CarMax: The Importance of Now, Next, Future

As Senior Product Manager on the CarMax Digital Merchandising Experience team, Victoria Lawson was focused on displaying cars in a way that would ignite desire and ultimately lead customers to purchase a car. She compares the user experience to a dating site, where the goal is for a customer to “find the right one and make a commitment,” only in CarMax’s case, it’s with a vehicle rather than another human being.

Through the course of customer interviews, Victoria’s team identified the target opportunity: “I want to feel confident that this car is in good condition.” Additionally, they saw new competitors start to highlight the cosmetic condition of their vehicles by visually indicating where a vehicle had dings, dents, or scratches, and Victoria’s team was hearing from consumers that they appreciated having this information. Many product teams would simply copy what their competitors were doing, but for Victoria’s team, it wasn’t that simple. A key value proposition for CarMax vehicles is that they go through an inspection-and-reconditioning process that fixes many of the cosmetic issues that their competitors were highlighting. Odds are, if a competitor is highlighting a ding on a vehicle, CarMax couldn’t highlight that same ding on their vehicle, because they would have fixed it in their reconditioning process. Would consumers understand that CarMax wasn’t highlighting dings, dents, and scratches because they had fixed them?

Victoria’s team had several questions they needed to answer before they could tackle this opportunity. While consumers were saying they valued the cosmetic condition of a vehicle, Victoria’s team didn’t want to take this for granted. They started by testing how much cosmetic conditioning impacted a consumer’s purchase decision. To test whether customers were accurately describing their own priorities, Victoria’s team set up a test in which they had wireframe versions of the same car—one had minor cosmetic issues and was $1,000 cheaper, while the other had no cosmetic issues but cost $1,000 more. Through this testing, they learned that people were willing to pay more for cars that were cosmetically reconditioned. This was a key learning, because it meant that CarMax’s reconditioning value proposition was important to customers.

Next, they had to figure out how to communicate this value proposition to their customers. Victoria’s team had two primary strategies for how they might do this. They could try to address the opportunity by highlighting the value of CarMax’s inspection-and-reconditioning program (a more generalized approach), or they could address it by sharing vehicle-specific reconditioning information (e.g., “A ding was removed”). Due to the volume of cars CarMax sells and the work that would be required to test vehicle-specific concepts, Victoria’s team knew that the quickest path to drive customer value would be to leverage general reconditioning to solve this opportunity, and wanted to prioritize discovery in that space before exploring larger efforts around vehicle-specific solutions.

Victoria’s team knew that customers primarily evaluated cosmetic condition by viewing photos of the car. So, they experimented with adding text overlays on top of the images that highlighted CarMax’s reconditioning work (e.g., “No major dings or dents”). The image gallery is one of the most engaged areas on the page, so the team established a high test threshold to ensure that they were truly solving the customer opportunity and could justify the high-visibility placement of the content. However, after several experiments, they were still unable to meet the test thresholds. Their changes did help consumers build trust in CarMax’s inspection-and-reconditioning process, but they were still hearing from consumers that they wanted vehicle-specific information to truly build confidence in a specific car’s condition. After a series of attempts, Victoria’s team concluded that they had done as much as they could at this moment in time to address their target opportunity. They learned that, to really solve it, they would need to consider vehicle-specific solutions. Since these types of solutions would require a much larger investment from multiple teams, Victoria’s team knew that, to deliver solutions to truly meet their customer needs, they would need to push this opportunity into the future.

Victoria’s team story is a great example of the temporal nature of opportunity selection. While we might assume that we’ll tackle all of the opportunities on our trees with time, there are some opportunities that are a better fit to tackle right now vs. in the future. Victoria’s team chose an opportunity that they thought they could tackle quickly by leveraging CarMax’s strong brand, however, they learned that consumers really needed vehicle-specific solutions and, as a result, the team had to defer this particular opportunity to later. Again, it turned out fine. Victoria’s team simply went back to assessing and prioritizing the opportunity space and chose a new short-term target opportunity. They were still able to make short-term progress toward their desired outcome, while laying the groundwork for even more impact down the road. With time, their discovery work helped them successfully make the case to invest in vehicle-specific solutions. Today, they are able to integrate vehicle-specific data about parts that were replaced during their reconditioning process, which reinforces CarMax’s reconditioning value proposition with its customers. Many teams shy away from hard problems—it’s easier to focus on low-hanging fruit. But Victoria’s story shows the value of balancing the short-term with the long-term. They looked for quick wins, but when they didn’t pan out, they used their discovery work to make the case to go after the harder solutions.