Scarcity of Rolex leading to a possible brand crisis.

[mdqs67]

New to the community but I have been thinking about this long and hard. As the scarcity of rolex watches at AD's increases...meaning you walk into an AD and they have 3 watches where before they had roughly 100 on display and the grey market having a surplus of models available but at double the cost does this not present a problem for Rolex as a Brand in regards to maintaining and capturing market share for the strategic longterm.

People who are passionate about Rolex who used to be able to "Afford" a 9K watch can not even find one and if they do they must spend crazy money either cultivating a relationship with an AD or buy on the grey market.

This leads me to believe that the broken process for acquiring a product like Rolex today and will begin to lose customers because people are so frustrated with the now broken process of acquiring a new Rolex watch that they go elsewhere to watches that provide better quality, accuracy and more innovation. Not to say that the AD's have vast portions of their stores with empty shells. I believe it is a fine line that Rolex is walking...that could have long term implications for the brand. I would love to know what everyone thinks....

[whiskyrolex]

The brand is stronger than ever. I am not sure about this crisis you speak of...

[geoffreyis]

Very unique theory you have.

[Snerks]

There's absolutely some truth to what you are saying. But I'm pretty confident the pros vastly outweigh the cons, lol.

[macrowatch]

Crises of too much money, makes it hard to count.

[samuel019]

IMO the scarcity makes some people want it even more. Granted I said some.

I don’t believe The Rolling Stones logic applies here.

[Nanasaka90]

Originally Posted by samuel019

IMO the scarcity makes some people want it even more. Granted I said some.

I don’t believe The Rolling Stones logic applies here.

Could you kindly explain “The Rolling Stones logic”? I’m afraid I don’t know much ..


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[samuel019]

Originally Posted by Nanasaka90

Could you kindly explain “The Rolling Stones logic”? I’m afraid I don’t know much ..


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“You can’t always get what you want but if you try real hard you get what you need”

I’m in the opinion you knew that. Just wanted to add some levity

[vh2k]

So, Rolex sells every watch they make; ADs are selling them faster than ever before, at the highest transaction prices in their history; and Rolex and their ADs are gaining so many customers that they will begin to lose customers? Beyond illogical.

Two years ago, demand for Rolex was X. Now, it is 2X. That’s an INCREASE in customers.

.

[skp]

I don't think there will ever be a brand crisis. The scarcity is probably losing them some new potential buyers but they're selling every unit made.

[AD337]

Just lol

More in demand than ever before - they’re all sold before they exist in most cases …. It’s not that hard to establish a good relationship with an authorized dealer .. just feel it out, use common sense .. they’re just people .. I’ve only bought from authorized dealers for all of mine —-good luck

[asiparks]

Originally Posted by vh2k

So, Rolex sells every watch they make; ADs are selling them faster than ever before, at the highest transaction prices in their history; and Rolex and their ADs are gaining so many customers that they will begin to lose customers? Beyond illogical.

Two years ago, demand for Rolex was X. Now, it is 2X. That’s an INCREASE in customers.

.

Rolex always sold every watch they made- to ADs. Whether the AD shifted them, well that was the ADs problem.

Rolex isn't making extra watches to keep up with the speed of sales.
Rolex isn't making an extra dime from the higher transaction prices.
You can't "gain" more customers than you make products.

ADs are gaining "potential" Rolex customers by making them believe that they'll get further up a list by buying other crap. There's a large potential downside to that when customers realize they're being ridden. Not just for the ADs, but also for Rolex as ADs point the finger.

[teck21]

Originally Posted by asiparks

Rolex always sold every watch they made- to ADs. Whether the AD shifted them, well that was the ADs problem.

Rolex isn't making more watches to keep up with the speed of sales.
Rolex isn't making an extra dime from the higher transaction prices.
You can't "gain" more customers than you make products.

ADs are gaining "potential" Rolex customers by making them believe that they'll get further up a list by buying other crap. There's a large potential downside to that when customers realize they're being ridden. Not just for the ADs, but also for Rolex as ADs point the finger.

Why are so many people willing to be ridden, as you so put it by ADs?

Would it not be human nature to walk away from a situation in which they are being ‘ridden’?

No one is putting a gun to anyone’s head and making them buy ‘other crap’, everyone is doing it out of their own free will.

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[zewill]

Originally Posted by vh2k

So, Rolex sells every watch they make; ADs are selling them faster than ever before, at the highest transaction prices in their history; and Rolex and their ADs are gaining so many customers that they will begin to lose customers? Beyond illogical.

Two years ago, demand for Rolex was X. Now, it is 2X. That’s an INCREASE in customers.

.

That’s a shortsighted post. No, that’s an increase in SALES. Not customers. If the greys hoard all the watches which they do, many customers are annoyed and do the right choice of not going grey. I agree with OP,they are losing customers. Sure, they might not care as they still sell, but it is shifting the brand someplace else. Also, do you really think ADs enjoy telling people ‘no chance sorry’ and client leaves… how do you think the client feels? Has 10k$ to spend, thought about this purchase for years and gets declined as soon as he Enters the doorstep? Insulting if anything…

[vh2k]

Originally Posted by zewill

That’s a shortsighted post. No, that’s an increase in SALES. Not customers. If the greys hoard all the watches which they do, many customers are annoyed and do the right choice of not going grey. I agree with OP, they are losing customers. Sure, they might not care as they still sell, but it is shifting the brand someplace else. Also, do you really think ADs enjoy telling people ‘no chance sorry’ and client leaves… how do you think the client feels? Has 10k$ to spend, thought about this purchase for years and gets declined as soon as he Enters the doorstep? Insulting if anything…

1. The entire Swiss watch industry is SHRINKING. There are only a handful of brands who are doing very well and growing: Rolex, AP, PP, RM, Lange, Tudor, and a few meaningless independents. So, yes, total watch customers are going down... but customer demand for the top brands (including Rolex) is sky high. For the top brands, sales are up and (potential) customers (i.e., demand) is increasing. Any customers who leave the brand are replaced by many more eager new customers. Net customers (demand) is increasing.

2. Greys hoarding all the watches? This has been debunked time and time again. 95% of new Rolexes are in the hands of Rolex-loving owners. Sure some of them flip their watches (especially the hot ones) for a quick profit. Can't be avoided. But, there is no secret underground bunker full of millions of watches.

3. ADs can be savvy and sell other brands or jewelry... but their entire purpose is to cultivate lifetime customer value. Sales people always want the easy sell, more product, more marketing, more demand gen, etc. If ADs were in charge, they would tell Rolex to make 5 million watches per year -- regardless of long-term impact. That's the natural bias of the sales/distribution channel. In the vast majority of cases, SAs are effective in communicating WHY cases are empty... and that actually increases Rolex brand equity.

[JParm]

It's a Veblen good - so completely disagree.

Tell Patek, Hermes, etc. that and you'd be laughed at. The "old" Rolex customer that people think defined the brand is just that - old... and I'm not talking about in terms of age.

[Boaters]

They seem to hold all the watches.

[interestedinwatches]

What type of weird backward logic is this lol? They are so in demand that because of the high demand, they will lose demand? What????

[rod727]

Originally Posted by interestedinwatches

What type of weird backward logic is this lol? They are so in demand that because of the high demand, they will lose demand? What????

I think its similar to “nobody buys Rolex anymore, you can't find them”
Almost a Yogi ism for you baseball fans.

[marine 337]

Originally Posted by rod727

I think its similar to “nobody buys Rolex anymore, you can't find them”
Almost a Yogi ism for you baseball fans.

Another fav of Yogi----ya want the time right now!!

[WalterW]

Yes there’s certainly a fine line they are walking. The line between going from a billion dollar company to a trillion dollar company. Scarcity only creates greater demand.

[teck21]

Originally Posted by mdqs67

New to the community but I have been thinking about this long and hard. As the scarcity of rolex watches at AD's increases...meaning you walk into an AD and they have 3 watches where before they had roughly 100 on display and the grey market having a surplus of models available but at double the cost does this not present a problem for Rolex as a Brand in regards to maintaining and capturing market share for the strategic longterm.

People who are passionate about Rolex who used to be able to "Afford" a 9K watch can not even find one and if they do they must spend crazy money either cultivating a relationship with an AD or buy on the grey market.

This leads me to believe that the broken process for acquiring a product like Rolex today and will begin to lose customers because people are so frustrated with the now broken process of acquiring a new Rolex watch that they go elsewhere to watches that provide better quality, accuracy and more innovation. Not to say that the AD's have vast portions of their stores with empty shells. I believe it is a fine line that Rolex is walking...that could have long term implications for the brand. I would love to know what everyone thinks....

You must not assume that unaccompanied walk ins are the only source of new customers.

Referrals and walk ins with existing customers are an increasingly important source of new business.

These people tend to have been vetted by the existing customers, non WIS types, no passion for watches and simply quite happy to be able to get a Rolex without any fixation on getting a sub, GMT whatever.

Many walk away very happily with their TT DJs. The goodwill generated by these customers and existing customers is far in excess of what’s lost from angry walk ins.

The truth also is that there are many references that simply aren’t as popular as the rest, and walk ins can obtain them.

But many walk ins are looking only for specific references which are harder to get and frequently will not compromise on what they are after.

The passionate WIS with limited spending means is a loser in this new paradigm. But they represent but a small proportion of Rolex buyers.

Their anger will lead to a brand crisis. Also, eventually they will adapt to what Rolex has become and look elsewhere to fulfil their passions.

Only a matter of time.


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[Tensai]

Rolex is just repositioning its brand, and favorably so.

Many with Rolex collections now consider themselves to be financially savvy and wealthy. It's hilarious. And ridiculous.

[asiparks]

Rolex marketing hasn't changed, they are not, as far as anyone can prove, making more or less watches per year. Demand is through the roof, but not driven particularly by anything Rolex themselves has done. They don't seed product with hip young social media influencers, they stick with posh sporting events and respectibly dull Brand Ambassadors.
Rolex haven't moved themselves up the horological ladder by increasing prices- that's all been driven by external speculation and wishful thinking. Rolex don't make a dime more from that. WIS know the true value of Rolex against other brands, and it probably doesn't correspond with the current "market" price.

If you believe the various "AD" told me posts, it appears that Rolex are not delighted with the current market and the speculative flippers that have driven their product beyond the hands of their existing "normal" client base-
Why else would we hear of the various policies, allegedly put in place by Rolex to stop watches migrating from ADs to grey ? That's recognition on their part, that things have gone a little wayward.
Things that go unreasonably up, often come crashing back down, and when that invariably happens, the hype kids are on to the next "thing", will Rolex find that their old customers have also drifted away ?

[WatchNutcase]

Things are going so well for them it's just crazy. As much as we'd love to believe this can't be good for them it actually is.

[kizerman]

Originally Posted by WatchNutcase

Things are going so well for them it's just crazy. As much as we'd love to believe this can't be good for them it actually is.

Yes. They are selling out of models they previously had some trouble moving. People buying less desirable pieces because nothing else is available and/or just to build a purchase history. Good to be Rolex these days.

[beshannon]

Originally Posted by mdqs67

This leads me to believe that the broken process for acquiring a product like Rolex today and will begin to lose customers because people are so frustrated

I would love to know what everyone thinks....

The desire to have what one cannot is never ending

[ThatOtherGuy7]

It’s true what you said but two things that will continue to drive up demand for Rolex watches: (1) the brand recognition and power of Rolex and (2) the value/money aspect of it.

1. Until such a day when Rolex loses its brand recognition, people will continue to buy their watches. It’s the same way people associate with brands like Chanel and Ferrari. If you own a Rolex, then you’re perceived to be successful and have good taste. Also, the more scarce something is perceived to be, the more people want it (take diamonds for example).

2. For as long as I can remember, people have been saying that if you buy a Rolex, you never have to worry about it losing value. I don’t know if that has always been true or if it’s just in recent years, but asking prices on the grey market tend to back that up. Now this is not the main driver as it is dependent on 1, but it highly benefits from the brand recognition and value. Not everyone cares about future value but I bet it does help drive demand.

[Danishtext]

I think you have a point there. Now I have lost my passion for rolex. These recent changes and trends are just too much for me. Rolex has become too commercial and there are many other brands out there. A number of my die hard rolex amateur friends are also starting to look at other less commercial brands. Rolex is losing its core customers and I don’t think it is good for the long term.

[teck21]

Originally Posted by Danishtext

I think you have a point there. Now I have lost my passion for rolex. These recent changes and trends are just too much for me. Rolex has become too commercial and there are many other brands out there. A number of my die hard rolex amateur friends are also starting to look at other less commercial brands. Rolex is losing its core customers and I don’t think it is good for the long term.

You are right that Rolex losing its core customers.

But it gaining new customers which view Rolex very differently from the old customers.

All the anger will disappear when the old group of customers walk away entirely.

The mistake many people make is thinking Rolex will somehow perish when that happens.

Rolex isn’t going to alienate old customers without making sure they’re attracting new ones.


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