This chapter explores digital innovation in the service sector and its impact on customer experiences. It covers the drivers and enablers of digital innovation, emphasizing the role of technologies like AI, data analytics, and mobile apps in transforming interactions. Case studies highlight successful implementations, while challenges such as privacy and change management are discussed. The chapter also explores emerging trends like blockchain, IoT, and VR. A customer-centric approach is emphasized, stressing the importance of understanding and meeting customer needs. Practical recommendations are provided for organizations to embark on their digital innovation journey, including strategic planning, talent acquisition, and fostering an innovative culture. Overall, the chapter offers a roadmap for businesses to leverage digital technologies and revolutionize customer experiences in today's digital era.
TopThe process of integrating digital technology and strategies to improve and revolutionise the delivery of services is known as “digital transformation” in the service industry (S. Park & Kim, 2022). It entails utilising recent technological developments to enhance operational effectiveness, customer experience, and overall business success (Jovanović & Milosavljević, 2022). Examples include artificial intelligence, cloud computing, data analytics, and automation. Digital transformation in the service sector has had a substantial impact on a number of sectors, including banking, healthcare, retail, hospitality, and transportation. Organisations are implementing digital platforms and technologies to optimise resource usage, streamline operations, and boost productivity. For instance, users can conduct transactions conveniently through internet banking services at any time, from anywhere, negating the need for physical branches and tedious paperwork (Suh & Ahn, 2022).
In addition, digital transformation enables service providers to tailor and personalise their products to satisfy particular client requirements (Mehraj et al., 2023). Organisations can give personalised suggestions, targeted marketing campaigns, and improved customer assistance with the aid of advanced data analytics and customer relationship management systems. By automating repetitive operations, lowering human error rates, and facilitating quicker service delivery, automation plays a significant role in digital transformation. Virtual assistants and chatbots are being utilised more frequently to answer questions quickly and offer immediate customer service (Higgins-Desbiolles et al., 2022). The service industry benefits from innovation as a result of digital transformation. Companies are utilising new technologies to develop new service offerings, such as ride-sharing platforms in transportation, online marketplaces in retail, and telemedicine in the healthcare sector. These improvements not only increase client comfort and accessibility, but they also open up new commercial prospects (Basheer et al., 2023).
Overall, the delivery, consumption, and experience of services are being transformed through digital transformation in the service industry. It has enormous potential for businesses to increase productivity, boost customer satisfaction, and maintain competitiveness in the ever-changing digital market. To succeed in the quickly evolving business climate of today, service providers must embrace digital transformation.