PROFILE

Peter Fader

Professor of Marketing, The Wharton School of the Univ. of Pennsylvania

Peter S. Fader is the Frances and Pei-Yuan Chia Professor of Marketing at the Wharton School of the University of Pennsylvania. His expertise centers around the analysis of behavioral data to understand and forecast customer shopping/purchasing activities. He works with firms from a wide range of industries, such as consumer packaged goods, interactive media, financial services, retailing, and pharmaceuticals. Managerial applications focus on topics such as customer relationship management, lifetime value of the customer, and sales forecasting for new products. Much of his research highlights the consistent (but often surprising) behavioral patterns that exist across these industries and other seemingly different domains.

Many of these cross-industry experiences have led to the development of the Wharton Customer Analytics Initiative, a new research center that serves as a “matchmaker” between leading-edge academic researchers and top companies that depend on granular, customer-level data for key strategic decisions.

Professor Fader believes that marketing should not be viewed as a “soft” discipline, and he frequently works with different companies and industry associations to improve managerial perspectives in this regard. His work has been published in (and he serves on the editorial boards of) a number of leading journals in marketing, statistics, and the management sciences. He has won many awards for his teaching and research accomplishments.

Current papers, course syllabi, and other materials are available at www.petefader.com.

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  • Posted on: 07/20/2017

    How much Big Data do retailers really need?

    Some comments here hit the nail on the head, but most tend to overcomplicate it. The answer is simple: it's all about clean, complete customer-level transaction log data. Retailers have it much easier/better than most other sectors, but they are pretty bad about using it effectively.Job #1 is to get up to speed with granular transaction data before trying to master other data sources or seeking deeper insights that aren't supported well by standard data structures.
  • Posted on: 07/11/2017

    Are retailers measuring omnichannel all wrong?

    How about Customer Lifetime Value? Pretty much everything else is just noise.
  • Posted on: 06/30/2017

    Does Blue Apron’s ‘meh’ IPO spell trouble for meal kit services?

    I'm not sure if this is the analysis that Tom referred to, but here's a really good one by my PhD student Dan McCarthy.In short: the unit economics couldn't be worse. And I'm afraid the same is likely true of all meal kit companies -- not to mention every kind of "thing of the month" subscription service. Basically, they're all pretty much doomed to fail -- unless some naive retailer or CPG firm overpays for them and makes the founders look like geniuses ...
  • Posted on: 06/29/2017

    Can an app know a customer better than a personal shopper?

    Count me (among others) as highly skeptical. Three concerns:1. The validity of this approach to (supposedly) capture emotions, etc. 2. Even if it were valid, its linkage to actual purchasing. 3. The failure of retailers to "walk before they run." Don't even think about doing this kind of "far out" analysis before you've taken full advantage of the richness of your boring old transaction data. Some of these emerging insights could possibly add some color to such analyses, but it can't replace them. And shouldn't precede them.Come on retailers! Stop horsing around with this kind of unproven pseudo-science, and do the right thing!
  • Posted on: 06/09/2017

    Is it time for stores to ditch the free Wi-Fi?

    I'm going to go against the grain here: retailers shouldn't make Wi-Fi an "unalienable right" for all shoppers, but rather it should be a perk that they give to members of their loyalty program. And for those folks it should be fast and free and very effective.Give shoppers a genuine reason to join the program (instead of discounts), and encourage them to take advantage of it.
  • Posted on: 01/10/2017

    Will 2017 be the year of the chatbot?

    Nope. Maybe one day, but not yet. The technology is still clunky and today's grown-ups are pretty set in their ways about their desired shopping experience.Give it another 10 years and we'll likely see a significant shift in this direction. That's fine: a change like this can't happen overnight.
  • Posted on: 11/07/2016

    Will a national loyalty program yield rewards for Whole Foods?

    Every retailer -- especially a grocery chain -- must have a loyalty program. No exceptions. But it should be a *loyalty* program, not a badly-designed discount program that gives people coupons for stuff they don't want and/or coupons for stuff that they were going to buy at full price. Those dumb tactics should not be part of a loyalty program in any setting, and certainly not for Whole Foods.It's all about learning about customers' preferences, changing the product mix and merchandising strategies and giving special treatment to valuable customers who benefit from it. That's what a loyalty program does, and there's no doubt that it could be a terrific asset to Whole Foods -- if they manage it the right way (unlike most grocery chains).
  • Posted on: 10/31/2016

    Why are mobile conversion rates so low?

    Are we still talking about online sales versus offline sales as distinct entities? What happened to all the "omnichannel" talk? Who cares where a purchase is actually consummated -- all that matters is that the purchase takes place. All of these channels/devices contribute to the purchase, so let's stop worrying about these meaningless device-specific conversion metrics.
  • Posted on: 10/25/2016

    It’s the Millennials’ world

    Allow me to expand on Ralph's key point: "not all Millennials are alike" -- in fact they're vastly different. All these efforts to stereotype and target Millennials are doing more harm than good for retailers. Any effort to paint all consumers in a large demographic group with the same brush is a terrible mistake.A modest proposal: let's stop stereotyping and focus instead on finding/leveraging *meaningful* differences across consumers ...
  • Posted on: 09/21/2016

    Is consumer demand really that unpredictable?

    Indeed, as Nikki points out, when you don't have granularity, demand forecasting can be challenging. But many retailers *do* have granularity or at least should be making more serious efforts to achieve it. And when you have such granularity, then forecasting is remarkably easy/accurate/actionable -- if you understand the basic behavioral patterns and choose the appropriate methods to capture/project them. Here is one such example from my predictive analytics firm, Zodiac and I encourage retail analysts to learn more about these methods and their implications for strategic and tactical decision-making.
  • Posted on: 09/16/2016

    Consumers rely on reviews, but they don’t trust them

    I respectfully disagree with Frank. As inauthentic as many reviews are, retailers' responses are generally even worse in this regard. Most reviews should be left alone -- even if they're negative. Retailers should only respond to reviews that truly demand a response.
  • Posted on: 09/15/2016

    Are robo-carts coming to a Walmart near you?

    This is a great example of the old metaphor: "Rearranging the deck chairs on the Titanic." This is not going to help retailers address the problems that are leading to their demise. Retailers should focus their efforts on understanding what their customers are doing instead of obsessing over the location of shopping carts.
  • Posted on: 09/12/2016

    Why are retailers struggling with Big Data?

    It's simple: retailers are obsessed with one and only one thing — operational efficiency. Big Data can be somewhat helpful in this regard but the real payoff from it, as noted in Brian's introductory comments, is in different kinds of personalization/customization. Retailers are notoriously bad at doing this (because these activities go against the grain of operational efficiency).Until retailers are willing/able to change their core strategies in a fundamental manner, they will never reap the rewards of Big Data.
  • Posted on: 08/30/2016

    Retail executives have no clue about digital

    Here's a big source of the problem: retailers are looking in the wrong places to find best-practice examples to follow. Specifically, they're often looking at big-name CPG firms and other manufacturers that have no direct contact with their consumers. So they end up focusing on "one size fits all" branding activities and other tactics that do not leverage their ability to have direct relationships with consumers. Instead, they should be looking to direct marketing to figure out how to move ahead. That's not a sexy industry and the brands may not seem to be as powerful as some of the aforementioned manufacturers. But who cares about the "sexiness" of a brand when you can form direct and profitable relationships with different customers? This is what led to the great (but fleeting) success of Tesco, and underlies much of the Amazon story as well.It's all about customer equity -- not necessarily brand equity, but retailers are looking in the wrong direction to really understand and embrace this distinction.
  • Posted on: 08/15/2016

    Is brick & mortar ready to leverage in-store shopper data?

    If the focal question asked "should" brick-and-mortar stores leverage in-store shopper data, then the answer is obviously yes. But the question really asks whether they're ready to do so, and unfortunately for most retailers the answer is a resounding no. They can't properly leverage their transaction log data, so forget about in-store shopper data. Retailers need to walk before they run: first figure out who's buying what before you worry about who's doing what. Given the disappointingly slow progress on the former, I'm not holding my breath for the latter. But I hope I can be proven wrong in the next few years.

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