Rolex Strategy

[watchwatcher]

Originally Posted by Sprta

Yet every day I see posts of incoming watches that are supposedly scarce.

Yep. Although I would agree that supply in general has slowed, I do not believe all the chatter that NO sports models are shipping.

I personally think Rolex has had the idea for some time and tested the waters on restricting supply with the new Daytona, which most likely exceeded their expectations. Then they did it with the new Sky, which I think the jury's still out on. Then...they looked at each other and said, "Hell, what about the whole steel line?" And there you go.

[2th_doc]

Just had a convo wit my local AD. He knows I am not currently looking for anything as I have everything I want at the moment. (Unless I hit the lottery.) I mentioned to him about all the threads on TRF about a shortage of SS and no more shipments. His response was that Rolex produces watches based on sales expectations per year. And he said that they were 30% above expectations. And I am sure the SS sports models are a big chunk of that 30%. Which explains the shortage at this years end. Im sure many will take this explanation with a grain of salt. But this is just me adding my input to this thread. I will say it sounds like a reasonable explanation to me. So a real SS shortage and not a perceived SS shortage could make some ADs want to vault certain SS models for more top tier customers.


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[Duey]

This makes perfect since if Rolex is changing a watch design (not just the movement). I look at the patents they've issued over the last few years and see a change is a coming (not sure if it's this next year).

1st) With the Sub's Getting New Ceramic Bezels That GLOWS -
https://www.rolexforums.com/showthre...ghlight=patent

2nd) With the GMT's Getting a New Bezel Enabled GMT function -
https://www.rolexforums.com/showthre...ghlight=patent

If these 2 come out Rolex needs to clean out the pipe line the best they can and still keep control of it.

[superdog]

Originally Posted by rossi46

Really? Can you expand on that?

Because I have a hard time understanding the concept. Whether or not tickets are hard to get for a certain concert, I only care if I really like the band that's playing. Same goes for watches: there might be some limited edition piece that's released, but if I don't like the base watch in the first place, then why would I get excited just because it's "limited"?

And especially in the case of a plain-jane 114060 (which I have owned and loved, by the way), why would simply the scarcity of it make you want it?

As to their strategy, I'm leaning towards a movement upgrade across the board (possibly with price hike) as the reason for current low supply. It's hard to reason that they're holding back on guaranteed sales of so many different models in order to, what - have pent-up demand for the next quarter?

I’d be happy to expand on it. Agree with you mostly.

In regards to the 114060 or even the LVC, I like them both a lot. Definitely prefer the 114060 though. Anyway, because they were so easy to get, I always figured if I ever want again, it’s an easy pick up.

But if they become similar to the Daytona, I want to grab one before their is either an increase, or they become nearly impossible to get.

Restaurants, concerts or even a nautilus that are hard to get or get into, don’t hold any draw for me.

[superdog]

Originally Posted by 2th_doc

Just had a convo wit my local AD. He knows I am not currently looking for anything as I have everything I want at the moment. (Unless I hit the lottery.) I mentioned to him about all the threads on TRF about a shortage of SS and no more shipments. His response was that Rolex produces watches based on sales expectations per year. And he said that they were 30% above expectations. And I am sure the SS sports models are a big chunk of that 30%. Which explains the shortage at this years end. Im sure many will take this explanation with a grain of salt. But this is just me adding my input to this thread. I will say it sounds like a reasonable explanation to me. So a real SS shortage and not a perceived SS shortage could make some ADs want to vault certain SS models for more top tier customers.


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This makes sense.

[SPMN]

Originally Posted by 2th_doc

Just had a convo wit my local AD. He knows I am not currently looking for anything as I have everything I want at the moment. (Unless I hit the lottery.) I mentioned to him about all the threads on TRF about a shortage of SS and no more shipments. His response was that Rolex produces watches based on sales expectations per year. And he said that they were 30% above expectations. And I am sure the SS sports models are a big chunk of that 30%. Which explains the shortage at this years end. Im sure many will take this explanation with a grain of salt. But this is just me adding my input to this thread. I will say it sounds like a reasonable explanation to me. So a real SS shortage and not a perceived SS shortage could make some ADs want to vault certain SS models for more top tier customers.


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This absolutely makes the most sense to me. Most other explanations seem far-fetched. If demand is up even 10-15% above their expectations world-wide, that's a massive number of watches. It would make sense that they wouldn't be able to increase production enough to keep dealers stocked.

The Daytona is obviously a different story, but I see no reason why dealers would otherwise be having difficulty getting the Sub or BLNR.

[Fleetlord]

With the exception of the SS Daytona and Skydweller, the other SS models are available.

Some of those (Hulk, BLNR, SD43, DEEP BLUE) are vaulted for "premium" customers.

There is a mild shortage of the choice SS models because of the proliferation of the gray market through panic buying coming from areas with lower currency valuations..

Joe Flipper was waltzing into stores, buying a Hulk and filpping it for a quick profit...rinse and repeat.

In order to curb this Rolex has to allocate supply of these choice watches and suggests the dealers vault the high demand pieces so that premium customers have access. These customers are thought not to be flippers and they are bigger buyers so it's best not to disappoint them. The watches being in the vault allow the dealer to discriminate at will, which also slows the flood to the gray market so Rolex can catch up a bit, protect dealers...etc.

Plus it gives them the opportunity to sell PM or DJ watches to the 99% of the buying public who think a ROLEX is the BEST regardless of what model it is...

Here is an example:

My buddies girlfriend wanted a BLNR for her son. She is an independent soul, so she called the AD and asked for one. She got the "sorry not available...short supply..blah blah"....She informed my friend who is a pretty good client there that she couldn't get the watch. He called his saleperson. Come and get it was the reply. Got one for you in the back. Easy Peasy.

The level dealers do this is inconsistent. Some dealers are vaulting all their SS...others aren't vaulting anything and it if you see it, it's yours...of course the exception being SS Daytona and SS Skydwellers.

[TickTockChuck]

Originally Posted by 2th_doc

Just had a convo wit my local AD. He knows I am not currently looking for anything as I have everything I want at the moment. (Unless I hit the lottery.) I mentioned to him about all the threads on TRF about a shortage of SS and no more shipments. His response was that Rolex produces watches based on sales expectations per year. And he said that they were 30% above expectations. And I am sure the SS sports models are a big chunk of that 30%. Which explains the shortage at this years end. Im sure many will take this explanation with a grain of salt. But this is just me adding my input to this thread. I will say it sounds like a reasonable explanation to me. So a real SS shortage and not a perceived SS shortage could make some ADs want to vault certain SS models for more top tier customers.


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Agree completely, Rolex has to plan out it's production cycles based on predicted demand, like any good company. As we know, the build process has many stages and has to schedule with outside suppliers. Modern Just in Time production doesn't allow any part inventory to just sit around to build extra watches if needed. Rolex indeed may be holding back on the DaytonaC, but I think they just basically ran low on the popular SS sports models by year end and are rationing them out. I've seen this before in Nov/Dec of 2015 when none of the ADs up here had much. Just put my name on the list and waited until spring. Rolex may also be retooling for some movement/case changes for Sub & GMT line. The Grey market and up charges for high demand models may also being addressed as well. Rolex is very smart and want to protect the brand which benefits all owners, but understandably frustrates those wanting a holiday purchase. My 2 cents. Cheers!

[GB-man]

My opinion is that Rolex had not forecasted this demand. They are a big company and don’t turn on a dime.

The Daytona of course is on purpose but the rest I believe is just poor supply management. I wouldn’t be surprised if we get a movement upgrade in the sub line.

[superdog]

Originally Posted by Fleetlord

With the exception of the SS Daytona and Skydweller, the other SS models are available.

Some of those (Hulk, BLNR, SD43, DEEP BLUE) are vaulted for "premium" customers.

There is a mild shortage of the choice SS models because of the proliferation of the gray market through panic buying coming from areas with lower currency valuations..

Joe Flipper was waltzing into stores, buying a Hulk and filpping it for a quick profit...rinse and repeat.

In order to curb this Rolex has to allocate supply of these choice watches and suggests the dealers vault the high demand pieces so that premium customers have access. These customers are thought not to be flippers and they are bigger buyers so it's best not to disappoint them. The watches being in the vault allow the dealer to discriminate at will, which also slows the flood to the gray market so Rolex can catch up a bit, protect dealers...etc.

Plus it gives them the opportunity to sell PM or DJ watches to the 99% of the buying public who think a ROLEX is the BEST regardless of what model it is...

Here is an example:

My buddies girlfriend wanted a BLNR for her son. She is an independent soul, so she called the AD and asked for one. She got the "sorry not available...short supply..blah blah"....She informed my friend who is a pretty good client there that she couldn't get the watch. He called his saleperson. Come and get it was the reply. Got one for you in the back. Easy Peasy.

The level dealers do this is inconsistent. Some dealers are vaulting all their SS...others aren't vaulting anything and it if you see it, it's yours...of course the exception being SS Daytona and SS Skydwellers.

I don't disagree with most of what you say. In fact, I almost always agree with all of your posts.

But I happen to have a super relationship with my AD. Yes, I am a flipper. And yes, they know that. But they also know that I don't buy watches to try and make a profit. I buy them, get bored and want to move on to something else eventually.

I have a sneaky suspicion that they like that I flip. That typically means that I end up buying many more watches from them.

Not only do I buy a lot of watches from them, I have bought many jewelry items for my wife. I bought my mother a TT DJ for the holidays last year, and I even bought my wedding band from them.

On top of all of that, I have likely brought in close to a dozen buying customers.

Could you be right? Are they just telling me they won't sell to me, and they have them in the back? Maybe. But it would surprise me very much.

I do trust what they are telling me. I got it from both the owner and the manager. And I am told they are not getting any SS sports watches until after the holidays.

I can't speak for any other AD's. But these guys appear to be consistent with much of what the forum is saying.

[Rolex addict]

Originally Posted by superdog

If this has been discussed, I am sorry. I did a search, but was unable to find.

I think that most of us will likely agree that Rolex is the king of marketing.

With the current lack of sports models most specifically in the UK and the US, do you think this is part of their marketing? I have heard from many sources that AD's are not getting any new shipments, specifically for sports models, until after the new year.

That seems odd to me. My guess would always be that they want to sell more watches.

Or, maybe they want to drive more sales of the professional watches?

Or, maybe they are looking to create scarcity in the market so that they can soon raise their prices?

Or, maybe they simply are looking to become more exclusive so they are limiting their supply?

Or, maybe they are just unable to keep up with demand?

I know for a fact it has had an effect on me. The simple fact that a 114060 is seemingly so hard to get, makes me want to get one. Then again, I have always been a sucker for marketing.

It turned me off when it was simply the allure of the Daytona. But with the apparent inability to get any of the sports models, it is changing my tune.

I am curious as to what the consensus here thinks.

Personally, I believe they saw the hype build up over the Daytona and decided to test the waters with other models to learn how much more people are willing to pay. Will this data lead to a price increase down the road? Who knows. From what I've seen lately, people are willing to fork over more money so why not increase the price.

[Dirt]

Originally Posted by Duey

This makes perfect since if Rolex is changing a watch design (not just the movement). I look at the patents they've issued over the last few years and see a change is a coming (not sure if it's this next year).

1st) With the Sub's Getting New Ceramic Bezels That GLOWS -
https://www.rolexforums.com/showthre...ghlight=patent

2nd) With the GMT's Getting a New Bezel Enabled GMT function -
https://www.rolexforums.com/showthre...ghlight=patent

If these 2 come out Rolex needs to clean out the pipe line the best they can and still keep control of it.

Quite plausible
Something on one has put forward yet.

Just a couple of things though.
Models that are not due for a movement upgrade are also in short supply.
Not counting the Daytona(unless it's getting a date function), the Rolesor Skydweller and SD43 are not coming through the pipe line either.

I was talking to someone seemingly "in the know a little" the other day and they said supplies of the TT Skydweller are limited. Also they noted that the SS versions supply shortage is seemingly not pushing the customers to go for more PM versions out of desperation.

I do also wonder if Rolex are having a problem with manufacturing a certain type of critical component which is made in-house.

Anyway the theory that they are restricting supply to generate pent up demand prior to a big price rise is still a good one.
If so, It's the same scenario as the early 2000's all over again.
Start saving harder

[aquatimerfla]

Originally Posted by Etschell

doesnt mean you are correct. funny how that works.

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You proved I am correct

I said horrible resale value.

you said. "not if you buy right". Basically saying buy pre-owned.

This verifies you indeed agree with me. Yes it is funny how that works.

[Rolex addict]

Originally Posted by aquatimerfla

You proved I am correct

I said horrible resale value.

you said. "not if you buy right". Basically saying buy pre-owned.

This verifies you indeed agree with me. Yes it is funny how that works.

Buying right doesn't mean preowned. I recently bought two Tudor Black bays. One was the sought after 79220N on bracelet. Both from an AD and I got a really good discount.

[aquatimerfla]

Originally Posted by Rolex addict

Buying right doesn't mean preowned. I recently bought two Tudor Black bays. One was the sought after 79220N on bracelet. Both from an AD and I got a really good discount.

I see guys right now cant even give away the new Tudor chrono. Bottomline. Tudors a dog. 'meh' brand.

[Rolex addict]

Originally Posted by aquatimerfla

I see guys right now cant even give away the new Tudor chrono. Bottomline. Tudors a dog. 'meh' brand.

That's your opinion. Some people love them, some don't. If you don't like it, don't buy it. No big deal. Personally, I love mine.

[superdog]

Originally Posted by Rolex addict

That's your opinion. Some people love them, some don't. If you don't like it, don't buy it. No big deal. Personally, I love mine.

I love them.

[Rolex addict]

Originally Posted by superdog

I love them.

Forget that watch you have on the way and get a Platona. Join us. You know you want to!!

[superdog]

Originally Posted by Rolex addict

Forget that watch you have on the way and get a Platona. Join us. You know you want to!!

I do want to. I really do.

But I can’t justify that number just yet.

[Rolex addict]

Originally Posted by superdog

I do want to. I really do.

But I can’t justify that number just yet.

You can never justify that number. Just do it. I promise you will love it!!!

[locutus49]

Come on in, the Platona water's fine.

Originally Posted by Rolex addict

Forget that watch you have on the way and get a Platona. Join us. You know you want to!!

[Nikrnic]

It seems to me, especially towards the end of the year when your out, your out. This year ended up with stronger than normal sales I've heard.

[Spartacus]

I like the reduction of SS models, I also think pushing PM models is a good brand strategy.

If everybody can walk in and buy "the" Rolex then is the brand still carrying the allure? Not really.

You ever wonder why so many buyers are taking their money to AP and PP?

[watchwatcher]

LOL. I see where we have abandoned the thread discussion and now encouraging the OP to get a Platona. TRF enabling at its best.

[stainlesssteve]

I think Rolex is simply trying to move more of the non sport models. Holiday buying season. Not every Rolex buyer is a forum member. Some buyers just wander into the store and buy what is in the case.

[Cru Jones]

Move existing inventory to make way for new movement + modify production lines for the new movement + higher demand than forecasted = no watches available for sale.

Rolex will roll out the Basel releases quickly next year.

[pgrandster]

I read on another thread that Rolex is simply not shipping certain SS models toward the end of the year, but will restart the beginning of the year.

On the conspiracy theory note, I once imagined that Wilsdorf put in his will that Rolex, a non-profit, would operate for x-years (maybe ending soon) and then dissolve with the profits going exclusively into humanitarian causes (keeping the trust body and using profits) while Tudor (created to continue the Rolex watchmaking) would continue to operate as Rolex's successor leaving all of us Rolex owners with a scarce and valuable product :D

[HK Islandboy]

Originally Posted by 2th_doc

Just had a convo wit my local AD. He knows I am not currently looking for anything as I have everything I want at the moment. (Unless I hit the lottery.) I mentioned to him about all the threads on TRF about a shortage of SS and no more shipments. His response was that Rolex produces watches based on sales expectations per year. And he said that they were 30% above expectations. And I am sure the SS sports models are a big chunk of that 30%. Which explains the shortage at this years end. Im sure many will take this explanation with a grain of salt. But this is just me adding my input to this thread. I will say it sounds like a reasonable explanation to me. So a real SS shortage and not a perceived SS shortage could make some ADs want to vault certain SS models for more top tier customers.


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This makes sense.

Add to the situation that increasing production requires that Rolex train watchmakers, I don’t think that Rolex will be able to be as nimble at responding to changes to demand as other industries

[HK Islandboy]

Originally Posted by Spartacus

I like the reduction of SS models, I also think pushing PM models is a good brand strategy.

If everybody can walk in and buy "the" Rolex then is the brand still carrying the allure? Not really.

You ever wonder why so many buyers are taking their money to AP and PP?

I don’t disagree. In response to the Apple Watch, I expect that over time the volume of luxury watches sold will decline (NOT among TRF members!!), but the average price will rise. In this scenario, moving toward a higher proportion of PM pieces sold would make sense for Rolex

[aquatimerfla]

I am hearing an awful lot of excuses being made for what many consider the premier watch brand on the planet. I dont buy any of it. Companys like Rolex dont get caught with their 'pants down'.

Whatever Rolex is doing, it is a measured calculated approach.