Ecommerce Agency Confidence Index: August 2024 Edition

Here at ReferralCandy, we're excited to introduce something we've been working on: the Ecommerce Agency Industry Report!

Each month, we’re gathering information from ecommerce agencies: their results, thoughts, and predictions, and then sharing these insights in an aggregated and anonymous industry report. 

Whether you're an agency owner or just looking for more information, this report can help you get a better understanding of the state of ecommerce agencies.

The current state of ecommerce agencies: trends, statistics & outlook (2024 August)

According to our August 2024 survey, agency confidence has steadily increased in the past two months. 

Most agencies expect their revenue to continue growing, and that merchants will continue using their services. To stand out, agencies can use marketing methods that bring high ROI, such as referral programs using software like ReferralCandy.

We will now discuss our findings about ecommerce agencies in more detail.

1. The level of confidence among ecommerce agencies was on a slight decrease but gained momentum again in April and May

As part of our survey, we calculated the Ecommerce Agency Confidence Index, which is an aggregated value from the responses to each of the individual questions below. The index ranges from 0 to 500 and takes into account aspects like how confident they are about customer acquisition, market saturation, and changing consumer behavior.

Based on our survey, here are the overall confidence levels reported by ecommerce agencies over the past months:

As you can see from the above graph, ecommerce agencies' confidence in the state of ecommerce decreased earlier in the year but picked up again in May and July 2024. It is not yet at the same level it was back in December 2023, but we expect the confidence level to continue growing.

2. Marketing budgets of ecommerce agency customers have continued to increase as we head to Q4

We asked ecommerce agency owners: Has there been any increase in your customer’s marketing budgets?

As we head into Q4, marketing budgets have increased compared to previous months, which indicates that we’re approaching the holiday season.

As Sunbowl Founder & CEO Jody Edgar puts it:

“In the last month clients have been increasingly receptive to scaling their ad spend. It's difficult to pinpoint if this is a seasonal effect or if it is due to the strategies we have been working on. Despite our wide range of client verticals, I find this index invaluable to get a pulse on the seasonal effect"

3. Ecommerce agency merchants are continuously willing to spend money on ecommerce apps as long as the app shows positive ROI

We asked ecommerce agency owners: On a scale from 0 to 10, how have your customers’ budgets for investments in ecommerce apps changed?

Ecommerce agency owners report that there has been an increase in how much customers are willing to invest in ecommerce apps. This is mainly due to the new and innovative app solutions which can help streamline marketing and operations. 

Customers are also willing to invest in long-term strategies, like referral and affiliate marketing, which often require apps.

Bogdan Mihalache, the Founder & CEO at EmailKong mentioned this about the current trends:

‍“Ecommerce owners are more eager than ever to streamline their marketing and operations by jumping on new apps that use powerful AI or bring fresh, innovative solutions. Whether it's improving customer engagement, fine-tuning supply chains, or making shopping experiences more personal, the appetite for cutting-edge tech in this space is only growing stronger. I don't see this trend slowing down anytime soon.”

Stefan Chiriacescu, CEO of ecommerce-today, also mentioned this:

‍"We’ve always emphasized the importance of visibility, encouraging our clients to list products on marketplaces to boost their exposure. While our marketplace activities were initially limited, this year, we've seen a significant shift. By August, 10% of our clients are actively engaging in marketplace tasks such as account setups, product listings, ads, and research. The results have been very promising."  

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It is evident that ecommerce agency clients are willing to spend money on ecommerce apps.

4. Merchants price sensitivity has remained high in August 2024, and they are focusing more on long-term strategies

We asked ecommerce agency owners: On a scale of 0 to 10, how would you rate the current price sensitivity of your customers towards spending on agency services?

As of August 2024, the price sensitivity has remained high. Instead of relying on short-term marketing strategies, merchants are implementing long-term strategies, like SEO, content marketing, and referral marketing. 

Stephan Moerman, CEO and founder at Bakklog mentioned this about price sensitivity:

“With marketing budgets under the microscope, many of our clients are getting more price-conscious and looking to get more ROI without spending more. They’re moving from high-cost acquisition strategies to more long term approaches like content marketing and SEO. This is a smart reallocation of resources to grow while being cost efficient. We help them navigate this change.”

Essentially, agency owners are more price-conscious and want to see that the marketing strategy provides ROI.

Ahmed Elghobashy, Founder & CEO of Simplixi, also mentioned this:

"As eCommerce keeps changing, agencies need to be flexible and proactive. While marketing budgets are shifting and people are more price-sensitive, there are still great opportunities ahead. Agencies that focus on providing real value and building strong partnerships will do well in important market times."

5. Most ecommerce agencies report that their customers' outsourcing behavior hasn’t changed

We asked ecommerce agency owners: How likely is it that your customers will bring their marketing teams in-house rather than outsourcing work to agencies in the upcoming months?

Earlier in the year, there was an increase in uncertainty or diversity in predictions about clients' strategies. 

This pessimism seems to have tamed down in August 2024. This stability indicates that while in-house capabilities are being considered, many businesses still rely on agency expertise – which is great news.

Some agency owners even report increased spending because of the Q4 preparation.

Preslav Nikov, Founder & CEO of craftberry mentions this:

"In August 2024, we noticed increased spending as merchants are ramping up their Q4 preparation. Our observation is that our clients have an in-house marketing manager who manages various agencies for different disciplines (e.g., Paid Ads, Search, CRO, etc. ). We are bullish about this Q4 season and believe there are significant opportunities for ecommerce merchants." 

6. Most ecommerce agencies believe their revenue increase in the Q4

We asked ecommerce agency owners: On a scale of 0 to 10, how optimistic are you about your revenue increasing in the next six months? 

As we head into Q4, most agency owners believe their revenue will continue to increase due to the holiday season. This trend already started in July with Black Friday preparations.

Ultan O'Callaghan, CEO at Thooja, commented:

"July is when the momentum for Black Friday Cyber Monday (BFCM) preparation really starts to build. We've seen a noticeable uptick in ecommerce brands reaching out with significant budgets, eager to solidify their email marketing strategies well ahead of the BFCM rush. This heightened activity is likely to persist until November, after which things typically taper off until the new year."

Jess Grossman, Founder & CEO of In Social mentions this about the holiday season:

“BFCM is coming, and we’ve been talking about it for weeks already! The holiday season is when our In Social clients (and Ecommerce brands in general) invest the most dollars into marketing that they will all year. Knowing that, I would take this month’s stats with a grain of salt because it is a very seasonal increase.”

Jess also frames up well how she believes the next six months will be, even after the Christmas season:

“Typically, we see an increase in agency revenue on our advertising, lifecycle marketing, and website development services between September and November, while our customer service offering sees an increase in November through to mid-December. It’s in the middle of December into January when our Ecommerce revenue really slows down (our restaurant and other industry clients make up that gap!) In our 9 years of experience, we’ve seen that most brands take December to rest, January to assess how the last year went, and then start looking to switch up their marketing spend or their agency around February.“

7. The majority of ecommerce agencies are optimistic about the opportunities for the next 6 months

We asked ecommerce agency owners: On a scale of 0 to 10, how optimistic are you about the opportunities in ecommerce for the next 6 months?

To conclude the results for this question: Most ecommerce agencies see the next 6 months as an optimistic time period with new opportunities.

As the holiday season is approaching, ecommerce brands are gearing up their digital strategies and bringing up new agency opportunities.

This is what Stephan Moerman, CEO at Bakklog said: 

“As the holidays get closer, we’re seeing ecommerce brands gearing up their digital strategies. Many clients want to improve customer experience through personalized and frictionless online interactions. Mobile and advanced ecommerce solutions focus on capturing the expected increased spending in the next few months. This means big growth opportunities as brands get ready to ride the holiday shopping wave. Over the past month, we have started having a lot more conversations about gamification solutions.”

8. The importance of ecommerce agencies will continue to rise in 2024

We believe that ecommerce agencies are the unsung heroes in the world of ecommerce. They’re the ones working closely with brands, crafting their online shopping experiences and, in many cases, doing the hard work so brands can focus on improving their products and services.

That's why their insights are pure gold. They have courtside seats to the world of ecommerce, and they see everything – the trends, the hits, and the misses.

We also believe that agencies are sometimes forgotten when it comes to analyzing the evolution of the ecommerce industry. We focus on metrics like merchandise volume and customer acquisition costs, but we never gather data about ecommerce agencies' revenue or their customers' price sensitivity to their services.

Predicting the future ecommerce agency trends

‍We're setting our sights high with this industry report. We're not just content with understanding today's trends; we want to get a sneak peek into tomorrow’s. The idea is to track these insights over time and start predicting where ecommerce is headed.

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This isn’t just number crunching; it’s about getting a sense of the human element behind the data.

‍This index gets better with more voices joining in. It’s a community thing – the more agencies chip in, the richer and more insightful this index becomes. It acts as a growing, evolving knowledge base for all of us in the ecommerce sphere.

Some of our agency participants include: SeaMonster Studios, Swanky Agency, Thooja, Audacious Commerce, Ecommerce Today, For My People, RPF Agency, Pluro, Webcetera, SmartBug Media, Gloross, VT Labs, Motif, TatJones, Growth Heist, EastsideCo, SmartSites, MageMontreal, GetVisible, StubGroup, Thooja, Gudu, TenThousandFootView, Storetasker, and SEOWorks.

If you're an agency and would like to participate and receive the full report, you can email ReferralCandy's Partnerships Lead Raul Galera at raul [at] referralcandy.com

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