CarMax to spread the word about omnichannel

CarMax’s long-stated goal has been to give customers the chance to transact when, where and how they want to — whether in the physical or digital realms or in both — a concept known as omnichannel retailing.

The nation’s largest used-vehicle retailer has now transformed every aspect of its business to fulfill this goal, and it will let the masses know about it through a multimillion-dollar marketing push set for 2021, CEO Bill Nash said.

“We want customers to understand that CarMax offers the ultimate flexibility to shop and buy on their terms, their way,” Nash said last month after the retailer reported higher earnings for its fiscal third quarter.

CarMax was set to launch the first ads in its multimedia marketing campaign in late December. The pitch, Nash said, is to highlight the differences between the sales platform offered by CarMax and the approach taken by traditional dealerships and online competitors.

The new campaign will run across several channels, ranging from broadcast TV to digital and even billboards, he said. CarMax wouldn’t disclose a specific spending amount for the effort but did acknowledge that the omnichannel campaign represents the vast majority of a planned $25 million increase in ad spending for the company’s current fiscal year, which ends Feb. 28.

CarMax completed the omnichannel rollout to its 220 stores this summer, wrapping up by the end of August. Nash called it a “significant milestone.”

“We really wanted everybody to be on the same platform before we started to go out and educate the consumer,” he said.

One of the key aspects to the retailer’s omnichannel approach is customer experience centers, which are used to offer remote customer service. In CarMax’s fiscal third quarter ended Nov. 30, about 70 percent of customers who bought a vehicle interacted with a customer experience center, and more than half of all customers chose to advance their transaction in some way online, Nash said.

Still, most customers opted to complete vehicle purchases inside a store. Fewer than 10 percent of vehicle sales completed in CarMax’s third quarter were what the company calls alternative deliveries, which include home delivery and curbside pickup.

With the rollout to stores complete, CarMax aims to further automate certain aspects of a vehicle transaction that still require assistance from customer experience personnel, such as appraisals, transfers and appointment scheduling.

“We are now focused on enabling self-service for all components of the sale that will deliver significant improvements over the next two quarters,” Nash said.

As an example, Nash pointed to instant appraisal offers on The feature gives customers an offer on their trade-in vehicle in five minutes or less. After initial testing, the company is offering the feature more broadly and expects it to be available for standalone appraisals nationwide by the end of February.

“We are on track for most of our customers to have the ability to buy a vehicle online independently if they choose” by late summer, Nash said.

CarMax launched its omnichannel capabilities in Atlanta near the end of 2018 and has since seen the platform deliver sustained growth in that market, the company said.

CarMax’s continued focus on its omnichannel platform comes as retailers from all sectors in the U.S. struggle through the coronavirus pandemic.

COVID-19 has sparked sharper growth in e-commerce, as it also has prompted government stay-at-home orders and fostered general uneasiness about physical shopping for some people. CarMax said its same-store vehicle-sales pace was tracking at a mid-single-digit percentage increase early in its third quarter but had dipped to a slight decline at quarter’s end. The company attributed that to a tapering off in demand, along with other macroeconomic issues.

How the pandemic plays out in 2021 undoubtedly will continue to affect sales for CarMax and other vehicle retailers. For customers who want to transact away from other people, CarMax’s new campaign will let them know they can do just that.


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