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: 07/10/2020

    Is consumer arrogance driving word-of-mouth recommendations?

    So this is further proof that most WOM is just "cheap talk" and shouldn't be taken very seriously as a meaningful indicator of the overall health/value of a customer base (or the products/services they buy). Retailers should be very skeptical of conclusions drawn from such data or decisions made using it.
  • Posted on: 03/09/2020

    Burlington Stores walks away from e-commerce

    Very bad move Burlington! No retailer can shut down a primary channel of distribution/interaction and live to talk about it. This is a desperation tactic, not a growth-oriented one. The "treasure hunt" narrative is overrated. I bet that a large percentage of purchases made there are more planned/directed than the result of serendipitous browsing. And I suspect that those purchases are made disproportionately by profitable customers (high CLV). This makes a bad move even worse. It reminds me of the days when bookstore chain Borders handed the keys to their e-commerce operations to Amazon. That went well, didn't it?
  • Posted on: 03/02/2020

    Will coffee subscriptions raise some dough for Panera?

    So many breakfast QSRs have tried this but given up. I hope that Panera can stick with it --and genuinely leverage the excellent data/insights that will arise from it. Lots of potential here!
  • Posted on: 02/28/2020

    Will a new subscription program be Walmart’s winning answer to Amazon Prime?

    I don't mean any disrespect to Walmart, but Amazon Prime was (and still is) lightning in a bottle. Walmart+ might be fine, but it can never match the game-changing nature of Prime. So sure, Walmart needs to do it to try to keep pace, but expectations about it should be suitably modest.
  • Posted on: 01/30/2020

    Will 2020 be the year of less flash and more substance for in-store tech?

    The answer to the headline question is "absolutely not" -- most in-store tech is nothing but flash. Sizzle but no steak -- at least until retailers learn how to cook. In other words, until retailers are truly in a position to make rigorous data-driven decisions about which tech elements to use for which customers and under which circumstances -- and to make rigorous data-driven evaluations of these activities as they perform them -- then they're wasting a lot of time, effort, and money. That's the harsh reality, and too many retailers will only learn this the hard and painful way...
  • 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 Pets.com.
  • 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.

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