What is a Rolex watches?
In this special feature article, we go on a quest to better understand what is behind the unremitting rise of luxury watch prices, and to do so, we will explore how and why Rolex prices have increased over the last 60 years. You see, while the steep increase of high-end watch prices has become evident to every discerning watch buyer on this planet, it remains difficult to point out exactly why and how things have changed so radically... or, if they have changed at all.
This is, without a shadow of a doubt, one of the most pressing issues in the world of watches today, something that has raised countless questions and fueled numerous debates among watch enthusiasts, collectors, and experts alike. It has directed the spotlight on issues such as value proposition, the economic state of both the industry and the luxury consumer, and has made us want to discover the "hidden driving forces behind it all." To answer as many mysteries as we can – and perhaps to ultimately raise new, previously unasked questions – we decided to scrutinize the pricing practices of one of the absolute benchmark brands of the luxury watch industry: Rolex.
About the process
To begin with, we used official retail prices dating back as far as 1957, based on data compiled by . This magnificent price table contains authorized retailer prices in about 5-year steps for just about all important Rolex references that debuted in or after 1957. We processed the raw data linked to two of the more popular models of the brand, namely the Submariner no-date and the Cosmograph Daytona, and we have also looked at the Submariner in 18k gold to see how this precious material has affected affordability. We dedicated charts to each of these examples. On the charts, we have marked in black the respective retail prices for each year, while in red we indicate how the price of each watch would have changed over the years had Rolex raised prices only to counter the effects of monetary inflation.
Naturally, there are many other factors beyond inflation that can define a fine watch's retail price, such as costs related to base materials, labor, research and development, marketing and brand positioning, as well as long-term investments related to advancements in manufacturing processes. With that said, our primary goal now is not to find a detailed answer for each respective model's appreciation but rather to acquire a comprehensive understanding of how and why luxury watch prices have changed so much in general.
The key steps in the process of "luxurification"
In an ideal world, no brand can go on for decades making the exact same product while gradually raising prices to several times of what it initially sold said product for. Regardless of whether we are talking about a historical model or a new one, we all expect our latest purchase to pack a number of new features or developments, refinements that grant that our latest and greatest piece is truly that, with advancements in terms of design, comfort, reliability or accuracy.
When it comes to wristwatches, there are many ways we could define what sets a luxury item apart from the rest, but for now we will say that a luxury item is one that goes beyond meeting the requirements set strictly by necessities only. Ever since the first wristwatches became commercially available around the early 1900s, there have always been superior – and hence more expensive – as well as cheaper watches, differing in the level of quality that they offered in the aforementioned factors. But despite that 100-year-long history, the dawn of the luxury watch industry as we know it today dates back to the mid-1980s. It was around then that the Swiss finally found their way out of the quartz crisis that almost completely destroyed them.
To understand the evolutionary cornerstones in the development of a fine-watch-turned-luxury-product, we must examine a product with an expansive and continuous history, one that dates back way beyond the '80s. A model we found to be most suiting for those purposes is the Rolex Submariner. Although its history is rather complex, for now we will say that upon its debut in 1954 it was one of the few professional dive watches out there at the time, and as such, it was more of a tool than anything else. By contrast, today's Submariner, the tool-watch of yesteryear, has transformed into an internationally recognized status symbol, consequently becoming one of the most widely imitated watch designs of them all. That is quite some transformation, and upon closer look, we will see how nicely this one model comprises the steps in the transition from a tool to a luxury product.
As the story tells – and the picture above beautifully illustrates – the Rolex Submariner remained more of a tool watch than anything else during its first few decades of existence. Its initial 100 meter water resistance was quickly doubled by the company and as such its 660 feet / 200 meter depth rating, rotating bezel and durable (for the time, that is) construction made it a perfect device for divers. By contrast, while the more modern iterations of it have been improved in just about every aspect one can imagine, the Submariner has gradually left the depths of the oceans and started a new and successful career in business meetings, spending vastly more time hidden under cuffs than exposed over diving suits.
It went on to incorporate better quality steel, replaced aluminum bezels with more beautiful and resistant ceramics, substituted most stamped components with milled ones, has become more legible, and much more accurate. But why was all that necessary, if only a microscopic percentage of its owners actually harness its enhanced capabilities? Because it has become a luxury item, something that must not only look, but also perform better than its more widely available counterparts – even if its heavy-duty construction will not once be put to test in its lifetime.
When it comes to Rolex and their historical models, we have seen them perform a large number of subtle as well as some major modifications over time. There is a peculiar way of coupling these two kinds of enhancements, meaning that smaller improvements are generally synchronized with the debut of more considerable alterations. In Rolex history, this generally translates into presenting a new, more refined movement which is accompanied by more minor improvements on the watch, such as a more durable and comfortable bracelet, a new bezel or luminescent material, and other tweaks.