Ecommerce agency BVAccel has laid off or furloughed 25% of its staff as the coronavirus crushes direct-to-consumer brands

• BVAccel, an ecommerce agency that helps brands set up and run Shopify storefronts, has laid off or furloughed a quarter of its staff as direct-to-consumer brands get pummeled by coronavirus.
• Mike Cassidy, the former CEO and chairman of adtech firm Undertone, took a majority stake in the agency two years ago to build out a portfolio of technology and marketing services.
• He said that some clients have seen a 70% to 80% drop in sales over the past few weeks, although the firm has also added some clients that are looking to diversify sales with DTC channels.
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The coronavirus continues to wreak havoc on direct-to-consumer brands, and the effects are trickling down to the agencies and companies that work with them.

BVAccel - an ecommerce agency that helps brands like Chubbies, Rebecca Minkoff, Kylie Cosmetics, and Untuckit set up and run digital storefronts on Shopify - has laid off or furloughed 25% of its employees, or 25 people.

CEO Michael Cassidy said that some clients have seen sales drop by 70% to 80% in recent weeks, without attributing the cuts to any one client.

Big direct-to-consumer brands like Away and Iris Nova have cut staff and ad spend over the past few weeks, citing the coronavirus' impact. Those cuts also hit every expense that DTC brands have, including the agencies and software companies that they work with in addition to costs like real estate, Cassidy said.

"If consumers are losing jobs and don't have money to spend or don't feel like spending it, it impacts all of our brands," he said.

Ecommerce has been hit hard by coronavirus

BVAccel primarily works with brands that sell on Shopify, where, similar to the turbulent sales on Amazon in recent weeks, sales for essential products have seen sales spikes while sales for non-essential brands have slumped. Electronics and health are two categories that have seen spikes in sales, Cassidy said.

Cassidy said that the firm has also won business from brands that lean heavily on retail distribution and now are looking to build direct-to-consumer channels. With the new business, BVAccel has brought back a few furloughed employees.

He expected that Shopify would not be hit hard by coronavirus because of its recurring contracts with brands that are based on how much brands sell on Shopify.

BVAccel wants to be a one-stop shop for ecommerce brands

Cassidy is the former CEO and chairman of adtech firm Undertone and launched a family-office fund called August Spark in 2018 with the goal of building out a portfolio of technology and marketing services.

BVAccel was his first big investment, and the fund has also acquired parts of e-commerce company Weblinc and media-buying agency Katana.

Cassidy's plan was to create a one-stop shop for e-commerce brands to handle everything from strategy to data. Last year, he compared the approach to consulting firms like Accenture Interactive, Deloitte Digital, and IBM iX.

"We are trying to build a 'mini-Accenture' for direct-to-consumer brands," he said in April 2019. "We want to be top-of-mind for all the brands in the $10- to $200-million range that are not Ford or American Express and are trying to figure out e-commerce."