“Now this doesn’t mean that agencies won’t struggle. With services like SquareSpace and Shopify eating into the lower end of the market, I think many smaller agencies or individuals will find it difficult to complete.”
I think the opposite is true, services like Squarespace and Shopify enable smaller agencies or individuals to actually deliver a service that they never could before. When an organisation has a need to be represented online, to sell things online etc. these tools make a single talented individual super-powerful.
You can add payments to a website with stripe in less than a day, it used to be a mammoth task of integrating Ogone and dealing with all kinds of issues. These days you can buy software that used to be thousands of dollars for one tenth of the price (I am talking about Logic and Lightroom). This software enables small companies to deliver a lot of value for their clients.