This is why Rolex will always be king

[Rollieo]

Article that primarily covers Swatch Group, but serves as the reminder why Rolex will always be king.

“ The problem is that the industry’s environment has since then dramatically changed with the high-end growing at a substantially faster pace than the middle-range and the entry price levels. This is by no means surprising or new phenomena, but an ongoing shift of the market since at least one decade. The two key words now are polarization and premiumisation, just similar to what is happening in any other luxury category. The high-end brands dominate the market, because they’re helped by a virtuous dynamic in which the higher you go in terms of prices, the more margin you are making.”

“ CEO of the group Nick Hayek Jr. was told that the first and premiere goal of the Swatch Group is to have its industrial capacities running at full speed… In other words, the production pushes the market and not vice-versa, which to me is a very strange way to look at things the primary objective is that everyone has work to do.”

No one is at the scale of Rolex when it comes to watches. They’re the only 800lb gorilla in the industry just dominating in the luxury segment, while everyone else (save the very high end brands like Patek but are a tiny fraction of volume compared to Rolex) is getting crushed and getting pushed lower down the luxury segment.

https://revolutionwatch.com/swatch-group-business-news/

[the dark knight]

Rolex is and will be king for a while, but I have this suspicion if they published numbers like Swatch and Richemont have to, you would have seen a decline as well.

Specifically, I wouldn't be shocked if the demand for most of their PM pieces have dropped like a rock. I see them displayed and available for sale quite regularly now.

So why is steel sports still so hard to get? Well they are still in demand, but I also suspect ADs are doing what they used to before the market got hot. Bundling PM pieces with steel pieces out to greys to unload them.

[Roddypeepa]

Originally Posted by Rollieo

Article that primarily covers Swatch Group, but serves as the reminder why Rolex will always be king.

“ The problem is that the industry’s environment has since then dramatically changed with the high-end growing at a substantially faster pace than the middle-range and the entry price levels. This is by no means surprising or new phenomena, but an ongoing shift of the market since at least one decade. The two key words now are polarization and premiumisation, just similar to what is happening in any other luxury category. The high-end brands dominate the market, because they’re helped by a virtuous dynamic in which the higher you go in terms of prices, the more margin you are making.”

“ CEO of the group Nick Hayek Jr. was told that the first and premiere goal of the Swatch Group is to have its industrial capacities running at full speed… In other words, the production pushes the market and not vice-versa, which to me is a very strange way to look at things the primary objective is that everyone has work to do.”

No one is at the scale of Rolex when it comes to watches. They’re the only 800lb gorilla in the industry just dominating in the luxury segment, while everyone else (save the very high end brands like Patek but are a tiny fraction of volume compared to Rolex) is getting crushed and getting pushed lower down the luxury segment.

https://revolutionwatch.com/swatch-group-business-news/

Omega have created a lot of the problems themselves by upping prices (at least here in the UK) to where there the value proposition is (to my mind at least) questionable.

I have often quoted the Seamaster diver 300m. Launch price 2018 £3600. Price now £5600. Moonwatch sapphire something like 4200 then, 7500 now.

And if you took away the resale values of Rolex - and we have seen that to varying extent over last 2 years or so, then are some of these models true value either? Interesting times.


Sent from my iPhone using Tapatalk

[cbalster]

Originally Posted by Rollieo

Article that primarily covers Swatch Group, but serves as the reminder why Rolex will always be king.

“ The problem is that the industry’s environment has since then dramatically changed with the high-end growing at a substantially faster pace than the middle-range and the entry price levels. This is by no means surprising or new phenomena, but an ongoing shift of the market since at least one decade. The two key words now are polarization and premiumisation, just similar to what is happening in any other luxury category. The high-end brands dominate the market, because they’re helped by a virtuous dynamic in which the higher you go in terms of prices, the more margin you are making.”

“ CEO of the group Nick Hayek Jr. was told that the first and premiere goal of the Swatch Group is to have its industrial capacities running at full speed… In other words, the production pushes the market and not vice-versa, which to me is a very strange way to look at things the primary objective is that everyone has work to do.”

No one is at the scale of Rolex when it comes to watches. They’re the only 800lb gorilla in the industry just dominating in the luxury segment, while everyone else (save the very high end brands like Patek but are a tiny fraction of volume compared to Rolex) is getting crushed and getting pushed lower down the luxury segment.

https://revolutionwatch.com/swatch-group-business-news/

Not more than 10 years ago my local AD had 300 rolex watches in stock and there were Panerai waiting lists. Things can change a lot, very little lasts forever.

[eugenetsang]

Rolex will "always" be king because of their marketing prowess. Not because of how great their products actually are. There are watches that are WAY better than Rolex. But the amount of people that actually believes in their marketing power has no boundaries.

I always told my watch friends that the absolute BEST watch in my collection isn't my one of my Rolexs, Tudors, or Omegas... But actually is my Citizen World Perpetual. It always accurate because its radio controlled with a tower in Colorado. It's a traveler's watch because you can set it to whatever country/time zone that you're in.. And also, the calendar is 100% accurate, I do not have to correct the date whenever it lands on an odd month... Not to mention, it's eco drive... I haven't taken it out of my watch box in over 6 months... And that sucker is still ticking, hold both accurate time and date. The other only watch that can compete with it would be my Casio GShock, which does almost the same thing. But to me, my Citizen World Perpetual is my KING of my collection. I know it's not a watch that commands a lot of attention, rarity, or money. But that watch for me ticks off every box that I would want in a watch.

[EEpro]

Originally Posted by cbalster

Not more than 10 years ago my local AD had 300 rolex watches in stock and there were Panerai waiting lists. Things can change a lot, very little lasts forever.

Yep. All it would take is a reputation slide from persistent low quality or a marketing misstep to turn the tide toward other fashion brands like Cartier.

[mickyd329]

Originally Posted by the dark knight

Rolex is and will be king for a while, but I have this suspicion if they published numbers like Swatch and Richemont have to, you would have seen a decline as well.

Specifically, I wouldn't be shocked if the demand for most of their PM pieces have dropped like a rock. I see them displayed and available for sale quite regularly now.

So why is steel sports still so hard to get? Well they are still in demand, but I also suspect ADs are doing what they used to before the market got hot. Bundling PM pieces with steel pieces out to greys to unload them.

Lot of truth in that statement. Bundling datejusts and PM models with the steel sport watches to greys was a real thing before COVID.

Originally Posted by cbalster

Not more than 10 years ago my local AD had 300 rolex watches in stock and there were Panerai waiting lists. Things can change a lot, very little lasts forever.

I clearly remember those days. lol. Many of the new collectors never saw those days when getting a discount on a Rolex and taking home the same day used to be the norm.

[the dark knight]

Originally Posted by mickyd329

Lot of truth in that statement. Bundling datejusts and PM models with the steel sport watches to greys was a real thing before COVID.





I clearly remember those days. lol. Many of the new collectors never saw those days when getting a discount on a Rolex and taking home the same day used to be the norm.

Yep, I guess the key difference is back then it was a good thing for the consumer, you'd get better pricing from greys than almost any AD could offer. Now it's the opposite, at least for steel pieces.

[the dark knight]

Originally Posted by Roddypeepa

Omega have created a lot of the problems themselves by upping prices (at least here in the UK) to where there the value proposition is (to my mind at least) questionable.

I have often quoted the Seamaster diver 300m. Launch price 2018 £3600. Price now £5600. Moonwatch sapphire something like 4200 then, 7500 now.

And if you took away the resale values of Rolex - and we have seen that to varying extent over last 2 years or so, then are some of these models true value either? Interesting times.


Sent from my iPhone using Tapatalk

I was thinking Omega was in trouble due to the dynamics mentioned in the article before the pandemic, and they got a temporary reprieve thanks to the pandemic.

Like you said, they have been too aggressive with price hikes, and their move towards boutiques means less discounts, if any.

Their marketing strategy seems faulty as well, they rely heavily on events that only come along once in a couple of years, like the Olympics or a James Bond movie. They generate some buzz for the brand, and then it goes away.

They seem to be adapting a Rolex-like strategy of hoping to bundle watches with hype pieces that are more readily available at boutiques. Like the Snoopy or Ed White. This strategy has serious limits for no other reason than the demand for these type of watches is nowhere near what demand would be for, say, a Daytona.

[Kevin of Larchmont]

Originally Posted by eugenetsang

Rolex will "always" be king because of their marketing prowess. Not because of how great their products actually are. There are watches that are WAY better than Rolex. But the amount of people that actually believes in their marketing power has no boundaries.

I always told my watch friends that the absolute BEST watch in my collection isn't my one of my Rolexs, Tudors, or Omegas... But actually is my Citizen World Perpetual. It always accurate because its radio controlled with a tower in Colorado. It's a traveler's watch because you can set it to whatever country/time zone that you're in.. And also, the calendar is 100% accurate, I do not have to correct the date whenever it lands on an odd month... Not to mention, it's eco drive... I haven't taken it out of my watch box in over 6 months... And that sucker is still ticking, hold both accurate time and date. The other only watch that can compete with it would be my Casio GShock, which does almost the same thing. But to me, my Citizen World Perpetual is my KING of my collection. I know it's not a watch that commands a lot of attention, rarity, or money. But that watch for me ticks off every box that I would want in a watch.

And yet you haven’t worn it for six months. It sounds like it’s best for keeping time, just not for wearing.

[0nly5iv3Digits]

Came here to concur - Yes, Rolex will always be king. Always.

[Rollieo]

Originally Posted by cbalster

Not more than 10 years ago my local AD had 300 rolex watches in stock and there were Panerai waiting lists. Things can change a lot, very little lasts forever.

Rolex was king 10 years ago. They also were 20 years ago or 30 years ago.

Yes demand and supply will change. Maybe people will stop wanting luxury watches as much as they do now. But there will always be a luxury watch industry, and Rolex will dominate it. I don’t see that changing for the next 50 years.

Difference of being a private company that doesn’t make decisions based on quarterly earnings combined with incredible marketing prowess. Quality will rarely be an issue with Swiss companies.

[eugenetsang]

Originally Posted by Kevin of Larchmont

And yet you haven’t worn it for six months. It sounds like it’s best for keeping time, just not for wearing.

I was stating why it was the best watch in my collection. But yes, it most certainly had a lot of wrist time action during my ownership. But thanks for the reminder. It does needs some attention!

[Harry-57]

That reads like bot speak.

Hard to believe "This is by no means surprising or new phenomena" got past a human proofreader.

[Marcjvr]

Originally Posted by Rollieo

Rolex was king 10 years ago. They also were 20 years ago or 30 years ago.

Yes demand and supply will change. Maybe people will stop wanting luxury watches as much as they do now. But there will always be a luxury watch industry, and Rolex will dominate it. I don’t see that changing for the next 50 years.

Difference of being a private company that doesn’t make decisions based on quarterly earnings combined with incredible marketing prowess. Quality will rarely be an issue with Swiss companies.

At one point Yahoo dominated the search engine game, Kodak dominated the photo game and Nokia dominated the mobile phone market

Never say never…

[CarlOver]

Originally Posted by the dark knight

Rolex is and will be king for a while, but I have this suspicion if they published numbers like Swatch and Richemont have to, you would have seen a decline as well.

Specifically, I wouldn't be shocked if the demand for most of their PM pieces have dropped like a rock. I see them displayed and available for sale quite regularly now.

So why is steel sports still so hard to get? Well they are still in demand, but I also suspect ADs are doing what they used to before the market got hot. Bundling PM pieces with steel pieces out to greys to unload them.

Yet they released mostly PM watches this year. Interesting move by then. Maybe they think if we keep seeing them we will all want one?

[Kevin of Larchmont]

Originally Posted by Marcjvr

At one point Yahoo dominated the search engine game, Kodak dominated the photo game and Nokia dominated the mobile phone market

Never say never…

All of these companies got left behind by advancing technology. Luxury wristwatches are fascinating and desirable specifically because they are anachronisms. Smartwatches exist but they are superfluous commodities with zero emotional gravity, much like those products in your examples.

[brandrea]

Originally Posted by the dark knight

I was thinking Omega was in trouble due to the dynamics mentioned in the article before the pandemic, and they got a temporary reprieve thanks to the pandemic.

Like you said, they have been too aggressive with price hikes, and their move towards boutiques means less discounts, if any.

Their marketing strategy seems faulty as well, they rely heavily on events that only come along once in a couple of years, like the Olympics or a James Bond movie. They generate some buzz for the brand, and then it goes away.

They seem to be adapting a Rolex-like strategy of hoping to bundle watches with hype pieces that are more readily available at boutiques. Like the Snoopy or Ed White. This strategy has serious limits for no other reason than the demand for these type of watches is nowhere near what demand would be for, say, a Daytona.

Could also be that the Daytona has been overpriced relative to the Speedmaster, which is playing catch up

At one time they were almost the same price.

[Neil McCauley]

Originally Posted by eugenetsang

Rolex will "always" be king because of their marketing prowess. Not because of how great their products actually are. There are watches that are WAY better than Rolex. But the amount of people that actually believes in their marketing power has no boundaries.

I always told my watch friends that the absolute BEST watch in my collection isn't my one of my Rolexs, Tudors, or Omegas... But actually is my Citizen World Perpetual. It always accurate because its radio controlled with a tower in Colorado. It's a traveler's watch because you can set it to whatever country/time zone that you're in.. And also, the calendar is 100% accurate, I do not have to correct the date whenever it lands on an odd month... Not to mention, it's eco drive... I haven't taken it out of my watch box in over 6 months... And that sucker is still ticking, hold both accurate time and date. The other only watch that can compete with it would be my Casio GShock, which does almost the same thing. But to me, my Citizen World Perpetual is my KING of my collection. I know it's not a watch that commands a lot of attention, rarity, or money. But that watch for me ticks off every box that I would want in a watch.

This

Rolex will always be king because its brand perception is indoctrinated into everyone, even if you're into watches or not. If you're not into watches, you will still have heard Rolex but have a very different association with it than people like us do. The vast, vast majority of people couldn't give two hoots that the Rolex market has receded or that a BLRO is now trading 30-40% below it's peak on the secondary... most of them don't know what that is.... "oh the red and blue one, I think?"

This is one of the most genius marketing campaigns of the 20th/21st century. You don't just do this overnight, and any brand would literally kill for this kind of recognition.

And you're absolutely right, there are better watches out there, but nobody else makes a Rolex.

[BraveBold]

Rolex retains its position over generations because it doesn’t move much with the market. It sets its own market and shows great restraint in focusing on the long-game. If they were public they would look very different and would not be the success they are today.

They have outstanding quality, reliability and thematic design - all comes together (alongside marketing and smart limitations on production) to drive enduring value on all levels.

Those who deride Rolex due to manufacturing approach, ubiquity etc - including those who give too much praise to independents and high horology, misunderstand Rolex and why it endures.

Restraint is key. Rolex is genius in restraint. Ferrari was, for a time, another example of this. I’d argue Ferrari lost its way while Rolex has continued - partly due to governance and ownership structure.

[rufio0811]

Originally Posted by Rollieo

“ The problem is that the industry’s environment has since then dramatically changed with the high-end growing at a substantially faster pace than the middle-range and the entry price levels. This is by no means surprising or new phenomena, but an ongoing shift of the market since at least one decade. The two key words now are polarization and premiumisation, just similar to what is happening in any other luxury category. The high-end brands dominate the market, because they’re helped by a virtuous dynamic in which the higher you go in terms of prices, the more margin you are making.”

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I think the issue is there's far too many choices in the mid range luxury and a lot of underwhelming brands in the same price range too. Swatch Group has so much overlap with their own portfolio too.

[Neil McCauley]

Originally Posted by rufio0811

I think the issue is there's far too many choices in the mid range luxury and a lot of underwhelming brands in the same price range too. Swatch Group has so much overlap with their own portfolio too.

Definitely, the middle section of the market is completely over-saturated (Say £1.5k to £5/6k) with garbage that, quite frankly it amazes me that people actually buy this stuff at the prices they're touted at. If I was a non-watch person and fancied buying a watch around that figure, I wouldn't have a clue where to even start.

I see this a lot too, I'm asked "what watch shall I buy" and it's so difficult to recommend things to people in this way, I hate answering this question.

[Kevin of Larchmont]

Originally Posted by BraveBold

Rolex retains its position over generations because it doesn’t move much with the market. It sets its own market and shows great restraint in focusing on the long-game. If they were public they would look very different and would not be the success they are today.

They have outstanding quality, reliability and thematic design - all comes together (alongside marketing and smart limitations on production) to drive enduring value on all levels.

Those who deride Rolex due to manufacturing approach, ubiquity etc - including those who give too much praise to independents and high horology, misunderstand Rolex and why it endures.

Restraint is key. Rolex is genius in restraint. Ferrari was, for a time, another example of this. I’d argue Ferrari lost its way while Rolex has continued - partly due to governance and ownership structure.

Restraint is key, indeed.

[Rollieo]

Originally Posted by Kevin of Larchmont

All of these companies got left behind by advancing technology. Luxury wristwatches are fascinating and desirable specifically because they are anachronisms. Smartwatches exist but they are superfluous commodities with zero emotional gravity, much like those products in your examples.

Exactly what I was going to say. Tech and luxury watches are completely different markets.

It will take 25+ years to dethrone Rolex. An existing large manufacturer would have to make a lot of the right moves, making decisions for 10+ years ahead not a few quarters. Rolex would also have to have a lot of missteps.

Looking at the current manufacturers, who’s a contender? I don’t see one

[njlam]

Rolex is the Harvard of luxury watchmaking.

Ask anyone who is into watches what is the best watch and they will have many answers in the same way if your asked students/professors which is the best university.

However if you asked if you could have a degree from anywhere (similar to if you could have any watch), the answer would most likely be Harvard (Rolex).

Not necessarily the best, just the one everyone wants.

[rufio0811]

Originally Posted by Neil McCauley

Definitely, the middle section of the market is completely over-saturated (Say £1.5k to £5/6k) with garbage that, quite frankly it amazes me that people actually buy this stuff at the prices they're touted at. If I was a non-watch person and fancied buying a watch around that figure, I wouldn't have a clue where to even start.

I see this a lot too, I'm asked "what watch shall I buy" and it's so difficult to recommend things to people in this way, I hate answering this question.

The Swatch group has so much overlap with their own brands in just about every category

$5-8K range Omega is the king; IWC, Panerai, Zenith, B&R are also good choices but Omega is without a doubt the king of this price range

$2-5K you have the low end Omega's but also their sister brand Longines and the "high end" Hamiltons which you could argue both are better value for the money than the entry level Omega's at the same price. Then you're competing with Tudor, Ball, Rado, Tag Heuer, Doxa...when you're shopping the $2-5k range you really don't know what to buy because so many watches in this price range aren't good.

Entry level sub $2k Swatch Group has Tissot & Hamilton, they just have so much overlap with their brands it doesn't take much to understand why each individual brand isn't thriving.

Whereas Rolex makes a very good luxury watch and Tudor also makes a very good luxury watch in the $2-5k category and with more Tudor's coming equipped with METAS movements, they're starting to chip away at Omega's in the $5-8k category for less money.

[eugenetsang]

Originally Posted by njlam

Rolex is the Harvard of luxury watchmaking.

Ask anyone who is into watches what is the best watch and they will have many answers in the same way if your asked students/professors which is the best university.

However if you asked if you could have a degree from anywhere (similar to if you could have any watch), the answer would most likely be Harvard (Rolex).

Not necessarily the best, just the one everyone wants.

Agreed. But you missed the most important thing... The it's power of marketing. Using your example, Harvard being the "best" school? Is it really? No. But the name "Harvard" is constantly in your face. Whether it's in movies, media, or music... Everyone talks about it. But knows absolutely NOTHING about... Other than, "oh I was told, Harvard is the BEST". And then eventually it becomes status quo.

The same can be said about Rolex. The brand is always present and sponsors a million things. Whether it's a golf events, F1, tennis... The brand is always omnipresent.

[Pinchy]

Originally Posted by the dark knight

Like you said, they have been too aggressive with price hikes, and their move towards boutiques means less discounts, if any.

Omega boutiques... step into one. I'd be surprised if you don't hear the word "discount" within the first few sentences.

It's full panic mode at Omega boutiques, the hard sell, FUD. Buy now, this discount won't be here tomorrow...

[rolexpatek363]

Counterpoint (not for those of a nervous disposition). The guy makes some excellent and IMO irrefutable points about Rolex.

https://www.youtube.com/watch?v=QN5_...l=TheWatchBros

[rufio0811]

Originally Posted by Pinchy

Omega boutiques... step into one. I'd be surprised if you don't hear the word "discount" within the first few sentences.

It's full panic mode at Omega boutiques, the hard sell, FUD. Buy now, this discount won't be here tomorrow...

seriously I get at least 2 emails a week from my local Omega Boutique and I haven't visited them since March. They're directly next to a Rolex boutique and hurting.