How Rolex Gain Its Luxury Branding

Rolex is reported to make nearly a million watches a year, and while the brand is advertised almost everywhere, actually finding a watch to buy proves to be a futile task.

With precision manufacturing, specially selected materials and exceptional craftsmanship, Rolex watches were never cheap, but they were economically affordable for his 1960s connoisseurs seeking perfect timekeeping and technical innovation. It was not out of reach.

In other words, the mid-century Rolex resembled the Apple Watch more than it is today's prized collectible, where even the cheapest Datejust cost him $5,000.

According to Jeffrey Hess, a Rolex collector and co-author of "Rolex Watches", today's rarity and prices meant that in his 70s dealers had enough inventory to sell at negotiable prices. or his 80s. : Unauthorized talk.

"Anybody could afford a Rolex back then," Hess told Insider. “I drove around and bought [the Daytona] for $3,000. It is now a $50,000 commodity on the secondary market.

With secondary market prices starting to rise again after years of decline, it's worth taking a look back at how the company has evolved from a tool watch maker to the luxury icon it is today. In other words, a combination of clever marketing and collector interest led to demand far outstripping the supply of new watches.

Hess said the 1980s marked a turning point in the company's public image, as the brand evolved from a must-have precision tool for professionals and adventurers to today's icon of luxury goods.

"This watch was never meant to be a fashion watch," he said. "It was supposed to be a watch for bullies. Designed as a watch for swimmers, submariners and explorers.

Rolex did not respond to an insider's request for comment on the matter.

In its early days, the brand focused on practicality rather than luxury In fact, under its founder Hans Wilsdorf, Rolex was at the forefront of horological innovation for most of the 20th century. From jumping the English Channel to climbing Everest to breaking land speed records, the brand has aimed to establish itself as the most convenient and reliable watch for adventurers around the world.

When Wilsdorf died in 1960, his successor was Rolex marketing director André Heiniger, spearheading a decades-long effort to make Rolex synonymous with luxury.

Heiniger is said to have said, "Rolex is not in the watch business." We are in the luxury goods business. 

As usual, the brand has gained recognition through appearances in Hollywood movies, sponsorships of sporting events, and awards for its charitable efforts. In addition, the company has more control over its supply chain and distribution network, allowing it to strengthen quality control and maintain exclusivity appeal.

By the 1970s, these efforts to project an image of reliability and stability put Rolex in a prime position to ensure a store of value in times of economic uncertainty. The US abandoned the gold standard on the dollar in 1971, Italy tightened control of the lira in 1972, and the oil crisis rocked the market in 1973.

Rolex watches conquer the Italian market and become collector's items Hess said Italians were the first to embrace the vintage Rolex business because watches were a stable and portable alternative to currency during this era.

Dealers bought luxury watches in Switzerland and sold them across the border into Italy. After that, Italians wore Rolexes, Audemars Piguet, and Patek Philippe in the United States and elsewhere, selling them for many times the cash they could normally bring in. A collector's market was born.

Mr. Heiniger retired in his 1997, although a more accurate, versatile and affordable alternative that now measures time with atomic precision has superseded Rolex's original function. Regardless, the company remained true to the scheme he perfected.

Rather, the growth of this category has accelerated over the last few decades. Rolex, a privately held company (and notoriously secretive), does not disclose financial information, but Morgan Stanley estimated that the company had sales of CHF 5.2 billion (about $5.8 billion) in 2019. ing. Incredibly long waiting list drives second-hand prices higher Demand for a new Rolex watch can result in wait lists for a particular model at a retailer for years, or even decades. The company said in a rare public statement in 2021 that the current shortage was "not a strategy on our part."

As a result, pre-owned watch prices can easily exceed the list price, doubling or even tripling in value.

After a turbulent 2022, when prices of major Swiss brands fell sharply on the resale market, Rolex still outperformed stocks and real estate, each with their own problems.

With that reputation, Rolex has beaten the competition with a quarter of the luxury watch market, more than double his share of runner-up Omega. And Rolex's dominance is only getting stronger, says Hess. "This is the watch people buy when they make it," he said. “They all buy the brand they want to Rolex first, and then, if they succeed, they buy this Rolex.”

In other words, you wouldn't be born without a Rolex. It's not just a symbol of luxury, it's the front door.