Ecommerce Agency Industry Report: Trends, Statistics & Future Outlook

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 April)

According to our April 2024 survey, despite a slight decrease in agencies' confidence, 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 has been on a slight decrease

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:

As you can see from the above graph, ecommerce agencies' confidence in the state of ecommerce has slightly decreased in the recent months.

We started the survey right after record-breaking Black Friday and Cyber Monday numbers at the end of 2023, and there’s an overall sense that things have gone slightly downhill from there.

2. Marketing budgets of ecommerce agency customer’s haven’t changed much, but advertising costs have risen

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

To conclude the responses, marketing budgets haven't changed much, but advertising costs have increased, so customers want to allocate their budgets more wisely.

The increase in advertising costs over the past few months has had an effect on agencies that provide marketing services that can compensate for it. 

As Stefan Chiriacescu, eCommerce Today Agency puts it:

• “Our agency has had a significant increase in the number of new clients reaching out to us for email marketing automation setup, driven by the rising advertising costs. They recognize the necessity of maximizing the return on their investment in paid traffic, underscoring the importance of optimizing every aspect of their marketing funnel.”

Other agency owners like Daniil Andreev from  ECORN Agency mentioned that although they “haven’t really seen a reduction”, their clients have allocated funds “differently, even if the total dollar amount hasn’t really changed.”

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?

This is one of the most consistent responses we’ve had over the months. It is evident that ecommerce agency clients are willing to spend money on ecommerce apps, provided the app provides a positive return on investment.

Paul Rosenwald from SeaMonsterStudios has a great explanation for it:

• “Merchants are more leery of spending, but they are also open-minded to optimization, testing, iterating and improving. I can't think of too many merchants we work with that have a specific budget for apps per year.

As we mentioned, the real question is, is the app gonna show ROI? Can we track that we will make more money or become more efficient if we implement it? 

Merchants are almost always budget conscious, but they are usually performance driven.”

4. Merchants aren’t as price-sensitive as expected; the real challenge for them is finding the right ecommerce agency

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?

This is probably one of the most important pieces of information for agency owners. How sensitive are merchants to agency prices? Are merchants trying to renegotiate contracts or retainers?

Although in February it looked like merchants were becoming more sensitive, in March we’ve seen this trend stabilizing.

Paul Rosenwald believes that the “real challenge for the merchant is to find the right agency to work with.“ Someone who can speak their language and work cohesively with their team.” 

And although budget is usually part of the process, they have noticed that “the choice is based on finding the partner and being confident in that partnership.”

5. Almost 50% of 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?

In February, there was an increase in uncertainty or diversity in predictions about clients' strategies. If we could summarize in one sentence, it would be “I’m not sure, but it doesn’t look great”.

This pessimism seems to have tamed down in March, with almost half of our agencies reporting no change in their customers’ outsourcing behavior.

This is one of the key aspects that determine the health of an ecommerce agency. Are their clients likely to continue outsourcing work to them? Or are merchants looking to bring their marketing in-house?

Ultan O’Callaghan from Thooja has learned to think of his team as a “department” within customers’ companies:

• “Right from onboarding, we position ourselves as a department within our client’s company. Just like any other department, we need to constantly prove ourselves to justify why we’re getting budget ahead of other departments. We love this challenge as it constantly improves our service quality and results.”

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

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 answer is that most agency owners believe their revenue will continue to increase. 

If we could use one adjective to describe ecommerce agencies, it would be optimistic. Agencies continue to believe that it will be a positive year for them in terms of revenue.

As Paul Rosenwald from SeaMonster Studios mentions:

• “Ecommerce is still on fire, and it does not look like it is going to slow any time soon. Our pipeline continues to be robust, and we are projecting a strong 2024.”

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.

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.

This is what Jess Grossman, the founder & CEO of In Social, mentions about the importance of ecommerce agencies:

• “Running a successful ecommerce brand takes a wide range of skills and experience, as well as the consistent and ongoing management of multiple touchpoints at once. It is almost impossible to hire a single person, even 2 - 3 people with every set of skills and with enough time during a work day to manage all those touchpoints successfully. Instead, hiring an agency like In Social fills that gap! For the same cost as hiring 1 single employee, you could sign up for our marketing retainer and have access to 20+ professionals, their time, and their set of skills across digital touchpoints like social and Google advertising, website design and development, email and SMS marketing and automation, and more! We even have an in-house customer service team you can pay for as you go.”

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.

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