Why is Nokia Closing Flagship Stores?

Although the Internet was supposed to reduce the need for brick and mortar locations and in reality growth in ecommerce does come to some degree at the expense of catalogues, contact centers and of course retail stores – It seems having marquee stores in the electronics market is crucial to maintaining a strong brand.

That is why I look at the closing of Nokia’s flagship stores with a strange fascination like – perhaps the same way most of us would look at a magazine cover touting all the ways President Obama can learn from Tiger Woods.

The company is moving its store in Sao Paolo and closing its New York and Chicago locations. The company says it continues to expand in North America but explained that US buying habits are different as consumers buy their phones from carriers.

I have never been in a Nokia store but I wonder how it can take the exact opposite approach of Microsoft, a company seeing that Apple is succeeding and doing its best to copy the leading-edge phone and computer maker. Since all three of these companies are battling for similar buyers and Nokia is becoming a PC maker via a netbook product line, it seems this move is either really stupid or really smart.

Sadly for Nokia, the company has been cranking out great products for years but in the US it doesn’t have the buzz of Apple or Google. The options are to either do something to excite consumers or admit defeat. To me, this move signals the latter.

For an opposing viewpoint which explains the company is keeping 1,000 Nokia-branded retail stores, plus another 650,000 retail outlets globally but the look, don’t buy strategy was at fault, check out this piece from Jacqui Cheng.

  • gingko
    December 11, 2009 at 11:38 am

    Nokia has decided to close its flagship stores in New York City, Chicago, and São Paulo, as well as one of its two locations in London after failing to find the same success with retail locations as Apple did with its own fleet of Apple Stores. Reuters reported that the company decided to do so as part of a revamping of its retail strategy. “This confirms a turn in Nokia’s retail strategy. It has failed to replicate Apple’s success with this format of store,” Ben Wood, director of research at the UK consultant firm CCS, told Reuters.

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