The Future of Rolex Retail Sales (My View)

[Speedbird-1]

Originally Posted by tyler1980

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.

I agree with you Tyler.
But, we are peeing in the wind.
Immediacy is what buying/selling is all about these days, next day delivery and all that.
As for the Rolex buying experience, it would appear that the brand is way past 'commodity' status, and large numbers of 'New' watches are bought online from re-sellers, greys, scalpers or whatever you'd like to call 'em.
As I suggested, flagship stores for 'tyre kickers' and people that enjoy
being schmoozed on the way to buying something they'd already 'bought' before they even pushed open that heavy glass door.

Your new Sky-Dweller, delivered by drone, it's the future.

[rominvicta]

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.

Agree, a wave is part of tide and sooner or later Rolex will surrender. New board, new ED etc and policy will change overnight. I’ve seen it with way larger corporations. When rest of brands develop online business inevitably, no matter any advantage Rolex has they will start to suffer. And they will surely obbey call of market. It is just a matter of time.

[lenfried29]

Originally Posted by tyler1980

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.

+1. Just to add. I don't want to see brand become mainstream product. I hope Rolex going with the same direction as PP and AP.

[TswaneNguni]

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. I’ve seen it with way larger corporations. When rest of brands develop online business inevitably, no matter any advantage Rolex has they will start to suffer. And they will surely obbey call of market. It is just a matter of time.

[BillA]

I think we are going to see more boutiques in upscale malls and airports.
Rolex does not care about the mom and pop AD's. An AD near me lost their Rolex franchise years ago, and this AD has been selling Rolex for 25+ years.

[TswaneNguni]

Originally Posted by BillA

I think we are going to see more boutiques in upscale malls and airports.
Rolex does not care about the mom and pop AD's. An AD near me lost their Rolex franchise years ago, and this AD has been selling Rolex for 25+ years.

Past week in my part of the woods the boutiques of Patek P,Breitling and Panerai were dead quiet.In fact I never saw any client in the stores.

The Rolex AD,family owned,was VERY busy..

[AK797]

I think Rolex will and can avoid online selling, as there is still a large market for unctuous Champagne customer service for luxury products and Rolex still qualify, altho their current cheap price points are dragging them down the prestige ladder, ironically just as their exclusivity rises.

[westsiderkg]

This is so funny....last time I went to a local AD in my area almost nothing was in the case, lol.

I'd love to be a fly on the wall when Rolex corporation tells that AD they need a new, dedicated space specific to the Rolex line. For what reason I ask? To further alienate customers like me with little to no ss products on hand? Better yet, to make the showcase appear even more barren than it already appears in a relatively non dedicated area in the store? What a farce.

[Calatrava r]

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%.


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Not a chance. Prices will increase if that happens because they can and Rolex will continue to do exactly what it wants. Having independent ADs is good for the consumer.

[dtwer]

Originally Posted by tyler1980

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.

I think you are spot on. Luxury is really more than about “free two-day shipping.” For as long as human beings exist, human connections are still very much an integral part of humanity.

[tyler1980]

Originally Posted by westsiderkg

This is so funny....last time I went to a local AD in my area almost nothing was in the case, lol.

I'd love to be a fly on the wall when Rolex corporation tells that AD they need a new, dedicated space specific to the Rolex line. For what reason I ask? To further alienate customers like me with little to no ss products on hand? Better yet, to make the showcase appear even more barren than it already appears in a relatively non dedicated area in the store? What a farce.

most people don't even notice. The DJ is and always will be the most sold watch. You can buy most DJ in an AD anywhere and anytime. Go in for a "Rolex" and walk out with a DJ. The vast majority do just that, scarcity of professional watches or not.

[Ravager135]

I've seen a trend recently where the same store will have two separate locations in the same general area. You'll go into the mall and an AD will have a "boutique" that is Rolex only and at another location in the same mall, that same AD will have the rest of their watch brands for sale. I suppose this complies with the previously mentioned Rolex demands and it must make fiscal sense for the larger ADs to pay rent to have a separate "Rolex only" location.

I am only mildly annoyed by this. Given the current stainless steel situation, the last couple of times I have gone into a boutique I just see the same two tone models over and over again. There's a sports case that is nearly empty and everything else is Datejusts.

[FoolioABC]

Originally Posted by tyler1980

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.

You're generally right, but I don't really feel like ADs are holding up their end of the bargain in terms of a "luxury experience". The frontpage is full of reports of people getting treated like peasants by their new feudal AD overlords. Between an impersonal, generic online shopping experience and going in and kissing someone's ass and then getting treated like a bum, all for the "honor" of spending ~$10K, I would definitely choose the former experience. I'm someone who only has had positive experiences at my ADs, but I've recommended a couple of friends go to these shops now and they've universally been treated pretty poorly, so I hesitate to recommend now. To summarize, I agree with your sentiment, but I think in practice the "luxury experience" isn't really that accessible a lot of the time anymore.

[peterpl]

Rolex can never be a Patek or any of those higher tier brands. There is one simple reason why - because they are mass produced product and thats how they market themselves and make their money.

If they where to reduce their output to 50,000 watches per year they would go broke. Its that simple.

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.

[westsiderkg]

Originally Posted by peterpl

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.

I agree they are not Patek, but cmon... entry level is a tad of a stretch my friend. Try the swatch group with mass produced swiss 7750 movements for entry level imho...not Rolex with all due respect.

[jlovda]

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.

Here in Canton, OH there used to be a small family owned high end jewelry store that carried Rolex. A former salesperson told me the cost of meeting Rolexs' remodeling demands pushed them to retire earlier than planned.

[peterpl]

Originally Posted by westsiderkg

I agree they are not Patek, but cmon... entry level is a tad of a stretch my friend. Try the swatch group with mass produced swiss 7750 movements for entry level imho...not Rolex with all due respect.

Hmmm maybe entry level is a bit low but Rolex is definitely lower mid tier. But what I am saying is the truth 100%.

Mass produced, mass marketed and their clientele is meant for the masses.

[WatchLurv]

No one actually knows what Rolex’s plans are. They’ve been updating a lot of shops and the ones that can’t update close down. Survival of the fittest. This could also be a play by rolex to limit the amount of small mom and pop ADs and shift focus to the bigger groups such as Tourneau, Aurum, The Hour Glass etc.


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[Fleetlord]

Closing AD Doors is just another way to limit distribution.

The subsequent "exclusivity" that this helps to manifest is what the modern luxury good buyer craves and wants.

Closing doors doesn't eliminate grey market supply, but it does restrict Rolexes getting to the market, which makes their grey market price rise, which is AWESOME for the brand as it shows how desirable the product is if it selling for XXXX above retail, which fuels FOMO buying from the AD.

That is why Rolex won't shut down the grey market entirely, it is just another marketing channel and as long as pricing is propped up through distribution controls, it serves an important role in the overall Rolex marketing strategy. Rolex is sold THROUGH the grey market, not simply TO it...so as a manufacturer it is just another "place" to sell a reference, which will need to be replenished and so on....The buying proposition for the consumer to buy from the grey market has been switched from "low price" to "availability". While not ideal (no strategy really is after all), it is much better to have price controlled availability on the grey market than having it flooded with flea market pricing like it used to...

[nuts070]

My take on this issue is the lost “buying experience” because of market speculation. How much as a percentage are we collectors/enthusiasts rate compared with the whole Rolex clientele? Even if we rant day in and day out on the availability issue, we are still a small portion of the sales Rolex generates. Its the rest of the buying public that is being lost here since Rolex is for much of every society is an aspirational product. All of us are ow deprived of buying at THE MOMENT/RIGHT TIME. I think that in the long run, what Rolex intends is to become a niche but ultraprized luxury goods merchant where only the wealthiest of the economic strata will be able to afford much like Patek regardless of what everyone feels.

[BillA]

Originally Posted by Fleetlord

Closing AD Doors is just another way to limit distribution.

The subsequent "exclusivity" that this helps to manifest is what the modern luxury good buyer craves and wants.

Closing doors doesn't eliminate grey market supply, but it does restrict Rolexes getting to the market, which makes their grey market price rise, which is AWESOME for the brand as it shows how desirable the product is if it selling for XXXX above retail, which fuels FOMO buying from the AD.

That is why Rolex won't shut down the grey market entirely, it is just another marketing channel and as long as pricing is propped up through distribution controls, it serves an important role in the overall Rolex marketing strategy. Rolex is sold THROUGH the grey market, not simply TO it...so as a manufacturer it is just another "place" to sell a reference, which will need to be replenished and so on....The buying proposition for the consumer to buy from the grey market has been switched from "low price" to "availability". While not ideal (no strategy really is after all), it is much better to have price controlled availability on the grey market than having it flooded with flea market pricing like it used to...

Rolex cannot shut the grey market down......they are independent people. If Rolex had a boutique in a city, and nearby was a mom and pop store, even if they have had the franchise for 25+ years, they would shut it down. they don't care about mom and pop, they want to control distribution and prices. If you let mom and pop stores exist, the watches get discounted vs. a boutique who stands their ground and sells at msrp. If you feel that Rolex does care about the grey market dealers, which I think they do not, then letting mom and pop exist fuels the grey market because they sell to them out the back door the less desirable models causing price problems.

[WatchLurv]

Originally Posted by BillA

Rolex cannot shut the grey market down......they are independent people. If Rolex had a boutique in a city, and nearby was a mom and pop store, even if they have had the franchise for 25+ years, they would shut it down. they don't care about mom and pop, they want to control distribution and prices. If you let mom and pop stores exist, the watches get discounted vs. a boutique who stands their ground and sells at msrp.

Mom and pop stores still exist if they can meet Rolex’s demands. They’ll be struggling if they haven’t made a pact with a grey. Some are so loyal to the idea that greys are bad and they shouldn’t be doing business with them, yet, the grey would be making their business float and keeping it moving. Hard to imagine why some of them stay stubborn and decline business that could save them. Having a Rolex license can secure your generation and the next 3 if done right


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[BillA]

Originally Posted by WatchLurv

Mom and pop stores still exist if they can meet Rolex’s demands. They’ll be struggling if they haven’t made a pact with a grey. Some are so loyal to the idea that greys are bad and they shouldn’t be doing business with them, yet, the grey would be making their business float and keeping it moving. Hard to imagine why some of them stay stubborn and decline business that could save them. Having a Rolex license can secure your generation and the next 3 if done right


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But the bar is now set very high. AD's are being asked to spend lots of money on a separate room, displays, to keep their franchise. Is it worth it? I cannot answer that.

[peterpl]

Originally Posted by Fleetlord

Closing doors doesn't eliminate grey market supply, but it does restrict Rolexes getting to the market, which makes their grey market price rise, which is AWESOME for the brand as it shows how desirable the product is if it selling for XXXX above retail, which fuels FOMO buying from the AD.

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.

[tyler1980]

Originally Posted by westsiderkg

I agree they are not Patek, but cmon... entry level is a tad of a stretch my friend. Try the swatch group with mass produced swiss 7750 movements for entry level imho...not Rolex with all due respect.

they are "high end" for a mass market/high brand awareness watch company. In the grand scheme of luxury watches they are very mid tier though. Thats not a negative, but it is what it is.

[WatchLurv]

Originally Posted by BillA

But the bar is now set very high. AD's are being asked to spend lots of money on a separate room, displays, to keep their franchise. Is it worth it? I cannot answer that.

It has always happened - ADs updating their show room. However, in my humble opinion and observation I’ve seen a lot more ADs updating it recently (higher rate).

When that happens and mom and pop isn’t selling out their DJs I can see why it’s hard to foot a 1M EUR display and showcase room.

I’d say it’s down to the mom and pop to have thought about how they conduct business. Times have changed and if they believe Mr Smith who’s visited them the monthly for the last 10 years and bought 5 rolexes off them will see them survive, it just won’t happen. Only way is to sign up for the Grey relationship and give Mr Smith his SS Sub after 2 years of waiting.


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[WatchLurv]

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.

+1 to that. Doing what AP is doing won’t make sense for Rolex. They produce 500K-750K pieces a year. AP does 50K a year...

Rolex has something brewing. All these store display updates, limited supply etc. Come an economic crash worldwide where the middle class will suffer, Rolex will suffer - It’s not a Richard Mille brand where the rich will always be stupid rich.


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[peterpl]

Originally Posted by WatchLurv

+1 to that. Doing what AP is doing won’t make sense for Rolex. They produce 500K-750K pieces a year. AP does 50K a year...

Rolex has something brewing. All these store display updates, limited supply etc. Come an economic crash worldwide where the middle class will suffer, Rolex will suffer - It’s not a Richard Mille brand where the rich will always be stupid rich.
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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.

[WatchLurv]

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 for this kind of product.

Yep. They’re just cleaning out the ones that can’t survive and won’t survive in modern day. Survival of the fittest as I mentioned above.

In order to survive you need to couple up with a Grey you can trust and do long term business with. Rolex don’t like greys but without the greys the DJ display case would look full and the AD wouldn’t be meeting Rolex’s numbers. Rolex in other words NEED the greys. Anything else that they’re thinking of doing to try to prevent them is suicide.


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[ronricks]

‘Malls’ are a dying business model. Even the one here that was once only luxury retailers can’t fill their spots without letting in sub luxury brands.

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