SUGAR Cosmetics: Employee Influencers and Channel Conflict (A)

Affected by the COVID-19 pandemic and the associated lockdowns, the management team at digital-first, Indian cosmetics brand SUGAR is deliberating over ways to respond to the new development in its influencer strategy. SUGAR grew into an INR 100-crore brand digitally by delivering content that was relevant to its young, urban customers in India through its Instagram page. Micro- and nano-influencers played a significant role in building its follower base of 1 million people. SUGAR was hungry for more. With the aim of becoming an INR 1,000-crore brand, the cosmetics firm began to expand its physical presence and grow in Tier 1 and Tier 2 cities. As the team planned this expansion, the COVID-19 pandemic struck, and the associated lockdown, a measure to slow down the spread of the disease, relegated everyone indoors. Unexpectedly, SUGAR’s beauty advisers transformed into employee influencers, attracting customers from Tier 1 and Tier 2 cities in India, while bringing in revenue through digital sales even when physical stores were shut. The company recognised using employee influencers as an opportunity to get new customers. However, the management team pondered over several questions. Did SUGAR have the resources to develop its employees as influencers? How would retailers respond if their sales employees focussed on online sales while manning physical counters? Would development of employee influencers dilute their existing influencer plan? The company had to also decide whether it would grow by focussing on traditional media and channels or by expanding its digital influencer plan.