Is Rolex Fever Destroying The Luxury Watch Market?

Straight talk from the Editor’s keyboard;

I only ask the question because according to trade magazine WatchPro, one quarter of the entire Swiss watch industry is Rolex sales. The UK is arguably one of the most Rolex obsessed markets in the world, as the 2020 launch of the new Oyster, GMT and Subs showed. Flippers who managed to bri-sorry, get allocated a much prized Submariner were able to sell it on for around 50-80% above the RRP, depending on the dial colour, bezel etc.

Recently UK retailer Goldsmiths announced that it was rolling out a new store concept, based on Mayors of Miami, where watch brands would have dedicated zones. This offers consumers the chance to look at particular brands in detail. The danger with this idea is that it mirrors the disaster that is the Premiership in English football – all the money, marketing and top talent is concentrated on a handful of brands. Goldsmiths will have Rolex, Breitling, Omega, Cartier, TAG and Tudor – which is of course part of Rolex. You could say it’s Rolex-Lite, but that does minimise how good a Tudor Black Bay is in terms of value when compared to a Rolex Sub; same build quality for half the price, some might say.

But this focus on a handful of brands, with Rolex as the `One Watch To Rule Them All’ is going to damage the market in the end. Because history teaches us that every bubble, whether it’s a UK housing market, Tesla, South Sea, tulip bulbs or spices, will go pop eventually. When it does, then confidence is buying luxury watches as an investment will largely evaporate. It will have a catastrophic effect on watch retailing, as chains like Goldsmiths, Beaverbrooks and Watches of Switzerland depend on luxury Rolex and other watch sales to help keep them afloat, now that the government has decided that house arrest is a good idea long term. Footfall is NEVER coming back to pre-lockdown levels, and many older people – who make up a high percentage of luxury Rolex buyers – don’t trust the inetrnet. They also don’t want their Rolex purchase data to be held online either, as they rightly assume that various thieves and accomplices will hack that info at some point, leaving them vulnerable to house burglary or card fraud.

The final reason why Rolex domination is a bad thing is that it stifles innovation, to the extent where many of their watches are often quite boring. The Oyster range really needs a kick up the rear, as it’s becoming the Honda Jazz of the watch world; safe, steady, reliable but entirely uninteresting to any serious watch collector. There is nothing to talk about if you own an Oyster, exept its value.

Rolex don’t really do anything left field, quirky or challenging in their range, except perhaps the Milgauss, which is a 1950s idea still in production for some bizaarre reason. Personally, I like the Milgauss because I love the blue dial, but you have to admit that it’s a one-trick pony as a modern watch. Rolex could be creating some 21st century ground-breaking watchmaking tech instead, not just anti-magnetic as regards digital devices, but with tourbillions, liquid-powered chrono functions, or maybe a MODshop where well-heeled customers could order truly one-off Rolex models, created in the same way that Bamford London are doing. But better, with all the resources that a global brand can bring to bear.

When you are number one there’s only way you can go, and that is down. Change and development is necessary, despite the risks associated with it. Rolex is in a sweet spot right now – apart from the ongoing customer anger concerning waiting lists. Demand could not really be any higher and it is consistently voted the number one brand in any marketing survey you read. It is amazing that so many people believe that Rolex is the best watch in the world, despite the obvious truth to anyone who has taken their watches apart. They are not the very best, but they are brilliant at mass production to a very high level. But resting on those laurels is not a strategy for long term progress and it will also damage the entire watch industry when consumers decide that buying a Rolex is no longer as safe an investment as buying a Premium Bond.

Maybe that’s the future, the Rolex Fantasy Share Index? You basically mine your Rolex data like Bitcoin and when you get to GMT III level you cash in. Stranger things have happened…

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