A New York-based online car-buying company is opening a new hub south of Atlanta.
Vroom (NASDAQ: VRM), a marketplace for buying and selling used cars, is creating a network of last-mile hubs to help with the final leg of delivery.
The hub is located in Fairburn, about 20 miles south of Atlanta and will service a 25-mile radius, which includes more than 7 million people, according to Vroom.
Vroom has sold to Atlanta customers since 2012 and saw a 135% increase in customer car buying and a 305% increase in selling this past year, making it a prime market for the company expansion.
The creation of Vroom’s last-mile hubs coincides with a trend in the industry to offer customers more e-commerce and digital options when purchasing a used car. Carvana (NYSE: CVNA), which was founded in Atlanta, pioneered the industry in 2014. Local dealership giant Asbury Automotive Group Inc. (NYSE: ABG) entered the market late last year.
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In addition to safety concerns during the pandemic, Vroom Chief Logistics Officer Mary Kay Wegner says in-person car buying limits people to only the cars in the lot and takes hours in the dealership.
"It’s a much more empowering and no-pressure-experience to be able to buy online,” Wegner said.
Vroom began building out its last-mile hub network two years ago with pilot programs in Dallas and Orlando, Wegner said. In addition to delivering cars to consumers, the hubs also provide the resources needed to repair and clean the used cars when they come in.
Wegner declined to comment on how many employees are at the local office but says the team is continuing to grow to match the demand in the Atlanta market.
That final leg of the delivery journey is the most important for the customer experience, Wegner said. Before Vroom started opening these hubs, a third-party car delivery service would drop off the vehicle in the customer’s driveway. That model didn’t allow Vroom employees to work with the customers and answer any questions they may have about their purchase.
"It’s a much more personalized concierge-level service and provides a more personalized experience,” Wegner said.
Vroom plans to have 30 last-mile hubs across the country by the end of the year, which will cover more than 50% of their car purchases, Wegner said.
