I don't understand the recent Rolex SS craze/shortage. What am I missing?

[MTROIS]

vacheroyale

the article say very clearly : When we have nowhere to be, why do people need a $9,000 Rolex?
people in the Pandemic do not need a watch...who needs a watch today when our smartphone does everything...but for sure they need a Rolex. Probably people in "some parts of the world" without a Rolex they don't feel comfortable trying to survive hard times. maybe Rolex is a good companion to have , it will diminish the stress, maybe is a good commodity to get for parking money, who knows.

all this does not make any sense, but on the other end...... like the good old man Einstein used to say: Two things are infinite: the universe and human stupidity; and I’m not sure about th’universe!

I really don't think it is stupidity to want a Rolex or any high end watch in these uncertain times. Are there more prominent "problems" to address for humankind? Certainly!!

But buying such a watch can be anything such as: a memento to give to your loved ones some day, a mechanical wonder to admire, a very fine piece of aesthetics and design, it could be an investment for some, but it can also be the buying a piece of timelessness, of immortality which, especially in these uncertain times can be reassuring for some people.

And then, let's not even start mentioning other aspects (that some will deem "shallow") such as the image that people want to project, the on-line competition on social media platforms, etc.

So, no, not all this behavior is stupidity.

 

[Burr]

Isn’t this all simple demand and supply economics? The demand for ss rolexes is larger than the supply, which creates the demand “craze”

Am I missing something?

 

[MTROIS]

Burr

Isn’t this all simple demand and supply economics? The demand for ss rolexes is larger than the supply, which creates the demand “craze”

Am I missing something?

In simple numerical terms, yes, but with the advent of social media and the expended interest into wristwatches, it is quite clear that demand has exploded, especially for sport SS models.

A decade and a half ago, I was fully satisfied with one (1!!!) watch... and now, I collect them.

I would have never thought I would acquire one Rolex, and now I have a couple.

How many people around here are now hoarding such watches.... when they might not have so long ago??? 👎

 

[Burr]

MTROIS

In simple numerical terms, yes, but with the advent of social media and the expended interest into wristwatches, it is quite clear that demand has exploded, especially for sport SS models.

A decade and a half ago, I was fully satisfied with one (1!!!) watch... and now, I collect them.

I would have never thought I would acquire one Rolex, and now I have a couple.

How many people around here are now hoarding such watches.... when they might not have so long ago??? 👎

I agree, once you get that first watch... well, the collecting bar can escalate quickly — I think we all can relate to that 😉

 

[STANDY]

MTROIS

In simple numerical terms, yes, but with the advent of social media and the expended interest into wristwatches, it is quite clear that demand has exploded, especially for sport SS models.

A decade and a half ago, I was fully satisfied with one (1!!!) watch... and now, I collect them.

I would have never thought I would acquire one Rolex, and now I have a couple.

How many people around here are now hoarding such watches.... when they might not have so long ago??? 👎

But when you are on a site with some crazy collectors and hoarders like here and Rolex forum that are not getting watches it makes you stop and think.

Yes, it’s a supply and demand thing. But supply was cut a few years ago and demand has grown.

2-3 years of every Rolex boutique being empty. This is Rolex playing games nothing more.

 

[kip595]

sleepyastronaut

I'm sure your AD would be happy to source you a PM Rolex. Doesn't necessarily mean he's going to have it on display.

A few months back I tried that approach - at an AD I have a good history with - the answer was quite simply "6 mos to a year". I'm not saying it's the same at every AD or in every area, but around my region that's just the way it is at present.

 

[Meyrin]

Jockywilson1

The Rolex Condrum. I thought about it many a time and it’s full of contradictions but I think the fault lies in the eye of the beholder.

Rolex are a not for profit, whatever that actually means, but you can safely assume that brand identity means more to the company than out and out profits. Look what happened to Burberry in the 2000s when the flooded the market, it became a chav haven and subsequently lists its cache. So how do you keep a strong brand identity in the luxury world, advertise massively, limit demand and charge more than the items true ‘worth’. This is how Rolex operate and very successfully.

And to a certain extent it keeps everyone happy, the ADs are happy as they can shift watches, people who get to buy the watch are happy as they are special, and Rolex are happy as they maintain there brand identity.

Omega might make just as good a watch but every other day, there is a thread asking will the old moon watch go up in value. The short answer is if there is supply that meets demand then no, Rolex’s increase because there isn’t the supply. A tiny part of the watches value is how well it tells the time, luxury items value is far more complicated than that.

Adding to the above, interest rates are at an all time low, people look to put there money into other areas, in Rolex’s traditional increase in value year on year then that’s a good investment.

Thank you, you've made some very good points here! I´d like to add that one thing keeping Rolex´s brand identity and value very strong, I think, is the fact that they haven't fallen into the trap of making endless (and imho mostly superfluous) "limited editions" of this watch or another, like Omega and Seiko do, all for a quick buck and very tiresome! Rolex has never operated this way. Cheers!

 

[Burr]

STANDY

But when you are on a site with some crazy collectors and hoarders like here and Rolex forum that are not getting watches it makes you stop and think.

Yes, it’s a supply and demand thing. But supply was cut a few years ago and demand has grown.

2-3 years of every Rolex boutique being empty. This is Rolex playing games nothing more.

I don’t see how “playing games” would be in Rolex’s best interest. Think about it...

it takes one year to make one Rolex, demand has gone up tremendously but Rolex production numbers have not.

People can’t get rolexes because there aren’t enough to go around. That’s it.. no games or conspiracy theories here imo

 

[cvalue13]

Meyrin

Thank you, you've made some very good points here! I´d like to add that one thing keeping Rolex´s brand identity and value very strong, I think, is the fact that they haven't fallen into the trap of making endless (and imho mostly superfluous) "limited editions" of this watch or another, like Omega and Seiko do, all for a quick buck and very tiresome! Rolex has never operated this way. Cheers!

it is interesting that Rolex gets so much criticism for its marketing practices and limitations on supply, while other brands use limited additions in a less effective attempt to achieve the same exclusivity but don’t appear to catch the same scrutiny.

That’s not to say there are critics of the limited addition approach. Instead it’s to say people seem to scream that Rolex is too good at this, while only rolling their eyes at other brands being bad at it.

 

[Burr]

Meyrin

Thank you, you've made some very good points here! I´d like to add that one thing keeping Rolex´s brand identity and value very strong, I think, is the fact that they haven't fallen into the trap of making endless (and imho mostly superfluous) "limited editions" of this watch or another, like Omega and Seiko do, all for a quick buck and very tiresome! Rolex has never operated this way. Cheers!

Your point is better than the one you quoted with regards to marketing. At the end of the day, what amplifies and takes your marketing to the highest level is having a great product. Rolex has an amazing product which takes their marketing to the highest level.

 

[sxl2004]

You can buy a new Rolex any day with plenty to choose from. Just not from the AD if you are a nobody.
IMNSHO The watches all go out for extra profit to Grey Market dealers and flippers (and then to GM dealers) who sell for the extra profit. ADs and GM dealers all make a nice profit. Why sell for less to a not regular customer.

 

[Davidt]

Burr

I don’t see how “playing games” would be in Rolex’s best interest. Think about it...

it takes one year to make one Rolex, demand has gone up tremendously but Rolex production numbers have not.

People can’t get rolexes because there aren’t enough to go around. That’s it.. no games or conspiracy theories here imo

Come on - it doesn’t ‘take a year to make a Rolex’. That marketing bumf.

I actually agree to a certain extent though. I don’t think Rolex is playing games if the argument is they have intentionally instigated the whole steel sports shortage by limiting production. I think demand has shot up and they’ve simply refused (or are unable) to increase supply to match it.

I’m sure they’re perfectly happy that the market price of a Sub is greater than the RRP, but I don’t think they masterminded it.

 

[mbeast]

There are a multitude of factors contributing to the current madness but it seems to me there was a sort of 'great awakening' sometime around 2016 where social media, particularly Instagram, started getting a new generation interested in watches. When I say watches, I really mean the Rolex, Audemars Piguet and Patek Philippe sports models, as these are the only watches worthy of consideration for most of the new generation. An Omega is simply not an option, regardless of the price disparity, as it is not a status symbol nor an 'investment'. I'm still relatively young and there lots of guys my age and a little younger who previously had no interest whatsoever in watches who now know the full Rolex catalogue, RRP and current grey market prices by heart. Around 2016/7, sports Rolexes suddenly became 'must have' items for these guys.

The bit I'm not sure about is how much the shortage is a genuine shortage, or simply the result of massive, unprecedented demand. When products start selling for above their MSRP strange things start happening; the perception of a shortage leads to even more demand (Birkin bag effect) and you get a vicious cycle where prices keep spiralling. As the top-tier sports models have become almost unattainable from ADs the demand has moved down the Rolex hierarchy and now even once-undesirable and expensive models like two-tone Yachtmasters sell immediately for MSRP or above.

There's definitely no overall shortage; Rolex are selling more than ever and they are now selling everything; pretty much every model has a waiting buyer and only the extremely undesirable pieces even make it to the display cabinet. There are waiting lists for Oyster Perpetuals and Datejusts at many ADs. The graph below is for the UK but can't imagine things are massively different worldwide. Rolex must be very happy indeed with the current situation.

 

[Jockywilson1]

Burr

Your point is better than the one you quoted with regards to marketing. At the end of the day, what amplifies and takes your marketing to the highest level is having a great product. Rolex has an amazing product which takes their marketing to the highest level.

A great product will only take you so far, of course Rolex make great watches, but so do loads of other brands. What they excel at is marketing them, their history has always been about making the customer believe what they are buying is the best. It’s human nature to want to be associated with having the best, it doesn’t really matter if it is the best as long as the public perception is that it is.

 

[DoctorEvil]

mbeast

There are a multitude of factors contributing to the current madness but it seems to me there was a sort of 'great awakening' sometime around 2016 where social media, particularly Instagram, started getting a new generation interested in watches. When I say watches, I really mean the Rolex, Audemars Piguet and Patek Philippe sports models, as these are the only watches worthy of consideration for most of the new generation. An Omega is simply not an option, regardless of the price disparity, as it is not a status symbol nor an 'investment'. I'm still relatively young and there lots of guys my age and a little younger who previously had no interest whatsoever in watches who now know the full Rolex catalogue, RRP and current grey market prices by heart. Around 2016/7, sports Rolexes suddenly became 'must have' items for these guys.
(QUOTE)


Your analysis is spot on. The influence of social media in this era in undeniable and unfortunately there are a lot of sheep out there who just want what everyone else is into. FOMO. Social media has created a generation of people who need the approval of their peers all the time and if having a Rolex gets you more "likes" then I gotta get one. No different to a popularity contest in a schoolyard.

I seem to also recall that around that time Paul Newman's Daytona sold for a ridiculous sum of money at auction, sparking interest in Rolex watches as investments. The coronavirus pandemic has also restricted travel and made the share market more volatile, so rich people started looking for somewhere else to spend their money. Add flippers into the mix and you've got a perfect storm.

Like any craze, I feel that it will eventually run its course and situation will stabilise once people start moving on to the next big thing. In the meantime, just be patient and check out some of the other great watches from other brands out there.

Edited: Feb 7, 2021

 

[STANDY]

Burr

I don’t see how “playing games” would be in Rolex’s best interest. Think about it...

it takes one year to make one Rolex, demand has gone up tremendously but Rolex production numbers have not.

People can’t get rolexes because there aren’t enough to go around. That’s it.. no games or conspiracy theories here imo

If people on Rolex forum can’t get a Rolex watch there has to be something going on.
Your common Joe blow is not shopping gray dealers. Too many it’s the Rolex experience from Rolex. You disconnect this too much you will have ramifications down the road.

 

[vacheroyale]

Jockywilson1

A great product will only take you so far, of course Rolex make great watches, but so do loads of other brands. What they excel at is marketing them, their history has always been about making the customer believe what they are buying is the best. It’s human nature to want to be associated with having the best, it doesn’t really matter if it is the best as long as the public perception is that it is.

Absolutely correct !!!!!!!👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍

 

[vacheroyale]

MTROIS

I really don't think it is stupidity to want a Rolex or any high end watch in these uncertain times. Are there more prominent "problems" to address for humankind? Certainly!!

But buying such a watch can be anything such as: a memento to give to your loved ones some day, a mechanical wonder to admire, a very fine piece of aesthetics and design, it could be an investment for some, but it can also be the buying a piece of timelessness, of immortality which, especially in these uncertain times can be reassuring for some people.

And then, let's not even start mentioning other aspects (that some will deem "shallow") such as the image that people want to project, the on-line competition on social media platforms, etc.

So, no, not all this behavior is stupidity.

buying brand new rolexes in the middle of a pandemic when there is a shortage of work , and all bunch of related problems...maybe is lack of good judgment . in hard times people usually park their money in precious metals. gold bullions ( double eagles, etc) which they translate in immediate cash when they need it......but reselling a rolex for profit is always a project just like any other watches. probably this strange watch buying behavior is justified in the era that we're currently living in it.......if the pandemic was hitting the 50's or the 60's , most likely people weren't even thinking buying an expensive watch!

 

[Burr]

Jockywilson1

A great product will only take you so far, of course Rolex make great watches, but so do loads of other brands. What they excel at is marketing them, their history has always been about making the customer believe what they are buying is the best. It’s human nature to want to be associated with having the best, it doesn’t really matter if it is the best as long as the public perception is that it is.

Agree, I’ll also mention that what they really excel at is understanding why customers like their products. They understand the “feeling” their watches give customers when they wear them.

It all comes back to the product and customer relationship. In all the professional marketing work I’ve done, it’s always come back to this.

 

[Jockywilson1]

Burr

Agree, I’ll also mention that what they really excel at is understanding why customers like their products. They understand the “feeling” their watches give customers when they wear them.

It all comes back to the product and customer relationship. In all the professional marketing work I’ve done, it’s always come back to this.

Yes I think we all agree, Rolex make iconic watches, market them well, keep them exclusive both through price and supply and are very successful. If your running Rolex your doing a fine job.

in terms of limiting supply, I don’t doubt they do this on purpose, with all their experience, are we really suggesting that they couldn’t have rammed up production over the last 5 years. They don’t want to because they want to keep their product exclusive. In the past they did this through price, but with cheap credit and the ability to borrow money very easily, the only way to maintain exclusivity is to limit supply. Their other option would be just to increase their prices considerably but then all you’d get would be threads asking why Rolex’s have gone up so much and accusations of price gouging.