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OC&C Proposition Index 2011/12 Summary

1. Overview

• The OC&C Proposition Index is an annual, independent consumer research study that measures shopper perceptions of retail proposition strength.
• Based on surveys of nearly 20,000 shoppers across 6 countries and 360 retailers.
• Retailers are benchmarked on overall proposition strength (including price, service, value, etc.) through a 5-star rating system (1=poor, 5=excellent).
• Top performers ("Proposition Champions") are identified, recognized for setting industry standards.
• Strong performance in the index correlates with faster long-term revenue growth over the past 5 years.

2. Overall Findings

• Amazon consistently ranked highest as the UK's Favorite Retailer for over two years, excelling particularly in low prices and value for money. Its perceived value leads globally.
• Second place was shared by online pure-plays Play.com and eBay, followed by established brands like John Lewis, M&S Simply Food, Waitrose, and Amazon (top-ranked).
• There are two tiers of strong performance: established "Multiple" retailers (physical and online) and highly appealing *online-only *retailers.
• Trust is a key factor for consumer appeal, despite an average decline of 2.8 points in the previous year.

3. Key Trends & Drivers

• Rise of Value Players: Discounters (ASOS, Primark, Poundland) and lower-cost champions (Clarks, Argos, John Lewis, M&S Simply Food) gained significant ground, challenging traditional mid-market players.
• Pressure on Mid-Market/Squeezed Middle: Consumers with lower incomes show less satisfaction, accelerating value competition. Retailers face pressure to improve price or quality to differentiate against low-cost challengers.
• Strong Sellers by Proposition Element:
  • Low Prices: Amazon leads globally/UK.
  • Value for Money: Amazon leads globally/UK.
  • Quality Products: M&S Simply Food (Grocery) and Waitrose top UK rankings.
  • Service: John Lewis and Amazon lead high globally/UK respectively.
• Sectors: Grocery shows strong performance globally; Health & Beauty, General Merchandise, and Department Stores are favored in the UK. Furniture, Electricals, Stationers, and Entertainment categories lag significantly.
• Global Context: UK retailers generally fare better than those outside the UK (except low-cost players) when segmented by category (e.g., Grocery, Dept Stores). Value category leaders like Amazon rank highest globally.

4. Retailer Spotlight/Analysis

• Amazon: Leads significantly due to strong value perception and broad-based consumer appeal across different purchase reasons and demographics. Success stems from low prices, service, and delivery efficiency.
• Clarks: Showed significant improvement (+6.1 pts), boosted by strong gains in Service (+1.7), Value (+1.1), and Choice (+1.2) among others.

5. Strategic Implications

• Retailers ranking in the top third achieved superior growth.
• Holding competitive advantage in key areas like price, service, or quality is crucial.
• Building trust requires strong positioning and consistent execution.
• Adapting to emerging value competition and evolving consumer trust dynamics is essential for sustained performance.

6. Consumer Champion Elements (Example: Value for Money)

• Top 10 for Value for Money (01): Primark, Amazon, Card Factory, Play.com, 99p store, Home Bargains, Wilkinson, Asda, Argos, Morrisons.
• Top 10 for Service (TRUST) are noted separately (03).