How Carvana Shifted Customer Experience in the Automotive Industry

How Car Dealerships Can Outpace Carvana

Written By Carol Marshall

In this blog, you will: 

  • See how Carvana has disrupted the automotive industry.
  • Get insight as to where consumers stand when it comes to purchasing a vehicle online.
  • Learn how you can match (and beat!) Carvana’s unique brand of automotive customer experience.

If you haven’t heard of Carvana by now, you aren’t paying attention

Eight years ago, Carvana was born out of the used car retail giant DriveTime. Since then, its angelic imagery, novel vehicle vending machines, and streamlined fully online buying process have (mostly) delighted customers while leaving some in the auto industry laughing nervously. 

Undeniable Disruption

While the traditional car dealership obviously hasn’t disappeared (and isn’t likely to), Carvana’s approach has applied some pressure to the car sales game. Carvana isn’t exactly taking the lion’s share of sales from dealers overall, but their performance is not something to sneeze at. According to this press release from Carvana, in 2020 they saw: 

  • Revenue of $5.587 Billion
  • Total Gross Profit of $793.8 Million
  • Retail Units Sold of 244,111, an increase of 37% Year Over Year

Some might call that a bit of disruption!

Those numbers tell a story, and the underlying theme is that the Carvana (and competitor Vroom) customer experience fills a niche that consumers have been looking for in the automotive industry. Convenience and ease are their shticks — universally sought-after benefits no matter the product or industry. If you also consider the pandemic, the timeframe for online-focused car sales has been expedited. 

According to a study from Kelley Blue Book, a total of 86 percent of consumers polled said they shopped online to save time at the dealership during the pandemic.

This is a luxury car shoppers won’t want to leave behind, pandemic or not. 

Consumers Aren’t Ready To Go Full Carvana

Fortunately for traditional dealers, the majority of car shoppers still prefer to see and drive a vehicle before finalizing their purchase. 

According to Forbes Wheels, consulting firm Deloitte’s 2021 Global Automotive Consumer Study found that 71% of American consumers still want to buy in person, with a Harris Poll similarly observing that 64% aren’t comfortable buying entirely online. 

The convenience versus price tag isn’t convincing consumers en masse to purchase mostly sight unseen. Even though Carvana’s approach starts to introduce Amazon levels of convenience, this doesn’t mean that in-market car shoppers are ready to take a blind plunge. 

3 Ways Dealerships Can Edge Out Carvana’s Customer Experience 

A truly 100% online car buying experience isn’t feasible for brick and mortar dealerships — but that doesn’t mean you can’t do as Carvana does. A hybrid model can help bridge the gap between you and Carvana’s convenience.

With the right changes, you can even outdo them. 

1. Optimize your website.

Since Carvana is fully online, consider ramping up your website’s accessibility and provide more information and resources. Meet the customer where they are, and scoot them closer to a closed deal! We all know the goal is to get showroom traffic and butts in finance office seats, but getting customers comfortable in your digital showroom has tons of value. 

Car buyers can be at any number of points in their personal customer journey. Make specific targeted offers that draw from their browsing behavior, like ActivEngage’s ActivTarget, or provide them the means to get a signature-ready deal with guided retailing from ActivEngage’s Customer Engagement Experts through our managed messaging platform

2. Overnight test drives & delivery.

For those that do want the full Carvana experience, offer as close to it as possible! If you can be both the traditional experience PLUS what Carvana can offer, then you already inherently have more value. 

Customers don’t like to feel pressured, and sometimes a chaperoned test drive might add to that. Consider allowing the customer to test drive for 24 hours to actually utilize it in their day-to-day lives (grocery shopping, picking up the kids) to get a real feel for the vehicle. This can be a low-pressure offering similar to Carvana’s return period to see that the customer likes their vehicle in context.

3. Highlight your fixed-ops.

For all its convenience, Carvana is sorely lacking in one critical area: vehicle servicing. While they offer service warranties, they lack physical service bays: an incredibly valuable resource for your customers and a place for you to build trust and value for retention

With ActivEngage’s managed messaging solutions, we can offer what might be the closest option to a Carvana-esque experience for service scheduling needs. Super-easy integrations with service scheduling software like XTIME and CDKEdge allow inbound service customers to set appointments quickly and easily — all via live chat! 

Get Closer to the Carvana Customer Experience with ActivEngage

ActivEngage is so much more than live chat! Along with our award-winning, industry-leading managed messaging, ActivEngage offers a variety of services for dealerships to provide value to their customers before they ever enter the showroom.

In addition to the services previously mentioned, we also offer: 

Ready to take your customer experience to the next level? Upgrade your digital dealership with ActivEngage and get ready to outpace Carvana, Vroom, and all other retailers like them! 


Ready to discover how ActivEngage helps your dealership succeed?