CarMax: Digital Capabilities Support Over 80% of Used Car Sales
CarMax’s digital capabilities now support over 80% of its used car sales, executives said Thursday (April 10) during a quarterly earnings call.
The user car retailer and auto finance company saw increases in both omnichannel and online retail sales during the fourth quarter, which ended Feb. 28, they said.
“We are proud to offer customers the ability to progress seamlessly through and across online and in-store channels, delivering what our research affirms is the most customer-centric buying and selling experience,” CarMax President and CEO Bill Nash said during the call.
Omnichannel sales accounted for 58% of total retail unit sales during the quarter, up from 55% in the fourth quarter of 2023. CarMax defines omnichannel sales as those in which the customer completes at least one of four transactional activities online: reserving the vehicle; financing it, if necessary; trading in a vehicle or opting out of doing so; and creating a remote sales order, Nash said.
When the definition is expanded to include three other activities — prequalifying for financing, setting appointments and signing up for notification on available cars — the share of CarMax’s retail sales that are omnichannel was 67% in the fourth quarter, up from 64% a year earlier.
Online sales accounted for 15% of total retail unit sales in the fourth quarter, up from 14% a year earlier, according to a Thursday earnings release. CarMax defines an online retail sale as one in which the customer completes all four of the transactional activities mentioned by Nash online.
“Across omni and online, our digital capabilities supported over 80% of our sales during the fourth quarter,” Nash said. “We expect that our mix of digitally supported sales will continue to grow over time as we add further enhancements to our online tools, customers become more accustomed to leveraging them and we improve our ability to track their use.”
CarMax also continues to add brick-and-mortar locations. It added two locations during the fourth quarter, bringing its total to 250, according to the earnings release.
Asked about the news that Amazon plans to help dealers sell used cars as well as new cars, Nash said it appears the company is most interested in advertising and lead generation, which means it will be another facilitator with which CarMax can partner.
“It just makes me really glad that we’ve gone through this pivot to really become an omnichannel retailer,” Nash said, “because I think customers are really looking for this combination of physical and digital assets when it comes to buying a car and it’s a big competitive moat that we’ve built and it’s very hard to replicate.”
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