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CarMax is the largest used-car retailer in the U.S., selling more than 700,000 cars each year from 169 dealerships in 39 states. The company has grown dramatically since the first CarMax location opened in 1993 after two years of development by Circuit City executives. It spun off from Circuit City in 2002 and is now a publicly traded company, with 22,000 employees and annual revenue of more than $14 billion. It was on Fortune magazine's “100 Best Companies to Work For” list from 2005 to 2017.
During his keynote session, “Data and Personalization Drive the Journey: How CarMax is Evolving to Meet Customers Whenever and Wherever They Want to Shop,” on Tuesday at the 11th annual Loyalty Expo, Jim Lyski, EVP and CMO, talked about how CarMax is leveraging data and the agile product organization of Silicon Valley to drive customer experience and loyalty.
Since its first store opened in 1993, customer experience has been a priority for CarMax.
“That has been the North Star for us over the past 24 years. Think of us as retailer that is putting customer experience first.”
With customer expectations changing in every industry, and it becoming harder to delight with higher expectations, it is no longer enough to be the best in ones given vertical, since customers now compare brands across industries. Meeting this increased level of expectation and personalization has been both a challenge and opportunity for CarMax’s CMO Jim Lyski.
In many ways, CarMax is the antithesis of the used car dealership. There’s no haggling; the price is the price. The sales people get paid on the sale of the car, not the price of the car, so they aren’t trying to push cars that people can’t afford. Financing bids are put out to several lenders at the same time, and the buyer sees the results and gets to pick which one he wants to do business with.
“That’s the nexus of our advantage. We believe you can’t provide an exceptional experience without exceptional associates, and we put significant effort into who we hire and how we continue to support them throughout their career development. We’ve been recognized as a Fortune 100 Best Company to Work for the last 14 consecutive years, which for a company our size in a retail environment is quite exceptional. I think it’s a great testament to how much we value the associate aspect of our business and the ability to provide a great service.”
In the world of CarMax, results stem from failure. True innovation, in the eyes of Lyski and his team, occurs only after they have tried and failed.
“We believe behavior speaks much louder than words. We’re set up in a structure that is very similar to software product structures in Silicon Valley. We have product teams, and each team continuously runs a set of experiments. These experiments are designed to fail fast and fail cheap, meaning we’ll run an experiment, and grab the insight as fast as possible by watching a consumer’s actual behavior. We then use those findings to inform the next experiment, which will run in a matter of hours, days, or weeks to hone in on exactly what kind of experience we want to innovate against. It’s proven to be a very strong source of innovation for us and we’re happy with the results so far.”
With CarMax’s innovation and personalization, advanced data implementation has been a key driver for both of these models. The buildup of data was centered around adding to their customer experience.
“You can’t do personalization right without data. Our recent digital transformation helped us operationalize our massive data advantage and create a seamless experience for our customers as they transition online and in-store. But having data is not enough, you need to have: collection organization, accessibility, and application.”
Some of Lyski’s key takeaways included:
• Act like you know the customer – they want it!
• Make the experience easy and simple.
• Use data for good.
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