Twelve months ago, as we approached the first Watches and Wonders Geneva show since the pandemic, the industry was in a jubilant mood.
Demand for new watches had never been stronger, driven in large part by a new breed of customer, which a report by Boston Consulting Group and WatchBox defines as Collector/Investors.
These customers are younger, predominately high-earning millennials, currently aged 27 to 42, who frequently buy ultra-luxury watches and resell them for profit.
BCG says they represent 44% of watch buyers and claim a 58% share of the market by value.
If BCG is right, almost six in ten watches sold today are being acquired by collector/investors. That includes both new and used watches.
When you look at the other categories of luxury watch customers in the BCG graphic above, you can see how difficult it must be for normal people with an occasional lust for a high end timepiece — perhaps once or twice in a lifetime — to get a look in with retailers.
Three types of customers, which would have been the lifeblood of the watch business as recently as 2018, are now fighting over two-fifths of watches at retail, and losing.
Every time WatchPro runs a story about a new Rolex showroom, we get comments from these “normal customers” complaining that they will never even get on a waiting list for the watches they would love to buy.
So why keep building retail capacity?
The answer is that investment in newer and bigger stores is nothing to do with serving normal customers better, it is entirely to do with retailers securing better allocations from Rolex for customers with the greatest spending power and strongest purchasing history.
So, when Watches of Switzerland opens its temple to the Rolex god in London later this year, its primary aim is to get more watches for the benefit of its investor/collector customers.
This is why the Rolex market is rigged against normal customers who truly love their watches.
I can only hope that neglecting these normal customers, and even insulting them for the past five years does not come back to haunt Rolex and its authorized dealers if their watches lose their AAA investment-grade status.