Rolex’s launch of a Certified Pre-Owned program is providing some real insight into what brand-owned secondary market endeavors look like in the luxury segment. While resale is by no means a new segment, the entrance of some of the biggest names in luxury (namely, hard luxury) is presenting a first-hand look at how such endeavors will work. Early this month, the Swiss watchmaker confirmed that on the heels of the resale endeavor rolling out in Dec. at Bucherer locations in Europe and the UK, select Tourneau Bucherer and Watches of Switzerland locations in the in the U.S. had begun offering up pre-owned Rolex models that have been approved and authenticated by the brand, itself. In addition to ensuring authenticity, Rolex is implementing a new two-year international warranty on the pre-owned watches by way of the program.
The most immediate takeaway from the Certified Pre-Owned program is the element of control. By participating in the resale market, Rolex can exercise a strong hand in dictating the buying experience in third-party retailers’ stores, the condition of the watches being traded, some of the conditions of the sale, etc. For example, Rolex has dictated how the pre-owned watches should be displayed (i.e., in a specific/separate section of participating retailers’ stores), and what the packaging looks like (pre-owned watches will come with distinct Certified Pre-Owned packaging), among other things.
The Bigger Picture here is a rising embrace by companies like Rolex – and Audemars Piguet, which is set to launch certified pre-owned program by end of 2023 – of the resale channel for their offerings. This indicates that brands want in on one of the biggest results of their strategy of consistently limiting the supply of their goods: a robust secondary market. This is also an apparent acknowledgment by brands of the fact that resale and retail can co-exist for luxury goods. (This is distinct from the view of those that see resale as a threat/a channel that will cannibalize primary sales.) Revenue is, of course, also a factor worth noting, with Audemars CEO François-Henry Bennahmias stating early this year that the company anticipates that its pre-owned business will be bigger than retail sales of new models.
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