CarMax, the nation’s largest used-vehicle retailer, is always trying to enhance the customer experience through improved customer engagement. Digital technology is helping CarMax on that all-important front.
CarMax CEO Tom Folliard discussed the company’s digital technology priorities during the company’s Dec. 18 third-quarter earnings conference call.
“Our priorities are somewhat unchanged,” Folliard said, according to Seeking Alpha. “We want to keep making sure that our customers have a great experience, regardless of how they interact with CarMax. It could be from a desktop, it could be from a mobile device, a tablet, or in the store and we are very focused on making the transition 
from their digital experience to the store simple and seamless so that the experience they have online matches up with the experience that they have in the store. And we are also pushing real hard over the next 12 months or so to make sure that our store teams are equipped with information that’s available regarding the individual customers to try to make their experience more personalized. We have a very big database of customers and we are going to make sure that we can access that information and that our associates in the store can access the information when the customers arrive. And also we just want to keep increasing capabilities of customers if they want to do more and more of the transaction online.”
The third quarter was challenging for CarMax due primarily to slightly negative used unit comps, Folliard noted.
“Our lower used unit comps were primarily a result of modestly lower traffic in our stores partially offset by better conversion,” he explained. “Total web traffic increased by 7% compared to the same period last year. We believe our cost may have been impacted by several factors of note this quarter. First, we have seen a decrease in the supply of 5-year-old to 10-year-old cars as you would expect. Second, we have seen very aggressive promotions and lease offerings from new vehicles that appear to be pressuring sales of 0 and 1-year-old cars. Wholesale prices of SUVs and trucks have increased. So, some don’t represent a good value for our customers.”
CarMax sells an average of 340 cars a month during the quarter.
“If you look at industry data, the average new car dealer sells about 50 cars a month,” Folliard said. “So it’s really hard to say that we are losing ground and a lot of that stuff that you read about –from new competition are very small players in very limited markets. So it’s not likely that we are seeing an impact across the nation for our 153 stores when a lot of the press you see is around very small players in limited markets.”