Could Rolex Dispense with Stainless Steel Watches?

[HogwldFLTR]

How about this possibility? Rolex is trying to eliminate sales of stainless watches that are in competition with their precious metal watches. Using them only as loss leaders to get their consumers to buy the PM watches. No lack in availability of PM pieces afaik. Rolex could choose to focus their manufacturing efforts where they can get the most bang for the buck going after the higher market tier. They don't care if there are people dying to buy their bargain stainless watches. That's not their problem. They could take the attitude that if the consumer wants Rolex watches let them pay for PM. The brand might have enough clout to pull that off.

[douglasf13]

Originally Posted by HogwldFLTR

How about this possibility? Rolex is trying to eliminate sales of stainless watches that are in competition with their precious metal watches. Using them only as loss leaders to get their consumers to buy the PM watches. No lack in availability of PM pieces afaik. Rolex could choose to focus their manufacturing efforts where they can get the most bang for the buck going after the higher market tier. They don't care if there are people dying to buy their bargain stainless watches. That's not their problem. They could take the attitude that if the consumer wants Rolex watches let them pay for PM. The brand might have enough clout to pull that off.

While they certainly make more on PM watches, I wouldn't call the steel watches loss leaders. The things probably cost less than a grand to make.

[RolexNorth]

You're suggesting that Rolex may be looking to drop stainless entirely from their line?
Sounds like a stretch to me.

[asiparks]

horrible idea.
The price of entry, ( retail at least ), would pit Rolex against far more compelling watches with more interesting, better finished movements from higher tier, more exclusive brands.
Right now, they are the "everyman" luxury watch brand, expensive, but attainable at the ~$6k price point. The buyers of the that first watch can then rationalize the trade up to a $12k Rolex a little later, they then can become collectors and brand loyalists....
Start at $40K and Omega, IWC will come eat your lunch and build that brand loyalty instead.

Not to mention Rolex make a shedload of $$$ by volume, selling those steel models.

[Forum-Dweller]

Well that's one way to let Omega become #1 in the watch market.

[ajas]

I cant wait to see PM Explorer

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[bondtoys]

Imo, we should not underestimate Rolex's capabilities in terms of marketing.

While it's true that their S/S models (particularly the Professional Series) is very high in demand - they are trying to improve sales of their (highly profitable) precious metal watches on every single day.

So, I am very sure that Rolex is well aware of their product portfolio and the success of the different sectors and they don't see the need (and the logic) for such a radical step like you are suggesting

[DuncanInLeeds]

Will not happen in a million years...

A pretty decent analogy is motor cars where manufacturers try to build brand loyalty for prestige cars - BMW, Mercedes et. al. - start off with a 1-series Beemer and, as your career/wealth improves you move up the scale.

You may counter that Bentley and Rolls Royce don't really have 'base' models but then that aspiration is in a different league. However, Porsche realised a number of years ago that they were missing out on a massive demographic so introduced the Boxster & Cayman for the aspiring 911 driver.

[HogwldFLTR]

Originally Posted by ajas

I cant wait to see PM Explorer

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Why bother selling an Explorer; actually that could be part of the scheme. Allow sale of the less desirable models in SS and keep the more desirable available in PMs mainly. It works for the Day Date which is only available in PM.

Originally Posted by bondtoys

Imo, we should not underestimate Rolex's capabilities in terms of marketing.

While it's true that their S/S models (particularly the Professional Series) is very high in demand - they are trying to improve sales of their (highly profitable) precious metal watches on every single day.

So, I am very sure that Rolex is well aware of their product portfolio and the success of the different sectors and they don't see the need (and the logic) for such a radical step like you are suggesting

If the price of a SS in the secondary market is greater than the price of a TT or near the price of a PM then it certainly places pressure to move to the more valuable PM.

Originally Posted by DuncanInLeeds

Will not happen in a million years...

A pretty decent analogy is motor cars where manufacturers try to build brand loyalty for prestige cars - BMW, Mercedes et. al. - start off with a 1-series Beemer and, as your career/wealth improves you move up the scale.

You may counter that Bentley and Rolls Royce don't really have 'base' models but then that aspiration is in a different league. However, Porsche realised a number of years ago that they were missing out on a massive demographic so introduced the Boxster & Cayman for the aspiring 911 driver.

What's the entry price for a Patek?

Originally Posted by douglasf13

While they certainly make more on PM watches, I wouldn't call the steel watches loss leaders. The things probably cost less than a grand to make.

Your right, poor choice of words on my part. More like a bait and switch game.

[Onikage]

Whorehouse Dweller, Brothel Explorer, Pimp Master.. I don't see why not.

[bondtoys]

Originally Posted by HogwldFLTR

If the price of a SS in the secondary market is greater than the price of a TT or near the price of a PM then it certainly places pressure to move to the more valuable PM.

I am pretty sure that Rolex gave us lots of evidence, that they give a rat's rear about secondhand markets and values.

They are in business selling new watches - end of story

[asiparks]

Originally Posted by ajas

I cant wait to see PM Explorer

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I'd actually rather like an all brushed, white gold Explorer with a dark blue dial....

[DuncanInLeeds]

Originally Posted by HogwldFLTR

What's the entry price for a Patek?

Hence my Bentley/Rolls Royce analogy which is the bracket I think Patek also fall into...

[rolex75216]

Their 904L Stainless Steel is stronger and more durable than PM watches and great for daily wear. Can't beat a Datejust in 904L Stainless Steel. Best Rolex watch for the money hands down!

[Cru Jones]

Rolex is "attainable" mass market luxury. SS helps keep it that way.

For more upmarket brands, it's not the gold case that makes them more expensive, it's the hand finishing and exclusivity.

[1William]

Sure they could do it but using the same thought why not get rid of all TT and PM watches and use your manufacturing capacity to make more SS watches that are desirable. Without sale data it is only speculation on how many SS watches Rolex sells across the line-up compared to PM. Like many companies for different lines of products the ability to offer the customer options is what make many companies profitable.

[alexxelor]

I'm happy . the lines of the steel watches should be changed,especially submariner and Gmt. the only steel watch I have loved in 10 years is the deep sea . the daytona is a restyling, it's not the new daytona, the new daytona will come....

[Bigblu10]

Stainless watches are certainly not "loss leaders" in any aspect of the word. In grocery store terms this word means an item for sale that actually incurs profit LOSS in order to make the customer buy other items that fetch high profit. Most stainless watches may cost Rolex 2-3 thousand? To make. Then sell for 7-12 thousand depending on reference. PM only would take the average middle class worker out of Rolex ownership, period. A big mistake business wise!

[Sprta]

Take the watches that are the most in demand off the market and eliminate a current and future customer base......no way

[JBoone]

No way

[beshannon]

No

[AK797]

Originally Posted by asiparks

horrible idea.
The price of entry, ( retail at least ), would pit Rolex against far more compelling watches with more interesting, better finished movements from higher tier, more exclusive brands.
Right now, they are the "everyman" luxury watch brand, expensive, but attainable at the ~$6k price point. The buyers of the that first watch can then rationalize the trade up to a $12k Rolex a little later, they then can become collectors and brand loyalists....
Start at $40K and Omega, IWC will come eat your lunch and build that brand loyalty instead.

Not to mention Rolex make a shedload of $$$ by volume, selling those steel models.

Yes, rather they should abandon all PM models and focus all output on SS watches, and the popular ones should probably have a 10-20% price rise to help curb the over-demand and cancel out greys. If they were to cut SS and focus on PM then they would have to have displaybacks to compete, and spend far more time decorating and finishing their movements, just all too much hassle for this toolmaker.

[douglasf13]

Originally Posted by Bigblu10

Stainless watches are certainly not "loss leaders" in any aspect of the word. In grocery store terms this word means an item for sale that actually incurs profit LOSS in order to make the customer buy other items that fetch high profit. Most stainless watches may cost Rolex 2-3 thousand? To make. Then sell for 7-12 thousand depending on reference. PM only would take the average middle class worker out of Rolex ownership, period. A big mistake business wise!

There have been great threads in years past about cost. I’d be surprised if the cost even breaks 4 digits for steel models. These are Veblen goods, after all.

[pickettt]

Originally Posted by douglasf13

I’d be surprised if the cost even breaks 4 digits for steel models.

I'm with you there.

[hsm]

its probably a few hundred to make a ss watch,

I don't like the precious metal watches, you pay through the nose and they look too ostentatious if you know what I mean.

if they stopped ss, a massive second hand market is always there,

I don't think its even in their minds.

[Tangier11]

I dont know the actual profit margins of SS watches, but I would think they have a HUGE markup. Since I am in the car business Ill use an automotive analogy. General Motors makes more money per unit on a Cadillac than say a Chevy pickup, but how many Chevy pickups do they sell vs Caddys....

[Duey]

This is the exact business model of the 4 Seasons Lanai. You can fill a hotel with $200 rooms or have it 1/3 full with $1500 rooms and make it more profitable. The model works in business you may not like it but it works.
Not saying that's what Rolex is doing but ....

[douglasf13]

Originally Posted by Duey

This is the exact business model of the 4 Seasons Lanai. You can fill a hotel with $200 rooms or have it 1/3 full with $1500 rooms and make it more profitable. The model works in business you may not like it but it works.
Not saying that's what Rolex is doing but ....

Yeah, we also see it with builders building luxury condo complexes that always seem partially empty, rather than more affordable complexes.

[kilyung]

Wouldn’t bother me in the least but never going to happen

[cuibono]

Given all the SS watch shortages reported all over the place, I get the sense that Rolex might be restricting supply to a) eliminate discounts b) further improve their brand image.

If everyone can easily get an iconic SS Rolex then a Rolex is nothing more than an expensive Casio. If most people have to be patient and wait for theirs, then when they finally get it, they will appreciate it tremendously since they will know just how difficult they are to come by.

It makes the watch, despite the fact that it is mass produced, special. This fact is irrespective of one's wealth.

My 2 cents.

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