Want a Rolex? Easy! Just pay a large premium to a “flipper” or gray market dealer and Bob’s your uncle. Either that or buy a large number of Rolex that you don’t want from an authorized dealer and wait your turn to buy the one you do want at the official retail price. An increasing number of watch enthusiasts aren’t willing to do either . . .
Disgusted by favoritism and free market profiteering, they’ve launched an unofficial Rolex boycott. The brand’s recent, unexpected statement about the shortage will do nothing to stem to the rising tide.
The scarcity of our products is not a strategy on our part. Our current production cannot meet the existing demand in an exhaustive way, at least not without reducing the quality of our watches – something we refuse to do as the quality of our products must never be compromised.
This level of excellence requires time, and as we have always done, we will continue to take the necessary time to ensure that all our watches not only comply with our standards of excellence, but also meet the expectations of our customers in terms of quality, reliability and robustness. Rolex does not compromise on what it takes to produce exceptional watches.
Rolex’s “it wazzunt me” opening salvo (courtesy finance.yahoo.com) depends on what’s called a false dilemma: a statement that “oversimplifies the choice by excluding viable alternatives.” Rolex is asserting that they have two and only two alternatives to address the shortage: increase production (“in an exhaustive way”) or fuhgeddaboudit (to maintain quality).
On the face it, Rolex’s defense makes sense. Increasing production from the brand’s estimated 1m-watches-per-year output would be no simple task. While Rolex relies heavily on computerized machinery, the technology requires a lot of highly skilled labor and fastidious quality control. Expanding production would require a significant investment in both new equipment and [unionized] workers.
Would Rolex quality necessarily decrease if the company increased production? Nah. But it would take both time and money to ramp up production to the point where it could make an appreciable dent on existing demand. Neither expenditure appeals to the powers-that-be.
Rolex is owned by a foundation, not shareholders. Public companies value market share surtout. Rolex’s beneficiaries are insulated from this goal and they’re banking billions, thank you very much. The Foundation has seen good times and bad. Why suck dividends out to pay for increased capacity that would be worthless if the Rolex bubble bursts?
Anyway, Rolex wants you to believe that quality control eliminates the possibility of increased availability. So . . . suffer. A sentiment that does nothing to assuage enthusiasts currently committed to a Rolex boycott. The second paragraph of Rolex’s statement throws these frustrated buyers a bone . . .
All Rolex watches are developed and produced in-house at our four sites in Switzerland. They are assembled by hand, with extreme care, to meet the brand’s unique and high-quality standards of quality, performance and aesthetics. Understandably, this naturally restricts our production capacities – which we continue to increase as much as possible and always according to our quality criteria.
A million watches per year assembled by hand? Seriously? Awesome! That said, OMEGA might take issue with their crosstown rival’s use of the word “unique” when it comes to “quality, performance and aesthetics.” As would many other watch brands. Meanwhile, I’m offended at the terms “understandably” and “naturally.” They drip with Rolex-knows-best condescension.
Be that as it is, the brand’s publicly pledged to “increase [production] as much as possible.” Vague much? Post-pandemic, how many watches is Rolex currently cranking-out? What percentage increase are they promising? You know the answer: none, really. But the real kicker, the part that exposes the false dilemma, is in their close:
Finally, it should be noted that Rolex watches are available exclusively from official retailers, who independently manage the allocation of watches to customers.
Our man Adams’ post Watch Dealer Markups – A Proposal flagged an easy solution to the Rolex shortage: let authorized dealers (ADs) charge a premium. That would eliminate the rapacious gray market, which would nip the growing Rolex boycott in the bud.
Enthusiasts resent the fact that Rolex AD’s slip new watches to high-spending customers and the gray market, even as they put “lesser” inquiries on an entirely fake and completely capricious “waiting list.” Not to mention Rolex’s hands-off policy when it comes to either practice. Which their statement makes entirely clear.
Rolex dealers do not have to “independently manage the allocation of watches.” The corporate mothership would be entirely within their rights to require dealers to sell coveted watches on a “first-come, first serve” basis. But that would pull the rug from under what Rolex cherishes more than fairness: class.
Rolex has left its tool watch rep behind. It’s no longer the watch brand associated with professionals, adrenaline junkies and professional adrenaline junkies (e.g., pilots, race car drivers, submarine captains, mountaineers). It’s now the watch of millionaires and billionaires, whether actual or wannabe. Make no mistake: Rolex likes that.
Thanks to gray market prices and dealer arrogance, a growing number of enthusiasts have soured on the brand. They wouldn’t buy a Rolex at retail even if they could. Mind you, this unofficial Rolex boycott will have no effect on Rolex demand, prices or availability. Not now. And maybe not for a long time. But Rolex’s self-righteous statement tells us the damage is real, and ongoing.
I can remember a time when Brooks Brothers was an institution and it would always be there…until it wasn’t.
I was speaking to a fellow collector, a successful young professional in Los Angeles, six months ago. Rolex is off his list. Between the unwelcome image of ostentatious wealth that the brand conveys, and the surging crimes perpetrated upon those who display their wealth, he has no interest. Not auspicious.
Does Rolex even need collectors? Much like the auto industry, the “enthusiast” market makes any money for their respective company. It’s a lame boycott and would only work if “influencers” decided to reject the brand. A hollow gesture because they’d pick one up tomorrow at retail if they could. There’s plenty of Rolexes that fly under the radar, they just aren’t worth the price.
should say “makes no money”
They do and they don’t. I’m sure it won’t hurt the bottom line if collectors throw in the towel. On the other hand, collectors can give a brand cachet.
The auto industry analog is complicated. Over 60% of “luxury” cars are leased, and there is often some (rapidly decreasing) marginal utility in luxury cars with regard to safety, NVH, acceleration and braking, etc.
On the other hand a “luxury” watch is inferior in every functional way to a quartz watch that has reached a couple hundred dollar level of specification (100M+ WR, sapphire crystal, stainless case and bracelet, solar or kinetic power replenishment). That is before considering smart watches that can make phone calls and provide real time health metrics.
The equivalent of a auto enthusiast demanding their car have a manual transmission or rear wheel drive is the watch enthusiast demanding their watch not be quartz, or be made in some weird European country. Take away the stuff a watch “enthusiast” cares about and put in the stuff normal people want and one is left with an Apple watch. So the Swiss mechanical watch makers cannot disregard the “enthusiasts” in the same way BMW can.
Find someone in a non-enthusiast BMW/Audi/Benz and they are going to have an Apple watch on their wrist.
I suspect demand for Rolex will outstrip supply for many years unless they have an organisational brain fart. Maybe the millionaire collectors will become real sports and reduce their Rolex purchase from, say, 6 watches to 2 pa so that us peasants can fight over the few oyster perpetuals and date justs. Maybe GS and Omega may tweak their designs and packaging just a little so that they will be more loved by prospective watch buyers. Maybe interest in watch collecting is replaced by something else, such as tulip bulb collecting. I suspect the ongoing Rolex drama is a bit more interesting than actually having one after ownership of a few weeks.
The statement “issued” by Rolex reads very much like Defence Statements I receive from Ponzi fraudsters that I prosecute – ‘I have not done anything illegal, I have been running my business for the benefit of my clients and to the best of my ability, I cannot do anymore than that and if anything illegal is happening is because of my associates/partners and I have no control over them’.
The forum in which this statement was made is suspicious – Finance Yahoo(?), why not the Wall Street Journal, Forbes or The Times? Why not a watch website like Hodinkee or ablogtowatch, that would have been a huge scoop for one of them. The article on Hodinkee is an interesting read as it suggests that Finance Yahoo did something no watch journalist has ever thought to do – just ask Rolex what is going on! I find it hard to believe that the writers on Hodinkee, ablogtowatch etc have never thought to ask Rolex and probably have asked Rolex what is going on. More likely lots of watch journalists have been asking that very question and Rolex did not answer them.
The fact the statement was apparently made by Rolex in the forum it was made is not what one would expect but the content of it is, as analyzed in the article above, shows a level of contempt for the customer that borders on incredible. I would not but anything from a company that had such an attitude to its customers.
What Rolex realizes, and watch “journalists” (e.g., Ho-dinkee) do not realize, is that Rolex demand is being driven by unprecedented, drunken US fiscal and monetary stimulus. Not real global economic growth. Look at US Swiss watch purchases (which are particularly heavily weighted to Rolex) and they almost perfectly map to the drunken stimulus:
That is why Rolex is not going to increase supply, because the demand is not real. It is a delusional country (on both sides of the political spectrum) unsustainably putting it on the card. The 2020 US deficit was $3.13 trillion. 2021 is projected to be $3 trillion. That’s unsustainable for more than a few years, but even before then inflation is going to force the monetary stimulus to end while a Republican House mixed with a Democratic President will cut off the drunken fiscal spending.
The problem for Rolex is that while Rolex is playing the correct long game with regard to supply, the current situation is destroying the Rolex brand image. To play on an old Rolex ad campaign:
“If you were an overweight, internet obsessed shut-in that lucked into some money due to US stimulus posting pictures of your watch here [insert https://www.reddit.com/r/rolex/ screenshot] tomorrow. . . you’d wear a Rolex”
The current Rolex customers – cartoonish people that simp themselves to low pay salespeople at ADs or pay stupid grey prices – make me not want to wear my Rolex.
Boycott? LOL. You must be talking about forum bottom dwelling humans that Rolex couldn’t care less about (or anybody else either), or children playing adult watch collectors on Reddit.
Nobody is boycotting anything. And if they did, cool. Let us know when it’s enough people to bring the demand back under control.
I’ve said it before. I like my Rolex. I used to want another – Daytona, specifically. Not anymore. That lovin’ feelin’ is gone, gone, gone….
Does Rolex care? Certainly not. But, that’s not the point in any case. The point is remaining true to my own principles. It’s not to be “noticed” by Rolex.
“Racer88 gave up on his life quest for a Daytona? The shit is gettin’ real!” – said nobody at Rolex.
Two words: Grand Seiko
I think the fact that the writer took the time to investigate to this level and challenge their strategy, makes Rolex’s strategy effective, the fact that even though what you write might make sense, yet we still want it is what makes Rolex, ROLEX. It’s what makes this brand so desirable.