Even its competitors give Carvana, the online, used-car seller, high marks for an easy-to-use customer experience — but until now, there was one thing old-fashioned, brick-and-mortar dealerships could deliver that Carvana couldn’t, and that’s instant gratification.
That is, many used-car shoppers still want to drive a car home, the same day they buy it. Meanwhile, Carvana built its whole approach around the absence of traditional dealerships.
Instead of hundreds of local dealership lots, Carvana maintains an inventory of cars at its regional reconditioning centers, where it fixes up used cars for retail delivery. Carvana wasn’t designed to deliver a car the same day the customer ordered it.
That’s starting to change, said Matt Dundas, Carvana senior director of finance, in a recent phone interview.
Carvana, based in Tempe, Ariz., announces today it is launching a program to offer same-day delivery, starting in its home market of Greater Phoenix, with plans to add more markets in its coast-to-coast distribution network.
“It has been a gap in our customer experience, since we started,” he said of same-day delivery, even though customers like the convenience of online ordering. “We’re excited to see where it goes.”
Besides Phoenix, Carvana is also working on same-day delivery in the metro areas around Indianapolis, and Charlotte, N.C., with plans to add more, Dundas said.
What those markets have in common is a critical mass of customers, and enough available used cars and trucks in inventory to enable same-day delivery, all in a concentrated area.
Dundas said that in markets where same-day delivery is offered, the offer will be limited to vehicles that are already in the area, without having to be shipped from distant markets.
If same-day delivery isn’t a priority, Carvana customers can still order a vehicle from a far-away region, and pay for shipping, he said. Within a smaller radius, there’s no charge for shipping. Customers can also opt to pick up a car themselves, at a Carvana delivery center. “We’re all about offering customer choice,” Dundas said.
A big milestone that enables Carvana to carry out even limited same-day delivery is Carvana’s $2.2 billion acquisition in 2022 of 56 vehicle logistics centers belonging to ADESA, the nation’s second-largest wholesale auto auction chain, based in Carmel, Ind.
That real estate gave Carvana the physical room it needed to make available a much bigger volume of cars and trucks in a greater number of regional hubs — in effect, reducing the distance between much of the U.S. population and the nearest Carvana used-car inventory.
In addition, Dundas said Carvana gained a lot of practical experience in “last-mile delivery” since the COVID-19 pandemic.
Dundas said he was a little surprised to learn how much importance many customers attach to same-day delivery, even when there’s no obvious urgency, like customers who have to replace a wrecked car. But customer feedback has made it clear, he said.
“The signal we’ve seen over and over,” Dundas said, “is that customers really are sensitive about getting their cars as quickly as possible.”
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Carvana, The Online Used-Car Company, Adds Same-Day Delivery In Some Markets - Forbes
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