• by Gavin O'Malley  @mp_gavin, July 7, 2011

How is the rise of Facebook commerce, whereby retailers sell directly on the social network, affecting the online and retail ecosystems? Maybe not as much as you think, according to a new trend report from WPP's JWT.  

Why isn't the success of F-Commerce guaranteed?

For one, privacy concerns appear to a big hurdle for Facebook commerce. Nearly eight in 10 American and British adults expressed worries about the privacy implications of shopping directly on Facebook.

Three-quarters said they "don't think Facebook is secure enough to make purchases on," and almost that many said they "wouldn't use a shopping application on Facebook because of concerns that it could compromise my privacy -- e.g., shared with third parties."

"There's a great deal of hype in this early stage of social commerce, as brands experiment with ways to mesh the social graph with shopping," says Ann Mack, director of trendspotting at JWT.

"What's clear is that there's tremendous potential here for brands to create more personal, accessible experiences and to amplify word of mouth, especially when it comes to targeting Millennials."

Ironically, Millennials demonstrate both the greatest appetite for F-commerce, along with the greatest concern about its privacy implications.

Still, JWT did find that overlaying the social graph helped people make decisions more quickly. Indeed, when asked about Web sites that offer personalized recommendations based on one's Facebook profile, 46% of American and British adults felt that "there is too much information out there, so I think this is helpful."

Overall, Millennials were most likely to say this -- 59% -- followed by Gen Xers -- 49% -- and Boomers -- 31%. Overall, more than one-third said personalization of this nature helps them make decisions more quickly.

JWT found that Millennials are the most interested in "F-Commerce," or Facebook commerce. More than four in 10 Millennials -- aged 20-33 -- in the U.S. and the U.K. said they wish there were more opportunities to shop within Facebook.

By contrast, just 26% of Gen Xers -- aged 34-46 -- and 16% of Boomers -- 47-66 - expressed a desire for more shopping opportunities on Facebook.

What's more, nearly half of Millennials agreed that they spend so much time on Facebook already, they might as well shop there, too, compared to a quarter of Gen Xers and 14% of Boomers.

Similarly, 48% of Millennials said they wish the places where they shop had a page where customers could buy products and services directly on Facebook, compared to 27% of Gen Xers, and 19% of Boomers.

Specifically for this report, JWTIntelligence interviewed experts and influencers in research, technology and business, and conducted a quantitative study in the U.S. and the U.K. The survey also used SONAR, JWT's proprietary online research tool, to poll 971 adults aged 20-plus from late May through the beginning of June.