CarMax: Omni-channel Strategy

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My questions generally revolve around what this business will look like three to five years from now. I'm interested in their growth potential and the associated costs. You mentioned the investment in tech, and I recall them stating that the omnichannel model would eventually be more efficient than the legacy model. However, the SG&A is currently running in the opposite direction, mainly due to increased tech spending. Was this something discussed internally, and do you think the new business model, with smaller stores supported by CECs rather than e-offices, will be more efficient from an expense perspective in the long run?

Regarding growth, CarMax has around 8% of used car sales, in established markets like Richmond and Atlanta, while their nationwide share is around 4%. There's potential for growth if they can replicate their success in established markets across the United States.

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I'm curious about CarMax's ability to process and glean insights from the large volume of data they collect. Could you discuss their operation, capabilities, and the advantages they derive from their data processing expertise?

They don't just get data from the vehicles they bid on, but data on every vehicle that is at that auction.

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How would you describe the cultural shift, internally? This is a significant change for a company that had been doing things a certain way and being very successful for a long time. Were people on board quickly, or was there resistance to the change? What was the mood like? What was the culture like?

I think this is still going on today, and it's part of the reason why I'm not there anymore. When I was there, everything was focused around the customer. We had one experience for the customer, one goal for them, and every team rallied around that to solve that specific problem. However, now there's a lot of spending happening, and everyone is still trying to do things for the customer, but they're not doing it cohesively. Each team is solving their own problem or what they think is their own problem for the customer, and they're not working together to build a cohesive solution. I think there's a bit too much of teams thinking that whatever they're building is the most important thing, without considering the overall vision.

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