control. It’s all about control. If you are not completely controlled, others can ruin things, and you take responsibility for it and bring about a negative image. That’s one thing you don’t want to deal with luxury brands. So, Rolex intends to control everything from creating alloys to creating parts, assembling watches, selling, selling services, buying back and selling again. The Crown wants to understand every aspect of the life cycle of a watch. What does this mean?
In 2023, Rolex made history and became the first Swiss watch brand to surpass 10 billion channels of sales. That year, it strengthened its control by overseeing an impressive 30.3% retail market share. According to Morgan Stanley and Luxe Consult, a year later, the market share reached 32.1%. To put that number into perspective, it is 300% more than its closest competitor, Cartier, with an 8% retail market share. And what do you know? The market share of the used Rolex luxury watch market is much larger. According to vintage Rolex seller Bob’s watch, the crown’s market share is 73.8%. The market-controlling brands have a solid grasp of other key factors that their products are involved. Rolex wants to do it all. This includes, among other things, controlling where the product is sold and served.
Rolex headquarters in Geneva
Rolex wants to control everything
If you sell over a million watches each year, you can keep them close after your initial purchase can be very advantageous. If you sell your internal products at an internal sales location, we will provide services at our internal service center, buy it back, and sell it again at our internal second-hand dealer. Rolex wants to be involved in the complete life cycle of its product, from its creation to its end, but in theory there is eternal life in a watch that has been cared for and well served.
Rolex Explorer II ref. 16570
Rolex Certified Used Program Rollout
Rolex has been making watches since the early 20th century and has been steadily working to become the number one manufacturer of luxury watches. Recently, the brand appeared to have taken its pace to further strengthen its position in the lucrative luxury watch market. In 2022, Rolex launched its certified China program. This began with Rolex “CPO” watches being sold at Butcher Boutiques in Switzerland, Austria, Germany, France, Denmark and the UK. In two years, the CPO programme saw a quadruple expansion. Apart from Bucherer, some approved retailers have also become part of the program, including Dutch retailer Gassan and US-based dealer mayors and Tonaud. The number of approved retail partners has rapidly increased from 25 to 107, meaning 217 physical locations around the world.
Rolex CPO Approval Seal
The program works as follows: First, sources from CPO retail partners used Rolex watches from at least three years ago. Rolex then checks these watches for credibility. If they pass the test, they will be certified and guaranteed. The CPO Rolex comes with a fresh 2-year international factory warranty and shows a physical seal to prove it. CPO Rolex is a safe choice, but prices outweigh most second-hand retailers. It’s a peace of mind price, and many (inexperienced) watch buyers willing to pay. Rolex is profiting from this in every way.
Butcher’s flagship store in Lucerne, Switzerland – Image: Butcher
In-house sales
Speaking of in-house sales in 2023, Rolex acquired Bucherer, a multi-brand retailer with over 100 locations around the world, giving it a stronger control over brand sales and overall customer experience. This move will strengthen Rolex’s retail presence, giving you more tight control over pricing and watch availability, particularly high demand models. Strategic purchases also could allow Rolex to expand access to additional production capacity while reducing its reliance on third-party certified dealers. So far, 53 Bucherer locations have operated as certified Rolex dealers. In addition to that, Bucherer also operates a large after-sales service operation for the brand, which is in this aspect of the watch lifecycle that Rolex is currently focusing on.
Entrance to the Rolex After-Sales Service Center
In-house after-sales service
According to Jing Daily, a leading digital publication focusing on trends in China’s luxury consumers, Rolex is reportedly taking critical action to integrate control over distribution and post-sales services. The brand reportedly has closed third-party service centres to get an eye on all aspects of the watch’s lifecycle, especially in major markets like China. The closure of an independent service hub suggests more than just a logistical step to fully control the product. It also means more control over the customer. If you don’t buy a new or used Rolex from Rolex, or if Rolex doesn’t have Rolex serve with a Rolex set, you will cut it off yourself.
Who’s out?
Rolex means controlling every aspect of the watch’s lifecycle. This means that the company is trying to cut out the scanping grey market dealer. This also affects the way collectors buy, sell and maintain new watches from the crown. If Jing Daily is right, this strategy will lead to a Rolex hub that includes a local distribution center, a carefully curated Rolex style sales salon where you can purchase new CPO watches, and an after-sales service center.
Scalpers may welcome victims of this one-stop shop strategy, but what about existing independent Rolex certified service centres? Furthermore, it seems that the quality of service is guaranteed when controlled by Rolex, but how fast is the after-sales service?
The answer to the first question is that once this program is rolled out, third-party service centers will be reduced regardless of certification. When it comes to operating speeds in centralized service hubs, there will be a large service center like this at the level of excellence that Rolex vows to support. Are these hubs rumors or are they certain? It will be displayed within the time limit. And don’t forget that, like the CPO program, initiatives will continue to unfold around the world as they begin.
Everything in the company
Former Rolex CEO Patrick Heiniger (1950–2013) would have been proud to see virtually every aspect of the watch business under the direct control of the brand. Heiniger marked the company’s history in 16 years at the helm from 1992 to 2008. Rolex made a pivotal strategic decision in the mid-1990s to vertically integrate production processes. The move aims to control the production of keywatch components, thereby ensuring brand autonomy.
Controlling all aspects of the clock game inside and outside the production facility – therefore creating rules takes Heiniger’s vision a step further. It is a strategy that requires serious investment. Rolex can afford it. The company is under the control of the non-profit Hans Wilsdorf Foundation, which maintains a close-keeping secret of Rolex’s annual profits, but considering the very healthy margins of the luxury watch world, the brand’s 2024 Chf revenue of Chf in 105.8 billion means it is highly profitable. So if Rolex wants to do it all, the company will. But it feels like the big (clock) brothers are looking at you.
What do you think about this development? Will Rolex’s strategy comfort you or is it the exact opposite? Please let us know in the comments section below.
Unless otherwise stated, all images are courtesy of Rolex.
