What can Rolex do to retain luxury goods after withdrawing from the old department store in Xidan shopping mall?

Xidan shopping mall “can’t keep” Rolex. On July 4th, a reporter from Beijing Business Daily visited the Xidan business district and found that the Xidan shopping mall, which was once sought after by major luxury goods, now has very few high-end luxury brands, and the high-end watch brand Rolex has also withdrawn recently. Withdrawing from the old shopping mall is also one of Rolex’s efforts to highlight the high-end brand after several price increases. On the other hand, Xidan shopping mall also ushered in renovation in the second half of the year. Whether it can attract the attention of luxury brands again after the transformation is still unknown. However, it is undeniable that despite the end of glory, the value symbol behind Xidan is still the added value needed by high-end luxury brands.

Pulling with traditional high-end department stores

High luxury brands are “breaking up” with old shopping malls. When a reporter from Beijing Business Daily visited Xidan shopping mall, they saw that the Rolex store originally located on the west side of the first floor of the shopping mall had been withdrawn, and the iconic crown LOGO was gone. door head.

“Rolex has already withdrawn in May this year.” Talking about the reason, the staff of the store said that it was due to “the particularity of the shopping mall”, “Xidan shopping mall is an old state-owned shopping mall, and it will be renovated in the second half of the year, but at present A specific date has not yet been notified.”

However, is the withdrawal from the old shopping mall really just a coincidence that coincides with the renovation of the shopping mall? A reporter from the Beijing Business Daily learned that in recent years, Rolex has successively withdrawn from shopping centers such as Cuiwei, Lufthansa Friendship and Fuxingmen Parkson in Beijing. In the first half of this year, the Rolex store in Jinyuan Lufthansa Friendship Mall has also been withdrawn. “At the beginning of this year, the contract between Rolex and the shopping mall has expired, and the brand has not renewed the lease.” The relevant person in charge of Jinyuan Lufthansa Friendship Mall confirmed.

In the Xidan shopping mall, Tudor, which is also a watch brand under the Rolex Group, is still operating normally. According to the clerk of Tudor, he revealed to reporters that there are currently 7-8 Rolex stores in Beijing, which are located in shopping centers such as SKP, China World Trade Center and Parkview Green. After Rolex withdrew from the Xidan shopping mall, the original Rolex counters were filled with watches from brands such as Zenith, Montblanc, Breitling and Bell & Ross.

However, the average price of a single watch of the above-mentioned watch brands is still somewhat different from that of Rolex. According to the “2022 Watch Global Sales List” released this year by Morgan Stanley and LuxeConsult, a Swiss consulting company, in 2022, the average price of Rolex watches excluding tax will be 90,700 yuan per piece. Among the above-mentioned brands, except for Zenith, the average price of other watch brands is less than half of that of Rolex: Breitling is 41,400 yuan/piece, Montblanc is 34,500 yuan/piece, Tudor The lowest average price is 23,800 yuan/piece.

The confidence to raise prices three times a year

Rolex’s “going far and flying high” may also be related to the higher positioning of the brand itself. Since 2022, Rolex’s price increases have become more frequent, from once a year to multiple times a year. In 2022, after a global price adjustment in January, Rolex raised its retail price in the UK market by 5% in September of the same year. Just two months later, Rolex raised its retail prices in Europe by 5%. In January of this year, Rolex’s official website also increased the prices of many of its products, and the increase in series products was basically 2%-6%.

The more expensive you sell, the more you sell, this sentence has been confirmed by Rolex. According to the “2022 Watch Global Sales List”, Rolex still sits firmly on the throne of the first place in the global watch market share. In 2022, Rolex will sell 1.2 million watches, with a market share of 29%, exceeding the combined market share of the five brands ranked 2-6, Cartier, Omega, Audemars Piguet, Patek Philippe and Richard Mille.

Compared with the price of a single piece of about 80,000 yuan in 2021, in 2022, the price of Rolex will also rise all the way, and the average price of a single piece will jump to the 90,000 yuan mark. Therefore, although the annual sales volume is not as good as Swatch, Tissot and Longines, the combined sales of Rolex and Tudor, the two major brands under the Rolex Group, have exceeded 76.9 billion yuan, which is higher than that of watch giants such as Swatch and Lifeng.

“Rolex wants to improve and transform the previous overall image, but the decoration style of old department stores like Xidan Shopping Center tends to be traditional, which is not in line with the brand image of Rolex.” The above-mentioned staff from the Tudor brand under the Rolex Group According to the reporter, Rolex will continue to adjust its other stores in Beijing in the future, and there is the possibility of withdrawing stores or opening new stores. “From the perspective of the group, the purpose of Rolex’s brand adjustment is also to optimize the shopping experience of customers.”

The withdrawal of high luxury from old shopping malls is not an exception across the country. In 2011, GUCCI withdrew from Sunshine Department Store, an established shopping center in Qingdao. In 2020, Tiffany withdrew from the Jiefangbei CBD, a landmark business district in Chongqing. In 2022, Italian luxury brand Trussardi closed its directly-operated store on the Bund… Zhou Ting, director of Yaoke Research Institute It seems that the withdrawal of luxury goods from the established business circle is inseparable from the adjustment of its own brand strategy. “Compared with overall strategic adjustments such as reducing production and increasing unit prices, optimizing store layout is another strategy that Rolex strives to maintain its high-end brand. After all, from the perspective of the overall market, the sales of high-end watch industry are still very popular. business.” Zhou Ting said.

According to the 2022 Swiss Watch Industry Annual Report jointly released by Morgan Stanley and Swiss consulting company LuxeConsult, in 2022, the export value of watches priced at 200-500 Swiss francs fell by 24% year-on-year, accounting for 20% of the total Swiss watch exports. accounted for less than 3%. And 25,000 watches with a retail price of more than 100,000 Swiss francs were sold. Although it was less than 1% of the total Swiss watch exports, it contributed 3 billion Swiss francs to exports, accounting for 30% of the total Swiss watch exports. 12.5%.

Luxury brands still need Xidan

Right now, Xidan shopping mall is about to be remodeled. After the remodeling, whether high-end luxury brands such as Rolex will still be introduced is still unknown. “The degree of fit between the brand and the shopping mall is the standard that must be considered whether the brand can achieve long-term development in the shopping mall.” Guo Zengli, director of the Shopping Center Development Committee of China Shopping Federation, told the reporter of Beijing Business Daily that the suitability of the two parties is determined. It determines whether the target customer group of the shopping mall and the brand positioning can form a value linkage, thus producing the effect of “1 + 1 > 2”.

Therefore, whether Rolex will return to the renovated Xidan shopping mall still needs to be judged according to the positioning of the Xidan shopping mall after the renovation. According to the news released by the Beijing Xicheng Official Account at the end of June, Xidan Shopping Center will start renovation in the second half of the year, and is committed to building an urban quality consumer experience center.

According to the person in charge of Xidan shopping mall, under the premise of overall reduction, Xidan shopping mall will focus on expanding the value of underground commercial space and supplementing social public service functions during the renovation process. After the completion of the transformation, Xidan Shopping Center will create a comprehensive commercial service center integrating fashion retail, quality catering, community entertainment, and humanistic experience, and add a contemporary humanistic themed block, theater or curatorial space.

However, in addition to adaptability, Guo Zengli also emphasized to reporters that the Xidan commercial district, as the commercial center of Xicheng, Beijing, although the current passenger flow and consumption are not satisfactory, the value symbol behind it should still be One of the key points of brand consideration. As one of the earliest wholesale sources of China’s modern department store industry, Xidan is an out-and-out symbol of “old money”. On Xidan, a street with a total length of nearly 1 kilometer, Xidan Shopping Mall, Galeries Lafayette, Warwick Building, Pearl Shopping Mall, Hanguang Department Store, Xidan Joy City, Xidan Renovation Center and other shopping malls are more or less in a certain era. Played the role of a waver.

“Xidan is to Beijing what Nanjing Road is to Shanghai. Brand performance is not the only consideration in such a commercial project. The value and meaning contained in the commercial project itself is also very important for the addition of brand image and brand communication. Therefore, the introduction of luxury brands like Rolex will still be one of the key points in the layout of Xidan commercial projects.” Guo Zengli said.

Beijing Business Daily reporter Liu Zhuolan Qiao Xinyi

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