Will The Hype Cycle Kill Rolex Like It Did With Supreme?
Older or OG streetwear heads, like myself, who are also watch collectors will recognise what's happening to Rolex. It's the same hype cycle, from a handful of years ago, that the skateboarding brand Supreme went through.
Streetwear went mainstream and Supreme was the face of streetwear. The skateboarding brand popped a wheelie on the zeitgeist and became the it streetwear brand in the community and in the mainstream. Sold in limited numbers, irritating waits and obstructed purchases from suspected flippers.
Rolex, much like Supreme, spawned a dedicated YouTube/online community, meet ups basically dedicated to Supreme and investors bulk buying. It sounds so similar that I wonder if the Rolex brand crashes the same way.
Like current day Supreme, will Rolex be shunned by it's core community for being worn by posers. Will the YouTube community eventually dwindle to the point where it just moves on and the unsavvy investors end up making a much smaller return than their hearts desire?
Well, recently the watch YouTubers have claimed Rolex hate is at an all time high and they even go as far as saying Rolex is killing the community. I've heard this before, YouTubers claiming people who wore Supreme knew nothing about streetwear and the influx of non-skaters poisoned the coolest underground clothing brand. Ask the older streetwear community and they will either be gentle and say the community is split between the older and younger generations or they might tell it like it is and say the Supreme generation flexed so hard they killed the community spirit streetwear once had.
Personally, I think history will repeat itself to a significant degree. Where do you see the Rolex brand going in the mainstream and for enthusiasts?
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I think you've absolutely hit the nail on the head here. It becomes incredibly difficult for a company to survive when / if its products become part of some weird "craze."
There's a whole list of companies who have gone through this reckoning, and the history is not edifying
So, maybe, Rolex is smart in launching Tudor as a way to diversify if / when the Rolex hype cycle passes?
I don't think so. Rolexes are primarily purchased by people with little to no interest in, or knowledge of, watches. They just want an expensive watch as a status symbol and 'know' Rolex is 'the best'. That market isn't getting any smaller.
I don't think so. Rolexes are primarily purchased by people with little to no interest in, or knowledge of, watches. They just want an expensive watch as a status symbol and 'know' Rolex is 'the best'. That market isn't getting any smaller.
Regardless of one's opinion of Rolex, most people not of a certain age have no idea what Supreme is, while just about everyone on the planet knows what Rolex is. One is an icon that has outlasted all the trends listed above, the other is glorified fast fashion.
Regardless of one's opinion of Rolex, most people not of a certain age have no idea what Supreme is, while just about everyone on the planet knows what Rolex is. One is an icon that has outlasted all the trends listed above, the other is glorified fast fashion.
Rolex will likely survive, but it might survive as a much diminished version of what we have now.
Rolex has been around a long time, but it hasn't been a "hype" brand for the vast majority of its existence. It used to be what Tudor is now, an expensive watch, but still entirely attainable for an average income earner.
Rolex will likely survive, but it might survive as a much diminished version of what we have now.
Rolex has been around a long time, but it hasn't been a "hype" brand for the vast majority of its existence. It used to be what Tudor is now, an expensive watch, but still entirely attainable for an average income earner.
I will give you that the current environment will leave a sour taste for many, but one has not been able to buy a Daytona in over 30 years. The fact people cannot get an OP is laughable, but I am sure they will be fine, at least for the years to come.
Rolex has always been the one brand that non-WIS people associate with being a "nice watch." It's no different now, except it's more flagrant and, frankly, off-putting. Rolexes are nice, but the baggage associated with the brand is simply not for me.
Rolex has always been the one brand that non-WIS people associate with being a "nice watch." It's no different now, except it's more flagrant and, frankly, off-putting. Rolexes are nice, but the baggage associated with the brand is simply not for me.
I feel the same about the brand baggage. I love their designs, some of my favourites even, but I couldn't see myself wearing any Rolex to work or even around friends without being conscious of the baggage. Which is a real shame and I think the same would be true, for me, with most two toned watches.
I think you've absolutely hit the nail on the head here. It becomes incredibly difficult for a company to survive when / if its products become part of some weird "craze."
There's a whole list of companies who have gone through this reckoning, and the history is not edifying
So, maybe, Rolex is smart in launching Tudor as a way to diversify if / when the Rolex hype cycle passes?
Great points, I never thought of Tudor as a means for Rolex to diversify in anticipation for the end of the Rolex hype cycle. I always thought Rolex were moving upmarket to capitalise on the new found hype and Tudor were taking it's place in the market. Both make sense but I really like your last point.
Can't wait for the watch market to cool down and the hype to be over so I can buy a vintage Tudor or Rolex at a sensible price and with somewhat ease.
Great points, I never thought of Tudor as a means for Rolex to diversify in anticipation for the end of the Rolex hype cycle. I always thought Rolex were moving upmarket to capitalise on the new found hype and Tudor were taking it's place in the market. Both make sense but I really like your last point.
Can't wait for the watch market to cool down and the hype to be over so I can buy a vintage Tudor or Rolex at a sensible price and with somewhat ease.
I really think you've hit the nail on the head. I LOVE Rolex and Tudor.
But, unfortunately, I will NEVER purchase one of their watches, because deep down inside I'm a misanthrope and just imagining a random stranger coming up to me to ask me about my watch fills me with unspeakable dread.
Though, I do think your hypothesis is more compelling: Rolex is trying to move upmarket, and using the Tudor brand to backfill. I can't, for the life of me, imagine the management at a large company like Rolex having the right incentives for management to plan for the far future - as an executive, your bonus and your restricted stock units are all granted on an annual basis, so WTF do you care if the company even exists 5 years down the line, so long as you get your big payout 12 months from now, right?
Meanwhile, in a family-held company like Patek, you can see "principal / agent issues" being less prevalent, as the management ARE ALSO the owners. Hence, Thierry Stern's decision to stop production of the Nautilus. (Though, I suppose time will tell if Stern sticks with that decision or not, yeah?)
https://www.ablogtowatch.com/patek-philippe-was-right-to-discontinue-the-nautilus-5711-watch/
This is a subject I think about often but rarely feel any confidence in my conclusions.
It's always been put to me that Rolex makes decisions based not on YoY pressures, but rather on what will have the greatest impact on the generational future of the brand. This is why their releases are generally slow progressions rather than bombastic reactions. Just look how long it's taking them to replace the 31xx movements with 32xx movements. They seem to move methodically, plodding a course over decades. What bearing this has on leadership incentives is not something I've considered before but a good point @Omeganut. I've heard the leadership is charged less with making sure they best last months/years numbers, but more with making sure the brand will be around in 100 years.
This is of course runs counter to the current cultural embrace of the brand's products, which often have the undesired side effect of volatility, not to mention the sapping away of brand equity built over generations. Thinking on a macro level, a new customer that's grown up aspiring to own a Rolex, will have a rather sour experience when attempting to acquire one via Rolex's preferred channels. This person will at best look elsewhere for other options until they can source the Rolex they want, or at worst, be turned off on the brand forever. This is not the experience Rolex wants to be creating for new customers (they told me as much to my face when I met with them in Geneva).
In reality, I suspect Rolex is seriously concerned about their customer acquisition channels, not because they can't find customers right now, but because they aren't building a foundation of a new generation of buyers and enthusiasts (something vitally important if you're charged with ensuring the brand's long term future).
While I understand the comparisons to the beanie baby craze or supreme hype, I don't find them entirely analogous as those sprung up basically overnight, captured and defined a cultural zeitgeist and faded along with it. Rolex has been doing their thing for over 100 years, and what's caught them up here is a the quickly changing culture surrounding their products, which they are ill prepared to deal with. Their steadfast dedication to an antiquated dealer network is not doing them any favors here, as they will always favor their longtime wealthy VIP clientele. All this has of course added to the aura of Rolex within hype circles, but it's a quagmire for their long term future in my eyes.
I'll admit my bias here, as a Rolex owner and enthusiast. I've enjoyed the brand for many years now, and while much of the culture around them at the moment does not reflect me, I don't let that stuff get in the way of my enjoyment of my watches.
This is a subject I think about often but rarely feel any confidence in my conclusions.
It's always been put to me that Rolex makes decisions based not on YoY pressures, but rather on what will have the greatest impact on the generational future of the brand. This is why their releases are generally slow progressions rather than bombastic reactions. Just look how long it's taking them to replace the 31xx movements with 32xx movements. They seem to move methodically, plodding a course over decades. What bearing this has on leadership incentives is not something I've considered before but a good point @Omeganut. I've heard the leadership is charged less with making sure they best last months/years numbers, but more with making sure the brand will be around in 100 years.
This is of course runs counter to the current cultural embrace of the brand's products, which often have the undesired side effect of volatility, not to mention the sapping away of brand equity built over generations. Thinking on a macro level, a new customer that's grown up aspiring to own a Rolex, will have a rather sour experience when attempting to acquire one via Rolex's preferred channels. This person will at best look elsewhere for other options until they can source the Rolex they want, or at worst, be turned off on the brand forever. This is not the experience Rolex wants to be creating for new customers (they told me as much to my face when I met with them in Geneva).
In reality, I suspect Rolex is seriously concerned about their customer acquisition channels, not because they can't find customers right now, but because they aren't building a foundation of a new generation of buyers and enthusiasts (something vitally important if you're charged with ensuring the brand's long term future).
While I understand the comparisons to the beanie baby craze or supreme hype, I don't find them entirely analogous as those sprung up basically overnight, captured and defined a cultural zeitgeist and faded along with it. Rolex has been doing their thing for over 100 years, and what's caught them up here is a the quickly changing culture surrounding their products, which they are ill prepared to deal with. Their steadfast dedication to an antiquated dealer network is not doing them any favors here, as they will always favor their longtime wealthy VIP clientele. All this has of course added to the aura of Rolex within hype circles, but it's a quagmire for their long term future in my eyes.
I'll admit my bias here, as a Rolex owner and enthusiast. I've enjoyed the brand for many years now, and while much of the culture around them at the moment does not reflect me, I don't let that stuff get in the way of my enjoyment of my watches.
🙏🙏🙏
Thank you so much for the incredible industry insider insight!
Makes sense that Rolex management is focused on the long-term versus quarterly earnings, etc. I did not previously know, but thanks to your comment, just looked up and found out that Rolex is owned by the Hans Wilsdorf Foundation, which effectively means that it is controlled by the private family trust yeah? Hence, like Patek Phillippe, they don't have quarterly or annual earnings pressure.
That would explain a lot!
It's funny, but in my line of work - private equity operations - I've come to discover that the whole "private company" thing can be a double-edged sword. The best companies / management I've come across have been private affairs, where management and ownership incentives are perfectly aligned, because management is ownership. But, the absolute worst companies / management I've come across have also been private affairs, precisely because there is no external / objective pressure to perform, create value, etc. Some of the CEOs I've had the displeasure of working with at these companies make Logan Roy's shenanigans on "Succession" look tame by comparison!
Rolex, unlike some of those unfortunate companies, are obviously doing many, many, many things right. Per your insight, though,
I guess the trade-off to long-term thinking / planning is that it makes it very hard to react to new developments.
As a spectator, I do think it will be fascinating to see how it all unfolds.
On the one hand,
But, on the other,
Gonna be a lot of fun seeing how it all plays out!
This is a subject I think about often but rarely feel any confidence in my conclusions.
It's always been put to me that Rolex makes decisions based not on YoY pressures, but rather on what will have the greatest impact on the generational future of the brand. This is why their releases are generally slow progressions rather than bombastic reactions. Just look how long it's taking them to replace the 31xx movements with 32xx movements. They seem to move methodically, plodding a course over decades. What bearing this has on leadership incentives is not something I've considered before but a good point @Omeganut. I've heard the leadership is charged less with making sure they best last months/years numbers, but more with making sure the brand will be around in 100 years.
This is of course runs counter to the current cultural embrace of the brand's products, which often have the undesired side effect of volatility, not to mention the sapping away of brand equity built over generations. Thinking on a macro level, a new customer that's grown up aspiring to own a Rolex, will have a rather sour experience when attempting to acquire one via Rolex's preferred channels. This person will at best look elsewhere for other options until they can source the Rolex they want, or at worst, be turned off on the brand forever. This is not the experience Rolex wants to be creating for new customers (they told me as much to my face when I met with them in Geneva).
In reality, I suspect Rolex is seriously concerned about their customer acquisition channels, not because they can't find customers right now, but because they aren't building a foundation of a new generation of buyers and enthusiasts (something vitally important if you're charged with ensuring the brand's long term future).
While I understand the comparisons to the beanie baby craze or supreme hype, I don't find them entirely analogous as those sprung up basically overnight, captured and defined a cultural zeitgeist and faded along with it. Rolex has been doing their thing for over 100 years, and what's caught them up here is a the quickly changing culture surrounding their products, which they are ill prepared to deal with. Their steadfast dedication to an antiquated dealer network is not doing them any favors here, as they will always favor their longtime wealthy VIP clientele. All this has of course added to the aura of Rolex within hype circles, but it's a quagmire for their long term future in my eyes.
I'll admit my bias here, as a Rolex owner and enthusiast. I've enjoyed the brand for many years now, and while much of the culture around them at the moment does not reflect me, I don't let that stuff get in the way of my enjoyment of my watches.
By the way, also wanted to say that I absolutely LOVE the content on Worn & Wound, and am also a big fan of the products from the Windup Watch Shop!