Consumer preferences are moving towards digital experiences on the online car market, and Carvana And Cargurus Take advantage of artificial technology and intelligence (AI) to improve the purchasing process. The two companies reported solid performance in 2024, using digital tools to optimize customer engagement and refine their commercial models, although everyone was faced with separate challenges along the way.
Carvana’s strategic growth engines and AI’s investment
Carvana recorded An increase of 33% from one year to the other of the retail units sold (416,348) and saw its income increase by 27%, to 13.67 billion dollars. According to the fourth quarter of the company shareholder letterCarvana has three main growth engines: continuously improve its customer offer; increase the awareness, understanding and confidence of the brand; and the increase in the selection of stocks and other advantages of the scale.
“The pieces are all in place,” says the letter. “We are a team that knows how to build. We have love to customers. We have a unique and very scalable business model. And we have already built, acquired and invested in the most complex and costly parts of the infrastructure necessary to be many multiple larger ones than we are today. We have reached the above figures with only 1% market share. We are far from the ceiling of this enormous opportunity. »»
According to the shareholders ‘letter, at the center of Carvana’s continuous success, of the shareholders’ letter in AI and digital transformation. Company has Automatic learning with leverage and advanced technology To rationalize the purchasing experience of car, offering consumers faster and more personalized options.
“Carvana teams use AI to become more effective and improve our offer and we expect it to affect almost all aspects of our business,” adds the letter. “One of our first most developed examples of this is Sebastian, our Customer Service Agent powered by AI. Over the past two years, the percentage of customers who choose to interact only with Sebastian and never ask to interact with a customer defender has almost tripled. »»
Carvana’s purchase process is designed for speed, indicates the letter, 10% of customers ending their purchase in less than 15 minutes while others move at their own pace. This contrasts with traditional dealers, “where transactions generally take hours”.
Cargurus faces challenges while exploiting AI for growth
Meanwhile, Cargurus has grown in income by 2%, 229 million dollars in the fourth quarter, and its market income increased by 15% in the fourth quarter. But the company faces several challenges, as indicated during its Thursday (February 20) in the fourth quarter profit call. This is in particular the potential impact of prices on the automotive market and challenges in the digital large segment, highlighted by a loss of Ebitda of $ 18 million. In addition, the increase in the inventory of new and longer days on the market could put pressure on the segment of used cars, while macroeconomic factors such as interest rates and consumer confidence may have an impact on vehicle purchasing behavior.
“We actively work to rebuild this segment [digital wholesale] Optimization of the unit economy and stimulation of operational efficiency with the ultimate aim of returning the company to profitability ”, CEO Jason Trevisan said analysts when the results were called. “We believe that our success and our continuous investment in growth and innovation strongly position us for 2025.”
Like Carvana, Cargurus is optimistic about the potential IA impact on the customer experience. In 2024, the company launched more than 30,000 personalized cars comparison, offering recommendations based on user search history. This AI -centered approach increased LED conversion by 10% during its test phase, presenting the value of personalized engagement.
“With a 14% increase in direct traffic from one year to the next and 30% of our prospects from our application, it is essential that we are continuously improving experience on our detained channels,” Trevisan said. “To support this, we have introduced multiplatform synchronization, allowing consumers’ activity to pass transparently between the office, the mobile web and the application.”
Carvana and Cargurus are positioned for continuous growth by taking advantage of technological innovations. Carvana focuses on AI, operational efficiency and customer experience, while Cargurus emphasizes an approach based on data and satisfaction of dealers. The two companies recognize the importance of digital transformation and AI for future success and invest in tools to improve consumer experiences and commercial operations.
