ROLEX CHÊNE-BOURG SITE, GENEVAPhoto credit : Watchpro
So, Rolex closed its factories last week. The COVID-19 virus continues to ravage the world and it seems that nobody and nothing will escape its effects. These effects have caught up with Rolex’s supply, having formerly been primarily impacted by the decline in demand while the virus was for the most part still confined to Asia. With the COVID-19 virus now have debilitated most parts of Europe and many areas in USA, lockdowns have become the preferred, and hopefully the most effective, method for containing its spread. Admittedly, there are far more important and real consequences that stem from these response measures for us to consider. However, given that this hobby is often an escape from the harsh realities of life, let’s consider what this closure and the virus in general really means for the brand.
Photo credit : fhs.swiis
Firstly, and most importantly, as many people as possible will be kept safe and healthy. In our enjoyment of this hobby, it is easy to forget all the people involved in making the watches that we crave after. Sure, it is often bandied about that we can relate more to people in microbrands and more independent brands as opposed to the mega-corporation that is Rolex. Nevertheless, all the Rolex sports models that so many clamour after are also put together by very real people behind the scenes. Hopefully, with this temporary shutdown, these people (and everyone else of course) will be kept safer and healthier. As an added bonus, besides better health all round, when Rolex does restart its production, this move would have helped ensure that its workers are also ready to go. Now to less serious matters.
Photo credit : Watchprosite
One unavoidable result of this shutdown would be the end of the rich flow of Rolex stainless steel sports models we have been blessed to receive over the past couple of years! Not! Much like how the stock market bull run defied the increasingly tenuous financial precipice that the world seemed to be tottering on for some time now, Rolex defied the crazy rampant increase in demand for its stainless-steel sports models. It has churned out an excess supply of its regular models while also satisfying the hardcore fans with weekly limited editions that were not even all that limited. Oh, wait, I forgot we were discussing Rolex, not Omega.
In all seriousness, those hoping that the current situation would ease up demand for Rolex sports models will be disappointed with this development. In fact, it is likely that the current shortage of Rolex stainless steel sports models would only increase. In casual chats with several authorized dealers over here in Singapore, the month of March has been exceptionally bad in terms of the supply of Rolex watches. Barely anything besides two-tone and precious metal pieces have come in and that includes even non-stainless-steel line ups. This closure will only exacerbate that situation. For those thinking that this is only for 10 days which is approximately 2 – 3% of the entire working year, think again. The currently announced 10 days closure is the bare minimum period. Considering the way the COVID-19 virus has been spreading, it is very likely that the closure continues for a prolonged period of time.
Photo credit : Chrono24
As for how this affects, the prices, it will not in my opinion. Retail prices for one are not going to drop. While there will be (if it has not already) a drop in the demand for the stainless-steel sports pieces, the concurrent drop in supply will offset this somewhat if not entirely proportionately. I doubt grey market dealers will be rushing to slash prices, unless they are heavily in debt. Don’t take my word for it but perhaps with sufficient research, you may come across a deal or two especially for the relatively less popular pieces.
Photo credit : Hodinkee
With every crisis, there is also room for opportunity. For one, there are thousands if not millions now cooped up at home for the foreseeable future with nothing to do and not a lot to spend their money on. To qualify, I am ignoring the economic impact that this virus and the shutdown has and will cause too many around the world. All else constant, consumers now don’t have trips to spend on, parties and events to attend and shops to visit. All this translates to a need for an outlet and that outlet would inevitably be found online. However, Rolex and other watch conglomerates have proven to be reluctant and resistant to adapting to the advent of e-commerce, choosing often to rely on their brand power to mandate a retail experience to sell their watches. Well, the current climate vastly reduces the appeal of that retail experience and travel lockdowns restricts the volume of clients that can enjoy this retail experience. Perhaps this is an opportunity to test and experiment. After all, microbrands, who are far more equipped to cope with this crisis at least from a client-facing perspective, have proven that a digital retail experience is a workable solution. If Rolex chose to allow its retailers to sell watches online, it may very well save some of them and potentially open an untapped market for the brand. Of course, it would first have to deal with the constant “Out of Stock” issue consumers will once again likely get frustrated by.
Speaking of opportunity, if this were the 70s, Rolex would have pounced this “golden” marketing opportunity. “If you were fighting the COVID-19 virus tomorrow, you’d wear a Rolex” would be the tag line with a Rolex Day-Date against images of hospital equipment and scrubs, even if the Day-Date, in reality, would possibly get magnetized. After all precious metal Day-Date and oil rig fire-fighting do not seem like a good fit, but what do I know? I come from a generation where the majority of professional models are safe-queens and do not see anything of the action that Rolex sports models were once known for. I wonder how many of those on the frontlines today would actually choose a Rolex as their companion as the daily wrist companion. Red Adair and his firefighters would strap on their yellow gold Rolexes and look on us (the safe queens not the front liners) with disdain.
Photo Credit: @jwit94
All in all, while it will be difficult to quantify the extent of the effects of the shutdown of Rolex’s factories, I highly doubt there will be much visible difference to the consumers given that barely anything was coming into stores in any event. It is, however, a little daunting when you consider that even the biggest of them has to resort to such drastic measures. I am curious to find out (though this may never be possible) if Rolex’s decision was driven more because of the increasing government restrictions as opposed to something that it had intended to do of its own volition. Either way, here’s to hoping this along with all the other measures around the world helps improve the situation. In the meantime, if you are quarantined at home, it is a great chance to catch up with the Scottish Watches podcast episodes and the great articles on the Scottish Watches website. Oh, and of course, wash your hands. Stay safe everyone.