When COVID-19 took root last year, CarMax, like so many dealership operations, saw a surge of customers going online – rather than into stores – to transact much of their vehicle purchases.
“But once (pandemic) restrictions eased up, consumers started to migrate back to the stores again,” says Bill Nash, president and CEO of CarMax, the nation’s largest used-car retailer.
That suggests automotive physical points of sale aren’t going away anytime soon. “We’ve been brick-and-mortar since we began in 1993,” Nash (pictured below, left) says at an auto retail conference put on by news agency Reuters.
Still, he adds, digital auto retailing “is here to stay.”
CarMax has long had online tools that help consumers research and shop for vehicles. But when the pandemic hit, the chain’s tech team jumped into action to enhance the digital customer experience by rolling out a planned next-generation omni-channel platform sooner than later.
“It’s easy to make changes,” Nash says of such technical work. “It’s harder to sustain them.”
He adds, “The pandemic accelerated the trend of consumers wanting to do more online,” but it’s vital to offer customers options. About 35% of CarMax customers “want to do everything in the store.”
Another group of consumers starts the car-buying process online but at some point goes to the dealership.
A third group wants to do almost everything online. That self-service subset is small, Nash says. It’s likely to remain so.
CarMax’s omni-channel platform serves as a bridge for car shoppers who at various pints turn to the dealership for help, whether it is online or in-store, he says.
CarMax’s goal is to offer personalized experience with the option for customers to do as much as they want, or as little, online and in-store, Nash says.
The chain provides a variety of vehicle delivery methods, including home delivery and contactless curbside pickup. COVID concerns spurred those services.
During the fiscal year ending Feb. 28, CarMax sold more than 750,000 used cars and more than 425,000 wholesale vehicles at its in-store and virtual auctions.
It has 220 stores and more than 25,000 employees.
In January 2020, CarMax paid $50 million for a minority stake in Edmunds, a website that offers sales leads and car shopping advice to consumers. CarMax plans a $404 million cash-and-stock transaction to fully acquire Edmunds.
“They will always remain an independent company,” Nash says of Edmunds.
Following the initial investment, CarMax and Edmunds jointly developed an online “instant-offer” program of buying used autos from private parties. The initiative positions CarMax to become the largest online buyer of used autos from consumers, Nash says.
In the works are more collaborations that leverage Edmunds’ content and technology expertise and CarMax’s own capabilities, Nash says.
Steve Finlay is a retired WardsAuto senior editor. He can be reached at [email protected].