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Vulnerability to digital marketing and the fashion industry in trouble

People with mental health issues are twice as likely to fall to digital marketing tricks than usual customers – warns the British charity, Money and Mental Health. Companies rely on the help of consumer psychologists to persuade clients to “impulse buys” – spontaneous shopping that generates a billion pounds monthly in the U.K. alone. Among common tactics are: creating a sense of urgency (i.e. only one room left, five people are viewing it), social proof (i.e. by showing the customer what his Facebook friends bought/liked), and frictionless or one-click payment. Money and Mental Health postulates adoption of “ethical marketing and advertising policies”.

The coronavirus emergency fund for small businesses offered by the U.S. Treasury Department didn’t end up landing in the hands of the small-scale recipients after all. The top 5% of loaners got more than half of the total 522 billion dollars of loans while the top 1% received over a quarter of that sum. Around 600 of the companies, many national chains included, got the maximum help from the program – 10 million dollars. Only 28% of the money was distributed in amounts less than 150 000 dollars, provoking voices that the emergency fund helped the well-lawyered, not the small ones.

The fashion industry noted a 93% decline in profit in 2020, according to McKinsey. The most resilient were the companies that went digital, operated in Asian markets and sports and leisure sectors. The future of fashion is digital, according to the McKinsey expert, with consumers moving to those channels of distribution. We can also expect that the market will follow the trend of so-called “super winners” – a fraction of companies gaining higher and higher profits.

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