Business challenge

Shopper engagement increases at Dillard’s stores and online during the holidays and during clearance events, but the unpredictable cost of accommodating these spikes in transaction volumes meant the retailer needed to better balance IT costs with customer service.

Transformation

Dillard’s unlocked greater agility by adopting the new IBM Tailored Fit Pricing model for its IBM z14™ environment, enabling it to dynamically flex IT resources while keeping costs predictable.

Results

50%

extra server capacity available on-demand enables excellent customer experiences

Predictable and balanced pricing

helps manage IT costs

Inspires

customer loyalty through more consistent shopping experiences

Business challenge story

Building quality customer experiences

How can retail organizations manage the sudden increase in demand on their IT infrastructure to accommodate large surges in traffic both in-store and online? Unless they provide consistent, seamless buying experiences to customers, they can send shoppers looking elsewhere. 

Terry Glover, Director of Infrastructure at Dillard’s, a fashion chain and online retailer, explains: “As our business drivers changed, we reviewed our IT infrastructure to ensure we were prepared for the unpredictable spikes in demand that would come in a more dynamic sales environment.”

Previously, Dillard’s would estimate sales volumes based upon historical data and trends. This would suggest what IT resources should be available. Due to the unpredictable nature of ecommerce and in-store shoppers, the outcome was typically the over- or under-provisioning of resources. Over-provisioning meant wasted resources and increased costs, while under-provisioning left the organization at risk of not being able to service customers to the high standards with which they had become accustomed.

“Our priority is always the customer experience,” says Terry Glover. “In the past, guaranteeing service continuity during peak demand periods was unpredictable, and it was too costly to load-test our systems as often as we wanted. We began looking for a different approach.”   

With Tailored Fit Pricing, we don’t have to worry about predicting demand any more. Instead, we can leave on capacity—and pay only for what we use.

Terry Glover, Director of Infrastructure, Dillard’s

Transformation Story

Discovering perfect-fit pricing

Dillard’s became an early adopter of IBM’s new consumption-based software pricing model for IBM Z: Tailored Fit Pricing. The retailer is now billed on the basis of million service units (MSU) consumption rather than peak four-hour rolling average. Rather than being concerned about turning on capacity in advance, Dillard’s consumes resources on-demand with completely predictable pricing.

“When we explained our challenge to IBM, they listened,” recalls Terry Glover. “IBM Z is the engine that powers our backend enterprise sales processes. With Tailored Fit Pricing, we don’t have to worry about predicting demand any more. Instead, we can leave capacity on—and pay only for what we use.”

Dillard’s also took the opportunity to upgrade its IBM Z environment, deploying the latest-generation IBM z14 servers to increase performance.

Results story

A predictable pricing model

“With Tailored Fit Pricing, we can take full advantage of our IBM Z capacity,” says Terry Glover. “Surges in demand are now an opportunity rather than a challenge. By providing stable and consistent IT services, we ensure that shoppers get the same great service no matter where or when they buy from us.”

Dillard’s can now bring shoppers into stores and onto its ecommerce site with the confidence it can scale IT resources predictably and cost-effectively to meet demand. Even in busy sales periods, the retailer can deliver consistent experiences to customers.

Terry Glover concludes: “With IBM z14 and Tailored Fit Pricing, we’ve gained a future-proof platform ready to support our 291 stores and ecommerce site. Now, rather than worrying about balancing customer experience with IT costs, we can focus on innovating and using new technology to its full potential.” 

About Dillard’s

Founded in 1938 in Nashville, Arkansas, Dillard’s, Inc. ranks among the nation’s largest fashion retailers with annual sales exceeding $6.3 billion. The company focuses on delivering style, service and value to its shoppers by offering compelling apparel, cosmetics and home selections complemented by exceptional customer care. Dillard’s stores offer a broad selection of merchandise and feature products from both national and exclusive brand sources. The company operates 265 Dillard’s locations and 26 clearance centers spanning 29 states plus an online store at www.dillards.com.

Solution components

Take the next step

To learn more about Tailored Fit Pricing, please contact your IBM representative or IBM Business Partner, or visit the following website: https://www.ibm.com/it-infrastructure/z/software/pricing-tailored-fit

To learn more about IBM z14, please contact your IBM representative or IBM Business Partner, or visit the following website: ibm.com/it-infrastructure/z/hardware

View more client stories or learn more about IBM Systems Hardware.