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: 11/08/2017

    Big Data is done, put a fork in it

    I'm as strong an advocate as you can get for "Small Data," i.e., squeezing as much value/insight as possible about simple transaction log data before turning to more elaborate "Big Data" schemes. But that doesn't mean that Big Data is done -- quite to the contrary, the real era of Big Data hasn't even started yet. Once we master the art and science of Small Data, we'll finally be in a position to start to properly leverage Big Data, in ways that most retailers can't even imagine today.It's a lot like CRM: people were writing off CRM systems (literally and figuratively) 15 years ago because they weren't yet in a position to make strategic decisions that required it. But today we know that CRM is the bare minimum pf what you need for customer-centric success. Big Data will have a similar resurgence in a few years.But first retailers really need to get started with the Small Data revolution that is right at their doorstep and ready to happen ...
  • Posted on: 11/06/2017

    Can Kroger make a name for itself in fashion?

    It's a great aspiration, but it's a ridiculous short-term goal for Kroger. They should start with "baby steps," focusing on more utilitarian products/services, i.e., more aligned with grocery shopping.it's not unreasonable for them to eventually get there -- look at how Amazon has evolved since its days as a low-price bookstore -- but it will take many years to broaden their brand to enable it. And talking about it now seems to diminish their credibility and strategic thought processes.
  • Posted on: 10/03/2017

    Walmart deal shows it’s serious about same-day delivery

    This is an interesting but very risky move by Walmart. It goes against their usual mantra of maximizing efficiency and avoiding unnecessary overhead/complexity. So I'm not saying that it's a bad idea, but it does seem to be inconsistent with the kinds of decisions/investments they tend to make.
  • Posted on: 10/02/2017

    IKEA buys TaskRabbit to give consumers relief with furniture assembly

    Regular readers of this forum know (and often criticize) me for being so negative about retailers. But this is pure brilliance on the part of IKEA. So clever, so sensible and I bet it will be so successful!
  • Posted on: 09/28/2017

    Macy’s counts on new rewards program

    Recipe for a poor loyalty program: start with discounts and push the good stuff (e.g., experiential components and other relationship-enhancing activities) off until next year ...
  • Posted on: 09/18/2017

    Did this startup make a big mistake calling itself Bodega?

    Brilliant move on their part (or pure luck). This is a mundane business: vending machines for businesses -- not very interesting. But this has been priceless PR, which they will take all the way to the bank.
  • Posted on: 09/13/2017

    Survey says grocery has reached its digital tipping point

    From a consumer standpoint, groceries reached the digital tipping point around five years ago. But the grocers themselves are clinging tightly to their old ways, refusing to truly embrace the new reality. With Amazon more directly in the mix now, this won't end well for them.
  • Posted on: 09/11/2017

    Professor says price gouging is simple supply and demand at work

    Idiot economist. The net present value of a customer (or a customer base) is never maximized by price gouging -- the key is to build a profitable relationship that will growing and manifest over time. So when times are tough, you should allocate scarce resources carefully, but not by seeking out the highest bidder. Yes, you should give preferential treatment to some customers over others, but it should be based on *projected lifetime value,* not just the wad of cash they're showing you today.Customer-centric thinking is the right mindset for retailers to understand how and why they should avoid for the temptation to gouge customers, and it's the same mindset that they should use to avoid getting all caught up in Black Friday nonsense that is just starting up for the upcoming holiday season. At first glance, it might seem that these two business settings are unrelated, but think about it -- they're very similar and very dysfunctional.I like to envision an ideal world where retailers "get it," and so they wouldn't even be tempted -- and thus regulators wouldn't even have to think about impacting market mechanisms when supplies are tight. But as long as economists are driving policy decisions, we'll be dealing with this kind of problematic thinking for a long time.
  • Posted on: 09/08/2017

    Will CVS’ sales take off in airports?

    It all depends how you define "successful." Will CVS sell a ton of stuff through these kiosks? Maybe, maybe not. But will they enhance the value of their customers and create more system-wide profits as a result of this campaign? Almost surely yes. That makes it a good idea regardless of how much stuff they sell in airports, per se.
  • Posted on: 08/28/2017

    Should Starbucks close its online store?

    Very bad idea, Starbucks! As some (but surprisingly few) folks have commented, it's a big mistake to give up on a channel of distribution (and a customer touchpoint) like this.It doesn't matter much that Starbucks has little volume in this channel: what matters more is that it is likely populated disproportionately by high-value customers. You don't want to pull the rug out from under them. Unless they clearly demonstrate otherwise, Starbucks is making a mistake.Come on Starbucks! I've been touting you as a great example of customer-centric transformation, but this is a step backwards. Say it ain't so!
  • 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.

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