CarMax Revenues Climb as CEO Calls for Digital Tune-Up

CarMax revenues are up, and CEO Keith Barr said he is focused on improving the company’s digital car shopping experience.

The used car dealer reported quarterly earnings Wednesday (June 17) that showed net revenues of $8 billion, a 6.2% increase. To continue this trajectory, Barr said during an earnings call that CarMax’s online presence needs to change.

“Our digital experience is too complex and not seamlessly connected to the in-person experience,” he said. “When a customer arrives at one of our stores, we do not make it as easy for them as it should be, given all the steps they have taken online.”

The process has added friction to the customer experience, which has affected conversion and kept CarMax from using its scale and store network, he said.

“We know exactly what needs to change, and we’re moving forward with urgency,” added Barr, who became CarMax’s CEO in March.

Management said during the earnings call that consumer behavior in the automotive sector has pivoted toward a demand for a hybrid experience, combining digital convenience and physical verification. The company said industry research and its own in-house findings bear this out.

“Buying a car is one of the biggest financial decisions someone makes, and they have a strong desire to see, touch and test drive a vehicle that will be part of their daily lives for years to come,” Barr said.

To address this, management said CarMax is working to remove friction from the buying journey with upgrades like integrating AI assistants into the digital experience.

“We basically improved the entry point for our customers arriving from online ads,” Barr said. “We’ve made it easier to navigate our website to get toward prequalification and reserving a car. We’ve effectively shifted away from sticker prices to monthly payments.”

The company has also streamlined its web navigation to accelerate prequalification and vehicle reservations, making sure that the work a customer does at home translates instantly when they arrive at one of the company’s stores.

“Our stores reach 85% of the U.S. population, which gives us access to the largest total addressable market,” Barr said. “We expect more customers will visit our stores, and we will sell more cars.”

Barr joined CarMax after serving as CEO of InterContinental Hotels Group (IHG). In announcing his appointment earlier this year, CarMax said Barr modernized IHG’s technology, in part by developing a digital reservation system that improved the booking experience and let guests personalize their stays.