Playing it safe is the most certain way to lose your future. In a market that is constantly changing, taking risks and challenging the status quo are the only ways brands can inspire, survive, and strengthen their competitive position.
Such an event just happened in fine watchmaking, and nothing will be the same. For many brands this will be the ultimate wake-up call.
The term “genius” is often overused, but in the case of Rolex’s acquisition of Bucherer, it’s the right description. Rolex, the world’s leading watch brand and a byword for luxury, announced the acquisition of Bucherer, the world’s largest watch retailer, on August 24.
This acquisition can only be described as a strategic masterstroke. The move offers significant synergies and potential for both sides, and it has far-reaching implications for both brands and their competitors, especially in a hyper-competitive market where access to clients is a critical success factor.
The strategic advantages are multifold. First, Rolex now has unparalleled access to Bucherer’s expansive distribution channels, which include a multitude of international locations. This effectively augments Rolex’s penetration into key markets around the world and will give the brand a long-term strategic advantage that others can practically not match.
Rolex also gains access to Bucherer’s very important clients (VICs). This provides invaluable data and connection points, especially when launching new lines, gaining information about competitors, and segmenting further.
But in luxury, it’s not just about the watch but also how the watch finds its way onto a customer’s wrist. Rolex can now manage the entire customer experience, from product creation to after-sales service, guaranteeing a seamless purchase journey. This was, in my point of view as a watch collector myself, one of the brand’s weaknesses. Whether the client relationship was hit or miss depended on the retailer; now, Rolex can control all aspects.
Second, the acquisition strengthens the newly launched Rolex Certified Pre-Owned Program (CPO). Bucherer’s ownership of Tourneau, an American multi-brand retailer dealing in new and certified pre-owned watches, fits like a glove with Rolex’s newly launched CPO program. The synergy could not be more perfect.
Third, there’s succession clarity. With the previous owner of Bucherer facing an uncertain future in terms of succession planning, Rolex’s acquisition guarantees stability, thereby reassuring clients and stakeholders.
However, there are also significant pitfalls that Rolex needs to manage. Rolex has limited retail experience and is dependent to a large extent on third party retailers. This will require a significant step up of in-house retail expertise. It necessitates a different skill set and operational model. Rolex must manage the acquisition delicately to prevent potential dilution of either brand.
A significant uncertainty is market and regulatory reactions. There is a significant risk of negative market reactions or anti-trust issues when a powerhouse like Rolex acquires a massive retailer like Bucherer, which also retails the closest competitors of the brand. The regulatory implications will have to be managed carefully along with the potential reaction of rival brands.
The acquisition of Bucherer by Rolex is a game changer that sets the stage for a new era in luxury watch retailing. As I often point out, the brand that is able to control the entire narrative — from the brand story to distribution to each customer touchpoint — stands to gain significant value and loyalty. For Rolex, this acquisition isn’t just another strategy; it’s an all-encompassing vision for the future, replete with tremendous extreme value-creating opportunities.
With this purchase, Rolex has effectively fired a starting gun, signaling a race to holistic brand experience management that many will follow but few will master. Instead of just asking “what watch are we selling,” the luxury industry should be asking “what kind of value are we creating at every customer touchpoint?” Because in today’s high-stakes market, anything less than genius simply won’t cut it.
A new era for luxury watch brands has begun. For competing brands it means there is no more business as usual. It’s a call to action to reshape their strategies amit a new market reality.
This is an opinion piece where all views expressed belong to the author.
Named one of the “Global Top Five Luxury Key Opinion Leaders to Watch,” Daniel Langer is the CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the executive professor of luxury strategy and pricing at Pepperdine University in Malibu, California. He consults many of the leading luxury brands in the world, is the author of several best-selling luxury management books, a global keynote speaker, and holds luxury masterclasses on the future of luxury, disruption, and the luxury metaverse in Europe, the USA, and Asia.
Follow him: LinkedIn: https://www.linkedin.com/in/drlanger, Instagram: @equitebrands /@thedaniellanger