CarMax rolls on with efforts for seamless buying

CarMax Inc. continued the rollout of its omnichannel capability — offering a seamless buying experience to consumers who shop online, in-store or both — into most Florida dealerships this spring, and the used-car giant will open its second customer experience center late next month in Kansas City, Kan.

Expansion of the omnichannel efforts, in which CarMax offers customers online price estimates and appraisals, vehicle delivery and expedited vehicle pickup at its stores, is expected to continue this summer in North Carolina and Virginia.

CarMax debuted the initiative in December in the Atlanta market, where for the second-straight quarter it has logged double-digit percentage increases in same-store sales and its same-store sales have outperformed company averages, CarMax CEO Bill Nash said in a conference call last week. Atlanta also is generating a higher-than-average number of vehicles appraised and purchased from a customer.

"This is an experience we can tailor to each individual customer. This is the future of car buying," Nash said on the call after the nation's largest used-vehicle retailer reported record profit for its fiscal first quarter. "We're off to a great start, and we're excited about the future."

CarMax opened its first customer experience center this month in Atlanta, where staff help customers over the phone or online choose a vehicle, assist with financing and answer other questions.

CarMax has not announced the location of the third customer experience center it plans to open this year. While Nash said he believes the three centers will be sufficient to serve CarMax customers, the company may consider smaller centers in some states that require a presence there to sell vehicles.

The omnichannel initiative, Nash said, is key to boosting the retailer's same-store sales and market share. CarMax is on track to have omnichannel capability available to most customers by the end of its 2020 fiscal year, or early 2021.

"We continue to believe the unique and powerful integration of our in-store and online capabilities provides us with a significant competitive advantage," Nash said. "And as consumers continue to do more online, it's important that we provide them with the ability to shop on their terms anywhere, anytime."

Web traffic in CarMax's first quarter rose 15 percent from a year ago, Nash said. That, combined with customer service enhancements, a strong lending environment and a delay in tax refunds that rolled into its first quarter, helped boost sales and propel CarMax to record profit for the three-month period ended May 31.

During that period, CarMax opened stores in Waco, Texas; McAllen, Texas; and Memphis, Tenn. It plans to open 14 more stores by the end of May 2020, including four in markets new to the retailer — Lubbock, Texas; Palm Desert, Calif.; Gulfport, Miss.; and Fort Wayne, Ind.

The other stores will be expansions in existing markets.

CarMax is No. 1 on Automotive News' list of the top 100 retailers based in the U.S. ranked by used-vehicle sales, with retail sales of 751,512 used vehicles in 2018.