CarMax Bets on Tech to Streamline Used Car Buying Journey

Using technology to streamline the buying and selling of cars is on the agenda at CarMax, as the used car retailer prepares a new strategic plan under the leadership of a new CEO.

Keith Barr, who became president and CEO of CarMax on March 16, said during a Tuesday (April 14) earnings call that technology is one of the company’s initial strategic priorities. CarMax also highlighted that priority in an investor presentation released Tuesday.

“We’ll use software, data and AI in practical ways that make it even easier for customers to buy and sell cars and easier for our associates to serve them,” Barr said. “That means reducing friction across the journey, personalizing the experience, improving how we match inventory and pricing to meet customer demand, and ensuring a great experience both in our stores and online.”

CarMax enables customers to shop for used cars both online and at the company’s 250-plus stores in 41 states, according to its website. During the fourth quarter, the company sold 303,969 vehicles, up 0.7% year over year, according to a Tuesday earnings release.

Barr was named CEO in February and assumed that role in March. He joined CarMax after serving as CEO of InterContinental Hotels Group (IHG), a hospitality company that operates 6,000 properties across 100 countries.

When announcing the appointment, CarMax said in a press release that Barr modernized IHG’s technology, in part by developing a digital reservation system that enhanced the booking experience and enabled guests to personalize their stays.

During Tuesday’s earnings call, an analyst asked Barr how that experience in the hotel industry might color Barr’s thoughts on how to streamline CarMax’s click-through experience.

Barr answered: “One of my rallying cries in my old role was, ‘How do we reduce friction in the customer experience? If it takes us six clicks to do something, how can we make it three?”

He added that at CarMax, he will focus on the things that matter most to customers, understanding the end-to-end customer journey, both online and in-store, and streamlining the experience to make it easier for customers.

The company will start announcing parts of its new strategic plan in June, executives said during the call.

CarMax Chief Financial Officer Enrique Mayor-Mora said during the call that CarMax made improvements to its online selling capabilities, one of three key things that contributed to growth in the company’s used car unit comparable sales during the fourth quarter. The other contributors were lower prices and higher acquisition marketing spend.