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

  • Posted on: 12/03/2019

    Why are brands so bad at identity resolution?

    This might ruffle some feathers, but retailers don't care enough about this (hugely important) topic. Doing this merely for "improved customer satisfaction" is a weak rationale that ends up being treated as a cost to be minimized as opposed to a genuine investment. Aligning customer data at a granular level should be as vital to retailers as are their accounting compliance issues: if they viewed this issue with similar importance (as they should), then this conversation would be way different. Of course the related (and larger) problem is that few retailers are in a position to effectively leverage better data about their customers. Let's first motivate them to see the benefits, and then the data systems will naturally improve.
  • Posted on: 12/02/2019

    Mobile jumps out as retailers get a mixed start to the holiday season

    Count me in as skeptical, unimpressed, and confused. The picture above shows someone shopping on a tablet, not a mobile phone. Big difference! Do tablets count towards mobile? If so,how about laptops? Seems like a lot of these analyses are relying on fairly arbitrary/meaningless distinctions. It's fine to talk about how online and in-store activities are supporting each other -- that's great. But must we (over)use "mobile," per se? I bet that the amount of sales volume attributable to mobile phones is far smaller than the numbers above suggest. In short, I suspect that we're making a lot out of a little here.
  • Posted on: 11/07/2019

    Why do digital transformations often fail?

    It's pretty simple: because the tech and the tactics get way out in front of the strategic reasons/benefits that motivate them. Retailers (and any other firm) will not find success with any kind of "transformation" initiative until they are truly ready to be transformed -- and have some sense of how the transformed version of the firm will operate. Most retailers, at heart, want to run the business the good old way, with the hope that the digital stuff will help them keep chugging along. They're not willing/able to adapt to the strategic demands of the new reality. (Self-serving plug: "The Customer Centricity Playbook”) Figure out -- and truly commit to -- the right strategy, and the digital transformation aspects will make a lot more sense.
  • Posted on: 09/20/2019

    Is AI at the center of the retail technology universe?

    "Is AI at the center of the retail technology universe?" I sure hope the answer is no! Meaningful insights about buyers and buying patterns should be at the center (and all too often, this isn't the case). But that's different from the tools that enable them. It's just a rebirth of the same old 1990s fuss (and, ultimately, frustration) about CRM -- it was going to change everything, but the focus on the tools ended up blocking out the focus on their purpose. So count me as a pessimist here: the same thing will happen with AI.
  • Posted on: 08/22/2019

    Will shoppers thank heaven for mobile checkout at 7-Eleven?

    Beyond the obvious benefit of speed/convenience, there's the more subtle (but equally powerful) one: granular customer-level data. Traditionally, c-stores have been at the tail end of the data-driven retail revolution in their ability to really understand their customers and find ways to build better relationships with them. Mobile checkout can be a huge step forward to enable them to finally embrace customer-centricity and better align their offerings with the wants and needs of their best customers. So it's not just the shoppers "thanking heaven" in this case -- but even more so for the c-store retailers themselves!
  • Posted on: 03/27/2019

    Wayfair takes a bigger step into brick and mortar retailing

    The e-commerce fantasy world of finding glory by losing lots of money does not work in the real (brick-and-mortar) world. Several of the comments (especially the one from Neil Saunders) focus on this key point. Wayfair is hemorrhaging cash and their outlook is getting worse every quarter (shrinking margins, increasing acquisition costs). It won't be long before Wayfair is the subject of jokes and scorn, similar to its idealistic (and fiscally irresponsible) dot-com predecessors such as
  • Posted on: 01/02/2019

    Why are retailers publishing paid-subscription magazines?

    This is a very promising trend -- and I hope it doesn't stop with print magazines. It's a great way to get retailers to change their mindsets from being "sellers of stuff" towards being "builders of meaningful, multi-faceted relationships with select customers." Or, in other words, the shift from product- to customer-centricity. This is vitally important for retailers to master -- not just a box to check in order to keep up with their rivals.
  • Posted on: 12/13/2018

    Retailing success doesn’t depend on silver bullets

    The top two comments here (by Min-Jee and Bob) say it all: the value created for (and extracted from) most customers has got to exceed the value invested in them. And yes, it's hard work to figure that out and do it consistently. But it also takes a lot of discipline: don't "give in" to a particular customer just because they make a lot of noise, or because of some old-fashioned notion that they'll suddenly become a great customer after you satisfy them. The key takeaway here is that value creation happens at the *customer* level, not the *transaction* level. It's about CLV developed over time, not revenue collected at a particular moment. Doing that is hard, but it starts with a very different mindset than most retailers (and store managers) currently utilize.
  • Posted on: 06/13/2018

    The question for today’s retailers: What business are you in?

    The answers here reveal a very interesting pattern: in the first 21 posts, there are 15 mentions of "experience," but only one reference to "relationship." That's the problem with retail today: too much focus on the former and not enough on the latter. Giving out glasses of champagne is not a business model. Building relationships can be one.
  • Posted on: 05/11/2018

    The importance of prioritizing high(er)-value customers

    Yes, yes, yes! This is the key to sustainable growth in today's highly competitive (and data-driven) era. Let's all celebrate CLV day next Monday. (Get it? CLV=155 in Roman numerals, and Monday is the 15th day of the 5th month....) All the other stuff we chatter about (e.g., customer experience, in-store technology, personalization, and branding) follows after you get good at customer valuation. But too many retailers are getting the cart before the horse by jumping into those tactics without a clear understanding of how their customers differ and which ones are likely to be the best in the future.
  • Posted on: 05/03/2018

    Do retailers need to update customer persona development?

    No no no! Focusing on buyer personas is pretty much like relying on horoscopes. Retailers should move far away from them and focus more on the gritty reality of their actual customers and the vast differences across them. As long as retailers focus on personas, they will continue to get steamrolled by Amazon.
  • Posted on: 03/20/2018

    Will it always be about price for Gen Z?

    Most of this generational marketing stuff is utter nonsense. At best, marketers are just making up harmless stereotypes, but at worst, these one-size-fits-all pronouncements become destructive self-fulfilling prophecies. Given the quality of the data and analytical capabilities that we have today, why are we still legitimizing this kind of broad-based stereotyping -- and making big decisions based on it?
  • Posted on: 01/02/2018

    Is Walmart aiming for a new customer with personalized text shopping?

    I'm right there with all the other folks here who have said "great idea but why that subgroup?" This kind of demographic targeting is a terrible idea in this day and age. Why not offer this interesting service to all of their highest CLV customers -- and then learn which ones are most responsive to it? It's ironic to see an initiative that is so technologically advanced in one respect, but so terribly backwards in another.
  • Posted on: 12/26/2017

    Is ‘brick mining’ valuable enough to justify physical stores?

    Of course not! I'm as strong a proponent as anyone for retailers to fully leverage point-of-sale (and other in-store) data, but that's not reason enough to have physical stores. So the question is a bit absurd as it is phrased here, but I do hope that all retailers will make it a high-priority New Year's resolution to start using their data more effectively. My advice:
    1. Make bigger/better investments in systems that allow for clean tagging/tracking of customers at a granular level.
    2. Focus primarily on simple transaction data -- don't get distracted by less-direct sources such as geolocation, social media usage and shopper characteristics.
    3. Carefully test predictive analytics (such as customer lifetime value) instead of relying on purely backwards-looking/descriptive metrics.
    4. Segment and target customers based on these forward-looking metrics instead of demographics, etc.
    5. Do this repeatedly -- the real learning and value arises over time, as you look across different cohorts of customers to see what tends to distinguish the best customers (and what tends to make them even better).
  • 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 ...

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