Rolex Boutiques?

[ShawnK]

Originally Posted by Moggo

I was a long-standing customer but over the last year or so I was told they were ‘favouring’ customers who bought jewellery for Rolex purchases.

Not sure what the truth is about them losing Rolex status but interesting.


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My local AD (pretty blatantly) told me the same thing recently. I was looking for an OP, which used to be pretty easy to find. Basically he said I needed to “buy earrings or something really nice for my wife” and they would see what they could do.

I bought my first Rolex from them. I told them I would take my business to the gray market. I don’t need 10-20k if jewelry my wife won’t wear to get a stinking stainless steel, basic model.

[GoingPlaces]

Originally Posted by brucethemanlee

Being able to write-off doesn't make any sense. writing something off doesn't mean it increases your profit. it means you spent the cash as an expense and you can "write-off" against the sales of the watch

No new customer is going to spend $10k+ on a watch without trying it on (or old customer with new style watch). 1 boutique per major city but define major city? It would limit the brand to those living in major cities for those wanting to try it on, what about those who don't live in major cities but can afford Rolex but haven't had it on wrist before.

I agree more things going online and eventually Rolex may also go that route. But your business model is all wrong. And it is the marketing/advertsiing that keeps Rolex name strong especially as years go by

Agree on all points. His business model made no sense on any level. Can you imagine, cutting out advertising?

[gabbysplace]

Originally Posted by watchmaker

People can be really confusing some times.

One the one hand people think Rolex owned boutiques would solve all the woes and wrongs that they presently perceive.

Contrast this with RSC which are Rolex owned. People can't stop complaining at the way they run their business and their lack of transparency and flexibility.

So...why exactly would a Rolex owned boutique be any better?

And...why do people constantly make it sound like Rolex are fools for not already being in the retail game. There is a lot of positives to be said for not having to engage with the public as part of your primary business model. (The public aren't all they're cracked up to be).

Just my two cents

Great point.

[Fleetlord]

Originally Posted by EDL7

All writeoff-able..
Go to the 1 boutique per major city model..
Bring in internet sales..
Done dealeo..
Eventually as the years pass...90%+ internet sales..with just a few boutiques left in the world..for people that want to try on stuff..
Dont even need to advertise at this point in time..R already has the name..
Just sell em..by the millions..for 40% more..
Concentrate on quality and service..
Get rid of the middleman..

All of this has been done by other brands.

Omega, Cartier, IWC, Breitling, Panerai, Heuer...all have their own factory owned boutiques (to be fair..Breitling and Panerai do have some AD run ones).

They also have the cherished and MUCH Ballyhooed Internet E-commerce Websites. That's right, you can buy your beautiful and easily available Omega or IWC right online...just like you describe...

What is the result of all this effort on the part of those brands to capture sales via their own company boutique channel and internet of things?

Absolute and complete NON-FACTOR against the market domination of Rolex. Yep, none of that stuff really means anything to the market. People aren't like...oh I can get a PAM Due online, so now I don't have to go to the Rolex AD....not at all...

Omega and Cartier have actually CLOSED boutiques in some of the best shopping districts in the country. It simply costs too much. I expect more factory stores to close at some point...It just didnt work out.

It costs a fortune to run these stores and the merchandise sitting in the cases isn't actually SOLD. It just sits there being managed, air conditioned, lit up and surrounded by walls and roof at great expense...why would Rolex sign up for all that, when they are already obliterating brands who are currently using that exact sales strategy to zero effect against them? Every single Rolex reference that is sitting in an AD or AD sponsored boutique is 100% sold. Rolex has received their money and other than warranty obligation, is finished with any other costs that could be associated with the product. It is built and sold free and clear.

I understand AP is looking to go to factory boutique only. I'm not so sure they should. It will be interesting to see how that works out. Maybe if they keep it very exclusive and scaled appropriately it will be ok. Less is certainly more in luxury.

Grand Seiko is going the factory boutique route because I think it's tough to get an AD chain to agree to take on the line and invest in a build out..etc So they are doing it themselves because they have to in order to get the retail space to promote the brand. Good Luck. We will see how that goes...

So, yeah...I don't see Rolex bothering with any of that factory boutique strategy. Why should they?

[TswaneNguni]

Originally Posted by Fleetlord

All of this has been done by other brands.

Omega, Cartier, IWC, Breitling, Panerai, Heuer...all have their own factory owned boutiques (to be fair..Breitling and Panerai do have some AD run ones).

They also have the cherished and MUCH Ballyhooed Internet E-commerce Websites. That's right, you can buy your beautiful and easily available Omega or IWC right online...just like you describe...

What is the result of all this effort on the part of those brands to capture sales via their own company boutique channel and internet of things?

Absolute and complete NON-FACTOR against the market domination of Rolex. Yep, none of that stuff really means anything to the market. People aren't like...oh I can get a PAM Due online, so now I don't have to go to the Rolex AD....not at all...

Omega and Cartier have actually CLOSED boutiques in some of the best shopping districts in the country. It simply costs too much. I expect more factory stores to close at some point...It just didnt work out.

It costs a fortune to run these stores and the merchandise sitting in the cases isn't actually SOLD. It just sits there being managed, air conditioned, lit up and surrounded by walls and roof at great expense...why would Rolex sign up for all that, when they are already obliterating brands who are currently using that exact sales strategy to zero effect against them? Every single Rolex reference that is sitting in an AD or AD sponsored boutique is 100% sold. Rolex has received their money and other than warranty obligation, is finished with any other costs that could be associated with the product. It is built and sold free and clear.

I understand AP is looking to go to factory boutique only. I'm not so sure they should. It will be interesting to see how that works out. Maybe if they keep it very exclusive and scaled appropriately it will be ok. Less is certainly more in luxury.

Grand Seiko is going the factory boutique route because I think it's tough to get an AD chain to agree to take on the line and invest in a build out..etc So they are doing it themselves because they have to in order to get the retail space to promote the brand. Good Luck. We will see how that goes...

So, yeah...I don't see Rolex bothering with any of that factory boutique strategy. Why should they?

Excellent post .

[teck21]

Originally Posted by GoingPlaces

They own a few. I believe the boutique in Athens Greece is Rolex owned, it's really small.

You believe or know with certainty?


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[Lamontre]

I would take the bet that Rolex and many other luxury brand will be opening online store, sooner than we think.

[teck21]

Originally Posted by Lamontre

I would take the bet that Rolex and many other luxury brand will be opening online store, sooner than we think.

Why would Rolex want to go online?


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[GoingPlaces]

Originally Posted by teck21

You believe or know with certainty?


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This is what the manager told me on a couple occasions. I didn’t ask to see paperwork verifying the claim. Hence “believe”.


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[GoingPlaces]

Originally Posted by teck21

Why would Rolex want to go online?


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I don’t think they can in the current market. What are the offerings? People think by going online that hotter pieces will become readily available. Not happening. First they need to take care of the dealer networks, especially their top world level AD’s. Then what remains for the online program? Do they really want or need to get involved with the customer interface? Not really, there is no upside. Only headaches for Rolex as far as I can see. People need to realize, Rolex is a watchmaker. Period. They already have a distribution network and a very good one obviously because the brand is hotter than ever and just about everything they make is selling.


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[nachopc]

I work in high end retail, the shops owned by the brands are always minimum, and they use it to have direct contact with market. Also true they select to own only top locations....

London, NYC, Paris, Hong Kong, etc

I don’t think Rolex will open boutiques themselves.


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[teck21]

Originally Posted by GoingPlaces

This is what the manager told me on a couple occasions. I didn’t ask to see paperwork verifying the claim. Hence “believe”.


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Thanks for that. Just wondering cos we live in a world now where unverified information get too easily passed off as fact, and opinions and beliefs also mistaken as such. No offence was intended.

My own impression is that apart from the highest level of management, your store manager who may well be in that echelon, who deal directly with Rolex, the information most staff have at any AD is possibly as scant as what the general public has.

Maybe a notch more, but that isn’t saying much either.


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[teck21]

Originally Posted by GoingPlaces

I don’t think they can in the current market. What are the offerings? People think by going online that hotter pieces will become readily available. Not happening. First they need to take care of the dealer networks, especially their top world level AD’s. Then what remains for the online program? Do they really want or need to get involved with the customer interface? Not really, there is no upside. Only headaches for Rolex as far as I can see. People need to realize, Rolex is a watchmaker. Period. They already have a distribution network and a very good one obviously because the brand is hotter than ever and just about everything they make is selling.


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Good points, my point to the poster was that the reasons why many retailers are going online do not apply to Rolex at all.

If nothing more than the understanding that Rolex is not a retailer at all.


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[Nairn1980]

Originally Posted by Lamontre

I would take the bet that Rolex and many other luxury brand will be opening online store, sooner than we think.

Rolex? No chance

[77T]

Originally Posted by Moggo

Hi all,

Just found out my AD here in the U.K. is no longer selling Rolex as of a few days ago, they have done for many years but it’s been removed from them.

Apparently they were told Rolex are looking towards having their own Boutiques.

Not sure what truth there is in that but interesting.

As an AD’s contract with Rolex comes due for renewal there are usually new T&C’s put forward by the Rolex Distributor managing that country. Some are easily implemented, others are difficult without new capital investment.

It’s not as though the AD’s contract is “removed” but it is often a matter of an AD capitulating, or choosing to decline the new contract.

My nearby AD was painted into a corner as Rolex and Omega separately made demands during renewal that were mutually exclusive. Omega lost that battle. Then the AD took on the Tudor line and never looked back.

Some AD’s have noticed that customer dissatisfaction with Rolex availability bleeds over into dissatisfaction with the AD’s good name. So other routine purchases of jewelry suffer by association.

It is a mess for the local loyal Rolex buyers - but all the annual output from the factory will be sold to the sales channels at the end of the day even as the retailer names change.


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[jon_jon]

Many Rolex ADs lose their license for one reason or another. When asking the AD, they will always blame Rolex and other reasons. But when there is an end to an AD relationship, it usually doesn't happen suddenly. There are ongoing issues that are not addressed (usually by the AD) and eventually the relationship is severed. It is not the same with Omega, AP and others who are opening their own company owned stores. Rolex is not starting their own retail stores. That is just an excuse ADs who lose their Rolex license give to their customers to put the blame on Rolex.

[ginster6]

Originally Posted by GoingPlaces

I don't see it. There have been other posts on this. Unlike AP or PP, Rolex needs a larger distribution network as they produce and sell nearly one million or so units a year. Going boutique only would require significant real estate liabilities which I don't think they would be interested in undertaking. As well as construction of all these boutiques. Rolex will continue on the current course, eliminating smaller mom and pop AD's and propping up major market AD's.

starting 2019 AP is going Boutique only...

[wesdaniel]

Why would Rolex OWN boutiques when they can get somebody else to take all of the expense and risk of doing the TIs, long-term leases, inventory investment, insurance, risk of theft, employee liability, etc.?

There is obviously profit margin to be realized in operating a Rolex boutique, but there's also a fair amount of risk (as we saw during the coronavirus shutdown - the economy freezes, but, rent and bills are still due and cash is still tied up in inventory).

If Rolex can shift the risk to a third party and stick to what they do (make watches), it makes a lot of sense.

And, if Rolex can get their dealership network to be or appear to be "exclusive" to the brand (the boutique model), then it's even better for them.

[teck21]

Originally Posted by CraKaLaCKiN

That's all well and good . . . except the AD's don't have inventory. No either that's Rolex's fault or the AD's are selling out the back door. But when your AD's don't have watches to sell it doesn't help the brand.

On the contrary, it would appear that not having these watches to sell (in the quantities desired by the market at least) seems to have helped the brand more than anything else. Including Roger Federer.

And ADs too. Don’t think any of them imagined the huge windfall that have fallen into their laps in recent years simply by being a Rolex distributor.

Oh, and selling online would absolutely not make it easier for the ‘average’ person to get hold of a Pepsi / Hulk / whatever. If anything, greys would game it even more successfully than they are now.


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[wesdaniel]

Originally Posted by CraKaLaCKiN

That's all well and good . . . except the AD's don't have inventory. No either that's Rolex's fault or the AD's are selling out the back door. But when your AD's don't have watches to sell it doesn't help the brand.

They do have inventory - plenty of it. Just not the hot stainless steel sports models. They have cases full of PM Day-Dates, diamond-encrusted pieces and two-tone Datejusts.

And, they've had to buy that inventory from Rolex. So, Rolex shifts the cost of stocking inventory in stores to a third party.

[RJRJRJ]

People seem to not realize that even a boutique owned by Rolex will still have a management team and sales staff.......just like a store not owned by Rolex.They would still want to hit sales goals, commissions, bonuses etc. Nothing would change.

[Bruno Datejust]

Maybe Rolex finds it simple and safe to stay in Switzerland (being a non-profit foundation there) and to sell all over the world ... and stop! In this way they simply don't need to understand legislation, taxation, uses, mentalities, of so many different places in the world, consider simply USA against GB, Italy, China, Saudi Arabia, Russia, everyone completely different.
For what concerns the ADs/boutiques, I am certain they want the Rolex brand as a factor of prestige and of attention, but once the customer gets in, they are much more interested in selling other brands or stuff. So "Rolex" is necessary to them, but maybe not at all loved by them.

[platinum574]

Rolex will never be in the retail business. All boutiques and ADs are ALWAYS separate business entities from Rolex and this will ALWAYS be true.

[Polarexplorerii]

they own very few

[Lamontre]

Originally Posted by teck21

Why would Rolex want to go online?


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Precisely because of the actual market situation and this situation is not going to be any better.
People can't travel freely, most people staying home and spending their money online. Having online shop surely doesn't mean hotter pieces will become readily available.
Rolex is not going to open more boutique as it cost too much and too much hassle, also many AD had or will face bankruptcy, having a physical store no matter what you are selling is no more a good option, they still need some visibility so yes they will keep few store located in the most prestigious areas around the world and loose money with those boutique, but online can boost their sale as if people cant reach to them, they can still reach to people.
Maybe i'm wrong and will see what happen, but i tend to believe that the key to successful business now and even more in the future is online, especially when you are so good at marketing with strong image like Rolex.

[brucethemanlee]

Originally Posted by Lamontre

Having online shop surely doesn't mean hotter pieces will become readily available.

exactly

[Fleetlord]

Originally Posted by CraKaLaCKiN

That's all well and good . . . except the AD's don't have inventory. No either that's Rolex's fault or the AD's are selling out the back door. But when your AD's don't have watches to sell it doesn't help the brand.

Are you sure about that?


Anecdotal as is may, I have seen people blow right past Omega boutiques filled to the rim with beautiful and easily available watches, to cram into a Rolex AD ran "boutique" that barely had anything in the case, just to get an opportunity to buy a Rolex...any Rolex they could get...

Generally, the only buyers who seem to be turned off by the limited availability in AD's are the WIS "type" who needs their "fix" now or those that have oneitis (Only want SS Daytona or Pepsi and NOTHING ELSE PERIOD)...but the general public? They don't want ANYTHING to do with luxury watches they can readily buy. The current market dominating performance of Rolex (and some select others with limited distribution) makes that very, very clear.

[Jb1264]

Originally Posted by 77T

Some AD’s have noticed that customer dissatisfaction with Rolex availability bleeds over into dissatisfaction with the AD’s good name. So other routine purchases of jewelry suffer by association.

I can’t believe the arrogance of AD’s who hint purchasing jewellery will help with the purchase of an high demand reference.
I refuse to take the bait with AD’s and will go elsewhere to purchase jewellery as have imminent milestones

[watchmaker]

Originally Posted by Jb1264

I can’t believe the arrogance of AD’s who hint purchasing jewellery will help with the purchase of an high demand reference.
I refuse to take the bait with AD’s and will go elsewhere to purchase jewellery as have imminent milestones

In what way is it arrogant? It’s just business. Desirable products go to people who spend money. If they ‘hint’ at that so bloody what?

Nobody can honestly expect to jump the queue on desirable watches if they’ve never spent a dime in the store on anything else.

I wouldn’t have said anything about your comment had you not specifically mentioned ’high demand reference’. Those three words shoot your argument in the foot IMO.

[77T]

Originally Posted by Jb1264

I can’t believe the arrogance of AD’s who hint purchasing jewellery will help with the purchase of an high demand reference.

I refuse to take the bait with AD’s and will go elsewhere to purchase jewellery as have imminent milestones

My nearby AD doesn’t do that. Never had a mention of purchasing additional items. But I have been purchasing from them and another jeweler for 20 years.

And that AD hosted one of our ATL GTG’s in the past. I’m sure they had some expectation that goodwill would be built among our cadre.




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