Abstract Services have become a key factor for China's department stores to improve competitive advantage under the joint operations. However, how to carry out service innovation is still an unsolved problem for China's department stores. Based on the literature review, this article develops the theoretical framework of the service innovation for of the department stores. Then, using a standardized case study method, including field interviews, secondary data collection, data coding, research and analysis, this article systemically studies the service innovation practices of Beijing Modern Plaza. Finally we get the conclusion of the service innovation theory of China's department stores: (1) The driving forces of service innovation in China's department store mainly include middle and senior managers, customer information and peer benchmarking; (2) The protection or support mechanisms of service innovation primarily consist of corporate strategy and organizational environment; (3) Department stores will follow certain development stages or steps while developing new services, but this process showed a strong informal tendency. However, the process still follows the basic sequence of Philosophy - Content - Process - Regulation - Standard.
Keywords Retail industry, Department store, Services innovation, Innovation process, Case studies
(Source: LI Fei, CHEN Hao, CAO Hongxing, MA Baolong, Management World, 2010, issue 2)