Source: Rolex.com - GMT-Master II (Reference: 126710BLNR)
So the biggest headliner at the biggest watch show in the world gave what most have considered a ‘less-than-stellar’ performance with its new releases for 2019. Rolex released a number of new SKUs, with the main focus on the following three models:
An Updated ‘Batman’ (Ref: 126710BLNR): A stainless steel “Black and Blue” (aka the “Batman”) GMT-Master II with an upgraded 3285 movement and jubilee (as opposed to the traditional oyster) bracelet;
A new Yacht-Master (Ref: 226659): A Yacht-Master in 42mm for the first time in white gold with an updated 3235 movement, matte black Cerachrom bezel, on an Oysterflex bracelet with Glidelock extension clasp (btw, once they release this in SS, it is going to be one hard find); and,
A Two-Tone Sea-Dweller (Ref: 126603): A Sea-Dweller in two-tone for the first time ever with stainless steel and 18 carat yellow gold.
It should be noted that Rolex also introduced updates to its Datejust lineup and can’t forget about the completely ridiculous new Daytona with an elaborate intertwining of diamonds throughout the dial and an iced-out bezel.
Rolex Strives to Exert Absolute Control Over the Primary Market
As I’ve said many times, Rolex is a family-owned business that does not have shareholders to appease that controls its business (including production, model proliferation, and distribution) with the same precision as its newest mechanical movements. The fact of the matter is, while many want all of these new models, would it really make them any more accessible to the general public? The answer is “no” - you still cannot go into any Rolex Authorized Dealer (AD) and find any Rolex stainless steel sport watch - that goes for models such as the No-Date Submariner to the Cerachrom Daytona. And…models introduced last year (such as the highly-popular GMT-Master II "Pepsi”) remain both inaccessible through the primary market and still fetching near double retail price on the secondary market. I have no doubt that the ‘new’ Batman, will sell for thousands over retail price when it finally hits retailers (likely in the summer) and all of them will already be ‘allocated’ to preferred customers.
So as Rolex watches other high-end watch brands see their watches discounted by their own distribution channel and selling for huge discounts on the secondary market, the company sits in a highly enviable position of knowing that it can sell every watch it makes at retail price, and still leave demand on-the-table. Rolex has been playing the same game for the last four or five years, and if you don’t believe me, do two things
Take a look at what you could buy for retail price from a Rolex AD in 2014 vs. what you can buy from that same AD today; and,
Look at what a pre-owned stainless steel Submariner was selling for on eBay in 2014 (likely a discount) vs. what a similar watch is selling for today (likely a heavy premium).
Aspire for Desire
Rolex is an aspirational brand that sells aspirational products, and the best way to maintain that type of brand is to leave the public…desiring to aspire. And it certainly isn’t going to make people happy, but in an industry where everybody else is struggling, by not giving the public what it truly wants only strengthens Rolex’s market position by creating an insatiable level of demand. After all, the allure of Rolex watches are in ‘stories’ (not precious metals) and the story of the day is….”I always want what I can’t have.”