My guess - Rolex scarcity strategy a reaction to smart watches.

[AK797]

Originally Posted by francoamerican

Yes - this makes a ton of sense.

Yes if you think Rolex is being run by Biver or Bennahmias, these are fiendish cutting-edge manipulators, Rolex is the exact opposite.

Look at this year's Basel, a lazy snoozefest. Now if you cut production of models so the resale price rises for greys but not for you the manufacturer, which Rolex would never do for this precise scenario, then you at least introduce some newer desirable models so you can make the revenue back that you have deliberately lost, while still keeping interest in your brand very high.

This Basel alone proves there is no master strategy or grand plan with Rolex, events are just happening to them and they are simply not reacting, just doing what they always do, which turns out is one of the best strategies.

[VicLeChic]

Originally Posted by francoamerican

While the Apple Watch isn’t yet as revolutionary as folks thought it might be, Rolex strategy is to create more desire for their watches by making steel professional feel scarce.

Because of the abundance of non steel sports for sale it cannot be a capacity issue and must be a conscious decision.

Patek have an excuse to underproduce because they don’t want to have aqua/naut overtake the brand.

The frenzy is working on me if I’m honest.

Possibly, but I wonder why not make everything in steel scarce, starting with the DJs? Why reduce only the sports steel range to increase the desire?

Here's an idea, Rolex: stop producing any steel piece and go PM only, not even TT. Forsake the Rolex way and embrace the Trinity way. Go true luxury or go home. Ha!

[georgekart]

I honestly don't think Rolex is making sports steel models more scarce than they were before (by which I mean I think production numbers didn't decrease), it's just the demand that went up.

I am 21, and i know a lot of people around me who got Apple Watch a couple years ago and now are getting Longines, Oris, some even Tudor and Omega. In a couple years those people are potential clients of Rolex. So I would assume people older than me in like 25-30 YO range might have started with smart watches and already went to wanting luxury watches, perhaps to commemorate their achievements such as graduating and landing a good job, or perhaps a promotion.

Now let's imagine, all those people want a more expensive watch. They want it to have a famous brand name, most famous brand is Rolex. They are also young so they don't want it to be too expensive, so no PM, most think TT is for older people (my TT GMT is often called a 'dad watch' by my peers), therefore leaving them with SS. With style preferences of younger people, most people don't want a dress watch. Therefore sports models.

We have a lot more young people that want SS sport models, but same supply, meaning pieces become hard to get, raising prices. Rolex obviously doesn't want to increase production numbers sharply because if they do and prices plummet, it is bad for them. Plus, we as younger folk are used to instant gratification due to internet and to buying stuff for over MSRP due to things like sneakers. So we see Subs are over retail, we go to grey and buy it there instead of waiting reasonable time, thus perpetuating the grey market even more.

[SeaAndSky]

Originally Posted by georgekart

I honestly don't think Rolex is making sports steel models more scarce than they were before (by which I mean I think production numbers didn't decrease), it's just the demand that went up.

I am 21, and i know a lot of people around me who got Apple Watch a couple years ago and now are getting Longines, Oris, some even Tudor and Omega. In a couple years those people are potential clients of Rolex. So I would assume people older than me in like 25-30 YO range might have started with smart watches and already went to wanting luxury watches, perhaps to commemorate their achievements such as graduating and landing a good job, or perhaps a promotion.

Now let's imagine, all those people want a more expensive watch. They want it to have a famous brand name, most famous brand is Rolex. They are also young so they don't want it to be too expensive, so no PM, most think TT is for older people (my TT GMT is often called a 'dad watch' by my peers), therefore leaving them with SS. With style preferences of younger people, most people don't want a dress watch. Therefore sports models.

We have a lot more young people that want SS sport models, but same supply, meaning pieces become hard to get, raising prices. Rolex obviously doesn't want to increase production numbers sharply because if they do and prices plummet, it is bad for them. Plus, we as younger folk are used to instant gratification due to internet and to buying stuff for over MSRP due to things like sneakers. So we see Subs are over retail, we go to grey and buy it there instead of waiting reasonable time, thus perpetuating the grey market even more.

Best analysis of the current state of availability I've ever read in these never ending threads.

[Dsmith1974]

Originally Posted by Monte Cristo

They survived the quartz revolution

Exactly this. Smartwatches are just another fad. People will soon get annoyed with having to charge them and the novelty (driven by narcissism) of calorie counting and sleep monitoring will soon wear off.

[Why1504]

IMO, the smartwatch phase has leveled off. More and more I see people who were wearing smart watches switching back to wristwatches. Most of these people are wearing high end watches. I believe this is due to many many factors.

[ilovethiscity]

Originally Posted by Iluxa

Completely agree. When Apple Watch further improves their designs, add cool watch faces, starts monitoring all your health stats and detect all kinds of health issues before they happen, who is gonna wear Rolexes?! So their only viable strategy going forward is to create an artificial perception of exclusivity and scarcity. Makes perfect business sense


Sent from my iPhone using Tapatalk

This is an amazing point you’ve made!

[csaltphoto]

Originally Posted by Why1504

IMO, the smartwatch phase has leveled off. More and more I see people who were wearing smart watches switching back to wristwatches. Most of these people are wearing high end watches. I believe this is due to many many factors.

Unless you really need a smartwatch they are also boring as heck. Soulless.

My GF is a perfect example of someone who really gets a lot of use out of a smartwatch. She does cancer research. There are some places she can't take her phone and even when she can, she is often doing lab stuff where she can't touch anything but what she is supposed to be working on (test tube stuff). She can get all the alerts on her watch relevant to work without touching anything. I think plenty of people try them and find them annoying.

I also see more young people at working gravitating to mechanical watches. The times I have been in AD's or at Rollieworks all the customers were young. I think the future of Rolex is secure.