My new BLNR and perspective on Rolex’s inability to scale

[Watch This]

Originally Posted by rossi46

Thank you for being one of the few to bring this up. How short a memory everyone seems to have. As if it's only in the extremely recent past that Rolex has become the brand it is? As if it took scarcity to make Rolex watches desirable?!

Hello, people? Rolex was already known as the most prestigious brand on planet earth for decades and decades before this inventory situation. The idea that only just now, when you have to go on a multi-year waiting list for a Submariner (which still makes me laugh), are Rolexes a hot item is ridiculous.

Excellent post.

[RJRJRJ]

Originally Posted by Harry-57

He's right. There is no guesswork involved. Speak to some ADs. My AD spent £350k in 2019 on an in-store Rolex boutique. Rolex contributed zero. My AD's profits on Rolex sales continue to be at record levels year on year. Rolex sells every watch it makes, wholesale, to independent dealers the world over.

My AD could probably sell 100 SS BLROs next month and probably 150 SS Daytonas. Most ADs could, and would if they could get hold of them. But they make good profits and associated income from the Rolex inventory they routinely carry. If they did not, they would not waste time being pissed. They would sell something else. They've been in business for over 100 years, as have Rolex, and like Rolex they have become very good at it.

Well said. If your AD tell you they're pissed, they either:

1. Want more watches than normal because they know they could sell them.

or

2. Use it as an excuse to let you down easy. "Hey man, you and me both...

[teck21]

Rolex is still alive only because it has a far better handle on watch wearing trends than those of you who think Rolex has done fine for 80 years, and can simply carry on as it has. As well as economic trends.

The shift to exclusivity as opposed to just being a watch to celebrate a milestone is not a decision that Rolex HQ took lightly for sure.

No business wants to upset customers, existing and potential. But a shift of this sort definitely will, and they are aware of it.

But the GFC also taught them that having the American middle class as their single largest customer segment is a risky proposition, coupled with the onslaught of smart watches.

More challenges lie ahead, mechanical watches are never ever returning to mass popularity.

A Rolex watch as a tool is all but obsolete except in the most exceptional of situations.

Rolex believes it needs a more resilient customer base, ie those with very resilient wallets and want to show it.

The global explosion in wealth has, and is still allowing them to consolidate this base.

In time, market participants who cannot keep up will fall out.

This is the new normal. ADs falling like flies, and eventually all that will be left, are the ones that will prioritise the best spenders.

Rolex’s primary objective is to live in perpetuity as a brand. Not produce as many watches as necessary to satisfy its customer base.

It can change its customer base and still achieve its objective.


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[Tricolore66]

It was only 6-7 years ago that there was the biggest glut of unsold Swiss watch inventory in the history of the industry. Many major brands were buying inventory back from dealers and literally destroying them (dismantling is probably the more correct term) to preserve some value in their brand and keep the dealers from dumping them to grey dealers below cost (which was happening). Some of these brands are just now recovering, and some never will completely. Rolex wasn't completely immune and you could find virtually anything short of the BLNR, Daytona, or gradient dial SDDS sitting in cases. The point is, this isn't ancient history for these brands and they aren't likely to get caught out like that again by producing too many watches.

[BroncoOne]

Your SA may want more Rolexes to sell to valued customers, but any good sales person can and should talk someone who just walked into the store into at least considering another brand of watch that they carry.

[Sunny_Submariner]

Originally Posted by 101031-28

IMO Rolex does not want to up production to meet demand. Luxury is about scarcity and exclusivity. If everybody was able to get the coveted Subs, Daytonas and GMTs, they would no longer be desirable. Simple as that.

I was just going to say this. Rolex will never increase production because they want the watches to be hard to get. The harder it is to get something, the more demand it commands. We all want what we can't have and luxury brands capitalize on that.

[rmwill]

Yes. Omega and other brands try to accomplish this with limited/special/commemorative editions, but they just cheapen the brand.

Originally Posted by 101031-28

IMO Rolex does not want to up production to meet demand. Luxury is about scarcity and exclusivity. If everybody was able to get the coveted Subs, Daytonas and GMTs, they would no longer be desirable. Simple as that.

[Treble Treble]

Rolex just double your MRSP. Bit simple I know but it will give Rolex their margin rather than the grey market parasites. Doubt a SS GMT will jump to 30 or 40 K on the resale market.


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[superspectral]

Originally Posted by Treble Treble

Rolex just double your MRSP. Bit simple I know but it will give Rolex their margin rather than the grey market parasites. Doubt a SS GMT will jump to 30 or 40 K on the resale market.


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Rolex may not have increased MSRP prices quickly enough in the past years. They are probably terrified that they would have to drop them if the market gluts again.

[turkeysub93]

Originally Posted by rmwill

Yes. Omega and other brands try to accomplish this with limited/special/commemorative editions, but they just cheapen the brand.

AP actually does this as well. Check out how often the release limited RO watches or even their concept watches (Black Panther being the most recent). Much of it is an absolute eye sore that should be shipped off to Mars and never seen again but collectors buy them because they are "limited".

Aside from maybe Patek..I'd argue Rolex has the best heritage and congruency in the watch world. Hope they keep it that way.

[Treble Treble]

Think they are losing a lot of revenue. Obviously no need for a sales or marketing department any more. Sales underselling not positioning the SS models correctly based on new market price and marketing a waste of money creating demand they can’t fulfill. Depressing Outlets with no stock it’s all very bizarre. Rock on anyone who can be bothered building a relationship at your AD.


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[Robine]

Originally Posted by Tricolore66

It was only 6-7 years ago that there was the biggest glut of unsold Swiss watch inventory in the history of the industry. Many major brands were buying inventory back from dealers and literally destroying them.

Which brands? Source?