The Finnish company Nokia made the decision to close all branded stores back in May, but the public learned about it only in June. Nevertheless, the Russian market remains one of the priorities for Nokia, only the way of sales will change.
Eric Bertman, vice president of the company for the Eurasian region, announced the closure of all Nokia stores. At the beginning of 2012, the company had 57 branded stores, of which 44 were operated by Nosimo, and the rest were operated by re: Store Retail Group.
One of the possible reasons for the closure of stores was the drop in sales of mobile phones in Russia and the world. In the rapidly growing smartphone market, Nokia has lagged far behind its main competitor Samsung. If in the 1st quarter of 2011 Nokia ranked 1st in terms of share in global smartphone sales (60, 7%), then over the same period in 2012, the share of sales almost halved (31, 9%), dropping the company immediately to third place. Nevertheless, according to the total number of phones sold, Nokia still held the first place - 38.6% of the market versus 36.4% for Samsung.
This situation could not but alarm Nokia's management, a thorough analysis of the market and the latest trends was carried out. The mono-brand business, which the company relied on, has ceased to justify itself. If a few years ago all new items appeared at Nokia and only then were copied by other manufacturers, today almost any company can release an interesting product. The buyer prefers to compare models of different brands and choose the most interesting one for him.
In May 2012, the contract with the store management company Nosimo was terminated; it decided to redesign the stores into mono-brand Samsung showrooms. The management companies developed the retail of Nokia phones at their own expense, without funding from Nokia.
Sales in brand stores have always been quite high, but their share in the total revenue is insignificant. Nokia's management considered that the closure of the showrooms would not affect the share of the company's phone sales in the Russian market; online stores, partner showrooms and Nokia brand zones in retailers would be sufficient. It is in these areas that product distribution channels will be developed today.
Store closures are only part of Nokia's anti-crisis policy. In addition, it is planned to significantly reduce the number of employees, the elite division of Vertu and the release of super-cheap smartphones under the Nokia brand.
