CarMax saw the digital revolution in auto retail coming.
But even after a pandemic forced car dealers to quickly adopt online sales strategies, if they hadn't already, the growth rate of the digital revolution will remain slow, CarMax CEO Bill Nash said during a Reuters event this month.
CarMax began as a brick-and-mortar retailer in 1993 and was structured that way for years. But it "had to change everything in our organization" to make the pivot to become an omnichannel retailer, Nash said.
The largest used-vehicle retailer in the U.S. completed the rollout of omnichannel capabilities to its 220 stores last summer. Omnichannel refers to technology and processes aimed at providing a seamless buying experience for consumers whether they shop online, in-store or both.
With the shift, Nash said CarMax not only altered the jobs and pay of employees but also had to formulate new departments, such as a product organization focused on digital experiences.
"And that required a whole different subset of skills that we didn't have in the organization," Nash said. In the past few years, as it transitioned to the omnichannel approach, CarMax went from five product teams to more than 50, he said.
Even so, Nash does not see an equally abrupt shift happening on the consumer end.
"What's interesting is once some of the pandemic restrictions eased up, and we got beyond the worst of the pandemic, consumers started to migrate back into the stores again," he said.
Today, the customers who want to transact completely online and have a vehicle delivered to their home remains a "very small subset of used-car buyers," he added.
Undoubtedly, that subset will grow.
"But I think it will grow very slowly," Nash said. "It won't be like all of a sudden, what we saw during the pandemic, where the vast majority of folks want to do more things online. I think it'll be much, much slower than that."