Itunes Shutting Down, History and implications.

A favorite prof at Wharton discusses ITunes.  Long been interested in how the music industry has been changed by tech.

Game-changer to Digital Dustbin: Why iTunes Is Shutting Down

Wharton's Peter Fader and UT-Arlington's David Arditi discuss why Apple is shutting down iTunes. 

[Podcast] and transcript ....

If video killed the radio star, as the old song goes, then iTunes killed the record industry. Now, 18 years after Apple launched the music download store, the company announced that iTunes is shutting down.

During its Worldwide Developers Conference this week in San Jose, California, Apple announced iTunes will no longer exist as a digital jukebox but will be reformed into three separate apps for music, television and podcasts. While the change has been a long time coming —  sales of digital music downloads have dropped for six straight years, according to the Recording Industry Association of America  — it marks a significant shift in the company’s business model and in the kind of consumer behavior that Apple helped shape when it first opened the digital store in 2001. Music lovers were no longer bound to the full purchase of an album that was packaged and sold by a record label; they were free to buy single songs for 99 cents, which ushered in a new era of pick-and-choose consumption.

“iTunes is a cancer for the music industry. This was obvious 15 years ago … Good thing it will finally go away,” Wharton marketing professor Peter Fader wrote on Twitter. When Knowledge@Wharton asked him to explain his tweet on the K@W radio show on SiriusXM, Fader didn’t mince words. (Listen to the podcast at the top of this page.)  ... "

Customer Centricity Playbook

Mentioned this book by Peter Fader and Sarah Toms before, awaiting a copy.  Good topic.   Podcast and transcript. Now do we utilize this truth in engaging, marketing, servicing?  See also my previous post on the book.

How to Find Value in Every Customer

Wharton's Peter Fader and Sarah Toms discuss their new book, The Customer Centricity Playbook Customers are not monolithic. There are high-value customers, low-value ones, and plenty who fall in the middle. But they all matter for businesses that want to make the most out of them. That’s the message in a new book by Wharton marketing professor Peter Fader and Sarah Toms, executive director and co-founder of Wharton Interactive. The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customer Lifetime Value is designed to guide businesses to the next level, where success is measured beyond mere dollars. Fader and Toms recently spoke on the Knowledge@Wharton radio show on SiriusXM about the importance of being customer centric.

An edited transcript of the conversation follows: .... '

Customer Centricity Playbook

Forthcoming in October, sign up for alert at the link:

The Customer Centricity Playbook: Implement a Winning Strategy Driven by Customr Lifetime Value    By Peter Fader and Sarah Toms

How did Global Gaming Company Electronic Arts go from being named 'Worst Company  in America' to clearing a Billion Dollars in Profit?

They discovered a simple truth—and acted on it: Not all customers are the same, regardless of how they appear on the surface. The most successful companies, from Amazon to Best Buy, understand their best customers are their most valuable asset, and they tailor their acquisition, development, and retention efforts to those customers.

In The Customer Centricity Playbook, Wharton School professor Peter Fader and Wharton Interactive’s director Sarah Toms help you see your customers as individuals rather than a monolith, so you can stop wasting resources by chasing down product sales to each and every consumer. 
... Fader and Toms offer a 360-degree analysis of all the elements that support customer centricity within an organization. In this book, you will learn how to:

Develop a customer-centric strategy for your organization
Understand the right way to think about customer lifetime value (CLV)
Finetune investments in customer acquisition, retention, and development tactics based on customer heterogeneity
Foster a culture that sustains customer centricity, and also understand the link between CLV and market valuation
Understand customer relationship management (CRM) systems, as they are a vital underpinning for all these areas through the valuable insights they provide .... "     

Targeted Ads and Data Privacy

Surprising comments that there is still not clear understanding of what is required to comply. Thus the hundreds of checkboxes saying I understood that cookies where being used.  But not the details of how.

How Will Targeted Ads Fare in an Era of Data Protection?  in K@W

If targeted advertising needed indicators of both enormous growth and potential threats ahead, several recent events have been only too happy to oblige. On the one hand, this is the year mobile will edge out TV as the dominant advertising medium in the U.S., according to a forecast from eMarketer, just as Google continues to roll out products and services that make life and its logistics more seamless. On the other hand, the Cambridge Analytica episode has provided a cautionary tale in what can go wrong when a trusted tech giant like Facebook loses control over its users’ private data.

Another wild card has just begun to reveal itself. The General Data Protection Regulation (GDPR) went into effect last month, granting individuals a greater degree of control over how firms gather, store and use their personal data. The GDPR was crafted by and for members of the European Union, but because commerce and data move freely across international borders, many firms in the U.S. and across the globe have decided to conform to its guidelines.

What exactly will it mean in the U.S.? Even the federal government appears to be unsure. “GDPR’s implementation could significantly interrupt transatlantic cooperation and create unnecessary barriers to trade, not only for the U.S. but for everyone outside the E.U.,” wrote U.S. commerce secretary Wilbur Ross in the Financial Times. “We do not have a clear understanding of what is required to comply.” .... " 

“[GDPR] will force companies to take a closer look at their data infrastructure, much more so than they would otherwise — and we know it’s a big mess out there.”–Peter Fader ... "

Separating Better Data from Big Data

Interesting Podcast and transcript that leads towards operational considerations for analytics:

Separating Better Data from Big Data: Where Analytics Is Headed

Wharton's Eric Bradlow, Peter Fader and Raghuram Iyengar discuss what's next for customer analytics.

Ten years ago, the most forward-thinking companies were just starting to dive into the potential of data and analytics. Since then, brands have moved from using analytics to answer what customers are doing to exploring the how and why, and also to figure out what they will do in the future.

The Wharton Customer Analytics Initiative (WCAI) is celebrating its 10th anniversary this year and has seen every step of that evolution. Knowledge@Wharton recently sat down with Wharton marketing professors Eric Bradlow, Peter Fader and Raghuram Iyengar to discuss how the field has developed over time, and what they expect to be the key trends over the next decade. Bradlow and Fader are the founding directors of WCAI, and Bradlow and Iyengar are the current co-directors.

An edited transcript of the conversation follows. ... " 

Chatbots in Retail

In Retailwire.  Is 2017 the year of the retail chatbot?   Some good discussion.  We are not there yet,  there are still some issues to be worked out, but as long as they are focused on key issues and interactions, I think we are close.  " ... Yet many industry experts believe chatbots could become even more closely integrated into the shopper journey both online and in-store, particularly as consumers become more accustomed to the technology’s possibilities. ... ".    Further, read Peter Fader's cautious thoughts, he has a good understanding of potential analytic approaches.

Retail Marketing to Millennials

In Retailwire.  Good overview on the use of channel interactions by millennials in Retail, and discussion.   In the discussion, Peter Fader makes a good point:

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

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 …  " 

Changes in the Rules of Retailing

In Knowledge@Wharton:

How Target and Amazon Are Changing the Rules of Retailing
Wharton's Peter Fader and Syracuse's Amanda Nicholson discuss recent moves by Target and Amazon. ..." 

The retail business is witnessing two potentially game-changing strategies: Retail chain Target is opening smaller stores in urban locations to attract younger customers, betting big on that “flexible-format,” as is apparent from a Manhattan store opening announcement in October. Also diversifying its mix is online retailer Amazon, which plans to expand its grocery business with convenience stores and curbside pickups, according to an October 12 Wall Street Journal report. .... 

Target’s move could turn out to be a brainwave that attracts more than just millennials living in urban America, according to Wharton marketing professor Peter Fader. The smaller stores could also occasionally send those same customers to larger Target locations in suburban malls for larger shipping trips, and attract suburbanites who work in cities to drop by the downtown Targets on their drive back home, he says. ... " 

Retailers Struggling with Big Data

In Retailwire: 

When RSR recently asked retailers about the status of capabilities related to capturing and analyzing Big Data, we found that no capability was reported to have been “implemented” by up to 50 percent of retailers and less than a quarter claimed to be “satisfied” with what they had implemented.

The industry has a “half empty or half full” problem. The optimistic view is we’re in the very early days when it comes to truly leveraging non-transactional data. The pessimistic view is that retailers are just too slow to change.  ....  "

May also depend on your definition of big data.   Operational data based on the stream created by costs, sales and ongoing decisions may make much more sense.

I see our colleague Peter Fader at Wharton commented on this:

" .. 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. ..." 

(Link Fixed) -Wharton Customer Analyticast

Via Marin Hitch Associate Director, Marketing & Communications

Introducing the, "Wharton Customer Analyticast"
WCAI has launched a podcast, "The Wharton Customer Analyticast," where we'll have WCAI constituents share different opinions, observations, and speculations about the world of customer analytics. In our first episode, WCAI Co-Director Pete Fader, explains the concept of, “The U of Data Sharing.” 

Customer Centricity

Our long time Wharton Correspondent Peter Fader in Forbes.  Podcast: " .... Customer centricity is something we all intend to do–it sounds like it means being “into” your customers. You are interested and focused on them right? Well, not really. Customer centricity as defined by Dr. Peter Fader of Wharton might be different than what you think. I saw Dr. Fader speak at the 2nd Annual Customer Centricity Conference–there was a debate with the audience around the purpose of a brand. It quickly became clear everyone disagreed about customer centricity especially as it relates to the purpose of a brand. According to Fader, customer centricity is when the brand identifies the most valuable customers and surrounds them with relevant products and services. ... "   by Blake Morgan

See much more from Peter Fader in the tag link below.

Building Better Loyalty Programs

Have noted that loyalty programs in general are looking very stale these days.  Nothing new or very engaging.

In K@W: 
Consumers today often belong to a host of retailer ‘loyalty programs,’ earning redeemable points when they spend. In many cases, there is no extra reward for building up a high balance of points in your account. So why do so many people stockpile their points?

This is the question explored by Wharton doctoral student Valeria Stourm and marketing professors Eric T. Bradlow and Peter S. Fader in their paper, “Stockpiling Points in Linear Loyalty Programs,” recently published in the Journal of Marketing Research. In this interview with Knowledge@Wharton, Fader talks about what the trio learned, what it means for the businesses that use loyalty programs and how this peculiar hoarding behavior reflects a phenomenon at the heart of consumer psychology. ... " 

Wharton Customer Analytics Initiative

A reminder about the Wharton Customer Analytics Initiative (WCAI) , who we connected with from time to time via Peter Fader.  

" .... the Wharton Customer Analytics Initiative (WCAI) is the preeminent academic research center focusing on the development and application of customer analytic methods. Acting as “matchmaker” between academia and industry, WCAI has a broad impact on the practice of data-driven business decision-making, and the dissemination of relevant insights to managers, students and policy makers.

Based in the Wharton School’s Marketing Department and designed to capitalize on Wharton’s longstanding strength in conducting empirical research, WCAI is an interdisciplinary effort that brings a passionate data-driven perspective unmatched by any other business school. ... " 

" ....  WHAT IS CUSTOMER ANALYTICS?
Customer Analytics refers to the collection, management, analysis and strategic leverage of a firm\’s granular data about the behavior(s) of its customers. There are several features that distinguish customer analytics from other types of data collection/analysis. ... " 

Virtual Reality Emerges

Peter Fader, Wharton Marketing Prof, and others weigh in on the wearable-enabled, virtual reality marketplace.   Lengthy detailed piece.  Will this finally make them real as a new kind of interface?   One recommendation is: Emphasize business applications to avoid making them appear as a joke.   I agree:  Focus.  The general applications will follow if they make sense.

" ... A slew of new product introductions indicate virtual reality technology is coming into its own — but it’s a sector that is still waiting for a breakthrough product to win over consumers.

Following several product entries into the emerging field of virtual reality from companies like Samsung, Sony, Canon and Facebook’s Oculus Rift project, Microsoft recently launched the HoloLens, an augmented reality headset, and HoloStudio, a software development kit for the product, in hopes of jump-starting a market that could impact areas from gaming and entertainment to collaboration and business. ... " 

Customer Centricity

We worked with Professor Peter Fader of Wharton in the enterprise.  His book on Customer centricity essentials is now out in its second edition.    "  ... Despite what the tired old adage says, the customer is not always right. Not all customers deserve your best efforts: in the world of customer centricity, there are good customers…and then there is pretty much everybody else. Upending some of our most fundamental beliefs, renowned behavioral data expert Peter Fader, Co-Director of The Wharton Customer Analytics Initiative, helps businesses radically rethink how they relate to customers. He provides insights to help you revamp your performance metrics, product development, customer relationship management and organization in order to make sure you focus directly on the needs of your most valuable customers and increase profits for the long term.... " 

Customer Base Analysis

I see that long time correspondent Professor Peter Fader at Wharton has an upcoming workshop on Probability analysis of the customer base. This is an area I did work on in the enterprise.   Important things to think about.:  

" ... Customer-base analysis seeks to use information on the history of customer purchase patterns to address forward-looking questions such as: (1) Which individuals are most likely to be active (or inactive) customers in a future period of time? (2) What will the aggregate and disaggregate purchase patterns look like for a group of customers in the future period? (3) What will be the “customer lifetime value” for a group of customers listed in the firm’s database? An increasingly large number of practitioners have been charged by senior management to obtain valid answers to these kinds of questions, but unfortunately their skills – and the set of commonly available commercial tools – are not well-suited for these important tasks.... "

Can Social Save Media?

Talk from Supernova: Moderators are Wharton's Peter Fader and Eric Barlow ... Via WIMI: Wharton Interactive Media Initiative.

Paid vs Free Content

An interview with Professors Peter Fader and Stepen Kobrin of Wharton on these and other recent topics in Knowledge@Wharton

Bing vs Google

From Knowledge@Wharton: Bing Gives Microsoft a Boost, but Can It Compete with Google?. I have been using Bing occasionally, even comparing the two at times, but it is not enough of a difference to capture me.

' ... Wharton marketing professor Peter Fader, who co-directs the Wharton Interactive Media Initiative with Bradlow, says the hand-off from attracting to retaining customers is often difficult. "Marketing officers don't do a good enough job of generating trial versus repeat customers. It's easy to get people to try something -- you just shout at them enough -- but the traditional aspects of marketing are useless in getting repeat customers. The product has to deliver the goods or people will just go back to Google." .... Thus far, Microsoft has been modestly successful at attracting traffic to Bing. According to comScore, which measures web use, Bing drew 8.4% of all Internet searches in June, a gain of 0.4% over Live Search's performance in May. Google had 65% of the June search traffic, while Yahoo drew 19.6%. ... '

Inside the Mind of the Shopper Published

Herb Sorensen book is now out Inside the Mind of the Shopper: The Science of Retailing, from Wharton School Publishing.

It details some of his work exploring how the shopper behaves in their environment. Based on extensive databases of how shoppers move, shop and buy in the store.

We had many fruitful conversations with Herb that led to improvements in our innovation spaces. Wish we could have collaborated more. Includes descriptions of collaboration with Peter Fader at the Wharton school, Wendy Moe of the University of MD and work by Mike Twitty at Unilever and Bill Bean at Pepsi and Colgate. Glad to see that P&G provided some of the earliest inspiration for Sorensen's work. He describes some of those experiences with Bob Stevens of P&G.

As is quoted on the cover: ' ... Inside the Mind of the Shopper is a preeminent handbook for any marketer or retailers seeking to understand why people do what they do when they shop ... '

The book covers many classic issues based on quantitative results: the nature of the trip ... what do they buy ... why is money left in the aisle ... the influence of packaging ... the nature of the engagement and what makes the close. Must reading for marketers and retailers who seek to understand the complexity of retail behavior with real experiments. He treats the operation of retail as a science.

I particularly like his Three Currencies of Shopping: Money, Time and Angst. In that short section (p. 62) he quickly brings together the measures that can make or break a shopping experience. Overall the book is an easy read, with lots of useful measures and direction.

The book also covers some of the newest advances in merchandising technology such as visual media and cart based displays.

I often cover Sorensen's work and writings in this blog.
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