Will Nokia’s Storefront Retailing Work?

Shoppers apparently flocked to the opening of Nokia’s first US flagship store in downtown Chicago, just down the street from a temporary retail store Motorola set up to showcase its email-capable “Q” smartphone.

The stylishly appointed Chicago retail outlet is the first of four flagship stores that Nokia — the world’s largest mobile-phone maker, but second to Motorola in the US market — plans to open in the North American market. Nokia launched its first flagship store in Moscow in December last year, and plans to open 18 stores worldwide in the next two years.

Nokia says the flagship stores are aimed at giving the company total control of brand presentation. With the company-owned stores, Nokia makes “the ultimate presentation of our brand,” according to a corporate spokesman quoted in a story that appeared over the weekend in the Chicago Tribune.

Does that mean the wireless service providers, who also sell Nokia phones as well as accompanying service plans, don’t do a good job presenting the Nokia brand? Yes, most certainly.

Service providers are in the business of putting their own brands front and center, and subsuming the brands of handset vendors to their own marketing programs and strategic machinations. For carriers, it’s all about seeming more creative, innovative, and valuable than they are in reality. They have to create an illusion that they’re doing more than running a transport network with associating logistics and billing systems.

Even so, wireless carriers have their aspirations, which some might call delusions, and they might be upset that Nokia is selling their own phones and sending an underlying message — cutting-edge phones are sexy, networks are just plumbing — that undercuts the value proposition that service providers are attempting to market and sell.

Nokia says it’s not a problem, that there’s no conflict, that it will also help the service providers by offering relevant service plans along with the phones. Service providers are control freaks, though, and they won’t like Nokia’s retail gambit.

The wireless carriers are as much problem for Nokia as vice versa. Nokia is attempting to control its brand, but wireless service providers, with their walled gardens and presentation-layer transcoding, can significantly influence the ultimate customer experience of the subscribers who pay for privilege of shunting voice and data packets across their networks — irrespective of whether they’re using Nokia’s phones or other handset brands.

So, even though it’s clear Nokia wants to replicate the fashionable, high-gloss, upscale marketing brand that Apple was able to attain in the world of personal computing, I don’t think Nokia is as favorably positioned to pull it off. The oligopolistic wireless carriers control too much of the mobile experience, from closed technical standards to proprietary content, and Nokia’s branding exercise won’t change that.

From those of you who might be wondering, Nokia says it didn’t choose Chicago as its first US retail center to take a shot at hometown heroes Motorola. Evidently, the Chicago real estate simply was available before suitable property in New York could be found. That’s the story, anyway.


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