Creating Value through Customer-Centricity: Service Innovation for SMEs in the Beauty Service Industry

Driven by the growing “beauty value” economy and the release of consumption potential, the beauty service industry in China has experienced a continuous increase in its market size. The market predominantly consists of small-scale individual parlours, presenting a highly fragmented landscape. Yet, these small and medium-sized enterprises (SMEs) struggle with issues derived from limited resources and obsolete management strategies, resulting in decreased customer satisfaction and a high closure rate.
To address these challenges, this study aims to emphasise the value co-creation in beauty service businesses and propose a set of service innovations that enhance customer experience throughout the beauty service process. The qualitative research involves three phases. Firstly, participant observations and semi- structured interviews were conducted to identify key problems throughout the journey. Secondly, a focus group with design experts and stakeholders was organised to generate innovative data-driven solutions, which were subsequently refined through feedback from two beauty service SMEs in the third phase.
The proposed innovative solutions are synthesised and presented in a renewal service blueprint, underscoring three core values across the service stages. The findings provide a deeper understanding of customer-centricity in the beauty service industry and offer valuable guidance for beauty service SMEs to boost competitiveness and sustainability.