What’s the strategy of rolex going forward

[Madman37]

Hi all

Couple questions rolex has obviously dropped on the grey market and become less desirable.

1. Do rolex care about this. You would have thought any luxury brand would but are rolex considered a luxury brand or a tool watch brand?

2. As they are a charity they don’t need to pay dividends, worry about share prices so technically don’t need to make loads of cash.

3. If they want to be desirable why don’t they just make less watches instead of the amount they normally make.

What are your thoughts.

In my simple mind if they just churn out the amount of watches they do. Also as they are building a new factory they can churn out more they become less desirable. Is that what they want?

[WatchGuy1966]

They want to bolster the grey market so they can continue the high demand at retail. Hence the CPO.

It allows them to profit twice on (or more) each watch. Some of you may argue the CPO benefits and protect the AD, but you need to think twice if you think Rolex is not taking a cut.

[Calatrava r]

Rolex is actually trying to meet the current demand as best they can. I doubt they look to the secondhand market prices to gauge the desirability of their products where ADs have no inventory. Demand at retail is the best indicator of desirability. Rolex used to trade for less than retail used, and everybody including Rolex, still thought they were desirable and luxury timepieces.

[Dirt]

Originally Posted by Madman37

Hi all

Couple questions rolex has obviously dropped on the grey market and become less desirable.

1. Do rolex care about this. You would have thought any luxury brand would but are rolex considered a luxury brand or a tool watch brand?

2. As they are a charity they don’t need to pay dividends, worry about share prices so technically don’t need to make loads of cash.

3. If they want to be desirable why don’t they just make less watches instead of the amount they normally make.

What are your thoughts.

In my simple mind if they just churn out the amount of watches they do. Also as they are building a new factory they can churn out more they become less desirable. Is that what they want?

A lot of things to unpack.
Firstly, fortunes in both the new and used sectors of the market are always subject to fluctuations with no defined reasons or causes. It's probably best to not read too much into it.
Secondly, it's been said before and Rolex isn't alone in this and should not necessarily be taken as an outright endorsement, but Rolex has always sold every watch they make.
Take from that what you will.
Thirdly, Rolex need to weigh up all the pro and cons of the dynamics of supply and demand.
Looking at the current state of play with regard to availability and growing negative sentiment around the availability of their watches and their business model.
I imagine any further constraints on supply would hurt "the brand".
Whilst there's more to it, that sums up how i see things as they currently stand.

[GB-man]

I can only tell you they will likely continue to out market and outsmart the competition. They’ve been doing it my entire life and I would bet my house they continue to outdo the rest when it comes to marketing.

[Old Geezer]

IMO....
1) Position their product in the minds of their target customers and protect the brand (Event sponsorship, endorsements, ambassadors)
2) Sell whatever number of watches they wish to sell
3) Facilitate ADs to capture some of the grey market sales, hence the CPO program.

[JSCP]

Rolex wants exclusivity, they make 4x the cost of the watch at least.

They don’t really care about grays up and down.

They are going to make $$$$, from certified pre-owned and be their own grey.

They really are not worried about any of your comments or worries etc etc.

They can do anything they want.

[jb335]

I think people need to adjust their perspective historically.

Still today, hardly anyone can walk into a store and buy a new Rolex* and most of their watches sell well over retail. Just 6 years ago, only the SS Daytonas sold over retail and besides them, you could walk-in and have the choice of at least half a dozen sports models to buy on the spot.

If you consider how far off we are from that I have a hard time with all this doom and gloom talk around here. Rolex is hardly hurting or considered “less desirable.”


*Please don’t reply telling me about the TT DJ 36 with diamonds you bought as a walk-in. That doesn’t count.


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[KatGirl]

Since the CPO program is limited to watches older than three years, they can’t compete with the grey market sellers, who deal in new watches, except by sending more stock to their ADs. Rolex must also figure out a way to stop the grey market dealers from acquiring new stock. There must be a way….

Kat


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[JSCP]

Originally Posted by KatGirl

Since the CPO program is limited to watches older than three years, they can’t compete with the grey market sellers, who deal in new watches, except by sending more stock to their ADs. Rolex must also figure out a way to stop the grey market dealers from acquiring new stock. There must be a way….

Kat


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Interesting my “Rolex boutique” mgr says that he is suspecting that more than likely display models will go into CPO. Their CPO will be available I think end of year. All display models are working pieces btw, i wanted display model , and I’m “VIP” and he said he consulted but couldn’t on particular model I was interested in, an OP. He has in past year offered me a display piece, but not a model of interest to me.

[KatGirl]

Originally Posted by JSCP

Interesting my “Rolex boutique” mgr says that he is suspecting that more than likely display models will go into CPO. Their CPO will be available I think end of year. All display models are working pieces btw, i wanted display model , and I’m “VIP” and he said he consulted but couldn’t on particular model I was interested in, an OP. He has in past year offered me a display piece, but not a model of interest to me.

If I had to guess the reason that they must be 3 years old, or more, it is so that the ADs don’t hold back stock, let it sit in the safe for a year, then sell it above new retail price, as CPO, thereby artificially inflating its value. This, of course, assumes that there will still be a severe shortage. Also, they would have to have registered them as having been sold, when new, thereby starting the warranty, so they are “legitimately” used watches. This would be easy to do, since they pay for the watches, when they take delivery. It sounds a bit complicated, but there is always a way to game the system.

Kat


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[Madman37]

Thank you all kindly for your comments. Really appreciate it. The company is so secretive it makes me wonder what they actually want to do which is the reason for the questions.

If find it interesting that even when they were sitting in the AD window and selling under retail many years ago they were considered luxury as a simple search on google says:

A luxury item is not necessary to live, but it is deemed highly desirable within a culture or society.

That’s why i wonder do they want to be known as a luxury brand. Also do they care if all their watches don’t sell or how much they make as they are a charity.

[JSCP]

Originally Posted by KatGirl

If I had to guess the reason that they must be 3 years old, or more, it is so that the ADs don’t hold back stock, let it sit in the safe for a year, then sell it above new retail price, as CPO, thereby artificially inflating its value. This, of course, assumes that there will still be a severe shortage. Also, they would have to have registered them as having been sold, when new, thereby starting the warranty, so they are “legitimately” used watches. This would be easy to do, since they pay for the watches, when they take delivery. It sounds a bit complicated, but there is always a way to game the system.

Kat

This is the way it will be.


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They are going to do whatever they want anyway, so good luck as most people will not get their watch at MSRP, or off the shelf quickly for years to come. And VIPs will get one or two, maybe three, allocations a year. Celebrities get anything they want already ( that’s beyond VIP). Production will stay about same.

So assume anything you want to assume.

[Avari]

Originally Posted by KatGirl

If I had to guess the reason that they must be 3 years old, or more, it is so that the ADs don’t hold back stock, let it sit in the safe for a year, then sell it above new retail price, as CPO, thereby artificially inflating its value. This, of course, assumes that there will still be a severe shortage. Also, they would have to have registered them as having been sold, when new, thereby starting the warranty, so they are “legitimately” used watches. This would be easy to do, since they pay for the watches, when they take delivery. It sounds a bit complicated, but there is always a way to game the system.

Kat


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Hi,

Just to add to this: it is true that CPO watches have to be 3 years old but the AD‘s offering CPO can buy even younger watches but have to wait until the watches are older then 3 years before they can offer these under the CPO program. I checked with my AD and he would have bought one of my watches (younger than 3 years) but with a discount of 20% to the current list price.

[gerry100]

Same as the current strategy whatever that is.
They sell all the watches they make.
Preserving the brand long term is their focus
or so it seems