CarMax has fully integrated artificial intelligence into its customer service infrastructure, routing 100% of inbound calls from stores and the customer experience center through AI voice agents. The system, built with technology from Sierra, handles routine inquiries such as store hours and vehicle availability before transferring more complex requests to human associates.
CEO Keith Barr announced the complete deployment during the company’s fiscal second-quarter earnings call on September 29. He stated that customers can now resolve initial requests through these agentic AI tools or be directly connected to the appropriate associate. The move represents a significant shift in how the used-car retailer manages its high-volume customer interactions.
Sierra AI Integration and Scale
The voice agents went live in May and have since been scaled across CarMax’s entire operation. The company operates more than 255 stores and employs approximately 28,000 associates. In the quarter ended August 31, CarMax sold about 780,000 used vehicles. The AI system is designed to answer common questions and make transfers to associates smoother, reducing the burden on human staff for repetitive tasks.
Sierra, the AI customer service company behind the technology, is expanding rapidly. Led by CEO Bret Taylor, Sierra raised $950 million in May at a $15.8 billion valuation. The company currently serves a third of the world’s largest banks, indicating a strong enterprise focus for its voice AI capabilities.
Barr has previously noted that CarMax’s digital and in-person experiences needed better integration. In June, he described the company’s digital experience as too complex and not seamlessly connected to the in-person experience. The new voice agents serve as a bridge, providing a unified entry point for customers seeking information.
Limitations in the Sales Process
Despite the broad adoption of AI for customer service, CarMax maintains that the final transaction remains difficult to automate. Barr emphasized that every used car is an individual SKU, making the final sale a complex process that requires human judgment and physical inspection.
Buyers retain a strong desire to see, touch, and test drive a vehicle before purchasing. CarMax stores reach 85% of the U.S. population, providing physical access that digital tools cannot replicate. To determine where AI fits within the sales funnel, the company runs an AI center of excellence that reviews each use case individually.
The company is also expanding the role of AI in appointment management. CarMax is working to add scheduling capabilities for appraisals, browsing visits, and test drives through its AI tools. This expansion aims to streamline the customer journey from initial inquiry to physical visit.
Digital capabilities already support a large portion of CarMax’s sales. In the quarter ended August 31, digital tools supported 81% of retail unit sales. Total net revenues rose 19.5% to $7.9 billion, and comparable-store used unit sales grew 13%. The integration of AI voice agents is part of a broader strategy to enhance these digital touchpoints.
CarMax also leads in AI-driven car search. In February, it became the first U.S. auto retailer to launch an app in the ChatGPT app store. The app puts more than 45,000 vehicles in front of ChatGPT users, allowing shoppers to describe their desired car in plain language. Sellers can receive instant value estimates and access to CarMax’s online offer tool.
Consumer demand for AI in auto retail is growing. A Cox Automotive survey in August found that 63% of consumers plan to use AI for their next vehicle purchase. However, only 22% of AI-using dealers have reported sales and revenue growth from the technology. CarMax’s approach focuses on using AI to support the human sales process rather than replace it entirely.
Source: PYMNTS
