At ReferralCandy, we're thrilled to present our latest project: the Ecommerce Agency Industry Report!

Every month, we compile data from ecommerce agencies, including their performance metrics, insights, and forecasts, and publish these findings in a comprehensive and confidential industry report.

Whether you're an agency owner or simply seeking more information, this report offers valuable insights into the current landscape of ecommerce agencies.

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The current state of ecommerce agencies: trends, statistics & outlook

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As part of our survey, we asked ecommerce agencies to rate their confidence level from 0 to 500, which we turned into the below Ecommerce Agency Confidence Index. This index is based on aspects like how confident they’re 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:

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According to our latest survey conducted in July 2024, the confidence levels of ecommerce agencies regarding client budgets, price sensitivity, and overall optimism about opportunities in the ecommerce industry have dropped to the same levels recorded in January.

For context, the majority of the surveyed agencies were located in North America, followed by Europe, Australia, Asia and Latin America.

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

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1. Marketing budgets of ecommerce agency customers have shown a slight increase

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

The short answer is yes, a slight increase. 44% of respondents shared seeing an increase in their customers’ marketing budgets.

Here’s what Ultan O'Callaghan, CEO at Thooja shared about it:

"June is when we see ecommerce brands start preparing for Black Friday Cyber Monday (BFCM) weekend. So, as expected, a lot of ecommerce brands contacted us with sizable budgets, looking to get their email marketing in place before the BFCM surge. We expect this trend to continue until November when it'll slow down until the new year."

Dennis Kroon from Ecommerce Accelerator on why clients cut ad spend:

"In competitive markets, rising paid traffic costs shrink profit margins. To sustain margins, merchants cut ad budgets, focusing on organic search and email lists for customer acquisition and retention. These low-cost traffic sources boost profit margins, offering a slower but steady growth approach."

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2. Apps budgets of ecommerce agency customers are starting to move

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

This graph has traditionally been one of the most stable in the entire report, with agencies almost unanimously reporting that their customers rarely change their budgets for app installations in their stores.

However, this month, 68% of respondents have observed either an increase or decrease in these budgets—possibly because merchants are beginning to clean up their stores ahead of BFCM.

Dennis Kroon from Ecommerce Accelerator has seen a noticeable shift in customer budgets for e-commerce apps as they aim to cut unnecessary costs:

"One client, for instance, replaced LoyaltyLion with Klaviyo (which they were already using) to send loyalty discounts via automated email flows. This move reduced their annual app costs by €20,000 while enhancing engagement through personalized emails, demonstrating a smart reallocation of budget for better ROI."

As the ecommerce landscape evolves, customer support automation is becoming crucial. Businesses seek efficiency and seamless experiences, driving demand for integrated solutions. Reflecting this trend, Stefan Chiriacescu from eCommerce Today Agency observes a rising interest in automating customer support.

"At eCommerce Today Agency, we're seeing an increase in automation requirements for customer support from our clients. We're building chatbot automation, tying them into our existing marketing automation flows."

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3. Merchants price-sensitivity continued climbing in June 2024 due to ongoing cost concerns

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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?

In June 2024, ecommerce merchants' price sensitivity towards agency services remained moderately high. This indicates ongoing cost concerns and the necessity for agencies to demonstrate clear value propositions compared to the merchants' in-house teams.

Ben Zettler from Zettler Digital shares how the current economic landscape might be affecting the way customers interact with agencies:

"Broader economic challenges have trickled down to agencies supplying marketing-focused services to ecommerce brands. Brands we have been pitching over the last year have operated on significantly longer timelines with lighter budgets than in the past several years. At times, mismatches in expectations in the sales process have resulted in a strain on our own resources as we look to win new business while also fulfill existing work. Agencies need to be prepared to clearly demonstrate their value in as efficient a manner as possible, now more than ever."

Jess Grossman, Founder & CEO of In Social, shares a very interesting point of view on what made some agencies survive the “recession” that we lived last year in the ecommerce world, and the perspectives ahead for agency owners:

“Seeing the Ecommerce agency landscape decimated over the last year, with many agencies shutting down, others merging together, and some hanging on for dear life after layoffs, I was prepared for it to be a dry year for us at In Social. Luckily, (though I don’t believe in luck), we’ve continued to see a steady flow of leads from our existing clients, app partners, and through inbound efforts, so have been signing a fair amount of new business comparatively to the height of the pandemic. 

What I’ve noticed is that the agencies who haven’t survived this far are the ones who have poor reputations and poor results, have the 1 or 2 North American sales guys while offshoring the work overseas for pennies on the dollar, or are the agencies charging enterprise pricing for work that can be done by a mid-size agency like In Social for just as good, if not better results (if I do say so!). 

This year, we’ve signed new brands who are ready to spend on our agency fees, ready to invest in ads and apps, and are ready to take on the difficult Ecommerce landscape of 2024. Not flagrantly, of course, but methodically and strategically. Our results prove that we can do that.

Again, I don’t believe in luck, but in results, and I’m seeing that if you have a proven and continued track record for success, the clients are willing and able to spend with you. It’s now, more than ever, about proving your value as an agency, and making it easy for the clients to say yes!.”

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4. Ecommerce agencies begin to report concerns regarding their customers’ outsourcing behavior

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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?

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Although it’s far from being unanimous, agencies have started to show their concerns when it comes to ecommerce merchants preferring to work with in-house teams instead of outsourcing to agencies. As merchants begin to prepare for BFCM, this is going to be one of the most interesting metrics to watch.

The landscape of marketing is constantly shifting. As brands explore new strategies and opportunities, the role of marketing agencies are facing significant changes. To embrace these changes, agencies must stay agile and customer-focused to remain competitive. 

Reflecting on these industry dynamics, Blake Nolan from Storm Brain highlights the emerging trend of in-house marketing and its implications for the future of agencies:

"As we bet on a future of endless e-commerce possibilities, strategic shifts towards in-house marketing will challenge agencies to adapt, proving that success lies in maintaining customer-centric approaches amidst fluctuating budgets.

Strategic shifts towards in-house marketing could redefine agency roles, yet the adaptability and customer-centric strategies of agile agencies will continue to thrive despite the ebb and flow of budgets."

Ash Ome from Motif believes that: "It’s obvious that merchants would outsource a lot of the parts cause often time nowadays agencies try to be specialized. Brands need close knitted team but not agency behavior, they need experience level of an agency but its hard to do so with an in house team. exactly this is why we closed our agency and turned into an incubation company."

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5. Most ecommerce agencies continue to believe that their revenue will continue to increase in 2024

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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? 

The trend continues. A whooping 86% of merchants reported that they’re expecting some sort of increase in the next 6 months, this highlights growing optimism in the ecommerce sector and a likely rise in investments in ecommerce stores as we saw a few years ago.

"The ecommerce industry continues to evolve rapidly, providing more powerful tools for businesses to utilize. However, managing these tools requires qualified experts. Agencies, through their work with numerous merchants, have greater expertise and are best suited to solve specific problems. Additionally, agencies can often be more cost-effective compared to a full-time hire."

Preslav Nikov, Founder & CEO of Craftberry.

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

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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?

In summary, most ecommerce agencies view the next six months optimistically, anticipating new opportunities.

This is how Rizwan the CEO of Comredix, sees it:

"The e-commerce industry is indeed growing. We receive queries daily about starting an e-commerce business, and the main reason for these increasing queries is the low barrier to entry into e-commerce. Similarly, the demand for sales and marketing is expected to grow as we approach Q4 of this year."

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7. The importance of ecommerce agencies will continue to grow in 2024

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We believe that ecommerce agencies are the unsung heroes of the ecommerce world. They work closely with brands, shaping online shopping experiences and handling the heavy lifting so brands can concentrate on enhancing their products and services.

Their insights are invaluable; they have a front-row view of the ecommerce landscape, witnessing trends, successes, and failures firsthand.

However, agencies are often overlooked in analyses of the ecommerce industry's evolution. While we focus on metrics like merchandise volume and customer acquisition costs, we rarely collect data on ecommerce agencies' revenue or their customers' price sensitivity to their services.

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Predicting the future ecommerce agency trends

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‍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.

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, MageMontreal, GetVisible, StubGroup, Thooja, Gudu, TenThousandFootView 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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