CarMax's New Omnichannel Shopping Experience

If there's one industry you'd think might be immune to the pressures ecommerce is putting on the vast majority of retailers operating today, you'd be forgiven for naming the auto industry as a high contender. On the surface, the ecommerce model doesn't appear to suit car shopping. Consumer desire to test drive a vehicle before purchasing is strong and natural enough. A high-ticket item like a car isn't usually an impulse purchase after all, and the best way for most people to be sure the car drives like it should and is the right fit for them is to see it in person, get behind the wheel and take it for a spin.

However, the ecommerce revolution has forever changed the way people shop, and the convenience of using the internet to buy exactly what we want - even if it is a car or truck - is something consumers have come to expect from all companies they do business with.

CarMax, the US's largest used car retailer and a Fortune 500 company, is revolutionizing the industry yet again and is blazing ahead with a bold new omnichannel strategy that empowers customers to buy cars and trucks on their terms.

Adopting Online Retail Capabilities

CarMax's new buying experience is being piloted in Atlanta, Georgia. Here, customers can now choose how they want to purchase a car – from home, at a CarMax location, or through an integrated combination of both online and in-store experiences. CarMax is also making a new express pickup option available, which allows customers to carry out most of the process online and then complete the purchase with a representative in store in as little as 30 minutes.

This new car-buying process is the outcome of three years investing in tech talent and data scientists who were charged with bringing the company's new omnichannel strategy to life.

"We looked at auto retail and thought, 'Man. It's really not adopting any of the modern retail practices.' We realized we could offer something new to our customer based on what was happening in broader retail," said CarMax CMO Jim Lyski. "Today's customer has a completely different set of expectations."

To meet these expectations, CarMax customers in Atlanta can now complete the entire car buying process from the comfort of their home - including financing, appraisal and paperwork - without ever having to visit a store. They have the option of having their vehicle delivered directly to their home or work, at which point they can take it for a test drive, with absolutely no requirement to purchase prior to delivery.

Customers can also now head online to reserve models in store to try out later at a convenient time. Customers can hold a car or request to have a vehicle transferred from anywhere in the country after shopping CarMax's nationwide inventory of approximately 50,000 vehicles. In addition, CarMax is opening several Customer Experience Centers across the country to provide text, email and phone support for digital users.

"We're delivering on an unmet customer need for a car buying experience that is flexible, convenient and fully personalized, with the ability for customers to get help when and how they want," said CarMax President and CEO Bill Nash.

Overcoming the Data Swamp to Improve Customer Experience

For Lyski, one of the most important things to get right with the new service was to give customers the ability to move seamlessly between online channels and physical locations during the shopping experience. Customers can take weeks to make up their minds, Lyski said. But when they've spent time shopping around online and filling in their information, the last thing they want to do when they head into a store is start from scratch with a representative and fill it all out again.

CarMax's solution was to leverage and customize a new CRM (customer relationship management) system. Now, when a customer who has begun the shopping process online visits a store, CarMax associates can see where they are at in the shopping process and seamlessly pick up where the customer left off.

The CRM system also allows CarMax to make better use of customer data. Purchasing a car - whether started online or offline - requires customers to part with troves of information about where they live, what type of vehicle they're looking for, what car they already have, etc. Having been in business for 25 years, CarMax has truckloads of customer data, but it wasn't using that information effectively - until now.

"We were data rich, but it wasn't accessible," said Lyski. "It was more like a data swamp. So, we had to clean it up and get the core personalization capabilities set into motion. Now we use this information to drive efficiency and improve the experience."

Using the new system, CarMax is beginning to make personalized car recommendations to online users based on past visits, geography and car history, improving the experience for buyers across the whole customer journey.

Final Thoughts

If there's been a disconnect between what's happening in the auto industry compared to the rest of retail when it comes to omnichannel and ecommerce, CarMax is on a clear mission to close the gap. The Atlanta pilot began in December 2018, and the company will be taking everything it learned from this initial test run and using it for the continued rollout.

"The Atlanta launch is only the beginning," said Nash. "We plan to continuously improve the new omnichannel offering and scale nationwide. We anticipate having this new buying experience available to the majority of our customers by February 2020."

You can hear CarMax CMO Jim Lyski speak at eTail Boston 2019, taking place in August at The Sheraton, Boston.

Download the Agenda for more information and insights.

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