America’s largest used car retailer fuels customer experience with omni-channel initiative
vehicles sold every year between retail and wholesale
omni-channel experience delivered ahead of schedule
to implement curbside pick-up during COVID-19
- Identity foundation for an omni-channel experience
- Out-of-the-box IAM with plenty of options
- Partnering for continual leaps in scale and efficiency
- Expedited deployment. Ready for the next disruption.
- Balancing personalized experiences with customer security
CarMax was born to disrupt the automotive industry and a few years ago, it looked to transform the car buying experience once again. The company launched an omni-channel customer experience initiative to deliver outstanding digital services, world-class support, seamless in-store integration, and anywhere fulfillment. To succeed and stay agile, CarMax needed an identity partner who can seamlessly connect best-of-breed technologies.
After evaluating several vendors, the CarMax team decided to replace its homegrown solution with Okta because of Okta’s maturity in the market, its customer-first mindset, and its easy compatibility with a wide range of technologies.
Okta Professional Services helped CarMax design an identity solution that scales and adapts quickly to shifting customer needs. The solution bypasses on-prem infrastructure and custom-built authentication software to achieve huge leaps in efficiency for CarMax dev teams.
When COVID-19 hit, the CarMax team leveraged Okta’s identity proofing integrations as it continued and accelerated the rollout of its omni-channel experience to customers nationwide. By leveraging new technologies, CarMax remains an industry disrupter, quickly adapting to changing customer needs and expectations.
With an increase in online engagements during the pandemic, maintaining customer trust is key. Okta provides progressive profiling and Adaptive MFA that keep information secure with minimal friction. The ability to embed identity into applications gives CarMax flexibility as they innovate the customer experience for the future.
A secure, flexible car buying experience
CarMax technology and marketing leaders launched an omni-channel initiative designed to converge their revolutionary in-store and rich digital experiences. Okta meets the company’s agile, product-focused strategy with scalable, flexible identity solutions that CarMax teams can easily integrate into their complex ecosystem. Customers gain a secure, frictionless, car-buying experience.
“When this pandemic hit, we were well positioned to evolve our business quickly to support how customers and the environment were changing.”
Shamim Mohammad, Chief Information and Technology Officer
- Out-of-the-box identity products that can be deployed and integrated easily across many platforms and applications
- Support for progressive profiling, to keep customer friction to a minimum
- The ability to offer MFA where it’s needed to help balance customer security with personalization
- A professional services team available to help design solutions and plan future iterations
- A scalable solution that bypasses on-prem infrastructure and custom-built authentication to achieve huge leaps in efficiency
An industry disruptor
In 1993, CarMax revolutionized the automotive industry, opening its first store in Richmond, Virginia with the idea of providing a transparent, high integrity customer-focused experience that was haggle-free and hassle-free. Today, CarMax is the largest used car retailer in the United States and also is a leader in wholesale car sales and auto financing. The company’s 215 locations and 25,000 associates sell more than a million cars every year, including both retail and wholesale.
A few years ago, CarMax leaders set out to transform the industry once again. “We saw that if we didn’t disrupt ourselves, somebody else would,” says Shamim Mohammad, Chief Information and Technology Officer. Even before the pandemic, the majority of customers started their shopping journey online. They expected a personalized experience, tailored to their device, schedule, timeline, and location.
To that end, the CarMax team decided to take their original big idea—the exceptional, customer-focused car buying experience—directly to customers wherever they wanted to show up, whether that was in a store, at home, or a seamless combination of both. The company launched a cloud-first, omni-channel initiative with the goal of combining an outstanding digital experience with world-class support, seamless in-store integration, and anywhere fulfillment.
The era of the COVID-19 pandemic brought modern, digital technology to the forefront. Never had it been so urgent to adapt quickly to changing consumer behaviors and increase digital, online interactions. Organizations that were ready thrived, while those stuck in more traditional business models struggled like never before. CarMax was ahead of the curve as it had already rolled out its omni channel experience to more than half of its customers. Now it accelerated the nationwide rollout to offer remaining customers the personalized online offerings. “When the pandemic hit, we were well positioned to evolve our business quickly to support how customers and the environment were changing,” says Mohammad.
The pandemic validated that strategy. Customers expected convenient, efficient digital interactions—along with the ability to complete transactions safely and securely.
Starting with a startup mentality
The first step on the path to that omni-channel customer experience entailed a broad, cultural shift, says Mohammad. “We went from a traditional, established company to a digital, rapidly evolving, startup-like company.” He and his colleagues began promoting a “product” mentality, establishing many autonomous teams focused on creating superior customer experiences rather than on delivering lines of code.
“CarMax has always been very innovative, entrepreneurial, and collaborative,” says Mohammad. “These small, cross-functional, highly empowered teams are encouraged to take chances, experiment, and learn from those experiments.”
CarMax also fundamentally changed its approach to technology. “In the past, we would roll up our sleeves and build whatever technologies we needed to keep us in that market leadership position.” he says. “Today, we rely on a partner ecosystem of cloud service providers such as Okta to provide those disruptive technologies for us.”
In that new culture and ecosystem, the CarMax Technology team is not a service but a critical partner and driver of transformation, working closely with the business to achieve results. Mohammad works closely with CarMax CMO Jim Lyski, for example, to make sure Technology, Product, and Marketing collaborate to optimize the customer experience as the company’s omni-channel initiative develops and expands.
A search for secure, customer-focused identity
The connection to the CarMax marketing strategy is particularly important because for each customer, the shopping experience looks a little different. “It’s important that we understand what they’re looking for and how they want to do business with us,” says Jason Peña, a product manager at CarMax focused on customer identity and access management (IAM).
Identity and trust are key pillars of CarMax’s omni-channel initiative, but the company’s previous, home-grown IAM solution was built primarily to serve traditional, in-store customers. “In brick-and-mortar situations, we’re sitting side by side with the person we’re engaging with,” says Peña. “Now, we have the challenge of understanding and being secure in our knowledge of who’s sitting on the other side of that screen, as well as building trust and confidence with that person.”
The CarMax team made a decision to replace its IAM solution and evaluated several vendors. “We needed an identity solution that would give our customers a simple, seamless, efficient way to manage how they access information and how they interact with us,” says Mohammad. “We wanted to strengthen privacy and security without adding friction and complexity.”
Speed to market was important, even pre-COVID-19. “We wanted to begin learning from our customers as quickly as possible.” says Peña. The right identity solution would help the company engage with customers in the ways that they wanted to engage, and to bring every interaction to bear along each step of the customer journey, whether it came from a mobile phone or a store walk-in.
The new IAM solution also needed to be modern and flexible, so that the CarMax team could embed it within the digital ecosystem that they had already begun building.
Out-of-the-box IAM with plenty of options
After careful consideration, the CarMax team chose Okta to provide the identity foundation for the company’s omni-channel initiative. The decision hinged on three primary reasons: Okta’s maturity in the market, its customer-first mindset, and its ability to work with a wide range of technology partners.
“One thing that really stood out about Okta was the range of flexibility that we have with the technology,” says Brian Marshall, senior technology manager. While the CarMax experience looks cohesive from the customer point of view, behind the scenes it relies on a series of microsites and microservices, many built on Microsoft Azure.
The Okta Integration Network provides 6,500+ pre-built integrations that support CarMax’s approach. “Okta makes it easy for us to integrate with our other important platforms, such as marketing and master data management,” he says. “We don’t have to build from scratch every experience we’re looking to deploy. In some cases, we can pick a solution right off the shelf and deploy it. For others, we have the opportunity to use Okta APIs to deliver customized solutions.”
The team is taking advantage of Okta Universal Directory and Okta Adaptive Multi-factor Authentication (AMFA), along with all of Okta’s OAuth and OpenID Connect standards. “Those features would have been a huge lift to build internally, but they all come right out of the box with Okta,” says Marshall. “Okta’s robust API integrations, widgets, and SDKs make it seamless for our product teams to integrate identity into the apps they’re working on, so they can spend their time building cohesive and personalized customer experiences.”
Balancing personalized experiences with customer security
For CarMax teams, customer preferences drive everything. “What’s really important to us is understanding who that customer is, how they want to interact with us, what are their preferences, how do they want to be talked to,” says Marshall.
“Okta has helped us get to that point,” he says. “Whether it’s site personalization, the content they’re seeing, how their account looks, what emails we’re sending them, how we’re text messaging them—all of that. Identity plays a huge role.”
With Okta’s support for progressive profiling, CarMax teams can collect customer data incrementally over time, as relationships develop, rather than hitting people with long registration forms that they may be likely to abandon.
Progressive profiling also helps CarMax teams balance customer security with those personalized experiences. “We can gather the customer information we need to unlock the experience that they’re looking to engage with,” says Peña. “At the same time, we don’t introduce friction too early in the process and drive them away.”
MFA provides one example of how Okta helps CarMax teams align where customers are on the journey with the amount of friction they experience. “Through discovery, we’ve learned that some of our customers want MFA for any engagement they have with us online,” says Peña. “For others, it’s about where it is appropriate, based on the sensitivity of their transaction.
“One of the things we have enjoyed about Okta is the flexibility that we have with MFA,” he says. “We can essentially make it an option for all customers but require it where it’s needed for the most sensitive transactions.”
Mohammad speaks highly of the risk-based authentication capabilities in Okta AMFA, which adapt automatically to anomalous login behavior, minimizing the need to create access policies prescriptively. “That’s a big deal for us,” he says. “Okta’s advanced behavioral analytics are important as well, because that’s how you deliver great customer experiences.”
Expedited deployment. Flexible, frictionless results.
When COVID-19 hit, CarMax leadership looked at their plans and decided what needed to be accelerated. Omni-channel was one of those initiatives, so the CarMax and Okta teams worked together to expedite the deployment. “Today, I’m happy to say we have completed our omni-channel rollout to customers all over the country, five months ahead of schedule,” says Mohammed. Thanks to the technology stack CarMax already had in place, in less than 3 weeks the team implemented curbside pickup and to support employees and customers safety.
“Our guiding philosophy is to make sure we eliminate any customer friction,” says Peña. “They don’t care what technology we’re using. At the end of the day it’s all about the experiences we’re unlocking for them.”
Okta is the front door of the car buying experience for CarMax customers, who can choose to do a test drive on their own, have a new car delivered, or pick it up curbside at the store. All of those options provide the safety, convenience, and security that people are looking for in this time of COVID-19.
“We’ve seen a significant increase in the progress customers are making through our online offerings,” says Mohammed. Still, a car is a major purchase, and many customers prefer to complete the process in a store. CarMax’s omni-channel strategy gives people the flexibility to do as much or as little of the car buying process online —whatever makes them most comfortable.
Agility in an era of rapidly changing markets
Okta helps CarMax provide a secure, personalized customer service at scale. “Our customers interact with us from various channels,” says Mohammad. “Okta provides the scale so we can provide the right customer experience.”
Dev teams can bypass the on-prem infrastructure and custom-built authentication software that they relied on for years. “We’ve offloaded identity to Okta’s best-in-class service, which is a huge leap in efficiency for our technology teams,” Marshall says. “Now we can focus on building that simple and seamless customer experience.”
The result is happy, autonomous teams that can disrupt fast, learn fast, and fail fast. Okta’s collaboration with multiple stakeholders across Technology, Development, Marketing, and Security allows CarMax teams to maintain dev ops principles and get cloud-based solutions to market quickly.
“Okta Professional Services sat in the trenches with us to design the solution,” says Marshall. “They created proofs of concept, helped us build our log-in widget, and have been a close partner in helping us develop all the capabilities we need.”
Peña agrees. “Working with Okta has been great: One, because of the expertise they bring to the table, and two, because of the partnership. We have the opportunity with Okta to look forward, discuss future opportunities, and align product offerings and business opportunities.”
“Okta is one of those companies that is innovating fast and disrupting its industry, which is one reason we’re so excited about this partnership,” says Mohammad. “Nobody can predict what the future’s going to bring. We all have to be prepared for rapid change all the time.”
CarMax, the nation’s largest retailer of used cars, revolutionized the automotive retail industry by driving integrity, honesty, and transparency in every interaction. The company has more than 220 stores nationwide, selling more than one million vehicles annually, including both retail and wholesale. With more than 25,000 associates, CarMax is proud to have been recognized for 16 consecutive years as one of the Fortune 100 Best Companies to Work For®.