When people are not willing to spend money - be it on the gray market or at official dealers - first, the prices on the secondary markets go down, and second, the unobtainable Rolex models you so desire will appear in the shop windows again. And there are also emotional factors like the fear of a new COVID outbreak in the fall, war on the European continent with a global effect, and perhaps also the tangible effects of climate change. After a while, the cost of living won’t leave room for even a “sure bet” on a watch. But what could kill their confidence? Well, if inflation continues to stay high and shows no signs of falling soon, choosing between wants and needs becomes a bit easier. Confident consumers spending money is the key. Confidence and inflation - two opposites - are both high, but the luxury watch is the stabilizing factor. What you see in today’s watch market is a balancing act between inflation and customer confidence. And that’s because traders will always be willing to buy your Rolex no matter the state of the economy. Right now, the market for Rolex is booming, but if it ever stops doing that, the price you can get for your Rolex will never drop below a certain minimum. And what is good to understand is that, especially with a Rolex, there is a bottom when it comes to cash value. A Rolex is like an international traveler’s check that gets accepted everywhere in the world. You can carry your watch with you, have it serviced when needed to keep it in the best possible condition, and you can turn it into cash very easily. Even the younger generations have come to understand this.Īpart from an object that shows status, or the more refined idea that wearing a mechanical timepiece shows knowledge and appreciation of traditional craftsmanship, a watch is also a practical asset. The prestige and status of a traditional watch causes it to retain its value. Mechanical luxury watches have overcome the Quartz Crisis, and they also seem to do a pretty good job in fending off smartwatches.
And one way to protect yourself against inflation is by buying a luxury timepiece, one with a stable level of demand like a Rolex. I don’t want to infuriate all you passionate watch fans, but a luxury timepiece is not an essential product.īut as I said, consumer confidence is high despite a high inflation rate. The cost of living - the essentials - went up massively, but so did the cost of less essential products. And that March number was the highest in nearly 47 years. And I do think “craze” is the right word when you see stainless steel Rolex watches being sold for three times the retail price.Īccording to the Dutch Bureau of Statistics (CBS), the Netherlands’ annual inflation rate came down ever so slightly to 9.6 percent in April 2022 from 9.7 percent in the previous month. As a result, demand outweighs the supply, and that again has led to a watch craze. Consumers who feel that way want to consume, snapping up the best-known and most prestigious luxury watches, for instance. Nowadays, consumers just feel too good about the overall state of the economy and their personal financial situations. And to understand this number, it’s good to know that a figure above 100 is considered positive.
The Global Consumer Confidence Index was holding steady at 115 in Q4 2021. Strangely enough, confidence is one of the reasons that you can’t actually buy that new GMT-Master II “Destro”. What will burst the Rolex bubble? Customer confidence sure won’t do that Even for very self-confident people, a hard “no” and the absence of a “yes” on the horizon can destroy a positive feeling. But when you confidently stride into the nearest Rolex dealer with money in your pocket for the new oddball GMT-Master II, your positivity is put to the test. If you can take that confident feeling with you for the rest of the day, you will walk with a spring in your step. But what would happen when one of these elements is taken away? What will burst the Rolex bubble? Let’s look for an answer.Ĭonfidence is a good thing, especially when you wake up in the morning, look in the bathroom mirror, and walk away with a smile on your face. All these elements together create the Rolex fata morgana. This is especially true when there are also gray-market speculators and a shortage of watches that everyone seems to want. Inflation and confidence in the market are both high, and these forces have a lot of impact on the watch market.