The Rolex "Strategy" to go haute horolgy? -

[APPRF]

Originally Posted by macrowatch

Don't know about HH, but it's clear it's becoming a coke and diet coke (Rolex & Tudor) vs Pepsi (Omega) as a distant 3rd.

What? Tudor above Omega. No way, even Tudor fanboys can't claim that. Big gap between Tudor and Omega.

[SUPERDOC]

Originally Posted by Brny11

Lost me right in the beginning. Not certain they restrict supply or demand went up. Until we know that, I assume the rest of what you wrote (admittedly didn’t read past this) is invalid.

Amazing that someone would comment on an out of context statement that he himself took out of the context...

The reader's digest version is that there is a group who believes Rolex is intentionally restricting supply as part of a strategy to move upmarket... (admittedly "Haute Horology" is a bit off the mark, because its not about changing its watches to be grand complications, but its image to be more of an upper tier luxury item rather than a midlevel luxury item)

Support for this idea might be the willingness of people to pay premiums. And the lack of stock at the ADs, possibly giving Rolex, a new perspective on price expectations, and having Tudor poised to take over the mid-level space Rolex leaves behind...

I personally think it would be dangerous for Rolex to stray from its current base, and I see the shortages being mostly a natural supply and demand issue that is not part of a deeper, premeditated master plan...

But, I have been embarrassingly wrong before... and might be naïve in my thinking, so I'm enjoying the discussion so far..

Another thought... how high could they raise prices until more would be expected from their watches... and what more would be expected? Finished movements? Fancier boxes? How would they become more luxury if that was the plan?

[brucethemanlee]

Simple answer is no

Why care about HH? They’re number ONE already


Sent from my iPhone using Tapatalk

[AK797]

No, in fact I'd argue Rolex are going the other way and are underpricing their wares rather than charging a Haute premium as the base PP and AP models do, so the SS SkyD, CE Daytona and Pepsi could all have been priced a grand or two higher and still had overdemand so Rolex have played more the hype and popularity game with their lowish prices, while supply though has not been manipulated much other than on the Daytona which has long been their policy.

However even then I do feel the low prices, much like with the Patek Pilot 5522, were set competitively to attract not alienate their customer base rather than a cunning plan to drive up hype, I just don't think these watch firms are that cunning, they are watchmakers at the end of the day who were in the right place at the right time when the perfect storm of global factors struck in 2016, much like 2020 is the exact opposite.

[Onikage]

??? Rolex aren't restricting supply. They aren't increasing production and expanding factory size. Greys buying up all the hot models and charging more than retail are restricting our supply.

[Speedbird-1]

I see Rolex, easily being able to introduce a, 'Rolex Elite - Grand Complication' line, to rival PP and the rest. It'll have to be HUGELY expensive to give it that 'gravitas' the marketing dept would need to work with.
It's not like they can't afford to do it.

[SUPERDOC]

Originally Posted by AK797

No, in fact I'd argue Rolex are going the other way and are underpricing their wares rather than charging a Haute premium as the base PP and AP models do, so the SS SkyD, CE Daytona and Pepsi could all have been priced a grand or two higher and still had overdemand so Rolex have played more the hype and popularity game with their lowish prices, while supply though has not been manipulated much other than on the Daytona which has long been their policy.

That is a brilliant argument... excellent points, and I think speaks to where Rolex wants to sell... are they realizing that they've left too much money on the table?

[AK797]

Originally Posted by SUPERDOC

That is a brilliant argument... excellent points, and I think speaks to where Rolex wants to sell... are they realizing that they've left too much money on the table?

I'm sure it smarted a bit when they saw how high grey premiums were going, but they are a traditional firm, in it for the long term so as long as the brand was healthy and in demand, even if they were not maximising every last bit of profit, then they were probably satisfied with the situation, and now the global situation is going the other way they look set to weather the storm as well as anyone.

[Harry-57]

Nobody knows. Second guessing Rolex might be fun but that's all it is. A bit of meaningless, harmless fun.

They sell everything they want to make. And they make lots. Demand is just off the scale. One thing we do know about Rolex is that they don't bend and twist to fads and fashion. The tail does not wag the dog. If they want to sell less watches at higher unit cost they will. If they don't they won't.

They don't need to restrict supply at present. The market is already doing this for them and strengthening the air exclusivity, even for common or garden models with no precious metal or gems in them - apart from those in the movements - which are reliable, well designed, well engineered and rugged, but HH they are not.

[Boba Fett]

Originally Posted by kieselguhr

I think you are confusing popularity and high horology.

I don’t believe Rolex has any intention of joining the ranks of high horology as it does not fit their historical and current theme of robust watches nor their marketing strategy. If they ever make a minute repeater, grand sonnerie, or any actual grand complication, I’ll change my mind. A moonphase and annual calendar does not qualify for high horology. Furthermore, Rolex are mass machine produced. Thus they are missing the essential criteria of being hand crafted, assembled, and finished.

Now, I do believe that Rolex has every intention of using its popularity to increase its price point.

This person has it right.
Rolex is the waist of the hour glass in my eyes, the pinch point between the HH and Uber expensive and everyone below them, the crown has no rivals at their level. That level is the highest quality mass produced luxury watch.
Rolex shows no sign of wanting to join the HH gang, they keep the pretence of being tool watches with the solid case back despite making them in PM.
If they wanted to they could buy in, or poach some master craftsman to hand finish movements and sell them as Grand Rolex with sapphire case backs, but they don't. Same as they could make a cheap Rolex but they don't. Either would be upsetting I highly successful business. Yes, Tudor is a more affordable Rolex and it's watches are fantastic. That is a separate brand, another genius move by Rolex.
Rolex knows what they are doing and it's working very well, becoming a member of the trinity is not on the agenda.

[Chewbacca]

There’s nothing ‘haute’ about anything reproduced 1000000 + times a year and occasionally punted new through middlemen wholesale buyers.

There also aren’t enough craftsmen alive to make that many ‘haute’ watches.

It’s just a premium aspirational thing. Like a common Mercedes, tumi bag or well made suit.

[Stripiest]

This reminds me of how British Airways ultimately turned a profit on their Concorde routes - in the mid 1980s, they conducted a survey that suggested their customers (whose tickets were mostly booked by secretaries) thought Concorde flights were much more expensive than they actually were. So they increased ticket prices accordingly. I can't believe Rolex wouldn't incrementally do that to a point where supply balances with demand.

[Calatrava r]

I would point our that there is far more handwork to building a Rolex movement than people know. Most watch companies use CPC milling machines to make the bridges and parts as does Rolex. The actual movement is hand assembled and regulated. What Rolex does not do, is all the handwork in finishing the movement, case and dials as some costlier watch companies do. That is really what people mean when they refer to "handmade" in watch making. Look at any photo of the Rolex watchmaking facility and it shows rows of people hand assembling the movements in white coats.

[LawyerFlyfisher]

This is a very interesting thread.

If you go to Rolex’s website, it is brilliantly laid out because of Rolex’s masterful branding. You can easily select the watch, band, bezel and dial color you wish. How many product lines does Rolex have? 8? With almost no time you can build the watch you’d like.

Getting from the necessary AD the Rolex you now desire from building it on their site. Well, that’s the challenge.

The Omega website allows direct purchases from Omega. They have less product lines but countless variations. Their website is a mess to navigate. They offer anything and everything under the sun as far as how you want to get one of their watches including NATO bands, etc. I find their website disorganized and frustrating to use. But their watches featuring their coaxial movements are excellent quality. Their marketing/branding isn’t focused. Honestly, other than watch geeks, few care about Omega.

I would say that the sudden scarcity of previously very easy to find Rolex watches like the Sub seems like a push for Rolex to develop Tudor. I don’t think Rolex has any calculations on being considered HH like PP, VC or AP. They don’t need to and their watches are known for durability.

How many thousands of people have developed an interest in Tudor because they can’t get a GMT or Sub? Eventually, Rolex will probably push prices up to grey market levels. Those not wanting to play at that price have Tudor as the “kind of Rolex.” They’re marketing heavily with David Beckham, Lady Gaga, etc.

It’s very smart. Push up Rolex profits and push up Tudor demand. Frankly, it’s still working despite the pandemic.

[77T]

Originally Posted by LawyerFlyfisher

If you go to Rolex’s website, it is brilliantly laid out because of Rolex’s masterful branding. You can easily select the watch, band, bezel and dial color you wish. How many product lines does Rolex have? 8? With almost no time you can build the watch you’d like.

Getting from the necessary AD the Rolex you now desire from building it on their site. Well, that’s the challenge.

Yep - more like a video game though - since when you’re finished you have nothing to show for it, and will never get that hour of your life back again.


Sent from my iPhone using Tapatalk Pro

[77T]

Xelor could be a new brand - they could make the opposite of anything Rolex.

Tudor is their budget price option. Cellini their simple dress option.

So any haute horology option needs a new brand name to keep faith with the existing Rolex brand image.




Sent from my iPhone using Tapatalk Pro

[WatchNutcase]

Rolex is actually referred to as "The King" by those in the watch industry. They are on their own level and don't compete with any of those HH brands. It's almost certain they will not change their strategy because they have nothing to gain from it.

[RL777]

I'd love to see Rolex go the opposite direction and go back towards the tool watch feel. Unfortunately I think recent releases show that Rolex is more likely to continue its jewelry based designs.

[trfChris]

To me HH is all about

* Movement design, innovation & finishing
* High complications: tourbillons, minute repeaters, perpetual calendars, split seconds chrono, astronomical/celestial complications etc

Rolex does not play this game at all and I don’t see them wanting to play this game. Their movements are excellent for what they want them to be: well-built, sturdy and functional.

They have some great innovation (for instance skydweller bezel integrated with movement) but always in the service of making a robust & easy to use watch. I don’t think they have any interest in complications for the sake of complications.

They don’t show their movements so no need for elaborate finishing.

Is Rolex trying to go for higher-end luxury with precious metal and gem-set pieces - I think yes. But IMO they have little interest in HH in the sense of high complication and movement finishing.

[jack1]

Originally Posted by Boba Fett

This person has it right.
Rolex is the waist of the hour glass in my eyes, the pinch point between the HH and Uber expensive and everyone below them, the crown has no rivals at their level. That level is the highest quality mass produced luxury watch.
Rolex shows no sign of wanting to join the HH gang, they keep the pretence of ....

I agree with these comments above and those of kieselguhr..albeit being probably much more of a novice myself on the topic.
I think the current situation of certain SS models being impossible to find at ADs is simply a set factory output of pieces which is not matched by the increasing demand. That demand has increased in the past few yrs for many reasons, including the advent of social media and the popularisation of a luxury object that can be photographed on said wearer, celebrities and their representation on social media, and also an increasing general interest and discussion on watches as a hobby with a corresponding sort of ‘scholarship’ (as I saw Eric Wind on talking watches refer to it in his GMT ref points) that has sparked interest in vintage too. Only this latter reason I can appreciate; as to the former the idea of a proper mechanical watch being a fashion object I find very superficial.
I won’t pretend to understand the economics of their not-for-profit status, but from what I can see their level of investment in factory improvements and sponsorship of so many worldwide sporting events suggests they have plenty of coffers in the bank. It might be naive, but I’d like to imagine Rolex’s restricted supply is simply a set limited supply and that they just don’t want to churn out more to match an unpredictable market. And it then follows that they should be genuinely frustrated at any under the radar slipping of high demand pieces to the grey market. It’s my 2c but they can afford to be conservative and just keep plodding on rather than ride a wave of change.

[jack1]

Originally Posted by Harry-57

Nobody knows. Second guessing Rolex might be fun but that's all it is. A bit of meaningless, harmless fun.

They sell everything they want to make. And they make lots. Demand is just off the scale. One thing we do know about Rolex is that they don't bend and twist to fads and fashion. The tail does not wag the dog. If they want to sell less watches at higher unit cost they will. If they don't they won't.

They don't need to restrict supply at present. The market is already doing this for them and strengthening the air exclusivity, even for common or garden models with no precious metal or gems in them - apart from those in the movements - which are reliable, well designed, well engineered and rugged, but HH they are not.

Agree with this too, well said

[APPRF]

Originally Posted by LawyerFlyfisher

This is a very interesting thread.

If you go to Rolex’s website, it is brilliantly laid out because of Rolex’s masterful branding. You can easily select the watch, band, bezel and dial color you wish. How many product lines does Rolex have? 8? With almost no time you can build the watch you’d like.

Getting from the necessary AD the Rolex you now desire from building it on their site. Well, that’s the challenge.

The Omega website allows direct purchases from Omega. They have less product lines but countless variations. Their website is a mess to navigate. They offer anything and everything under the sun as far as how you want to get one of their watches including NATO bands, etc. I find their website disorganized and frustrating to use. But their watches featuring their coaxial movements are excellent quality. Their marketing/branding isn’t focused. Honestly, other than watch geeks, few care about Omega.

I would say that the sudden scarcity of previously very easy to find Rolex watches like the Sub seems like a push for Rolex to develop Tudor. I don’t think Rolex has any calculations on being considered HH like PP, VC or AP. They don’t need to and their watches are known for durability.

How many thousands of people have developed an interest in Tudor because they can’t get a GMT or Sub? Eventually, Rolex will probably push prices up to grey market levels. Those not wanting to play at that price have Tudor as the “kind of Rolex.” They’re marketing heavily with David Beckham, Lady Gaga, etc.

It’s very smart. Push up Rolex profits and push up Tudor demand. Frankly, it’s still working despite the pandemic.

[APPRF]

Originally Posted by Chester01

No, the reality is that VC, PP, and AP are dress watch companies, their so called sport watches are simply dress watches pretending to be sport watches. Rolex was and is a sport watch company and it’s in their DNA. It’s the trinity that is going after Rolex market share with their so called sport watches. They had to bring in an outside consultant (genta) to come up with a design that could compete and in my estimation never came close. You want proof, Rolex is the most copied design. If the nautilus or RO were great designs (without the label on the dial) companies would be ripping off their designs. They don’t because the sport watch offerings from the trinity look quite dated with the exception of the VC overseas.

[Ihatecheese]

Personally I don't think it makes much sense moving in that direction going by their success with the standard sports watches and brand recognition. 1 in 4 watches Swiss sold is a Role the last time I saw one of those Swiss export reports. That is ridiculous market share and ubiquity. If it ain't broke!...

Perhaps in the future. Things can change in an instant.

[Burlington]

All they are likely to do in the short to medium term is increase PM output and cut SS. More Profit for the same production time & no need for volume expansion.

[Muxi]

Originally Posted by Speedbird-1

I see Rolex, easily being able to introduce a, 'Rolex Elite - Grand Complication' line, to rival PP and the rest. It'll have to be HUGELY expensive to give it that 'gravitas' the marketing dept would need to work with.
It's not like they can't afford to do it.

That would be a new strategy that may or may not succeed.

[Onikage]

The average Rolex buyer doesn't appreciate haute horology and those that do don't want it in a Rolex. Bad move Imo.

[Boba Fett]

Rolex did make a display back with some decorative finishing. I found one in NOS condition with stickers on in a shop which couldn't shift it years after it was discontinued. That shows how popular that idea was.

[watchmavan]

Why would a company so successful in the sports watch range want to forgo that and move to haute horology.


Sent from my iPhone using Tapatalk Pro

[Token74]

Forums are great places to spend time talking about a geeky interest that our friends and partners don’t want to discuss with us! But...don’t be fooled into thinking a forum of watch lovers is a reasonable representation of the masses, it is quite the opposite!

The overwhelming majority of Rolex owners and wannabe owners have never heard of haute horlogerie and many, if not most, have not heard of AP or Patek, and certainly haven’t heard of VC.

Rolex sells in the region of 800k to 1m watches per year, this is not something any HH watch maker can even dream of doing.

Rolex operate in a bit of a niche, sitting somewhere between the likes of Omega and AP. There in is no way they would want to move away from that.

Any talk of them throttling supply is a nonsense. I’ve said many times before that for Rolex to increase supply, they would need to invest heavily in premises, equipment, and people. That’s a big risk as the demand profile can quickly change, and they have no need to take that risk.

The waiting list issue etc. is not as big an issue as forums suggest. Most of my friends who want a nice watch just go into a store, try on the pieces they have in stock, and pick one they like. Most of them are blissfully unaware of the fact that they can’t get a SS Daytona. They are also blissfully unaware of the investment value in certain watches, because it has never crossed their mind, they just want an nice watch to wear.


Sent from my iPhone using Tapatalk