Introducing Forerunner's inaugural 'State of Service' report
✨ The Forerunner Ventures Consumer Braintrust is a diverse group of forward-thinking consumers weighing in on what’s now and what’s next. Click to join the collective for early access to our reporting, as well as exclusive content, events, and giveaways for members. ✨
At Forerunner, we believe service is a brand’s secret weapon. Redefining service in a given category can be a cornerstone of building mind and market share, as well as a hook for acquisition and . This was especially true in the early days of digital brands when Glossier pioneered social commerce, Bonobos reimagined customer service teams, and Dollar Shave Club launched digital subscriptions. As modern brands of the last decade have redefined and elevated what best-in-class service means, consumer expectations have risen in tandem, setting a high bar for emerging and traditional brands.
In our inaugural State of Service report, we took a pulse on the services and policies that companies are offering — what’s novel, what’s expected, what’s a true wow — to define which services are table stakes today and which will become table stakes in the imminent future. To do this, we asked over 200 members of the Forerunner Consumer Braintrust what best-in-class service means to them, while also looking at the service policies of 100 top and emerging consumer brands with an eye toward identifying alignment and inefficiencies in the market, as well as opportunities to delight customers.
For fast-growing companies, it’s important to remember that service and policies are as much a differentiator as they are a cost center. Teams must weigh how to stay best-in-class — offering free 2-day shipping versus 3-5 day shipping, the upside of a 90-day return policy versus just 30 days — while not cutting into their bottom lines with overly generous strategies they can’t afford and may not get credit for. Five trends stood out from our research: shipping and returns, customer service channels and touchpoints in the path to purchase, checkout, new customer discounts, and subscription. Here’s what you need to know about each.
State of Service: What Consumers Want Today
Personalization has underpinned our investments across funds, including companies like Curology, The Farmer's Dog, Prose, The Yes, and Sunday. You may think of service as having that personal human touch, but that’s not necessarily what online shoppers believe. When we asked the Braintrust whether they preferred frequent contact with customer support or the ability to take care of themselves easily, there was a strong preference for the latter: 89% of our sample said they want to “do as much as possible on my own,” while just 11% claimed to desire being “in frequent touch with the brand for support.” The modern consumer is empowered -- they have choice and want to be able to do what they want, whenever they want, which includes many self-service tools.
Of course, that doesn’t mean you shouldn’t have reps available to wait on customers who are trying to exchange goods or troubleshoot a shipping problem. While 48% of respondents said that best-in-class service meant generous shipping, return and exchange policies, nearly the same number of survey-takers (44%) said best-in-class meant that a brand’s service team is easily accessible and nice to work with.
Service is as much about what you do for customers one-on-one as the overall digital experience and how a brand shows up across touchpoints and channels.
1. Shipping and Returns: Make or Break a Purchase
Shipping and returns policies are critical to buyers, and as such, we were keen to measure expectations in a world where Amazon and other high-profile retailers are offering consumers more for less. Our data shows that consumers expect free returns, free shipping and a return label in the box, and the market is moving to meet customer demand. Some 87% of brands we analyzed offer free returns, and 60% of brands offer free shipping (often after a shipping hurdle of $50 to $100).
Consumers care less about interacting with customer service agents or getting all their items in a one-stop shop; they prefer instead to get products quickly and return them easily. In fact, 80% of respondents always check shipping and return policies before they purchase; 50% said these policies sometimes determine whether or not they buy an item, and 26% said the policies always guide their purchasing decisions. Being strategic here is important; brands can get credit or flack for the policies they have.
When consumers were asked what was most likely to dissuade them from purchasing from a brand, disadvantageous return policies were the most obvious drawback — and we’re not surprised. While Amazon defined a new standard with its Prime two-day shipping offer, standards for best-in-class returns experience remains to be seen in the market. A super majority of respondents (70%) mentioned final sale with no returns would dissuade them from purchase while 65% said charging a fee for a returned item and 56% said getting store credit insteads of a refund were deterrents.
In addition, 60% of our respondents expected 30 days to return an item, and another 32% expected between 60 and 90 days to send back an unwanted product. According to our brand analysis there’s alignment in the market here: 61% of brands are meeting the 30-day benchmark while just over 20% are offering more than 30 days. For brands offering more than 30 days to return, the importance of a shorter return window comes down to three things: how seasonal your merchandise is, the value of having returned inventory back sooner on average, and whether or not you believe a shorter return window means fewer returns overall.
The most important takeaway for returns? Consumers are more willing to try new products and services online than ever before, but they want protection in doing so. Consumers are not willing to take the risk if policies are complicated or limiting after the purchase. This makes sense when considering the rising traction of ‘Try Before You Buy’ offerings, including , , and (read more ), which meet a growing consumer preference to limit downside with the potential to increase average order volume (AOV) and conversion rate.
Beyond returns, a significant portion of consumers also have high shipping expectations: 39% of consumers said they would be dissuaded from purchasing by a shipping fee and 30% said they’d consider opting out for slow delivery times. What is “fast vs. slow shipping,” exactly? Outside of Amazon, the consumer expectation for receiving a product is 4 to 5 days.
For fast and economical shipping, automation, micro-fulfillment centers, and density in routing are key. Consider to partner with local carriers at scale. is a good option if you have an eye toward sustainability, or and for micro-fulfillment centers. or can help companies that have reached scale and are looking for automation. has the best rates, and has a next-generation 3PL that can provide an Amazon Prime-like experience for customers.
More than any other policy, shipping and return fees can be the difference between a sale and leaving those items behind in the cart. As a greater number of brands offer these services, they are quickly becoming table stakes and an important, consistent means of honoring your customer for choosing you.
2. Path to Purchase: Desired Touchpoints
As we referenced earlier, most respondents chose “generous shipping, return and exchange policies” as the definition of best-in-class customer service (48%), but for a large percentage, (44%) knowing a “customer service team is easy to reach and work with” ranked supreme.
At the same time, online is often convenience-driven, and customers prefer to do the lion’s share of their purchasing, returning and shopping free from direct support. When a customer does need a brand, online chat is the most preferred option; 47% claimed they like to get in touch with brand representatives primarily via chat, followed by email at 22% and text at 18%. These days, few like to pick up the phone (just 8%) and social media, to our surprise, ranks last. We found most brands have yet to catch up with customer desires on support channels, with more traditional channels, like email and phone, showing the most significant misalignment. There is a meaningful opportunity for brands to reconsider how they can provide a quality, reliable and efficient customer service touchpoint on text and social media, two in-the-moment channels we at Forerunner see as increasingly important and the future channels of service.
Across customer service channels, consumers expect to hear back on different time intervals; like most communication, the medium determines the expectation, and the expectation can guide setting internal response KPIs. Online chat may be so preferred because it’s instantaneous: 89% of respondents expect to hear back “right away.” While texting, that expectation dips to 45% right away and 32% within an hour. Email assistance has the most generous consumer expectation: 46% expect to hear back within one day, and 39% within several hours. So, it’s better to let that email go unanswered for a day, and have your customer service reps prioritize chat and text.
Outside of customer service channels, what do consumers really want on the path to purchase? Independence and ease. Some of their preferences speak to mainstays of online engagement, like the 86% of consumers who expect customer product reviews onsite. Others show what’s trending toward table stakes. Since 61% of consumers expect to be able to live chat with a customer service representative when they need help, more brands should consider investing in this service that’s risen in prominence in the past several years; it’s popular among consumers, and less than half of brands offer it.
Beyond classic service channels, most emerging ways of interacting with brands are still too nascent to make a mark. When we asked about expectations for an assisted virtual shopping experience, video chatting with a sales associate was not important or expected for 73% of consumers — but would wow 24%.
The takeaway here is to really understand your customer. What are the best channels to communicate? What are they likely to use? What can be automated by technology, or augmented by overseas support? Where do you want to be sure you don't mess up, and how can you prioritize incoming requests for assistance? What behavior do you want to drive your customers toward while delighting them with a seamless experience?
If you want to stay within one platform’s ecosystem, offering your company many solutions, check out , , , or . If you prefer to take a bespoke, best-of approach, we recommend to stay on top of social comments; for outsourced CX to add extra bandwidth; , , and for online chat; or and to supercharge your customer service team. A holy grail we’ve yet to see is a platform combining text marketing and customer service into one phone number and user experience for consumers -- that would be a magical experience positioned perfectly in the market.
3. Checkout Options: Apetite is Ahead of Offerings
Especially as a growing percentage of our time is spent online, nearly every would-be shopper is now on social media; according to recent data, the average American spent on social channels last year. Today’s consumer follows their favorite brands. They get inspiration direct from influencers. And they’d like to shop directly from the social media platforms they frequent.
According to our data, 65% of consumers consider the ability to purchase from a brand via “social media” as table stakes. Though socially-driven, seamless checkout options are still in their infancy, the most important social media platforms have their eye on commerce to a degree that has not been seen before. Recent partnerships and integrations between Shopify and TikTok, Facebook, Instagram, Snapchat, and Pinterest demonstrate this trend and we expect more to come.
While purchasing from social media stood out as most important to consumers, another 45% expect brands to offer one-click checkout, and another 21% said this option would wow them. When consumers see something they like, they want to purchase immediately — without jumping through any additional hoops. , , , , and are innovating to create a seamless, one-click checkout experience, while , , , and are focused on easing the addition of new payment options, whether driven by international expansion or new consumer offerings.
In our previous research, we’ve noticed a shift toward convenience and immediacy when selecting a payment method. In fact, in a past Forerunner survey, 41% of consumers said their default payment method — of which credit, debit, PayPal, ApplePay and Cash app were top options — was most frequently chosen out of “convenience.” Seventy five percent of those surveyed were willing to adopt new forms of payment, especially if they carried ongoing rewards, were convenient to open and convenient to use.
We also see opportunities to break out when it comes to purchasing options. Some 58% of respondents claim purchasing via text is not important, and another 73% said purchasing via livestream video is not important, though it would wow 23% and 22% of consumers respectively. Especially as it relates to text as an — customers open 86% of text marketing messages versus just 20% of emails — there’s a growing opportunity to convert users from interest to purchase in the same immediate sense they might convert on social media.
4. New Customer Discounts: Expecations vs. Reality
Especially in the era of online retail, many brands hook consumers by offering a new customer discount — so much so that the bonus has become table stakes in the consumer’s mind. A significant 60% of respondents expect a discount the first time they shop with a new brand. Among the brands we analyzed, 57% offered a new customer discount and 43% did not, showing the market is aligning around this customer preference.
What discount will entice a new customer into purchasing? Nearly half the consumers in our survey claim 20% is the magic number that would push them over the edge from cart to checkout — a sweet spot that only 27% of brands we analyzed were syncing up on.
New customer discounts are intriguing, but tricky endeavors; they can weaken brand equity in the eyes of some, but also grease the wheels for customer acquisition. Here’s our take: If your company’s barrier to entry in building a strong, loyal following is simply getting customers to experience the product or service for themselves, then a first-time discount can certainly be a great tool for young brands. But if you can’t wean the customer off sales and discounts, you’re in trouble.
With this in mind, let’s look at the data another way. With the ability to select among three options, just 12% of consumers said the lack of a new customer discount would dissuade them from purchasing from a brand; far more important to respondents were strong return and shipping policies.
Your offering should be strong enough to stand on its own. If customers are trained to wait for sales and steep discount codes before purchasing, then you might not be on the best path to grow an enduring business. If you do offer a new customer discount, be sure it’s compelling enough to drive sales and worth offering — 10% or 15% likely won’t be appealing to most customers. Also, consider leveling up to dynamic pricing or discounts that reflect who your customer is. A tool like could help you qualify the most compelling users visiting your site, or a service like could empower you to personalize offers to each customer after they make a purchase.
5. Subscriptions: Nurturing Relationships
In our data, it’s clear that customers want more control over their subscriptions. Consumers want to be able to cancel online. They want free shipping. They want the ability to postpone service or skip shipments. They want a discount for subscribing, and they want to be able to edit their order before it’s sent out each time. More than any other category, high-quality service was “table stakes” across the board for subscriptions.
There's a trade-off in the subscription model that you won’t find in other businesses. The more service you provide, and the more you remind your customers that shipments are on the way, the more opportunities people have to opt out of your service. The more revenue you stand to lose each month.
We like to think of subscription businesses as ongoing relationships. If you are going to build a strong one, you need your consumer to trust you. Sending an email reminder before a shipment is on its way, or easily allowing your customer to opt-out online, is all about long-term relationship management.
Do you want to take money from your customer by forcing them to remember to cancel or edit shipments each subscription cycle without ever prompting them? Or do you want to build a stronger connection with the consumer by reminding them of upcoming shipments, and allowing them to adjust their purchase as needed? All subscription businesses must ask themselves these questions, but we’d opt for the gracious, consumer-first mindset if you want your customers to stick around for the long haul.
, , , , , and are building software in the subscription / repeat category with an eye toward improving the customer experience, but with more of a back-end focus. With that in mind, there’s still opportunity to create a dynamic, game-changing front-end offering that maps to the back end and holds both business and customer needs at the center. Just as one-click checkout companies are redefining the consumer-facing checkout experience -- and resetting expectations accordingly — we see an opportunity for a new frictionless standard to be set for subscription sign-ups, as well.
Service That Sets Brands Apart
Emerging and established brands alike should regularly review their service policies, looking for ways to stay in alignment with what their consumers want while also keeping cost and profitability in mind. At the same time, we fully believe creating a “wow” moment for customers can serve as a hook for enduring loyalty.
Stay on the lookout for ways to impress consumers with service. In our research, some service offerings that wowed consumers included shipping an exchange before an item is returned (53%), issuing a refund before an item is returned (46%), video chatting with a sales associate (24%), and text or livestream purchasing.
At Forerunner, we look for brands who are thoughtful about service. We also invest in B2B companies that power these offerings for brands, allowing them to differentiate themselves from the competition with a truly best-in-class experience. Don’t underestimate the power of how you show up for your consumer; it’s often the little things that count most.