Academics

Driven to Succeed: ICE Students Gain Valuable Insights from Visit to Corporate Sponsor CarMax

A mainstay of the ICE program throughout the last four years, CarMax has teamed with McIntire by offering students a series of significant product development projects.

Third-year McIntire students visit ICE corporate partner CarMax.

Third-year McIntire students visit ICE corporate partner CarMax.

There are many good reasons why McIntire’s hallmark undergraduate program, the Integrated Core Experience (ICE), is so highly regarded. Now in its third successful decade, ICE is well known for engaging third-year students with invaluable real-world business projects that develop their professional skills in analysis, strategy, organization, and communication.

One explanation for ICE’s incomparable role in shaping the professional lives of future business leaders graduated by the Commerce School is the program’s close collaboration with its corporate partners.

A mainstay of the program throughout the last four years, ICE corporate partner CarMax has teamed with McIntire by offering students a series of significant product development projects. During that time, the Richmond-based Fortune 500 company—and the largest used car retailer in the United States—has transitioned toward a retail model referred to as omnichannel (a shopping experience providing customers the option to complete transactions entirely from home, in store, or through a seamless combination of both). Management Professor and ICE Teaching Team Leader Gary Ballinger says the company’s ongoing innovations prompted some project updates this fall, which included sending ICE student group representatives to visit CarMax’s store in the Virginia capital.

Transformation of Major Transactions
“Over the years, CarMax tested various functions associated with e-commerce functions, such as financing, appraisal of the car someone would potentially be selling to the company, as well as home delivery of a purchased vehicle,” Ballinger says. “For the first three years, students developed a lot of products highlighting these functions and also focused on improving the customer experience through the app, website, and store. This year, CarMax changed the ICE project to specifically investigate the omnichannel offering to improve the customer experience.”

The ICE project update reflects a sea change in consumer thinking. “There’s a sense that people are becoming more willing to purchase a used car online,” he explains. “That’s sort of an organic change. You’re more likely to buy clothes online than you ever used to. You’re more likely to buy big-ticket audio or video equipment online than you ever were. And the same is now becoming truer for cars.”

As buyers become ever-more comfortable with the idea of buying a car online and having it delivered to their house, students were tasked by CarMax to conduct empathy interviews to research the factors driving those decisions. They dove headlong into a design thinking project that had them each speak with 10-20 car buyers representing various customer segments they were assigned.

Putting Concepts into Practice
In getting buyers to talk at length about their car buying experiences, students identified specific pain points or issues of concern in the customer journey.

Sterling Clay (McIntire ’21) says that putting those design thinking concepts into practice was one of his most valuable experiences in ICE. “What makes CarMax stand out as a corporate sponsor is the company’s use of this approach when determining what new ideas or products to explore and how to best execute them. By working with CarMax, we’ve been able to take what we’ve learned about design thinking in class and apply it in our ICE projects.”

After conducting their interviews, students then compared the results of the responses they collected with what they learned on site to guide their suggestions to CarMax for improving the overall customer’s car buying journey.

Meeting the Customer on Their Own Terms
Clay believes that the Richmond store visit revealed how well the company’s omnichannel model provides customers with a personalized, on-demand, and convenient experience that allows the customer to shop on their own terms, whenever and wherever is most convenient to them. “CarMax gives customers the ability to combine these interactions, which is something that sets their omnichannel model apart from that of competitors,” Clay says. “CarMax Location General Manager Mike Evans, who gave the tour during our visit, noted that when a customer first comes into the store, an employee will check to see if they’ve already completed research on the CarMax website. If they have, they can pick up right where they left off, but in person rather than online.”

Clay adds that the visit helped to supplement the empathy interviews by providing an opportunity to see how CarMax has already addressed many of the typical frustrations he has heard from car buyers. “Something I heard from a few of the interviews is how pressured car buyers feel with typical salesmen,” he says. “During my visit, I noticed how much more relaxed the environment was and how there was very little competition between employees. Mike even noted that sales consultants don’t approach customers when they’re browsing vehicles, which relieves pressure that a lot of car buyers experience.”

Offering an Authentic Experience
“For me, a lot of how CarMax functions as a business was a little fuzzy because I had never bought a car and had rarely even been in a dealership,” says Jake Eichenbaum (McIntire ’21). “Learning from my interviews that people really do want help when they’re purchasing a car, but they really do not want to be bothered or taken advantage of by pushy employees, it was easy to see why CarMax is so successful. The day we went in, it was mostly one employee helping one customer, and it felt authentic.”

Cameron Thrasher (McIntire ’21) says the effectiveness of the omnichannel model was only matched by the sheer size of the CarMax store and what the facility is capable of accomplishing. “It’s more than just a dealership. The refurbishing and conditioning areas showed how the entire process—from purchase to sale—occurs at the store. The visit gave us a better understanding of the process and the creative aspects of improving the omnichannel experience.”

Chetan Bharadwaj, Marketing Strategy Analytics Lead at the company’s Richmond headquarters, echoed the sentiment. “Our stores are key to ensuring customers have an iconic experience throughout their engagement with CarMax. It was great to see students ask really good questions during their store visits and take what they learned to make recommendations on what enhancements could be made to the omnichannel experience.”

Management Professor Daisy Lovelace, who accompanied the Commerce School third-years to Richmond, was pleased that the interactions proved valuable by providing insights about the omnichannel process. “Anytime we can take what we’re teaching in the classroom and provide real-world, experiential applications, it’s of tremendous value for our students. Our CarMax partners were generous with their time and expertise during our visit, and we all benefited from our time there.”

Eichenbaum was impressed that as an established business, CarMax is able to maintain a creative and innovative approach. “It’s interesting how all of the work and analysis that we are doing actually have physical substance and matter in the scope of the real world. The fact that CarMax is in the midst of a shift towards digital gives us a valuable opportunity to tackle an issue many other large businesses around the world are facing.”

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