Rolex Going Upmarket?

[Quamby]

Originally Posted by Fleetlord

Nah...

I think the thing to remember here is that the people who visit this forum are the vast minority of Rolex customers.

We are interested in high end caliber movements and the tool watch legacy of the brand.

The general public thinks Rolex runs off a battery and doesn't see watches as a "tool", but as a status symbol.

They think of Rolex as the best. So, if they own one, then THEY themselves become the best...far ahead of the plebians.

If one was to take 10 random people and show them a Rolex Sub or a Rolex DJ with fluted bezel and ask them which one they would like to have, I would say 80% would say the blingy DJ.

These randoms are the ones wandering into AD to obtain the best.

Rolex knows this, so they have plenty of the "best" on hand to get people their bling. Us tool guys can wait....or pay more off channel.

Sadly, I think you are right.

[ArtNouveau]

Hey Fleetlord, the Galleria Boutique is my main store, and yes I believe they sell lots of watches. Houston gets lot of international visitors both for business and medical tourism.
I have a friend there who has been there since it opened and has always been at a Rolex dealer since I met him in '97. He says that the lack of SS sports models has been frustrating but like you say most customers barely notice. They still believe the shortage is due to misjudged sales estimates last year and that things will eventually level out.
I also speak from time to time with a small market AD on my travels. He told me last week he actually made it to Basel this year and the Rolex line there was "no planned shortage, sales forecasts have changed, and production schedules being adjusted." He says his SS allocations are about what they've always been.

[Fabrice M]

Originally Posted by GreatScott

The theory of stopping selling steel is nonsense, Rolex is just not increasing production as fast as some people think they should because if a down turn happens again they don't want to be stuck with a bunch of extra stock. Their commitment to steel is strong, just look at the Basel releases.

Sent from my Pixel 2 XL using Tapatalk

I think you are right, demand is higher, but Rolex probably, and wisely I believe, decided that supply would remain about the same.

[NorCalKid]

Originally Posted by Quamby

I think Rolex is resting on their laurels if they think they can continue on by restricting supply of its most sought-after models to the market. It will not work out in the long run. The more fundamental problem Rolex has is that the bread and butter Date-just and Day-dates are just not appealing to the younger crowd, they are old and boring.

The SS and Professional models are now the entry models for new customers to the brand and Rolex needs to produce more of them. These first time buyers don't switch to the more expensive PM models because they can't get their hands onto a SS or Professional model, they either delay their purchase, buy second hand, or buy something else. Rolex loses out most of the time. Bottom line is: Rolex needs to rebalance its portfolio and produce more SS and Professional models and less Day-Dates and Date-Justs. Rolex needs to do it before one of LVMH or Richemont's brands regain their mojo, or before Audemars Piguet's official certified pre-owned program pick up steam.

I don't think Rolex can move upmarket without coming out with a new high-end caliber movement and a bespoke design. More bling and charging more just won't do it, further more, the high-end market is not growing except for AP, PP, and Richard Mille.

If it is Rolex's objective to regain control of the market of SS and Professional models from the greys and offending AD's, then commit to keep stock flowing for six months and stand ready to release stock when the market calls for it.

I agree with this. As someone new to watches (a couple years and early 40's). I find the DD and DJ old and boring(do like some Airkings). I really like the Rolex sports watches. I ended up buying a Tudor BB black as my first nice watch(after a bunch of Seikos and such). 8k+ for a 116060 was just too much for me. I think Rolex is targeting this market really well with their Tudor brand, doing new things, within reach for most people but not cheap.

As a new watch guy that went from $200 automatics, liked them and got the Tudor(been wearing for almost 2 years)I again find myself trying to look at a sub. I fly a LOT through Asia, I haven't found a single no date sub in an airport AD to look at in over a year.

[AK797]

Originally Posted by Fleetlord

If one was to take 10 random people and show them a Rolex Sub or a Rolex DJ with fluted bezel and ask them which one they would like to have, I would say 80% would say the blingy DJ.

These randoms are the ones wandering into AD to obtain the best.

Rolex knows this, so they have plenty of the "best" on hand to get people their bling. Us tool guys can wait....or pay more off channel.

I think this is age dependent, esp in this Social media age and I'd say under 30s would overwhelmingly go for the Sub, and probably under 40s too, so with a changing demographic of buyers and how they buy coming in future, supply will need to be re-allocated and it will be as we know Rolex are not happy with the grey market situation. They too want more balance in the long term, but for now not much changes in 2018.

[Dirt]

Originally Posted by Fabrice M

I think you are right, demand is higher, but Rolex probably, and wisely I believe, decided that supply would remain about the same.

If they are producing at a capacity that they are happy with and it's their comfortable maximum, then it follows that supply will not change.

With lead times to production and all else factored in.
It's not realistic to expect them to be able to just ramp up production.
Especially when there is always a high degree of human input. At the end of the day they still have to train replacement staff as well as employ new staff and it's one of the hardest parts of being a manufacturer of goods requiring highly skilled labour.

[train-time]

Originally Posted by Fleetlord

Nah...

I think the thing to remember here is that the people who visit this forum are the vast minority of Rolex customers.

We are interested in high end caliber movements and the tool watch legacy of the brand.

The general public thinks Rolex runs off a battery and doesn't see watches as a "tool", but as a status symbol.

They think of Rolex as the best. So, if they own one, then THEY themselves become the best...far ahead of the plebians.

If one was to take 10 random people and show them a Rolex Sub or a Rolex DJ with fluted bezel and ask them which one they would like to have, I would say 80% would say the blingy DJ.

These randoms are the ones wandering into AD to obtain the best.

Rolex knows this, so they have plenty of the "best" on hand to get people their bling. Us tool guys can wait....or pay more off channel.

Absolutely, especially the Forum members who are for the most part fans of the SS Professional line and in the minority of Rolex customers.

[jagwap]

Originally Posted by ArtNouveau

Hey Fleetlord, the Galleria Boutique is my main store, and yes I believe they sell lots of watches. Houston gets lot of international visitors both for business and medical tourism.
I have a friend there who has been there since it opened and has always been at a Rolex dealer since I met him in '97. He says that the lack of SS sports models has been frustrating but like you say most customers barely notice. They still believe the shortage is due to misjudged sales estimates last year and that things will eventually level out.
I also speak from time to time with a small market AD on my travels. He told me last week he actually made it to Basel this year and the Rolex line there was "no planned shortage, sales forecasts have changed, and production schedules being adjusted." He says his SS allocations are about what they've always been.

This very likely has a lot to do with it. Remember the story that each Rolex takes a year to make? Sure it got disputed here, but if you take this as true for a moment: consider the leadtime of ordering raw material to shipping out the factory door to be a year, a year ago there was a sizable downturn in the watch market. So it is not a large leap to think that all sensible manufacturers lower projections based on that.

Now that policy changes in asia have cause the market to bounce back, there will be a delay before supply catches up.

[No SUBctitute]

Originally Posted by Speed

Shoot

I should have cut / paste from the OP!

Haha. Its okay. At least my gaffe was quite worse than yours!

[No SUBctitute]

Originally Posted by Fleetlord

The general public thinks Rolex runs off a battery and doesn't see watches as a "tool", but as a status symbol.

Haha. I don't want to believe this, but I know its true. I know a guy at work who has a modern quartz Seamaster and a new automatic Planet Ocean. He doesn't seem to appreciate any horological difference between the two.....and he wears the quartz far more often.

[Aventura]

Originally Posted by Cato

On a side note, I find it hard to believe that almost a million Rolexes are sold every year.

And 50,000 Patek’s?

Whenever I’m at a Rolex AD, I never see folks buying. I see people joking about how expensive they are, even random guys “talking” watches, but never people handing over cards.

Maybe they are being bought over the phone? Maybe guys buy early in the mornings when I never visit?

Very good comment. I think the same. What I see coming is that there will be no more sports watches in the dealers' windows. And I'm going to tell you something imaginary ... it's not something that happens but something that I feel. I have no reason to say this but I know what happened with some very desirable brands of cars
A dealership sells a Daytona ... I suppose its utility is more or less than $ 3700 but I could also give it in consignment to a gray dealer who would try to sell it at $ 18400 and share the profit. So in that case apart from the 3700 would have another 3000 extra. I repeat that all this is imaginary but ..........

[Aventura]

I don't want to believe this, but I know its true. I know a guy at work who has a modern quartz Seamaster and a new automatic Planet Ocean. He doesn't seem to appreciate any horological difference between the two.....and he wears the quartz far more often.

I guess he uses more quartz because it is more accurate.