The Future of Rolex Retail Sales (My View)

[904VT]

Where's megan fox to talk about Rolex replicating Omega's online sales when you need her

[TswaneNguni]

Originally Posted by ronricks

‘
I would much rather do business with a mom and pop Jewelry Store than a Rolex Boutique.

I trust owners.I like dealing with owners.Owners know their clients.Owners go the extra mile.

I don't trust people acting smart/know nothing and working for a salary .Their incentive are just not the same .

[TswaneNguni]

Originally Posted by peterpl

Bingo!! As I mentioned above Rolex is a brand that

1) Rolex is mass produced
2) Rolex is mass marketed
3) Rolex is for the masses

These 3 points alone will never allow Rolex to flourish in the ultra high end luxury market niche. From my past history in marketing the current situation will never last for this kind of product.

Rolex must then be the mass production company with the highest quality control in the world.
How many of the masses in the world owns a Rolex watch ? Or can own a Rolex watch ?
Their marketing is excellent,they market and sponsor excellence .
Their history in marketing stretches over many many decades.
Waiting lists for products from the mass marketer is quite long.It is a sought after product.
For mass market production their product has an extremely high re-sale value and value retention.

[dtwer]

Originally Posted by TswaneNguni

I trust owners.I like dealing with owners.Owners know their clients.Owners go the extra mile.

I don't trust people acting smart/know nothing and working for a salary .Their incentive are just not the same .

Completely agreed. That’s why I have no desire to go to some big box ADs and deal with the sales people who are only interested in earning a commission from me yet clueless about the their Rolexes. I have zero trust or respect for people who don’t at least put in the effort to make themselves knowledgeable about the business they are in.

The only experience that is worse than that would be to buy on the internet.

[returntorolex]

Rolex watches used to be sold at the PX, and even catalog showrooms like Service Merchandise or Best Products. Of course, that was years ago....

The distribution model has evolved and continues to evolve. As to online sales, I’m not sure I would go down that path personally.

[Fleetlord]

Originally Posted by peterpl

Do you seriously believe this is good for the brand? So your saying its good for ticket scalpers to popular concerts like U2/Rolling Stones or whatever to control the gray market ticket prices?

I don't agree with that a single bit. Short term yes maybe existing customers are enjoying because their pieces are all of a sudden worth a little more but long term this is not the way forward strategically if they don't want the brand image to suffer. There are already many enthusiasts fed up with the whole situation and its creating very unpleasant dealings for existing and especially new customers. Once in my career I've dealt with brand image and marketing and this is one way that will end very badly longer term.

It is infinitely better for a luxury brand NOT to have deflated prices on the grey market. It isn't even close.

Example of this is poor Richemont. They spent millions to buy back overproduced and thus unwanted references to AVOID horrific price degradation. That is toxic poison to a luxury brand and cannot be allowed to happen. It just cannot.

Rolex recognized that they have an "exclusivity" problem in the luxury space they are occupying.

https://www.underscore.co.uk/insight...f-exclusivity/

They are handling that problem now. It's working out just fine. Limiting distribution in luxury is never a bad thing. It's driving FOMO purchases now and will also be effective when the economy tanks. There is no reason to flood the market with watches anymore. NONE! If a few number of enthusiast types jump ship along the way, so be it.

[rolexdream]

Its inevitable that sales will be online, surely its much easier and fairer to buy online and be placed on an online queue

[TswaneNguni]

I wonder how much the pepsi,batman/steel daytonas and ss skyDs would be sought after if it wasn't for a certain amount produced and much higher demand inflating prices in the secondary market ?
Make no mistake that there are many who have no interest in buying for self but merely making a quick buck on selling.
Pushing the price up and up ..of course those prices can lower quickly if the ratio between availability and demand changes slightly.

Since when has the ss Daytonas pricing been so inflated ? Well,since 2004 when I got interested.That I know.
Which other company in the world makes a product like that that remains so sought after for decades ? Rolex knows that producing more will destroy exactly that . When the ceramic came out ,what happened,the previous model got even more expensive in the market !! I thought pricing would drop.Nope.

I dont think much in this model will change,its working very well,for many many years.

Timing your buy ,is like timing the stockmarket,the only difference is you are more certain of Rolex pricing.

Of course paying highly inflated prices for certain models is something I wont do.I get it at MRSP or with a gesture or I move on.

[Late]

Originally Posted by rominvicta

Agree, a wave is part of tide and sooner or later Rolex will surrender. New board, new ED etc and policy will change overnight. ...And they will surely obey call of market.

Rolex isn't a corporation, but more of a family trust. It could happen, but not in the near future.

Originally Posted by peterpl

Rolex can never be a Patek or any of those higher tier brands. ... No matter what they do at the end of the day its a entry/mid level tier brand with mass market and mass distribution. Nothing can change that.

Your mental chart of the market must have steep distribution cliffs. Patek Philippe is the low-end of the sub-100K watches-per-year companies... but the mean Patek Philippe is only about three times as expensive as the mean Rolex (roughly $10K I think.) Meanwhile, a normal "nice" analog quartz wristwatch is about $50.

"Entry-luxury" used to be brands (i.e. probably "still is" for people not in a horophile site) such as Hamilton, Bulova, Tudor, e.g. Nomos, up to the entry models from Omega, TAG... basically, where you get a bit more craftsmanship and a real swiss automatic. Being in "Rolex-land" doesn't make it the baseline for most people.

You're also defining "Mass Distribution" in a non-standard way. You can't get a Rolex from Walmart or Amazon. Odds are pretty good that there are only three shops within 10 miles of you that have them... and that's if you're in a major metro. Part of what keeps Rolex in the "luxury" category is exactly what this thread is complaining about: That they limit their ADs and insist they provide a certain experience. The delivery, the sizing, the removal of stickers is part of the process. It isn't like buying a Citizen or Skagen, where you receive a box and do the rest yourself. It's more like a bespoke suit, from the browsing through the delivery.

Think audio equipment: You're looking at these nice separates and saying, Ah, those aren't Hi-Fi; these hand-blown tube amps are Hi-Fi... you can tell because they used green pen around the edges! But those are (1) "Sky-Hi-Fi", way beyond the luxury market, (2) more art than audio, (3) Unrelated to a market where an iPhone talking to a Bose is "Hi-Fi", a higher-end $4000 Denon or Marantz receiver, despite being a receiver, blows away the 95% that top out at Sonos, and Anthem/Cambridge/McIntosh define the sky-high-end... with no measurable or perceivable difference... but you can still go up from there. Rolex is already in the Anthem/Cambridge/McIntosh level by relative cost and by volume. That's luxury, even if you have the funds and discerning taste to be able to look down at it.

[Andad]

Originally Posted by TswaneNguni

Rolex must then be the mass production company with the highest quality control in the world.
How many of the masses in the world owns a Rolex watch ? Or can own a Rolex watch ?
Their marketing is excellent,they market and sponsor excellence .
Their history in marketing stretches over many many decades.
Waiting lists for products from the mass marketer is quite long.It is a sought after product.
For mass market production their product has an extremely high re-sale value and value retention.

Hi Neef,

You are giving too much time and credibility to some who don’t seem to have a few spare bucks to their name.

[tyler1980]

Originally Posted by ronricks

I would much rather do business with a mom and pop Jewelry Store than a Rolex Boutique.

some mom and pop stores own those boutiques since they are all independent AD's to begin with. Sometimes the underlying boutique ownership belongs to an AD chain, sometimes not.

For example, The Rolex Boutique in Houston at the galleria is a family owned store with two (i think) locations. One is a mono brand boutique and one is a multi brand AD. The Rolex Boutique on Bond street in London is owned by a huge AD chain. So not all boutiques are the same as far as that goes.

[rolexforum73]

I would have thought even a 6 figure sum to set up an exclusive rolex only area in a store would be well worth it. What do you need to do, sell 1 rolex a week and it’s paid for itself in a year? Simple maths but if it was my store it would be 6 figures well spent.

[tyler1980]

Originally Posted by rolexforum73

I would have thought even a 6 figure sum to set up an exclusive rolex only area in a store would be well worth it. What do you need to do, sell 1 rolex a week and it’s paid for itself in a year? Simple maths but if it was my store it would be 6 figures well spent.

umm 1 rolex a week at say $35,000 assuming a PM watch nets $13k for the store minus expected discounts so say 6k since everyone seems to think a 20% discount on PM is expected... taxes,rent, insurance, interest on holding millions of dollars in inventory probably on a line of credit, salaries, and still need to make a profit and pay six figures to renovate the store. No way

6k revenue a week for a year is 312k before expenses. A lot of AD's dont sell one PM watch a week, far from it

[rolexforum73]

Originally Posted by tyler1980

umm 1 rolex a week at say $35,000 assuming a PM watch nets $13k for the store minus expected discounts so say 6k since everyone seems to think a 20% discount on PM is expected... taxes,rent, insurance, interest on holding millions of dollars in inventory probably on a line of credit, salaries, and still need to make a profit and pay six figures to renovate the store. No way

6k revenue a week for a year is 312k before expenses. A lot of AD's dont sell one PM watch a week, far from it

I was working On The assumption this rolex set up would be part of an already established high street independent, so one can assume it’s turming a profit or breaking even already. I was doing the basic maths based on why wouldn’t you add a Rolex franchise to an existing store, eh numbers would surely add up providing you can get access to the initial 6 figure investment.

[tyler1980]

Originally Posted by rolexforum73

I was working On The assumption this rolex set up would be part of an already established high street independent, so one can assume it’s turming a profit or breaking even already. I was doing the basic maths based on why wouldn’t you add a Rolex franchise to an existing store, eh numbers would surely add up providing you can get access to the initial 6 figure investment.

i just dont think they make as much as you think. Even my London AD doesnt sell as many PM watches as you would guess. SS are easier to sell, but you have got to move more to get the same amount of revenue and they don't get as many. A lot of AD's go out of business and a lot get their status pulled because they dont sell enough and/or cant afford to upgrade the store.

My favorite US AD in small town Texas, has a WG Blue dial BLRO. It use to be the black dial version and it had just come back from Rolex to get the dial swapped. It was the SAME watch i tried on 18 months ago. Its safe to say the YG sub, DD's etc they also have in there probably sit in the same ballpark a lot of times.

[MTBer]

Originally Posted by tyler1980

A lot of AD's go out of business and a lot get their status pulled because they dont sell enough and/or cant afford to upgrade the store.

That must be fun to watch when the Rolex rep comes in and tells the AD their status is being pulled because they aren’t selling enough watches while standing next to an empty Rolex display case.

[WatchLurv]

Originally Posted by tyler1980

i just dont think they make as much as you think. Even my London AD doesnt sell as many PM watches as you would guess. SS are easier to sell, but you have got to move more to get the same amount of revenue and they don't get as many. A lot of AD's go out of business and a lot get their status pulled because they dont sell enough and/or cant afford to upgrade the store.

My favorite US AD in small town Texas, has a WG Blue dial BLRO. It use to be the black dial version and it had just come back from Rolex to get the dial swapped. It was the SAME watch i tried on 18 months ago. Its safe to say the YG sub, DD's etc they also have in there probably sit in the same ballpark a lot of times.

That's why a mom & pop store could sell for 500K USD to Greys and survive. From 500K they would take home ~175K. Minus interest on their credit line, minus overheads (staff, insurance, security, electricity etc). Probably do sub-100K from such a deal. If they can get rid of more on a gradual scale, Rolex will supply more, and they would be able to afford a renovation.

Also Rolex won't ask the low-scale Rolex AD for a 400K renovation, but they would require them to do something about their display as it wouldn't be representing the brand to its fullest.

Originally Posted by MTBer

That must be fun to watch when the Rolex rep comes in and tells the AD their status is being pulled because they aren’t selling enough watches while standing next to an empty Rolex display case.

They send them a letter.
The AD will have enough DJs, but they're just unable to sell those, hence their SS supply doesn't get restocked. The AD is left to fend for themselves if they haven't coupled up with greys and are basing all their loyalty and trust to their "local VIP'ers". Financial suicide in my eyes.