14 Comments
User's avatar
Sfwatchlover's avatar

The best analysis article I have read on this topic! It looks like that other big watch groups will have to think about their retail strategies and "CPO" strategies. Hopefully, this move will be good for watch buyers in the end.

Expand full comment
kingflum's avatar

Thank you sir! Indeed, we can only hope... not like we have much say, other than to buy other watches 😂

Expand full comment
Robert Olson's avatar

Thanks for the write up. What a fascinating new world this could be if Rolex can buy back models. My only qualm is what's to stop someone from buying a submariner at retail and selling it back to them for market price? They'd have to have some sort of rules with that. As always great write up and words.

Expand full comment
kingflum's avatar

Thanks for taking the time, Robert! That’s what the CRM system will allow them to do. They can cross reference names and addresses, to prevent for example a husband doing something like that and selling back in the same household… they also have a 3 year eligibility criteria I believe? Not sure about that, but it’s easy enough to implement - no watch newer than 2,3 or even 5 years is eligible for CPO? People will always try to game the system, but when they have all the data, they’ll surely be able to make it work!

Expand full comment
Robert Olson's avatar

That's a very good point for that I somehow completely didn't put 2 and 2 together. In the meantime I'll continue to scheme and plan on how I can game it 😂😂

Expand full comment
kingflum's avatar

I have no doubt you will find a scheme - kindly share it when you do :D

Expand full comment
Ervin Ooi's avatar

I felt R is allowing AD to do things ‘freely’ in the past and now starting to regret that and want to make things right. As for your example, RSC noticed your issue and probably many more similar encounter, what can and did they do to the AD? Nothing… Take my example, I bought a SD4K from a grey with a NFC card dated 2022.. This watch was discontinued in 2017. The watch comes with a old green serial tag. The watch probably come with the previous generation warranty card with retailer name but it was sold by the AD with new NFC. The warranty card have to be exchange with R during the transition. My question is, why R close 2 eyes on the AD who speculate /invest in this old model? Btw, my friend bought Hulk with new NFC dated 2022 too from the same AD. You need 2 hands to clap.

Expand full comment
kingflum's avatar

Hey Ervin, welcome, and thanks for subscribing! Agree, you need two hands to clap... 😂 All you examples add useful colour to the argument - I can only speculate, but many of these examples are from regions in the east or middle

East, where Rolex has less control over ADs anyway. They also have no alternative, so they make the best of the situation where possible. On balance, Rolex doesn’t want to stop supplying the Middle East - but they also know they can’t stop the AD i mentioned, from doing things in a less than straightforward manner, because that is how many, if not most things, happen in the Middle East anyway. We may even go as far as to say it’s a “cultural” thing 😂 ... so yes, they leave them to do things freely out of necessity perhaps. I don’t even think that will change at all - some places may always be lawless, but Rolex may care less because they know the brand will never lose its allure in the region despite the poor quality of service.

Expand full comment
Ervin Ooi's avatar

Haha thank you for enlightening me on the ME situation. Different hush hush things there in the ME for sure. Thank you for the discussion and summary for this whole saga.

Expand full comment
kingflum's avatar

Wild West, aka ME 😅🤣

Expand full comment
Bruce L's avatar

🤠

Expand full comment
David's avatar

I think the biggest point you did not approach is: what if they do not change ANYTHING at all at Bucherer? Rolex said they will continue to operate independently, and Bucherer (so now Rolex) were making significant profit on those quasi-bundles you well mention so why would they stop? I wish they would, but I do not see their financial incentive to do anything at all

Expand full comment
kingflum's avatar

I didn’t think that was a likely outcome in the short or long term. This would be a case of vertical integration without operating as a vertically integrated entity; which is inefficient and overall, likely to have more downside than upside. As far as the question you pose: why would they stop? This will be down to numbers, I’d imagine. The potential “loss” of bundling upside, measured against the “gain” of integration value and targeted CRM should likely favour integration. There are always enough rich people, and fewer Veblen goods to go around- by definition of Veblen goods, right?!

Expand full comment
David's avatar

I hope you are right! everyone but maybe flippers (probably even them too lol ..) would benefit

Expand full comment