that they have bills and other more important things to buy amid the coronavirus pandemic. Some also took issue with Fashion Nova using the code ‘stay in,’ saying it felt like the company was mocking a situation in which people have died.
For many, the alert seemed pretty surprising since Fashion Nova is one of many retailers that has show support to those financially suffering. Earlier this month the brand teamed up with Cardi B to donated $1,000 every hour until May 20, for a total of $1 million.
At the time, founder and CEO Richard Saghian said in a press release, “We all feel compassion and concern for those affected by the coronavirus.”
“Fashion Nova Cares with Cardi B will provide people with necessary relief to help them get through this crisis. As a community-driven brand, we are inspired by the kindness and generosity of others and we wanted to do our part to help those in need.”
US Retail Sales Drop by Record 8.7% in March
However, Fashion Nova’s new marketing strategy might not actually be too surprising considering the fact that so many retail stores across the country are struggling.
The Commerce Department released new data Wednesday showing that U.S. retail sales have plunged by 8.7% between February and March. That’s the biggest monthly decline since the government started tracking in 1992, according to CNBC.
A more specific breakdown of the data showed that some retail sectors actually saw a surge, such as grocery stores, online retailers like Amazon, pharmacies, and places that sell essential items.
Meanwhile, clothing and accessory retailers took the hardest hit, dropping in sales by 50.5%. Others that saw major drops include furniture stores, motor vehicle and parts dealers, gas stations, and electronics stores.
22 Million File for Unemployment
Strict stay at home measures across the country have of course played a huge role in the sales decline since so many businesses have been forced to close their doors. But on top of that, consumers have generally pulled back on unnecessary spending during a time of unprecedented layoffs.
The U.S. Department of Labor announced Thursday that 5.2 million people filed for unemployment benefits last week. That means that in just one month, over 22 million workers have filed for unemployment.
As far as weeks go, the new data shows a slight decline compared to the 6.6 million claims filed last week and the 6.9 million filed the week before. Still, even if the peak of layoffs is behind us, the country is still in uncharted waters with these incredibly high numbers.
Before the coronavirus outbreak, the highest number of new unemployment claims in a week was about 700,000 back in 1982. The largest number of people asking for unemployment benefits over a four-week stretch was 2.7 million that same year.
And according to The Washington Post, job losses in the past month have erased nearly all of the 22.8 million jobs gained from February 2010 to February 2020 during the rebound from the Great Recession.
Economists have noted that claims are surging, at least in part, because more people like gig economy workers and independent contractors are covered for unemployment benefits under the CARES Act.
But at the same time, economists say the numbers could be even higher than they look on the surface. That’s because state labor departments have become totally overwhelmed by the volume of claims and some people have reported being unable to get help over the phone or online.
What Are People Spending Stimulus Checks On?
So given those unemployment figures, it clear why so many people were frustrated by Fashion Nova’s alert during this sensitive time for millions of people.
But at the same time, the strategy might have actually brought the brand in some much-needed business. In fact, some internet users signaled that the deals may have been too good for them to pass up.
Whatever people choose to spend their stimulus checks on is their choice, but of course because of tough circumstances, many are wisely choosing to use it on essentials. Early evidence indicates that many Americans are using the money to buy the basics, including food and gas.
Netspend, which processed nearly $1 billion in relief payments by Monday, said its customers are using the government money “for groceries, fast food, pharmacies and gas, as well as withdrawing cash from ATMs.” It also said that more than half of the transactions were PIN-based at ATMs or grocery stores, and about a quarter were done online.
Meanwhile, data compiled by the digital banking service Current found that members who received stimulus payments over the past five days spent 16% of the money on food including takeout and delivery. An additional 14% went to money transfers, 10% went toward gas, 9% was spent on groceries.
Of course, these are all early reports, but for those who have managed to get their hands on their stimulus checks, the money has already provided some desperately needed relief.
See what others are saying: (CNBC) (InStyle) (Business Insider)
Target Joins Walmart in Offering Free College Tuition To Attract and Retain Workers
The decision makes Target the latest major company to dangle such incentives before employees, joining the likes of Walmart, Chipotle, and Starbucks.
Target Launches Debt-Free Education Asssitance Program
Target announced new employee perks on Wednesday that it likely hopes will help attract and retain workers.
Starting this fall, Target will cover the cost of tuition, fees, and textbooks for both part-time and full-time workers who pursue degrees or certificates at more than 40 participating institutions.
Employees will have at least 250 different business-aligned programs to choose from, including Business, Computer Science, Design, and more.
Target will also fund advanced degrees, paying up to $10,000 each year for master’s programs at those schools, and it’s offering up to 5,250 for those pursuing non-master’s degrees or business-aligned programs at one of the select schools.
The company said it plans to invest a total of $200 million in the education program over the next four years, and employees in the U.S. will qualify as soon as their first day.
“Target employs team members at every life stage and helps our team learn, develop and build their skills, whether they’re with us for a year or a career. A significant number of our hourly team members build their careers at Target, and we know many would like to pursue additional education opportunities. We don’t want the cost to be a barrier for anyone, and that’s where Target can step in to make education accessible for everyone,” said Melissa Kremer, Target’s Chief Human Resources Officer.
Companies With Similar Perks
Places like Chipotle and Starbucks have already had similar education programs in place, but more companies have been introducing or expanding on similar policies as businesses across the country struggle to find and retain workers amid the coronavirus pandemic.
Just last week, Walmart announced that it will cover the full cost of college tuition and books for itsemployees, after previously requiring them to pay $1 a day for the assistance. Those workers can now select from around 10 academic partners.
While many have applauded these actions from big corporations, others have noted that it makes it tougher for smaller businesses to compete since they don’t have the same resources at their disposal.
There is some concern about how this could change the business landscape in the future as a handful of large companies dominate in their own sectors and siphon a lot of the talent, forcing smaller competitors to close. Still, others argue that this was already happening. At least now, the big players are investing and support their workforce while doing it.
Tencent Stock Plummet as Company Weighs Video Games Ban for Kids in China
The world’s largest game developer appears fearful that the Chinese government will launch another crackdown on gaming similar to one it launched in 2019 when it limited game time for minors.
No More Video Games
Tencent Holdings, Ltd. — China’s most valuable corporation and the world’s largest gaming company — announced Tuesday that it would consider completely banning games for those under 12-years-old in China.
Tencent also announced that it will now limit playtime for Chinese minors to just 1 hour during weekdays and no more than 2 hours during weekends and holidays. Under a Chinese law set up in 2019, game developers are required to limit minors to just 1 hour and 30 minutes of playtime during weekdays and 3 hours during weekends and holidays.
Additionally, the company explained that it will move forward with plans to enact systems that bar those under 12 from engaging in microtransactions, starting with the largest mobile game, “Honor of Kings” (王者荣耀). It’s possible the ban will extend to some of Tencent’s other holdings, such as “League of Legends” (Riot Games) and “Path of Exile” (Grinding Gear Games), although these changes will likely only affect Chinese users.
Tencent’s decision comes just a day after the Economic Information Daily, a subsidiary of state media giant Xinhua News, said in a now-deleted article that video games were “spiritual opium” and that no industry should continue in a manner that will “destroy a generation.”
Likening video games to opium holds cultural significance in China, which has long disliked narcotics and is sensitive to comparisons to the drug. Using such language, especially by state media, is often seen as a sign that the government is ready to crack down on the industry.
Those fears largely played out over a 24-hour period as shares for Tencent and NetEase, another large game developer in China, plummeted. Tencent’s shares dropped by 11% on the Hong Kong Stock Exchange, although it eventually settled at just a 6% loss by the end of Tuesday.
It wasn’t just Chinese gaming companies that were worried. The announcement sent ripples across the entire industry as Nintendo, Capcom, and Nexon shares all were heavily affected as well. One of the reasons that such an article can cast widespread concern is that China has increasingly become the largest market in the $180 billion video game industry, making it larger than the global movie industry and North American professional sports, combined.
Coupled with the recent fall of ActivisionBlizzard’s stock over the last two weeks due to its sexual assault lawsuit and other industry shakeups, over a trillion dollars of market value was wiped out at one point on Tuesday.
See what others are saying: (Associated Press) (Time) (Fox Business)
Google Is Banning “Sugar Dating” Apps as Part of New Sexual Content Restrictions
The change essentially targets apps like Elite Millionaire Singles, SeekingArrangements, Spoil, and tons of other sugar dating platforms.
Sugar Dating Crackdown
Google has announced a series of policy changes to its Android Play Store that include a ban on sugar dating apps starting September 1.
The company’s Play Store policies already prohibit apps that promote “services that may be interpreted as providing sexual acts in exchange for compensation.”
Now, it has updated its wording to specifically include “compensated dating or sexual arrangements where one participant is expected or implied to provide money, gifts or financial support to another participant (‘sugar dating’).”
The change essentially targets apps like Elite Millionaire Singles, SeekingArrangements, Spoil, and tons of other sugar dating platforms currently available for download.
What Prompted the Change?
The company didn’t explain why it’s going after sugar dating apps, but some reports have noted that the move comes amid crackdowns of online sex work following the introduction of the FOSTA-SESTA legislation in 2018, which was meant to curb sex trafficking.
That’s because FOSTA-SESTA created an exception to Section 230 that means website publishers can be held liable if third parties are found to be promoting prostitution, including consensual sex work, on their platforms.
It’s worth noting that just because the apps will no longer be available on the Play Store doesn’t mean the sugar dating platforms themselves are going anywhere. Sugar daters will still be able to access them through their web browsers, or they can just sideload their apps from other places.
Still, the change is likely going to make the use of these sites a little less convenient.