- Mar 11, 2014
- Reaction score
I was recently the guest of Rolex at a tennis tournament ( I should note that I am no high roller and it was due to my friendship with the owner of a jewelry store) where I had a lengthy and surprisingly open conversation with a Rolex executive from Geneve. He said they do an immense amount of market research and that they arent producing that many fewer steel sports watches than they can sell. By far their biggest seller is the 36mm Date Just, and it isnt even close. How much impact scarcity has on those numbers I wouldnt know.It's probably because the ADs I went to were located in smaller markets, probably.
I'd assume that there is a lot higher demand in large American cities than in small Canadian ones.
Rolex is smart for creating this artificial scarcity, though. I mean, it would be just as easy for them to just MTO, or MTO with a bit of shortage, as to tell retailers "You get what you get, and you bloody well better not get upset." From a marketing perspective, it's genius, but it would not be actually that hard to shift their volume from a less desirable model to the stainless steel models, which are frankly, probably easier to make as well as considerably cheaper. Gold is selling about somewhere around $1450/ounce right now, which is orders of magnitude higher than steel, at any grade.
So while I think that the "race for Rolex" is a bit silly, I do admire Rolex's hustle.
He also said that engineering scarcity would be very difficult to manage. Produce a little too much and there is discounting, not enough and you run the risk of buyers moving on to other brands. From his point of view, they are close to getting it right, though dealers getting told what their allocations will be without much input is a process they are still working on.
Perhaps the most interesting thing he said was that they pay their ambassadors much less than most other companies. Peanuts in comparison, really. In most cases, becoming a Rolex ambassador raises the profile of the person enough that they earn more from their other sponsors. Pretty interesting conversation