Rolex Needs a New Business Model

[CalSRQ1]

Originally Posted by fsprow

- Great products
- Demand exceeds supply
- Increasing wealthy customers
- Popular with celebrities and web personalities
- Strong profits
- Great reputation through advertising, sports

Looks like they need a new business plan.

Exactly. Well put.

[Harry-57]

Originally Posted by mquarter

It's funny how, despite Rolex watches themselves being a real luxury product, the pre- and after-sales customer experience is anything but. Sacrifice your dignity sucking up to ADs while they treat you poorly. Dealing with scummy greys, or at the very least visiting them in stores that fall well short of luxurious.

I don't use those type of ADs or grey dealers. The people who get my money are highly professional, courteous, occupy well appointed, welcoming and clean premises, and make every visit a happy, comfortable and memorable experience.

Maybe you don't have any good dealers? That's a shame. But it is no reason to make blanket assumptions. I guess HK is in another galaxy to rural South West England.

[Kevin of Larchmont]

Originally Posted by mquarter

It's funny how, despite Rolex watches themselves being a real luxury product, the pre- and after-sales customer experience is anything but. Sacrifice your dignity sucking up to ADs while they treat you poorly. Dealing with scummy greys, or at the very least visiting them in stores that fall well short of luxurious. Not having the freedom to customise your watch after you bought it through dial or bracelet swaps. It's the opposite of customer centric.

But even if Rolex were moving to a corporate owned boutique model like AP, where you can at least experience a degree of politeness and a nicely furnished boutique to spend some time in, ​it's probably a ~10 year journey to get that retail footprint up. I'm guessing there's at least hundreds of ADs and to phase them out and replace will take so long and still wouldn't address the terrible customer experience problem.

The terrible customer experience is a risk to the brand of Rolex. Clearly it's damn durable because there's still no shortage of people after them. But it's not invincible.

I too have had nothing but excellent service from my AD. I’ve purchased five Rolexes and one Tudor from them over six years. The only jewelry I’ve purchased from them was jewelry I actually needed - wedding rings; there has been no pressure or request to buy anything else. They are responsive to my inquiries and kind, perhaps because I too am kind. I also bought a used Panerai from them that was running peculiarly and they serviced it at no charge - twice. I was on a “wait list” for my last two watches of three and one month respectively with no deposit requested.

There are a lot of complaints about ADs here and it’s only fair that we also share stories about ADs that provide excellent service.

[bluestreak]

If you can afford a Rolex, you’re usually able to get what you want when you want it. It leads to a sense of entitlement. So when you can’t get what you want simply because you have money, your entitlement makes it seem like bad service.

I’ve been to multiple ADs in multiple states. In every single one I’ve been treated courteously and with respect. They have all been frank and honest with me about the situation and I haven’t been pressured to buy anything. This has been consistent In the 10 or so ADs in 8 cities I’ve visited (I travel a lot for work and pop into an AD if I’m in town).

These stories about rude and abusive SAs that laugh at customers is not congruous at all with my experience.

[ProCoach]

Originally Posted by bluestreak

If you can afford a Rolex, you’re usually able to get what you want when you want it. It leads to a sense of entitlement. So when you can’t get what you want simply because you have money, your entitlement makes it seem like bad service.

Bingo.

[teck21]

Originally Posted by bluestreak

If you can afford a Rolex, you’re usually able to get what you want when you want it. It leads to a sense of entitlement. So when you can’t get what you want simply because you have money, your entitlement makes it seem like bad service.

I’ve been to multiple ADs in multiple states. In every single one I’ve been treated courteously and with respect. They have all been frank and honest with me about the situation and I haven’t been pressured to buy anything. This has been consistent In the 10 or so ADs in 8 cities I’ve visited (I travel a lot for work and pop into an AD if I’m in town).

These stories about rude and abusive SAs that laugh at customers is not congruous at all with my experience.

I would really love to see instances of these sales people openly laughing in the face of customers as is so commonly alleged here.


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[TswaneNguni]

Originally Posted by teck21

I would really love to see instances of these sales people openly laughing in the face of customers as is so commonly alleged here.


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Never experienced it in 2022 years .

One AD is a bit "too smart to talk to you" ,therefore they don't laugh at all ..

[Wing No]

Here's what I've gotten from all this discussion:
Rolex is doing fine and very happy and doesn't need to change anything.
Customers are unhappy because they can't get watches from ADs.
Customers don't want to spend $25,000 at a grey dealer for a $15,000 watch.
Customers do want to spend $100,000 at an AD buying jewelery, Tudors, undesirable model Rolexes, and any other junk they don't want to get the watch they want for $15,000.
There are 3 kinds of people, those who are good at math and those who aren't.

Conclusion:
Rolex doesn't need to change its business plan. It needs to change its advertising.
For diamond covered Rolexes show rappers, pimps, and drug dealers wearing the watches while shooting each other, beating hos with coat hangers, and selling crack.
For GMTs and Daytonas show Wall Street investment types smiling as they look at their Rolexes in their safes.
Problem solved.

[Uggi]

Originally Posted by TswaneNguni

Never experienced it in 2022 years

Wow. How old are you are?!

[904VT]

Originally Posted by bluestreak

This is all based on the assumption that ADs are just shoveling watches to greys and that the resellers are hoarding watches. I don’t think anyone has given any evidence that those things are happening.

This is not an Econ 400 problem. It’s a price ceiling and arbitrage problem. Hoofbeats usually equal horses and not zebras.

But I guess I’m impressed you know a bunch of economic terms.

Run a multi-factor model on the variables I mentioned and come back and tell us your results. I’d bet you’ll find very close to what I said already. Crypto profits parked in watches. You can see how many resellers are hoarding inventory based with a quick examination of their social media accounts. If it was arbitrage problem, you would’ve seen a price crash in secondary pricing when production was limited during the pandemic. But instead the opposite happened, so they’re hoarding. There is no arbitrage opportunity because resellers are only getting hot models when purchasing large quantities of undesirable models. It has nothing to do with them getting references cheaper. There is an additional barrier to entry and cost of carry. Then with lacking of inventory direct at AD for retail purchasers, it only increases demand. Is that real demand? You tell me, but sure seems to be an artificial demand component unless you believe in single variable only. I’m impressed you know a bunch of economic terms as well

[Krash]

Originally Posted by Wing No

Here's what I've gotten from all this discussion:
Rolex is doing fine and very happy and doesn't need to change anything.
Customers are unhappy because they can't get watches from ADs.
Customers don't want to spend $25,000 at a grey dealer for a $15,000 watch.
Customers do want to spend $100,000 at an AD buying jewelery, Tudors, undesirable model Rolexes, and any other junk they don't want to get the watch they want for $15,000.
There are 3 kinds of people, those who are good at math and those who aren't.

Conclusion:
Rolex doesn't need to change its business plan. It needs to change its advertising.
For diamond covered Rolexes show rappers, pimps, and drug dealers wearing the watches while shooting each other, beating hos with coat hangers, and selling crack.
For GMTs and Daytonas show Wall Street investment types smiling as they look at their Rolexes in their safes.
Problem solved.

This is what you got from this discussion?

[Srct]

Rolex doesn’t need a new model - it seems to be doing rather well- it’s more a case those that buy or want to buy Rolex products need to change mindset and expectations . I include myself in that as current supply conundrum is a first world problem on what are luxury goods.

[Gekota]

They would not want to lose their territorial physical presence and brand name by eliminating the ADs, many of which (especially in Asia), played pivotal roles in cultivating and spreading the Rolex brand name, reputation and prestige locally and regionally over the years.

[RampageWatch]

Originally Posted by Krash

This is what you got from this discussion?

Sense of humour..
:Thinking:


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[Kelvin Knight]

Then buying a Rolex will finally be as “easy” and as “fair” as buying Air Jordan’s or a PS5!

[afmars]

Dream on

[bonovox]

Originally Posted by GradyPhilpott

You can bet your butt that Rolex know exactly what they are doing.

[Calatrava r]

Can't provide what you do not have enough of no matter what your business model is. The list through corporate would be much worse than at your local AD. At least you have a person to connect with at your local AD.