CarMax, the largest used vehicle retailer in the United States, generates more than $26.5 billion in annual revenue and has long pushed the boundaries of digital transformation in the automotive industry. A great foundation that was laid prior to the pandemic ensured that the company was able to successfully ride a remarkable digital acceleration that society experienced during that multi-year period. Given new car shortages due to supply chain issues among other factors, this led to remarkable growth for the company. The executive who oversaw the building of this remarkable foundation is the company’s Executive Vice President and Chief Information and Technology Officer Shamim Mohammad. Over the past 12 and a half years, including nearly 11 as CIO and six and a half as CTO, Mohammad has played a pivotal role in evolving CarMax into a digital-first, data-driven company.
“We became a digital-first technology company and the most comprehensive omnichannel retailer in our industry,” he said. “Our customers can buy or sell a car 100% online, 100% in-store or anywhere in between.”
Evolving Leadership and Team Structure
Mohammad’s dual role as CIO and CTO has expanded the breadth and depth of his responsibilities. As CIO, he focused on execution, security and efficiency. He still does, but now as CTO, his role increasingly emphasizes innovation, customer experience and differentiation. “I had to play both roles very well,” he said. “It’s about driving execution effectively and also driving innovation to help the company grow.”
To support this expanded remit, CarMax significantly scaled its digital, engineering and AI talent.
Building a Digital Backbone
A crucial step in becoming a digital-first business was modernizing CarMax’s core technology foundation. The company transitioned much of its technology to cloud-based platforms, enabling speed, agility and scalability. “You need a robust, scalable and
adaptable foundation,” said Mohammad. “We also adopted startup-like digital practices, emphasizing experimentation, rapid iteration and a product mindset.”
This shift enabled CarMax to build digital experiences that simplify car buying and selling for customers while empowering associates with better tools and insights.
Data as a Strategic Asset
Mohammad described data as CarMax’s second most valuable asset after its people. Early on, his team prioritized data governance, quality and accessibility across the organization. “We had great data, but it wasn’t organized in a way we could leverage,” he said. “We established strong governance, ownership and built a robust cloud-based data platform.”
CarMax also invested in master data management, analytics tools and a deep bench of data scientists, engineers and architects. This foundation has proven critical to the company’s success with artificial intelligence.
Institutionalizing AI and Embracing GenAI
CarMax began using AI and machine learning to streamline operations and enhance customer experience. From product recommendation engines to AI-enhanced vehicle imagery, the company has pioneered creative applications of AI. “We created a patented ‘digital sweeper’ to clean the background of car images without altering the [images of the] car itself,” he said. “It’s just one example of how we’re using AI to improve customer experience.”
Mohammad noted that CarMax was also an early adopter of generative AI, using tools like ChatGPT before they became mainstream. One internal tool, Rhodes, simplifies access to company knowledge for associates. Another, Skye, enhances customer experience during vehicle transactions.
Looking Ahead to Agentic AI
Mohammad is especially enthusiastic about Agentic AI, which he sees as the next frontier. These AI agents will automate and optimize specific tasks or workflows across the business. “Agents will operate independently with guardrails, whether assisting a mechanic in the shop or a customer buying a car,” he said. “That’s where I see the most practical value coming from AI.”
Agentic AI has the potential to elevate both customer and employee experiences by simplifying tasks and delivering personalized insights in real time.
Optimizing the Partner Ecosystem
Managing an increasingly complex partner ecosystem is another critical part of Mohammad’s role. He emphasized the importance of investing in strategic relationships with partners who can co-innovate and evolve alongside CarMax. “You have to identify your most strategic partners and engage with their product and engineering teams,” he underscored. “Also, stay close to startups and venture-backed innovators who are pushing boundaries.” He noted that this provides early insights into topic areas such as agentic AI where the company needs to develop a perspective on its potential uses to a company like CarMax. He also noted the importance of flexibility, recommending that companies build architectures that allow them to swap partners in and out based on innovation performance.
The Enduring Power of the Product Operating Model
CarMax was one of the earliest adopters of the product operating model, defining product areas to staff cross-functionally to innovate in the areas defined on a perpetual basis. These days, the model is widely believed to be a better way to align resources with business outcomes. That model remains core to CarMax’s culture and strategy. The product organization has grown in size and strategic influence, with over 70 product teams now driving innovation across retail, supply and platform functions.
Mohammad marveled at the scalability and resilience of the model. “Those foundational principles remain unchanged,” he said. “We just evolved how we organize around retail, supply and shared platforms. The model enables our digital-first strategy.”
Staying the Course
Mohammad attributes much of his success and longevity at CarMax to the company’s culture of collaboration and mission-driven innovation. “It doesn’t feel like I’ve been here 13 years,” he said. “I’m more excited now than when I started because the opportunities ahead are immense.”
He believes that staying with one organization has allowed him to see transformation cycles through, creating long-term value and sustainable innovation. Also, as his responsibilities have grown, the opportunities for his team have grown with it, providing exceptional careers for many team members.
A Nimble Mindset
As he looks to the future, Mohammad remains focused on one core principle: positioning the organization for rapid change.
“That’s what I said nine years ago, and it’s even more true today,” he said. “If you stay nimble and invest in Agentic AI, you’ll be ready for whatever comes next.”
Through his forward leaning leadership and relentless focus on innovation, Shamim Mohammad continues to help CarMax define the future of digital retail in the automotive space.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written three bestselling books, including his latest Getting to Nimble. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
