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 (October 2024)

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After a couple of months of a sustained increase in confidence among ecommerce agencies, this confiedence has slightly decreased in October 2024, according to our survey.

Although most agencies expect their revenue to continue growing, and that merchants will continue using their services. There are some open questions especially when it comes to how agencies are proving their value to DTC merchants.

We will now discuss our findings in more detail:

Stable marketing budgets in October signal early Q4 prep by merchants

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In October, agency owners mostly reported that their customers' marketing budgets stayed about the same compared to previous months, closely aligning with the year-to-date average. Not much movement on either end, suggesting stable budgets with no big increases or cuts in spending.

This is likely due to something that has been mentioned in earlier reports: Merchants have started their BFCM/Q4 promotion earlier in the year. By now, they have figured out most of their moving pieces.

"In October 2024, our clients are gearing up for Q4's madness. Interestingly, it feels like our merchants are better prepared this year, having started earlier. We’ve noticed increased spending on agency services and third-party apps. Our observation is that the majority of merchants still rely heavily on agencies for specialized services like CRO and development. Overall, we are optimistic about the upcoming holiday season and anticipate solid growth for our merchants."

Preslav Nikov, Founder & CEO, craftberry

October sees slight shift toward tightening eCommerce app budgets ahead of BFCM

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In October, agency owners observed a slight shift towards budget cuts for eCommerce app investments compared to the year-to-date average. 

Most still reported "no change," but there's a noticeable uptick in lower scores, hinting at some tightening in app budgets recently, likely because many merchants don’t want to potentially compromise their site speed and other aspects of their stores, so close to BFCM.

Rising price sensitivity among clients pushes agencies to their worth

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In October, agency owners noted a spike in customer price sensitivity towards agency services, peaking at “no change” but with a stronger tendency towards higher sensitivity compared to the year-to-date average. 

This suggests that clients may be more cautious about spending on agency services recently.

Overall, this trend hints at tighter budgets or heightened scrutiny over agency fees. There have been some interesting conversations in the DTC space (mostly on Twitter/X) that seem to point in this direction.

"As we enter the final quarter of the year, agency confidence is undeniably high, but it's not without its challenges. The rapid growth in app spend and marketing budgets leading up to Black Friday and Cyber Monday signals a strong commitment from brands to leverage every possible tool to succeed. However, with increased price sensitivity among clients, agencies must continually prove their value through measurable results.”

Ultan O'Callaghan, CEO at Thooja

Slight shift towards in-house work as brands rethink costs and control

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In October, there’s a small but noticeable shift toward clients thinking about bringing more work in-house instead of relying on agencies. Most are still in "no change" territory, but the lean toward in-house suggests companies might be rethinking costs and wanting more control.

‍“At Thooja, we're seeing a greater emphasis on performance-based partnerships, where brands want us to grow alongside them. This trend reflects a more collaborative, long-term approach, with agencies playing an integral role in navigating an evolving ecommerce landscape. The key to success in the coming months will be adaptability. Whether it's shifting to email marketing in the face of rising ad costs or exploring new revenue-sharing models, agencies must be ready to innovate."

Ultan O'Callaghan, CEO at Thooja

Agencies see cautious optimism for revenue growth amid seasonal uptick and economic uncertainty

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In September, most agency owners were leaning toward "no big changes" or modest growth for the next six months. Compared to the year-to-date average, there’s definitely less hype around major revenue boosts, but a decent group still has their eyes on some growth. A few even expect significant gains, showing a mix of caution and optimism.

‍“Q4 always brings an uptick in agency revenue because we’re providing both our ongoing marketing, development, and customer support services and are also adding BFCM and other holidays campaigns on top of those services. This uptick is specific to this season and peters off by the end of December and early January, as brands regroup, reevaluate, and finalize their budgets for the new year.

That said, in our 9 years of being an agency, we usually see an uptick in our revenue in the new year as new clients sign on after realizing their previous agencies did not drive the growth in that previous year that they had expected or been promised. That said, the current uncertainty in economic conditions may have brands choosing to stay where they are and keep who they’re working with out of fear. Hiring a new agency can be a risk, (especially if it’s not working with In Social!), so many brands may choose complacency in 2025, thus keeping agency revenue fairly stagnant.”

Jess Grossman, Founder & CEO, In Social

October brings a boost in optimism for ecommerce opportunities ahead of peak season

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In October, agency owners showed a strong bump in optimism for eCommerce opportunities over the next six months, leaning slightly more positive than the year-to-date average. While most still fall between “cautiously optimistic” and “very optimistic,” the trend suggests confidence is on the rise as we head into peak shopping season.

🇺🇸🗳️US Elections

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Between September and October, agency owners got way more optimistic about Black Friday/Cyber Monday. Pessimism dropped, and most now expect sales to match or beat last year. 

Seems like recent trends and better promo strategies boosted confidence among agency owners.

"This year’s Black Friday/Cyber Monday is poised to break records once again. Ecommerce shows no signs of slowing down - if anything, it’s accelerating. We’re seeing brands that were making 6 figures a month last year now hitting 7 figures consistently. And despite economic challenges or elections, consumers are ready to spend - at least, that's my prediction. BFCM 2024 is shaping up to surpass 2023.

Bogdan Mihalache, Founder & CEO at Email Kong

"With profit margins tighter than ever, many clients are looking to move away from heavy discounting and focus on other strategies to boost conversions. On our side, we're prioritizing key selling points like product quality, enhancing the overall customer experience, improving customer support, and leveraging live chat to create stronger engagement. These elements are proving to be more sustainable and impactful in driving long-term success."  

Stefan Chiriacescu, CEO at ecommerce-today

🍗 🛍️Black Friday and Cyber Monday

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In September, eCommerce agency owners were split, with more leaning towards a neutral to slightly pessimistic view on how the U.S. elections might impact sales. 

By October, opinions shifted to the optimistic side, with a strong spike around “no change.” Seems like agencies are less worried and expect little to no negative effect.

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: Online Origins, 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