Retail Pricing Under Scrutiny: Trust, Fairness, and the Future of Pricing with Barrie Carmel

In this episode of Pricing Heroes, we speak with Barrie Carmel, a pricing, margin, and revenue management consultant with more than 30 years of experience, including senior leadership roles at Bed Bath & Beyond and Michaels. Barrie shares her journey from foodservice into retail pricing leadership and reflects on what it means to balance precision and speed, manage promotions and customer perception, and lead pricing in an era of public scrutiny.

Key Topics:

• Lessons from transitioning between B2B foodservice and large-scale retail
• How to manage complexity when in-store price execution depends on labor
• The decline of coupon culture and the challenge of generational shifts in value perception
• Why framing conversations in customer-centric terms builds credibility and influence internally
• Electronic shelf labels and AI — opportunities, risks, and why data protection is essential
• How litigation and regulation are likely to reshape fairness standards and reference pricing practices

Recommended Resources:

• Player Piano by Kurt Vonnegut
• Dombey and Son by Charles Dickens
• Predictably Irrational by Dan Ariely

Connect with Barrie Carmel:

LinkedIn: https://www.linkedin.com/in/barrie-carmel-6227284/

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For more information about AI pricing solutions, visit Competera.ai.

Transcript

Aaron: Hello and welcome to Pricing Heroes, a podcast sponsored by Competera. This is a series of interviews with best-in-class retail pricing experts driving bottom-line metrics for major retail brands and the industry as a whole.

Today’s guest is Barrie Carmel, a pricing, margin, and revenue management consultant with more than 30 years of experience, including the past one-third of her career focused on pricing across the retail and foodservice industries. Most recently, she’s held leadership roles in pricing at some of the most well-known retailers in North America, including Michaels and Bed Bath & Beyond.

Her first official entry into pricing was at Reinhart Foodservice, which has since been acquired by Performance Food Group. Barrie, welcome to Pricing Heroes.

Barrie: Thanks for having me.

Aaron: To start, would you mind sharing a little about yourself and how you found your way into pricing?

Barrie: Sure. Pricing as a profession didn’t exist when I was in college. It wasn’t a function, other than it was mentioned. I was a marketing major, and it was mentioned as one of the four Ps, and it was very rarely discussed. It was not anywhere near what it looks like now, where it’s become its own career path.

And you can get a degree as a pricer now, which is crazy to think about. It was accidental. My first jobs out of school trained me in classical category management through Brian Harrison, TPG. To be clear, I learned category management when it was a noun. It’s become a bit of a verb, but it was a noun when I first learned how to do it. And pricing was a big part of that. I was in a merchandising role at Reinhart. New leadership came in and changed things around. I’ve always been good at math and analytics. New leadership came in and was like, “Congratulations, you’re doing pricing and margin management.”

I had just been moved into a new role. So I am an accidental pricer. But the journey’s been incredible, and I love it. Without a doubt—and anyone who’s heard me talk before has heard me say this—it is the most powerful tool in the toolbox. Pricing drives both the top line and the bottom line (revenue and margin). And if you’re really good at your job, you can do both at the same time.

Aaron: Would you say that you were happy for the opportunity? You wouldn’t go back and change anything?

Barrie: No, I wouldn’t. It’s funny, I was a marketing major, and anyone who knows me will appreciate this one. My goal in life as a marketing major was to be a brand manager at Procter & Gamble. That’s all I ever wanted, and they would have nothing to do with me. I am not of the P&G mold.

It turned out to be the best thing that ever happened to me—that I found my way into this space where I can combine multiple things. Pricing is not purely pricing. You are a better pricer when you understand your business, when you understand merchandising, when you understand consumer behavior.

There’s a lot of nuance to it. So no, I wouldn’t change anything. And every time I think about, “Oh, what comes next? What comes next?” I’m not sure I would consider a job that didn’t have pricing sitting at the center of it.

Aaron: Very interesting. It is very interesting to hear that because, in pricing in general, when I think about it, it is one of those very unique roles where you have to take into account so many other facets of the world in general—because it is about economics, market forces, human psychology, and human behavior. It’s mathematics, it’s business in general.

Barrie: And you have a predominantly retail audience, so there’s a group of people out there who also know that understanding retail accounting, also known as monkey math, is huge. Understanding the financial implications of your decision is materially different in a retail accounting company than in a cost accounting company.

I learned that for the first time when I got to Bed Bath, and my mind was blown that I had to even think about it. Again, it’s very impactful to decision-making—never would have occurred to me to ask the question. Retail accounting versus cost accounting never would have occurred to me until I experienced it.

Aaron: Cool. So then, quickly for our listeners—anyone who finds themselves in a similar situation where they’re thrown into, or they find the opportunity to enter pricing—what can they do to quickly prepare for that if they’re coming from merchandising, marketing, or some other function within retail?

Barrie: Look, to me, pricing is very fundamentally basic: buy low, sell high. We want to sell things for more than we pay for them. But to be a really good pricer, I give two pieces of advice. One, learn everything you can about the business. Understand the entire journey so that your decisions land. In retail, for example, you may have the need or the desire to change 10,000 prices, but you don’t have the store labor to change 10,000 prices.

Know your operational partners. Know your accounting partners so you understand your decisions. If I want to lower a price, what’s the financial impact? Are there reserves to cover the decisions I’m going to make, or do they have to wait? It’s a very cross-functional role. So know your company and your business as well as you possibly can.

And then the other thing—and I’ll talk about this more, I’m sure, as we get through some of the questions—is keeping the customer at the center of your decision. If you are making a decision that is right for the customer, you will be okay. But it’s the definition of “right” and “customer” that are really important in the nuance.

So stick with knowing your customer—not just your business, but also your customer and their psychology. That’s true in any pricing role: B2B, B2C, whatever it may be.

Aaron: Internal and external relationship-building and understanding all of those complex relationships—that’s crucial for pricing for sure. You’ve spent more than a decade in pricing across foodservice and retail, including VP and SVP roles at Michaels and Bed Bath & Beyond, as mentioned in the intro. Perhaps you can walk us through your career journey. What did it look like going from that initial pricing role you had at Reinhart up to the SVP role, I believe at Bed Bath & Beyond?

Barrie: In foodservice, it’s a B2B space, and the work is different because you can’t see your competition. There’s a total lack of transparency in that particular space. I can’t log on and see what Sysco or US Foods is selling a good to a specific customer for. There is also no scenario where all customers receive the same price.

There’s a lot of nuance in the way you service your customers, so your cost considerations introduce a lot of variability. You can’t see what your competition is doing, and it’s very difficult for your customer to comparison shop because they have to log into every single account and get a specific quote or talk to somebody if they have a specific item.

There’s a lot of room there for opportunity, which can lead to greed or silliness when you make a decision. There also isn’t much syndicated data. There’s some, but not enough for real clarity on pricing decisions. What we ended up doing was creating analytical solutions around indexing our customer behavior and performance.

For example, to simplify it, pizza shops care about the price of tomatoes, sauce, and cheese. If you’re priced right on those, you can get other items in the basket. So we would look at all of our pizza customers and say, “Okay, where do we need to be on sauce, tomatoes, and cheese to attract more pizza customers and then get other things into the basket to profit from them beyond that?” It was a very different environment, but fundamentally it comes down to the exact same philosophy I take everywhere to every job: selling the right items to the right customers at the right price.

There’s a lot of nuance in the word “right.” In foodservice, what is right for a pizza shop is different from what’s right for a bar and grill. You have to manage complexity. In retail, it’s about understanding your core customer behaviors and who the right customer is that you want to protect.

But there are times that the word “right” actually means “wrong.” What I mean by that is: if this is not my core customer—say grocery stores want families with children of certain ages, because they buy bigger baskets, shop more frequently—their needs are greater. A customer like me, who’s just one person walking into the store but who wants higher-end goods, should be priced differently. They should take price opportunities against me by raising prices on those flanker items.

They’ve got to be right on milk and bread and diapers and all of those core things that people buy every day. But if I want 72% Ghirardelli chocolate chips for baking, I should pay $7 for that bag of chocolate chips, while Nestlé Toll House could be $3. I’m the wrong customer for the core set, and the items I want—my “right” items—should be priced higher. It’s a nuance and very difficult to do. It requires a lot of looking at the customer.

Aaron: Great, thank you for that. In your personal career journey, when you were moving from Reinhart to Bed Bath & Beyond and then to Michaels, was that a straight-line trajectory? What was your thinking shifting from foodservice to Bed Bath & Beyond, which is entirely different, and then to Michaels, which is also different?

Barrie: When I got the call from the recruiter about the Bed Bath & Beyond job, I was like, “Why are you calling me?” I didn’t even think I was right for the job because I didn’t have broad retail pricing experience at the level they were looking for. I just didn’t see how my B2B experience translated.

Reinhart was a $7 billion company. We weren’t small—we were huge—but I didn’t see the transition from 250,000 SKUs to 3 million SKUs and a $12 billion specialty retailer. Going from food to shower curtains didn’t really make sense to me. I didn’t know why they called. But in 2017, Bed Bath was king, and it was a really big deal to take the job. So I pursued it.

As I went through the interview process, two things became clear to me. One, they had a very technical pricing department—data scientists who were very slow on decision-making. Because they are precise in their work, they didn’t have a bias for action, which I do. So moving from theoretical to practical pricing was a big driver for me. The other piece was the merchants. The company and the merchants had been very focused on retail accounting, markdown, and margin percent, and they were almost paralyzed to make a decision.

They knew they had to lower prices, but they couldn’t figure out how—one, because of markdown, and two, because of the coupon. I can still barely talk about that coupon. It was very complicated for them to figure out. So it became clear to me that it was the right role for me.

Plus, I’ll be honest, I had no e-commerce experience, and I was going to get it. That was a big void on my résumé. I needed that e-commerce experience. So they hired me, and here we are.

Aaron: It seems like there were a lot of challenges associated with Bed Bath & Beyond. You mentioned a couple of them. When you say e-commerce, I think about the vast array—Bed Bath & Beyond has a plethora of products.

Barrie: They had 3 million SKUs active. In stores, there were probably 500,000 to 600,000 active SKUs—not that you’d see that in any given store. The stores had a lot of flexibility in choosing their own assortment, which made things difficult.

So there might be seven different cherry pitters available. Only one or two would be in any given store, but seven were active. It made decisions more complicated. So yes, huge SKU assortment.

Aaron: If you have an e-commerce platform where you’re selling, and then you have a large assortment in stores that varies from store to store, I imagine that’s extremely difficult to manage price changes. And on top of that, you have a team of pricing analysts who are very precise but slow. How are you balancing making those pricing decisions and striking the right balance between action and precision within the pricing team?

Barrie: First of all, on my third day on the job, the CEO—and this was pre-activist investor chaos—said to me, “You may never have the price online be different from the price in store,” which was terrifying because 85% of customer journeys begin online with research, especially when you’re talking about high-visibility KVIs like the KitchenAid stand mixer. If our price online is $100 more than Amazon, we have a problem. The customer will not choose to shop.

Balancing that with the labor situation—Amazon can change a price every 15 minutes with the push of a button. If we want to change a price, 1,200 people have to do something in the store. They have to print the label, take the label, move it to the shelf. It’s a very different situation. So the number one problem we had to face was: how could we change prices online to drive traffic into the store, yet protect our margins, and still take that coupon? It was a huge disadvantage.

One of the first things done—they started before I got there, but we enhanced it—was increasing the number of coupon-excluded items. This was tied to a price-match promise. We didn’t call it a guarantee because you still miss stuff, but the promise was that we’d match or beat. So if you found the price for the KitchenAid stand mixer online for $50 less than we had it in store, or somebody else had it in store, we honored that price. Yes, they still had to call it to our attention, but we put that language, especially in certain areas of the store.

We started lowering and coupon-excluding, and then matching the price, which gave the customer some confidence that we were doing the right thing. We were going to the psychology of it—before they got upset that we were taking away the coupon from them, we also wanted them to know we still had the best price in town.

Aaron: I’m very curious. That sounds like a great way to maintain positive price perception or the faith that the customer has in the brand. But I can also see that it could encourage customers to actively begin looking for lower prices online and in store. Did you notice that created any kind of challenge within the business?

Barrie: One of the things Bed Bath did exceptionally well was empower their frontline employees. It was very easy for a frontline employee to accommodate a customer, which is critical when you’re doing some kind of a price-match promise. So they could do that.

I think one of the most difficult things for Bed Bath that ultimately led to their demise was that, overarchingly, the coupon that was at the core of its value proposition to its legacy customers meant nothing to the next generation of customers.

If you back up a minute, Bed Bath’s entire reason for being is because people need things—they’re going to college, they’re getting married, they’re moving into new homes, they’re having babies. Acquiring things is very important. You have to be at the right life stage for Bed Bath to succeed.

The problem was that as their core customers started to age out of being acquisitive—as in, they’re now 60 years old and if they break a glass, they go, “It’s okay, I can only have 11 people for dinner instead of 12. I’m not buying 12 new glasses. I’ll just have one less person for dinner, and the glasses won’t match.” Those were the people who worshiped the coupon. They had the stack; they carried it everywhere. It never expired. It was a whole cultural phenomenon.

The next generation—basically Gen X is the last generation of core Bed Bath people—but the following generation doesn’t understand the coupon. “What do you mean I need a piece of paper?” That’s not how they live. It’s not how they shop. It was really difficult for them. That transition was hard. And that is where the balance, the process, everything became critical. Why are we doing this? Are we doing this to attract our new customer or to protect our loyal customer? You couldn’t do both things at the same time. It was a very fine balancing act.

Aaron: That sounds about right. I remember my mother and even my grandmother really liked the Bed Bath & Beyond coupons. They would carry them and intentionally go—

Barrie: Wasn’t it Tiger Woods? Didn’t Tiger Woods do a whole thing about the coupon? Was it on The Tonight Show? It was with Jimmy Fallon or somebody—he did this bit where he was in the sand trap digging for treasure and he found a Bed Bath & Beyond coupon. It was a big deal. It was a cultural thing.

Aaron: Yeah, it was. Then I’m growing up, moving out, getting my own place, and I couldn’t care less about Bed Bath & Beyond coupons. I shopped online. I would shop around online, make a decision based on that. The only time I’d go to Bed Bath & Beyond was if I needed something physical and they had it available in the store. I could tell it was available and maybe have it set aside. Maybe if I wanted to compare products in person I would, but almost always I preferred a place where I just knew the price was steady. The price online and the price in store—that was the price. I didn’t have to search for coupons or try to negotiate something or wait for a sale. I appreciated that more than feeling like I needed to look for coupons. And I’ll be the first to say, every single time I received one in the mail, it was tossed in the trash immediately.

Barrie: It meant nothing to you. That’s not an unusual problem for people to face: how do I go to the next generation? Luxury brands deal with it every day. They go from one generation to the next—how do I make the next generation aspire to want my stuff?

Transitions of a business and consumer base are something everyone should be thinking about, and they should really be thinking about it right now. The very largest population groups are at the polar ends of the life spectrum: Boomers, who are humongous, and Millennials, who are humongous. We have old people and young people, and that is a very tough transition. If you’re focused on only one group or the other, how do you move forward?

Aaron: That’s right. Have you seen anyone who does that well—who has made the transition from a big-box retailer approach with a high-low pricing strategy and coupons to accommodate newer generations that are looking for an entirely different way to shop?

Barrie: I’ve seen a lot of people do it badly. There are a lot of retailers struggling: Kohl’s is another one; JCPenney—we don’t even need to talk about that. Any of these retailers who had this high-low coupon behavior—they’re struggling to get through to the next generation.

Take Target in this particular moment. You look at Target—results are not great; the news is not good. What’s in the stores is very different. There’s a generational thing happening there. It’s not about promotion alone. When Target first came out, it was “Tar-zhay”—it was cool. Now it’s just Walmart-ish, but Walmart is suddenly taking the place of a better value proposition, better message. Walmart’s actually a great example of someone who’s done it really well, but they’re not a high-low coupon player.

By the way, the new Bed Bath stores under the new ownership—Beyond/Overstock—are saying they’re going to take the coupon. I just want to call and say, “Are you insane? Let it die. Don’t bring that back to life.” It’s a terrible crutch.

Aaron: It sounds like the best approach would be to reposition the brand entirely and remake the brand.

Barrie: And that was what was happening. You have to have runway for that.

Aaron: True. After your time at Bed Bath & Beyond, you moved into a pricing leadership role at Michaels, which is a very different business in terms of assortment, seasonality, and customer behavior. What were some of the key pricing opportunities and challenges you faced there?

Barrie: Priority one is about the timing of when I joined Michaels, which was the fall of 2021—post-pandemic cost increases driven by supply chain issues of an unbelievable amount. The problem at Michaels was that, in the previous tariff kerfuffle—not this one, but the last one—there had been a bad decision to peanut-butter-spread a 5% cost increase throughout the entire store.

Customers notice. I don’t know why people think they won’t, but they notice. So they were skittish about how to pass through these cost increases, which were humongous—multiple hits of anywhere from 10% to 15% to 20% on the same item over and over again, because transportation cost was so great. It was unbelievable. And most of those cost increases had not been passed through to the customer. Priority one was: we need to recover this lost margin, and we need to recover it now.

What’s interesting about Michaels—couple things to set the framework—is that Michaels is like little stores within a store. A customer who makes jewelry is not the same as a customer who’s a knitter, who’s not the same as a customer who’s a painter. All of them require incredibly long-tail assortments to be in the business. You cannot be in the jewelry business if you’re not carrying hundreds and hundreds of varieties of beads. It’s cumbersome to manage, but it gives you an opportunity, because you’re not talking about bread and milk or very high household-penetration items.

Some things have high purchase frequency, but most have a very long purchase cycle. That gives you some opportunity to raise prices. So the first thing we had to do was identify KVIs for each of those little pieces of business and protect them at all costs. Even if a cost increase on a KVI came through at 15%, we would not move that price until we had a signal that the rest of the market had moved. We did not want to lead an increase. So we found 26,000 other prices to change, where we disproportionately burdened those SKUs. An item that may have had only a 5% cost increase could have taken a 25% price increase to do that.

This is one of those conversations I always worry the general public gets ahold of and says, “You raised 26,000 prices in six weeks and we didn’t even notice.” Yes, you didn’t notice—that was the goal: to do the right thing for those customers to make sure they couldn’t see it.

We very rapidly had to put those through. It was an exhausting, miserable, difficult process. That was the number one priority. The next biggest issue was promotional activity. They’re a high-low retailer—aggressively high-low. They also have a coupon, which I don’t know where they are on phasing out. But there’s an ever-present coupon to consider in every purchase. That one was less of an issue than at Bed Bath. It wasn’t as ubiquitous. They were smart enough not to constantly play with it too aggressively. At Bed Bath, it was always 20% off, then it was $5 off $15 or $20 off $80 or whatever crazy number we put out there, which made it very hard to read what was really going on. Michaels is better at keeping that coupon clean.

Promotions are a big deal. It is hard to drive traffic into the store without promotions. And the promotions must be deep to be effective and motivate someone to buy. The challenge is figuring out the best investment of promotional dollars and the best cadence for those promotions.

Aaron: What was the outcome of both—managing the promotions and rebalancing the prices?

Barrie: The good news on rebalancing the assortment pricing is that we managed to recover most of the lost margin and reset the base. The bad news is that Michaels post-pandemic has struggled. I’ve been out of Michaels for two years, so I’m a little out of the loop, but they have to figure out: were we geniuses, or did the business just boom during the pandemic because people were stuck at home? What else were they going to do other than learn how to knit or crochet or whatever?

They’re chasing comps. Their comp sales situation has been very rough since 2020, and now it’s almost a different decade. What is the new normal? There’s a struggle in understanding that, which made the analytics around the increases difficult—whether those cost increases were viable long term.

We felt they were good. Every result we saw was, yes, we’ve recaptured margin; no, we haven’t hurt the business. And if we did hurt the business, we pulled back. If you make a mistake, pull it back as fast as you can. If you misjudge something, fix it.

On promotional optimization, the biggest challenge they continue to face is driving traffic into the stores. A lot of stores… JOANN is gone. That’s got to be good for them. They have new opportunity with new assortment from JOANN—they bought the IP from JOANN Fabrics. Party City also being gone helps. I’m hopeful for them that the balloons and the fabric businesses will help drive traffic and shift things around a bit.

Aaron: In terms of pricing strategy around COVID and all of that—let’s be honest, we saw it across the board with so many different retailers and business models. You have Peloton that saw a boom and now is struggling. You had REI, which couldn’t keep bikes in stock because everyone wanted to ride. Then as COVID ends, people go out, travel more, spend more at restaurants. They’re not spending as much on goods. The resale on a lot of these items is significant on marketplaces. People realized they didn’t want this stuff anymore. So it sounds like it was a little of both—the strategy was perfect for the time, but as demand changes, you have to adapt.

Barrie: I’m not sure anybody knows quite yet what the new normal is. Prior to the pandemic, we knew what normal was, and nothing seems to have settled back into a new normal because there’s constant disruption. I hope that’s not the new normal. It’s difficult to plan and manage a business without a normal baseline to understand.

I’ll be technical for a minute: if I don’t have a good baseline, I can’t understand my performance. What is a good-enough baseline? In e-commerce and digital, 14 days is a good baseline. But in stores where customer frequency—like in specialty retailers—is two or three times a year, you don’t have a good baseline without at least a full year of something looking normal. It complicates analytics.

Aaron: That’s a great point. I’m not entirely sure about the new normal, and there may not be a new normal. The new normal may be that there is no normal—it’s constant adaptation. But who knows?

Barrie: I don’t know. I don’t know if I’m still flexible enough for that. We’ll see.

Aaron: I feel like we’re being forced into it. From what I’ve seen, the constant disruption is forcing a lot of people to adapt very quickly, picking up new skill sets and new technologies. The same may be true in retail, and maybe this is why a lot of these legacy retailers are struggling. They don’t have that flexibility. They’re not native to adaptation in the same way a lot of startup direct-to-consumer brands are.

Barrie: It is really interesting. I did a talk about this with some folks discussing the AI apocalypse—Is it going to…? When you talk about not just retailers, but legacy businesses with legacy infrastructure, AI isn’t going to disrupt them right away. It will disrupt them, but they can’t adapt. When you’re still using—Aaron, you may not even know these terms—green screens and AS/400s. If that’s the kind of technology you’re still using, you’re restricted from engaging with the current state of AI.

Yes, you can do things on your laptop, but you cannot transform your entire system to deeply ingrain these new disruptive technologies into your stack. It’s a challenge and a defense mechanism at the same time. It’s one reason I don’t think it’s going to be an AI apocalypse. I think AI will be more socially influential than fundamentally transforming the way businesses do business—because as long as people still go to stores, which they clearly do, brick-and-mortar will have a place. There’s always a moment where you need to see, touch, and feel something. There will always be people who can’t buy things online without having seen or touched them first, no matter how good the guarantee and free shipping are.

Aaron: Absolutely. You make a good point that it’s not entirely about the technology. Legacy retailers and other businesses will find a way to adapt. It’s not going to disrupt them entirely. I think that’s because technology is not the core of the business—it’s relationships. So I want to turn to a question about relationships within the pricing function. In many organizations, pricing teams have to influence decisions without always owning them outright, although sometimes they do. This is especially the case with merchants and finance teams who are focused on metrics like margins.

How do you build credibility across functions and drive alignment around pricing recommendations within an organization that may not give all the decision-making power to the pricing function? Or maybe you do, but you still need the merchandising team on board.

Barrie: First, I learned the hard way that I need to get to know the CFO and what they’re looking for. When you can make the CFO happy, lots of things go much easier. If it’s markdown optimization, or if merchants have been incentivized on markdown or on margin percent, getting a CFO to endorse a shift away from percent into dollars is fundamental for me.

I get cranky when we only talk about percents. I never put a percentage point in the bank. I actually do a percent-versus-dollar test with people sometimes. It’s simple: would you rather have 50% of $10 or 10% of $100? If you can’t answer that quickly, we have a problem. So, CFO approval to change direction is number one. I also need to understand what the demands are on the CFO—publicly traded or private equity doesn’t matter. What are the demands? Are they looking for top line or bottom line so I can understand what they want? Never upset your CFO. Rule number one. Write that down, people.

For gaining influence—certainly at Bed Bath—I find I need a champion, someone who can be my guinea pig. There’s always a merchant who understands fundamentally that something’s wrong: they need to lower a price, raise a price, change a promo. If you can find a partner willing to be a guinea pig and go through experimentation—let’s raise prices, try a new promotional strategy, a different markdown strategy—they can become your internal evangelist.

Talk to everybody and say, “Help me help you.” That’s the way to get an internal evangelist. It doesn’t have to be the big, sexy partner. In a supermarket, it doesn’t have to be center-of-the-plate. It may be the health and beauty care person, who tends to be forgotten. I was an HBC person, which is how I know they were forgotten. Get that opportunity wherever you can.

Another thing is to keep my language as customer-focused as possible. When you’re constantly talking about right item, right customer, right price, it puts someone in a position where, instead of saying “I think” or “I want,” they have to consider the customer: “The customer needs this, the customer wants this.” When you phrase it from the customer’s perspective, it’s difficult for someone to say no. If they say, “I don’t want to lower my price because I don’t want the markdown,” what they’re saying is, “I don’t want to give the customer what they want.” They actually change their language when you do that. Center your decisions and conversations on the customer—consumer or B2B—and things go better. It also diffuses political challenges where someone is defending turf.

Finally, how can I make your job easier? I’ve been blessed that at Michaels and Bed Bath—and even at Reinhart—I owned the IT/technology process and operational piece of pricing. It turns out that a lot of people find those tasks really annoying. At Bed Bath, when we said we were going to redesign the system—the data entry, all of it—we took so much work off the buyers’ desks that they didn’t even care. It was busywork. They love the product and marketing parts. They hate the busywork. When we took that away, they didn’t even realize they had locked themselves out of the pricing system and could no longer make a change. They just gave it to us because we had established trust and relieved a burden. So: help them, focus on the customer, and find a co-conspirator.

Aaron: That’s great. You won’t believe this, but on the previous episode we recorded with Lee Mackedanz, he said the exact same thing about finding someone internally who is willing to work with you to prove the value you can deliver—and then turn them into an internal evangelist who validates your approach. If two amazing pricing experts are saying this, it must be the best way in.

Barrie: Implementing new pricing strategy and bringing in new pricing people can be scary. It’s very much a change-management situation. You cannot do it with a sledgehammer. You have to do it in a way that is digestible and palatable for people who are there. It’s Change Management 101. Good pricing functions are always about change management. Internal evangelists aren’t a new idea—pricing people should be doing it more, because that’s how it has to be done.

Aaron: Absolutely. Across functions, it doesn’t matter which one—if you’re doing change management, you need that person to validate the approach. I love that, especially the emphasis on change management. You also mentioned that one of the major focuses should be customer centricity—in language and in practice. I want to turn to some topics that have been in the news.

In the past year, pricing has come under a lot of public scrutiny. We’ve had Delta Air Lines with dynamic personalized pricing adjustments. We’ve seen the FTC looking into surveillance pricing. New York recently passed a law that says any price set using algorithms needs to be noted as such on the price tag. We’ve also seen headlines claiming that electronic shelf labels allow Kroger, Walmart, and other retailers to engage in surge pricing.

These stories miss a lot of nuance. They reflect a growing sensitivity around price fairness and transparency. As someone who’s led pricing at large retailers, how do you recommend leaders think about customer trust when approaching pricing strategy?

Barrie: I can’t tell you how much it hurts my heart, as a pricer, to see the news and what customers are saying and feeling. One issue is that it has become very politicized. Politicians, especially in the United States, have used inflation and technology to strike fear into consumers, because fear is a great motivator for action.

The noise hurts because I have never worked for a retailer—and I assume every retailer listening knows this—who has not fought every price increase every single day. It’s not something good retailers want to do. They know bad pricing choices are bad for business, and they don’t want to hurt their customers. It’s been twisted into a corporate-greed narrative that is not true.

Just the fundamentals—especially in supermarkets: the average consumer has no idea what a supermarket makes on the bottom line. A really good supermarket makes 2% to 2.5%. That’s ridiculous. For every $100 you spend, they make $2. Think about all the things that have to happen. It’s a tragic, sad little number, and nobody understands it. So it hurts my heart.

At Bed Bath, when we were really into dynamic pricing, we made more than 100,000 price changes a day online, and more than 75% were downward. Dynamic pricing has been turned into surge pricing—thanks, Uber, for introducing that word. It’s upsetting because it’s not the instinct. When we did increases, we had programming in the algorithm to stop anything from creeping up too much. The price couldn’t double in one day. We wouldn’t allow it, because it’s bad for customer perception. Good retailers do that.

Electronic shelf labels—again, this hurts my heart, because the labor used to change price tags is so valuable and could be touching your customer. If we could communicate better about what we’re doing, it would help consumers understand that it’s about cost savings (so your cost of goods will be lower) and that your service level will be better. I’m a big proponent of electronic shelf labels. They can dramatically change retail.

One important point: state by state—nationally, there is no legislation to protect consumers from surge pricing—but every state manages, through Weights and Measures, the requirement that the price on the shelf is the price you pay at the register. If it’s wrong, retailers often honor the lower price or give you the item free. So how does anyone expect to raise the price on the shelf while you’re standing there? If I pick up my 72% chocolate chips and they raise the price $1 before I get to the register—Weights and Measures in some states generate enough fine revenue to run the state. Some states are very aggressive. I don’t see that as feasible, and it’s a horrible experience for the customer. If you care about your customer, you won’t do that.

Using ESLs for perishables and things that need to sell makes sense. In general, we’ve done a terrible job—maybe because pricers are the ones communicating our activity—explaining to people what we’re doing. The Wall Street Journal just did an article on a study (SSRN) showing retailers are not doing this. That’s not clickbait, so it doesn’t land.

Prime Day brought bad press about fake sales and fake prices. Everybody’s on the defensive. I don’t know that anyone’s figured out the solution for properly communicating. Which takes me back to customer trust: if it’s not the right decision for the customer, you probably don’t want to do it.

I’ll take a cheap shot at United Airlines. They reinstated a surcharge for being an individual traveler. If they decided groups are their core customers and that’s who they want to protect, then it’s a strategy. But I’m guessing that’s not the decision they made. To say that if two people traveling together each paid $200 for a ticket, but the single person paid an 8% premium ($216)—that’s not good, and it’s a bad look.

I don’t know how this stuff keeps getting out, either. Delta—what possesses you to tell the world, “I’m going to let AI take over my pricing”? The same AI that everybody knows hallucinates is now going to be in charge of your pricing?

Aaron: I think it depends on the approach. It’s all about messaging, and many retailers have poorly messaged what they’re trying to do. There are differences. You said at Bed Bath & Beyond that, often, when making dynamic price changes, 75% of the time you were decreasing the price. We found the same to be true. Across millions of repricings over a year, about 55% of price recommendations were decreases, and the average shelf price decreased $3 year over year. There’s stability there. It’s about rebalancing price based on supply and demand, cross-elasticities, and so on.

If customers understand that adjustments enable the retailer to continue to provide service at the most reasonable price possible—especially on KVIs—there’s some permissibility. A lot of times, when they think about AI, it’s really more about precision pricing—not “How much can we gouge customers?” Long-term customer value matters, and you don’t get there by increasing prices to ridiculous amounts on key products all at once.

Barrie: I agree, and part of it is communication. But I’m not sure in today’s environment—the politicization of pricing, corporate greed, and AI as a threat—that we’ll ever get control. Wendy’s lost control of that narrative the minute they did their press release. It was devastating. They didn’t say it the right way. If they had, it would have been fine. Instead, people pictured lunchtime and the price of the burger going up $1, instead of understanding that breakfast at 11 a.m. was going to get lower—which is what they meant. They just didn’t say it.

Aaron: As someone who’s worked in PR for many years, I’m just wondering who dropped the ball. The messaging is clearly that there are dead periods when we want to increase traffic, so we may adjust prices then, but we’re not increasing at the busiest times of day. That makes no sense.

Barrie: Right. They lost control of the narrative the minute they did the press release, and it spiraled. They were basically forced to walk it back. It’s a shame, because what they were trying to do was great. It goes back to the question: are you doing the right thing for the customer, and can PR articulate what you’re trying to do? If they can’t, don’t do it until you can articulate it.

Aaron: Brand trust has a lot to do with it. That is not something you can implement with AI or in a three-month roadmap. It takes a long time to build trust. I think of Trader Joe’s as a perfect example of a retailer that should never use electronic shelf labels because of its brand positioning and the perception people have when they enter Trader Joe’s. There’s no perception that there’s going to be surge pricing, even though price changes happen. I worked at Trader Joe’s for three years and prices were changing daily. You have the artist in back hand-drawing tags and putting them on the shelf. It didn’t matter because people perceived overall value and the customer-centric experience.

Barrie: Electronic shelf labels are all over Europe. On my last trip I was in Paris at La Grande Épicerie, which is part of Le Bon Marché—this beautiful place. I didn’t even realize they were all electronic shelf labels until I was checking out. That is labor savings. It’s also accuracy. For Bed Bath and Michaels, 90% of our Weights and Measures violations were because somebody missed a tag—the wrong tag was on the shelf.

Best Buy has had phenomenal results. No one said a word about Best Buy putting in electronic shelf labels. They’re gorgeous. The signs, the information they convey—the larger labels allow them to be priced right on the things that matter most. Nobody said a word. They did it well, and it’s led to great results.

Aaron: With that brand, it makes sense. They’re a tech retailer, so if you’re selling tech, perhaps you should also have high tech throughout.

Barrie: The first place they did it was appliances. Now it’s tech, but it wasn’t tech when they started. It was just a dishwasher.

Aaron: We’re running out of time. I have two more questions. Do you have time for that, or would you like to jump?

Barrie: I’m fine. You can edit whatever you want to edit.

Aaron: We’re not actually running out of time—I just like to be mindful of the hour we blocked. Usually it doesn’t take as long, but the conversation is going well.

Barrie: It’s just my workout. We’re good.

Aaron: As pricing becomes more data-driven and automated, more transparent, and potentially more regulated based on the conversations we’ve been having, what challenges or opportunities do you think will emerge in the years ahead? What should pricing teams start doing now to stay ahead—not just in terms of compliance, but also protecting commercial value and the work they do?

Barrie: On compliance, I’ve been blessed to work with fabulous attorneys who gave me great advice. If your companies aren’t thinking about pricing compliance, you should be. Pricing law at the federal level hasn’t been written since 1967. Things have changed a little since 1967.

I would expect something to happen. Most U.S. companies now use the generosity of the language of that law—“reasonable” and “substantial”—for setting reference pricing. That’s the fair-advertising piece I’m referring to. The language protects them: “It feels reasonable to me.” I don’t expect that to last.

I don’t expect the current administration to do anything. My guess is it’ll happen through litigation: someone will find the right price-discrimination, unfair-advertising case and present it. I actually know three or four that would make a lot of money. For example, Oregon took Safeway/Albertsons for $107 million in the meat department alone for unfair pricing—they were artificially inflating the base price to get the BOGO. That’s one department, one retailer, one state. There are billions of dollars to be made through this kind of litigation. Eventually someone will figure it out and do it.

If I had to guess what it would look like at the tail end, it’ll look something like Canada, where there are very specific pricing laws that are easy to follow. They give you rules—time and volume tests for reference price and changing pricing. I think deceptive-pricing legislation will happen through litigation, not legislation. If California starts doing it, everybody’s in trouble. Anywhere with highly active Weights and Measures enforcement—start watching those states.

On AI and tech—the future of pricing and protecting what we do. If you are focused on the customer, AI will not replace you. I’ve always believed pricing is a balance of art and science. It’s not just about the science. The science goes only so far. A human being who understands the customer and human nature will have to look at some things and make decisions.

If you are just a spreadsheet jockey, you are in trouble. If your job is to spit data back without insight, AI and new pricing software can replace those tasks. I do feel a sense of loss about that, because one of the best ways to train pricers is to make them be spreadsheet jockeys and grind the data. I worry about the next generation of experts—where will they come from if entry-level roles are taken over?

If your pricing function is not operating as a strategic partner to the business—creating a strategy that’s right for your customer—then there’s a threat. As long as you are doing strategic work and building trust with the customer, pricing has a future. I don’t believe it will just be spreadsheets in the future.

Aaron: Even if AI becomes advanced enough to do some of the highly technical functions of a pricer, it will never be an enabler within the organization. It will not lead change management and develop relationships or understand the complexity of objectives across functions. There’s still always—

Barrie: One more point on AI: the great opportunity is to do the work you never could do before because you didn’t have the time, energy, or muscle power. At Bed Bath, we’re talking about 3 million products across 65 million customers across 1,200 stores. There’s a lot to unpack. How much can you do when you’re working with AS/400s and a green screen? You can’t.

To me, the potential—if you can train it to ask the right questions—is to find correlations (I won’t say causes) between certain types of customers and behaviors that you’ve never had the ability to study before. Think about how to take these ginormous data sets and properly feed them into a walled-in, boxed-in AI—not an open AI that anyone can read your data. Your data is your number one competitive advantage. Never release it into the wild. There’s a lot of opportunity. Think about the opportunity.

Aaron: Great. I couldn’t agree more. Final question: what books, podcasts, or resources would you recommend to our Pricing Heroes community?

Barrie: I have to admit, I am not a great business-book reader. I am a huge reader of literature. The number one book I have been telling people to read is Player Piano by Kurt Vonnegut. If you’ve never read Player Piano, it’s about a future in which automation takes over the world. Seems a little more relevant—and he’s hilarious. It’s not particularly long, and his work is always so funny. It won’t solve the world’s problems, but it helps you think.

I also love big classic literature. I’ve read every Charles Dickens book—sorry, I’m really a nerd.

Aaron: As do I.

Barrie: I’ve read every Dickens. A Tale of Two Cities: “It was the best of times, it was the worst of times.” Start there. It’s a moment in time. Hopefully someday we’ll look back and laugh at this. There are so many wonderful things—let’s try to do it in a great way instead of focusing on the worst of times, because there are so many bad things.

If I had to pick a business book, the classic Predictably Irrational was mind-blowing and changed everything for me, and every business book after that was disappointing. I used to read them all the time for leadership and all those things, but that would be my last one.

Aaron: That’s great. I can get on board with anyone who recommends Vonnegut and Dickens. I’ve also read a lot from both. I haven’t read everything by Dickens, but my favorite of his is Bleak House.

Barrie: Oh, I love Bleak House, but Dombey and Son is my personal favorite. I did a trip last year to London and had a wonderful Dickens tour—a five-hour walking tour—where they figured out, based on descriptions, where Scrooge’s office was, the church for Little Dorrit, and all of the scenery. That was probably the coolest thing I’ve done in a long time. If you want the guide’s name, I’ll give it to you. He does a three-hour tour also—you don’t have to do five.

Aaron: I think five hours is probably required for Dickens. Barrie, thank you so much for being on the show and sharing your insights with us today.

Barrie: Thank you so much for having me. It was fun. I could do this all day.