It's the internet stupid!

[Maiden]

Originally Posted by SS Oyster

So you are saying (?) the correct strategy for Rolex is as follows for the next 25 years:
1. Brick and mortar
2. Frustrated customers
3. Build whatever watches you wish in whatever ratio you feel like
4. Hope customers remain loyal

I believe this is correct. Rolex is preparing for the day they may only sell 400,00 watches as opposed to what they sell today. The next generation does not care for watches, I see it with the children/millenials in my life. So if you are going to be the rare niche consumer who buys a watch for college graduation 20 years from now, they want you to want a Rolex.

Exclusivity and brand awareness will keep them alive.

[ROLMARINER]

Originally Posted by Maiden

I believe this is correct. Rolex is preparing for the day they may only sell 400,00 watches as opposed to what they sell today. The next generation does not care for watches, I see it with the children/millenials in my life. So if you are going to be the rare niche consumer who buys a watch for college graduation 20 years from now, they want you to want a Rolex.

Exclusivity and brand awareness will keep them alive.

Precisely.

Along with rapidly and sharply increasing prices, something else the grey market is paving the way for. That's the way they can sell fewer watches, maintain revenue, and increase profitability.

[Roll the Lex]

Originally Posted by Maiden

I believe this is correct. Rolex is preparing for the day they may only sell 400,00 watches as opposed to what they sell today. The next generation does not care for watches, I see it with the children/millenials in my life. So if you are going to be the rare niche consumer who buys a watch for college graduation 20 years from now, they want you to want a Rolex.

Exclusivity and brand awareness will keep them alive.

The issue is nobody knows- not even Rolex on what will happen in the future. Remember the quartz crisis? The oysterquartz? Rolex stopped making them and the mechanical movement won that battle. Who knows what the future will hold?

Rolex can control supply of new watches. They can attempt to manipulate demands. The wild card in all of this is the secondary market. If the economy tanks, and people start off loading their watches to shore up cash- that could hurt them in a big way. If the greys get gummed up with everybody wanting to off load on them- both ADs and consumers... oops.

[dubins930]

Originally Posted by ROLMARINER

No, that wouldn't make me happy.

I own a Pepsi Ceramic because they are exclusive and scarce and as a result make me feel special. If any average guy with £7000 available to charge on a credit card could stroll right in to any Rolex dealer on Regent Street and walk out with one in ten minutes I wouldn't be seen with one on my wrist.

I’m still not seeing how a mass produced watch is exclusive... no one has Rolex production numbers, other than that they make upwards of 1 million per year, which is far more than the high end luxury brands. Grey dealers seemingly have no issues getting this watch. I guess it is exclusive at MSRP... Rolex puts up sales numbers right behind the Apple Watch... 8 billion in revenue doesn’t scream exclusive.

[Fleetlord]

Originally Posted by Maiden

I believe this is correct. Rolex is preparing for the day they may only sell 400,00 watches as opposed to what they sell today. The next generation does not care for watches, I see it with the children/millenials in my life. So if you are going to be the rare niche consumer who buys a watch for college graduation 20 years from now, they want you to want a Rolex.

Exclusivity and brand awareness will keep them alive.

I agree that Rolex may be preparing / already executing a production cutback, but I think it is to satisfy the growing exclusivity desires of the luxury buyer, rather than to prepare for the millennial apocalypse...

https://www.underscore.co.uk/insight...f-exclusivity/

"What these latest trends demonstrate is that while luxury and exclusivity are indelibly linked as concepts in the minds of consumers, major luxury brands need to ensure they continue to offer genuine exclusivity to maintain their luxury positions".

As for Millennials, I wrote about them in a previous post earlier this month:

They are still interested in ROLEX. It's among the first things they want when they get some $$$$.

ROLEX is FOREVER!

Well what do millennials with money they earn doing all this interneting buy?

They go and buy a Rolex, film it and post it on youtube, that's what they do.

Buying A $10,000 Rolex At 17!

https://www.youtube.com/watch?v=suNgBCJdbjw

There are many others:

https://www.youtube.com/watch?v=mnBxrtKKui8

https://www.youtube.com/watch?v=0dr2V60W3lg

https://www.youtube.com/watch?v=vH1Nrn8RTqY

They STILL want a Rolex! They still have that dream of owning one...even with cell phones and smart watches and whatever.

I wore my LVC to a party a few weeks back and my friends (not a watch guy) sons are Millenials. The only other thing they spoke about besides their phones was my Sub. Crazy huh? "Is that a Rolex"? All that stuff. "I want one just like that"! "It's badass"...blah blah blah.





To circle back to the internet of things, Rolex not having an ecommerce site isn't stopping millenials from buying Rolex. They seem to enjoy GOING to the AD or B&M location, picking out their watch "live" (not SS sports either....they don't care about that) and then they video the experience and put it on youtube. That's WAY cooler and more "dope" than videoing somebody fiddling with a smartphone or pad to get their ROLEX.

[ROLMARINER]

Originally Posted by dubins930

I’m still not seeing how a mass produced watch is exclusive... no one has Rolex production numbers, other than that they make upwards of 1 million per year, which is far more than the high end luxury brands. Grey dealers seemingly have no issues getting this watch. I guess it is exclusive at MSRP... Rolex puts up sales numbers right behind the Apple Watch... 8 billion in revenue doesn’t scream exclusive.

Well, when people stop me dead in my tracks on a commuter train to ask me questions, when I'm in a cafe and the guy sitting next to me is breaking his neck to take a peek, and when I walk into a local Rolex AD and they nearly fall over themselves muttering "Pepsi", yeah, I'm feeling a bit exclusive.

[superstarmar]

Originally Posted by Watch This

The "should I send chocolate to my AD" thread blew my mind.
:

Originally Posted by Ruud Van Driver

Somebody seriously asked this?

I actually gave a nice bottle of wine to my SA
for taking care of me on several pieces.
BLNR 10% off and no tax ... Plus a 5 digit pre-owned
Sub at a ridiculous low price ...

This was of course before the current crisis/shortage fiasco.

[challer]

Originally Posted by 037

If things reverse and Subs are sitting in dealer cases, secondhand resale 20% below MSRP and every "average Joe" with a Sub on his wrist, will you truly be happy? Honest question.

Yep. I don't care at all if sone one else owns what I own. Why should I? I own two Mercedes GLE. Where I live they are everywhere - doesn't diminish my appreciation of them. Both where special ordered at a premium - I didn't buy off the floor. Watches should be the same way.

The problem with all this analysis is the sports models are a side business to the main line Datejust/DD. They're at every dealer because that is what most people buy. If one doesn't use the sports complication/capabilities, the Datejust has amazing variety, availability, utility. Blue dials, jubilees, size variety, PM, SS all readily availability to anyone.

[ROLMARINER]

Originally Posted by challer

If one doesn't use the sports complication/capabilities, the Datejust has amazing variety, availability, utility. Blue dials, jubilees, size variety, PM, SS all readily availability to anyone.

Actually, SS DJ's are not readily available. I wanted a DJ41 SS Rhodium Fluted Jubilee a few months ago and I called close to 30 AD's in the NY/NJ/CT/PA vicinity and a) none had it and b) none could even tell me when they were expecting the next one.

So I went grey for the DJ as well. Got it for $500 below MSRP as a matter of fact. Point is, desirable color combinations of DJ's are not AD low hanging fruit, they can be just as hard to find as a sport model. Great watch FYI, Rolex really got it right.

[SS Oyster]

Who is getting stuck with all the TT DJs? Who is buying them? Why is Rolex making them? Where is the demand signal? Why are they shipping so many (forcing them down the ADs throat)?

This is not how a free market is supposed to work.

Rolex sets supply and "hopes" demand matches? No, Rolex builds what they want and the ADs eat what they get or lose their license. It is precisely because of this phenomenon that the Grey market exists. The Grey dealer saves the ADs butt by buying up TT DJ and Lady DJ inventory, which gets them access to SS professional models. The AD gets to keep their license and Rolex keeps shipping, but when the music stops, who is left with all the TT watches?

[ROLMARINER]

Originally Posted by SS Oyster

Who is getting stuck with all the TT DJs? Who is buying them? Why is Rolex making them? Where is the demand signal? Why are they shipping so many (forcing them down the ADs throat)?

This is not how a free market is supposed to work.

Rolex sets supply and "hopes" demand matches? No, Rolex builds what they want and the ADs eat what they get or lose their license. It is precisely because of this phenomenon that the Grey market exists. The Grey dealer saves the ADs butt by buying up TT DJ and Lady DJ inventory, which gets them access to SS professional models. The AD gets to keep their license and Rolex keeps shipping, but when the music stops, who is left with all the TT watches?

TT DJ's sell very well. So they are winding up on the wrists of people who love to wear them.

Why so grumpy? You've got two Sea Dwellers. What, you want a third?

[s_haverford]

Rolex is going to keep doing what they have been doing. I am sure their branding will change to appeal to a younger audience and some AD's will shut down. Hell maybe they will go the way of "boutiques" (dealers inside other bigger stores). What will change will be the demand. I think that while things are tight now, the demand will not sustain and we will see the times again where you could walk into a AD and pick up a steel Sub.

[ALF61]

Rolex is constantly innovating and people are buying many a Rolex, not just a Sub

[frankfrazetta]

Originally Posted by Watch This

I think you perceive Rolex to be more exclusive than it is. Where I live most every Average Joe already has a Rolex Submariner on his wrist.

Wow. Where I live NOBODY, or less than 1% have a Rolex on. I don't live in a million dollar a house area, but it's not cheap.

[avega357]

Originally Posted by ALF61

But exactly what is "more can be done" ?



Rolex may have other priorities for not wanting to increase supply. Internet changes dynamics of supply and demand, but supply and demand still exist. If you are saying that the internet contributed to more hype and desirability for the watches, I agree. Those are dynamics. Increase supply to meet increased demand ? I don´t know about that being feasible or convenient. Like I said, more than one company has seen benefits of limiting supply.

Rolex has always taken the long view, and grown slowly. This is the right strategy because there are economic cycles to consider. There is nothing wrong or right in a strategy it is just prudence






Sent from my iPhone using Tapatalk

[Boaters]

Rolex will do what they do and survive they will.

[ap1]

Originally Posted by 037

If things reverse and Subs are sitting in dealer cases, secondhand resale 20% below MSRP and every "average Joe" with a Sub on his wrist, will you truly be happy? Honest question.

20 below msrp is actually a strong residual in watch land, just saying. Clearly Rolex is special.