The Future of Rolex Retail Sales (My View)

[BillA]

I see no new, small jewelers popping up as AD's. The AD's that are not Rolex Boutiques have had the franchise for many many years.

Rolex is asking and demanding that their watches be sold in the AD in a separate display area, not along side with any other brand. This is costing the AD lots of money to renovate their store. When I go into a Rolex AD now, I see the Rolex watches in separate rooms, wall clock and separate display cases.

But I think the future of Rolex marketing is the way of the Boutique whether it be in the airport or in the malls. Look at the newer Boutique in Dubai. It is featured in Issue #8 of the Rolex magazine. I think that once the Boutique models are rolled out, it is good-bye to the small stores.

This way Rolex controls supply and stops discounting by local AD's. So either you buy at the mall stores or grey market. Mom and Pop will be history soon.

Rolex is not a public corporation, they can do what they wish, they are an amazing operation.

[doboy007]

Originally Posted by BillA

I see no new, small jewelers popping up as AD's. The AD's that are not Rolex Boutiques have had the franchise for many many years.

Rolex is asking and demanding that their watches be sold in the AD in a separate display area, not along side with any other brand. This is costing the AD lots of money to renovate their store. When I go into a Rolex AD now, I see the Rolex watches in separate rooms, wall clock and separate display cases.

But I think the future of Rolex marketing is the way of the Boutique whether it be in the airport or in the malls. Look at the newer Boutique in Dubai. It is featured in Issue #8 of the Rolex magazine. I think that once the Boutique models are rolled out, it is good-bye to the small stores.

This way Rolex controls supply and stops discounting by local AD's. So either you buy at the mall stores or grey market. Mom and Pop will be history soon.

Rolex is not a public corporation, they can do what they wish, they are an amazing operation.

Two AD's in one mall around my neighborhood stopped carrying Rolex and instead we got a new boutique.

[Andad]

But the boutiques are not owned by Rolex?

[Hodog16]

Most of the Rolex boutiques are run by local stores right? Like Wempe in NYC and Tourneau in SF?

[doboy007]

Originally Posted by Hodog16

Most of the Rolex boutiques are run by local stores right? Like Wempe in NYC and Tourneau in SF?

Yes. I thought I read only 1 boutique is actually owned by Rolex.

[dtwer]

Originally Posted by BillA

I see no new, small jewelers popping up as AD's. The AD's that are not Rolex Boutiques have had the franchise for many many years.

Rolex is asking and demanding that their watches be sold in the AD in a separate display area, not along side with any other brand. This is costing the AD lots of money to renovate their store. When I go into a Rolex AD now, I see the Rolex watches in separate rooms, wall clock and separate display cases.

But I think the future of Rolex marketing is the way of the Boutique whether it be in the airport or in the malls. Look at the newer Boutique in Dubai. It is featured in Issue #8 of the Rolex magazine. I think that once the Boutique models are rolled out, it is good-bye to the small stores.

This way Rolex controls supply and stops discounting by local AD's. So either you buy at the mall stores or grey market. Mom and Pop will be history soon.

Rolex is not a public corporation, they can do what they wish, they are an amazing operation.

If Rolex does manage to consolidate ADs and as a result exert very strict control over the sales and distribution channels, there would eventually only be ADs left; most greys will see their sources dry up.

Given the sheer number of Rolex ADs worldwide though, I just have hard time seeing this type of regime ever happen.

[ArtNouveau]

Keep in mind RolexUSA is the only national distributor in the world AFAIK that is independently owned and operated. Remember their too cozy relationship with Customs for many years?
They could be used as a test case for new distribution channels. I believe BillA is kind of correct. I think many more small market dealers will be forced out in the next couple of years and the big cities that don’t yet have dealer owned boutiques will get them. If you think the required small dealer buildouts were pricey imagine what the bid is to become the local boutique.

[GoingPlaces]

My AD stopped selling Rolex, he was a smaller market Mom and Pop shop. Evidently, Rolex insisted he build a Rolex display in his shop that came with a hefty price tag (six figures). He said no thanks, I believe many AD's faced this same decision and passed.

[WatchLurv]

Originally Posted by BillA

I see no new, small jewelers popping up as AD's. The AD's that are not Rolex Boutiques have had the franchise for many many years.

Rolex is asking and demanding that their watches be sold in the AD in a separate display area, not along side with any other brand. This is costing the AD lots of money to renovate their store. When I go into a Rolex AD now, I see the Rolex watches in separate rooms, wall clock and separate display cases.

But I think the future of Rolex marketing is the way of the Boutique whether it be in the airport or in the malls. Look at the newer Boutique in Dubai. It is featured in Issue #8 of the Rolex magazine. I think that once the Boutique models are rolled out, it is good-bye to the small stores.

This way Rolex controls supply and stops discounting by local AD's. So either you buy at the mall stores or grey market. Mom and Pop will be history soon.

Rolex is not a public corporation, they can do what they wish, they are an amazing operation.

Yes & no. It's a lot harder for the mom & pop store to survive if they don't have a grey dealer for backup to take all their inventory and to support them in updating their display and taking on crappy datejust / presidentials with baguettes and whatever Rolex throws at them that won't sell.

You also have to consider that some stores are ranked by Rolex (internally). The better the ranking the more SubC (example) you get a month.

I was at the opening for the store in Dubai, and it's owned by Ahmed Seddiqi; not Rolex. He has exclusive on Rolex in UAE, Dubai. Their sales' staff keeps stock to their own clientele that they "favour" for.

Originally Posted by GoingPlaces

My AD stopped selling Rolex, he was a smaller market Mom and Pop shop. Evidently, Rolex insisted he build a Rolex display in his shop that came with a hefty price tag (six figures). He said no thanks, I believe many AD's faced this same decision and passed.

Yep. Once you say no to the renovation, you're history. That store didn't have a grey and only "local loyal" customers to pick up their hot SS pieces.

[Hodog16]

Originally Posted by GoingPlaces

My AD stopped selling Rolex, he was a smaller market Mom and Pop shop. Evidently, Rolex insisted he build a Rolex display in his shop that came with a hefty price tag (six figures). He said no thanks, I believe many AD's faced this same decision and passed.

Yes and if they agree to the display, apparently Rolex sends the materials (wood, glass, etc) and maybe even the workers to make sure it is constructed up to Rolex's standards.

[MTBer]

So Rolex forces ADs to build isolated, expensive display cases and then refuses to stock those display cases and help the ADs make a return on their investment? Shameful

[WatchLurv]

Originally Posted by MTBer

So Rolex forces ADs to build isolated, expensive display cases and then refuses to stock those display cases and help the ADs make a return on their investment? Shameful

In summary, yes.

AD has to present their shop on blueprint and showcase how they will present the brand (all out of their own pocket). ADs will use the material given to them from Rolex at a huge mark up for Rolex (this is how Rolex makes their additional revenue). ADs are forced to build these displays and showcase rooms in order to renew their annual contract. Rolex supplies them with the watches at 35-40% off MSRP and then leave it up to the AD for the rest of it. Whether the AD is smart enough to couple up with grays or "stay loyal" to their "loyal clientele" will show in their sales. Remember that ADs need to meet sales figures of different models in order to get their popular ones restocked. Can't just be selling stainless steel professionals out of their showcases This is where the mom & pop shop will fail as they were used to be able to live off their "loyal clientele" up until recent times. Don't adapt, you die. And they're dying quick.

[SS Oyster]

I would prefer Rolex sell direct to consumer via web ordering. Rolex builds what the consumer wants, not what Rolex feels like building. Cut out AD’s 40%, keep more money (80% instead of 60%) and offer the customer the same watches at 80%.


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[stchambe]

Sounds like the Apple distribution model.

Originally Posted by BillA

I see no new, small jewelers popping up as AD's. The AD's that are not Rolex Boutiques have had the franchise for many many years.

Rolex is asking and demanding that their watches be sold in the AD in a separate display area, not along side with any other brand. This is costing the AD lots of money to renovate their store. When I go into a Rolex AD now, I see the Rolex watches in separate rooms, wall clock and separate display cases.

But I think the future of Rolex marketing is the way of the Boutique whether it be in the airport or in the malls. Look at the newer Boutique in Dubai. It is featured in Issue #8 of the Rolex magazine. I think that once the Boutique models are rolled out, it is good-bye to the small stores.

This way Rolex controls supply and stops discounting by local AD's. So either you buy at the mall stores or grey market. Mom and Pop will be history soon.

Rolex is not a public corporation, they can do what they wish, they are an amazing operation.

[TswaneNguni]

Originally Posted by BillA

I see no new, small jewelers popping up as AD's. The AD's that are not Rolex Boutiques have had the franchise for many many years.

Rolex is asking and demanding that their watches be sold in the AD in a separate display area, not along side with any other brand. This is costing the AD lots of money to renovate their store. When I go into a Rolex AD now, I see the Rolex watches in separate rooms, wall clock and separate display cases.

But I think the future of Rolex marketing is the way of the Boutique whether it be in the airport or in the malls. Look at the newer Boutique in Dubai. It is featured in Issue #8 of the Rolex magazine. I think that once the Boutique models are rolled out, it is good-bye to the small stores.

This way Rolex controls supply and stops discounting by local AD's. So either you buy at the mall stores or grey market. Mom and Pop will be history soon.

Rolex is not a public corporation, they can do what they wish, they are an amazing operation.

Rolex wont abandon mom and pop.Mom and pop have been selling their product for decades.The people I deal with is grand-pop,pop and son .Third generation.Their stock levels are excellent even in the current situation of high demand.

Mom and pop owns the boutiques anyway .

I have never bought a watch at a airport,even with tax benefits,local mom and pop always beats them over 18 years of buying Rolex.The airport sales people irritates me as well,fake friendliness and all ...

Local mom and pop also prefers selling to locals.That's good,should be that way .Who supports them over decades ?

Mom and pop know their product,they know their client as well .Its about a genuine relationship of trust working both ways to the long term benefit of all parties.

Rolex has been in business since 1919 in Geneve ,their business model works .

[TswaneNguni]

Originally Posted by SS Oyster

I would prefer Rolex sell direct to consumer via web ordering. Rolex builds what the consumer wants, not what Rolex feels like building. Cut out AD’s 40%, keep more money (80% instead of 60%) and offer the customer the same watches at 80%.


Sent from my iPhone using Tapatalk

No,that will be the end of Rolex.

[TswaneNguni]

Originally Posted by WatchLurv

This is where the mom & pop shop will fail as they were used to be able to live off their "loyal clientele" up until recent times. Don't adapt, you die. And they're dying quick.

I know of one AD that has gone under in this country in 30 years.All the rest are still there.All family owned.
(The one that went under is still there but lost the AD status ..high discounts,my opinion.Their status was pulled .)

[Cru Jones]

Yes, this process has been going on (and commented upon) for several years now.

[WatchLurv]

Originally Posted by TswaneNguni

I know of one AD that has gone under in this country in 30 years.All the rest are still there.All family owned.
(The one that went under is still there but lost the AD status ..high discounts,my opinion.Their status was pulled .)

Yes, ADs license can be pulled for various reasons.
1. Not selling enough
2. Caught with a grey
3. Selling too high discount (Rolex doesn't perform audits on their accounts but can send in mystery shoppers to test them out)
4. Not updating their display to Rolex's standards / expanding their shop.
5. Not following mandatory guidelines, e.g. taking payment over the phone.

I'd say it's normally the non-performance that makes them fold. The above list is just a few of the reasons. Im sure there's a few more.

[TswaneNguni]

Originally Posted by WatchLurv

Yes, ADs license can be pulled for various reasons.
1. Not selling enough
2. Caught with a grey
3. Selling too high discount (Rolex doesn't perform audits on their accounts but can send in mystery shoppers to test them out)
4. Not updating their display to Rolex's standards / expanding their shop.
5. Not following mandatory guidelines, e.g. taking payment over the phone.

I'd say it's normally the non-performance that makes them fold. The above list is just a few of the reasons. Im sure there's a few more.

Btw,I didn't enjoy it when that AD went under ..got my DSSD at less 28% . Not kidding.

[tyler1980]

IMO they need to get rid of airport shops immediately as thats the most brand damaging AD there is.

An easy way to save close to 20% and its usually PM which devalues the PM product as it forces AD's in cities to discount too as otherwise why not just wait until vacation and buy at the airport? Not all brands allow their products to be sold at airport AD's. Rolex should follow as it puts a ceiling on resale and the price anyone would buy new.

Luxury being on sale is poison to brand image. Its a big reason I'm not more into full PM watches. Im not playing the biggest discount game. The price is fair only if everyone else also pays it too.

[WatchLurv]

Originally Posted by TswaneNguni

Btw,I didn't enjoy it when that AD went under ..got my DSSD at less 28% . Not kidding.

I dont even doubt that. The days where you could get a SubC for 15-20-25% (depending on how good your relationship was) off seems very foreign to me now
Getting 10% off a PM is like going into WW3 with the AD.

[TswaneNguni]

Originally Posted by WatchLurv

I dont even doubt that. The days where you could get a SubC for 15-20-25% (depending on how good your relationship was) off seems very foreign to me now
Getting 10% off a PM is like going into WW3 with the AD.

Not true.I got nice gestures on my last additions to the collection ... a tt sporty and a DJ 36.Two days ago
A week ago ,the 2 ss sports models was at MRSP.I dont expect a gesture on that in current market conditions.

[Speedbird-1]

Online, with select flagship showrooms.
Highstreets are dying, and will eventually succumb, it's inevitable.
More than 40% of Seasonal buying was completed this year on the Internet.

[TswaneNguni]

Originally Posted by tyler1980

IMO they need to get rid of airport shops immediately as thats the most brand damaging AD there is.

Luxury being on sale is poison to brand image. .

Well said

[Rocket_Man]

It has to be tough being as AD in the current market. They have so many ways to screw up, and with nothing to sell, they can't do much right. In the last three ADs I went in, they all had new watch cases that held maybe half or fewer watches and even those there mostly empty. Even if I had cash in hand I still can't buy a watch.

Rolex needs to sell about a million watches a year. They need ADs, but it seems they have more distribution than they need in most markets. I don't think it is financially viable to switch only to Boutiques. Too expensive to build and their physical market area will be too small, at least in the US. Who wants to drive to a larger city just for a chance to see a Rolex you can't even buy. If they consolidated to only Boutiques I think I'd just shift to Trusted Sellers. They will still get watches from somewhere. Overseas probably.

[tyler1980]

Originally Posted by Lt Virgil Hilts

Online, with select flagship showrooms.
Highstreets are dying, and will eventually succumb, it's inevitable.
More than 40% of Seasonal buying was completed this year on the Internet.

i hate the online idea... if it becomes a commodity which i fear it has become then people wont care. If its luxury/representative of a milestone/an heirloom online is awful as there is no question it cheapens the entire experience. Luxury has to be tangible and about how it makes you feel where as online is cold and just a way to get something in a pretty lazy and casual way.

However considering some people want everything and want it now they just want a watch that says Rolex and it means nothing more than that, the idea would probably catch one just fine.

most people buy one Rolex in a lifetime and its a big deal to go in and try stuff one and walk out with a reward for your hard work on your wrist. People here switch out watches like socks and we are not representative of the buying public at large.

[TswaneNguni]

Originally Posted by WatchLurv

I dont even doubt that. The days where you could get a SubC for 15-20-25% (depending on how good your relationship was) off seems very foreign to me now
Getting 10% off a PM is like going into WW3 with the AD.

Should be able to get a gesture of at least 15% on PM.

[WatchLurv]

Originally Posted by TswaneNguni

Should be able to get a gesture of at least 15% on PM.

Squeezing to those numbers nowadays is a battle on its own. ADs are so tight on supply they don't even want to get rid of their pieces for less thank $XX,XXX. Trying to find the right number without offending is always a bit tough. Dont want the AD to feel like you're lowballing them, but you don't want to lowball yourself.

[TswaneNguni]

Originally Posted by WatchLurv

Squeezing to those numbers nowadays is a battle on its own. ADs are so tight on supply they don't even want to get rid of their pieces for less thank $XX,XXX. Trying to find the right number without offending is always a bit tough. Dont want the AD to feel like you're lowballing them, but you don't want to lowball yourself.

Never ask for more, after the gesture was given.Good long term business principle.