Service Analysis of Fashion Boutique Operations: An Empirical and Analytical Study

Service quality is a critical element for fashion boutique operations. However, owing to limitation of resources, fashion boutiques usually cannot afford to establish a very formal service quality management system. Motivated by the importance of service management for fashion boutiques, this paper examines the respective service quality issues in two related parts: based on the revised retail service quality scale (RSQS) model, the first part conducts a service gap analysis via an empirical survey. It is found that the RSQS model is valid, the respective service gaps exist, and the problem-solving dimension has the largest service gap. Focusing on this most significant problem-solving service gap (PSSG) identified in the empirical analysis, the second part analytically studies the optimal PSSG decision for fashion boutiques and examines the impact of retail competition via a game theoretic analysis. The closed-form analytical findings reveal several insights, such as: 1) for both monopoly and homogeneous duopoly cases, the equilibrium demands depend solely on the profit margin, and the service gap enhancement efficiency and 2) the relative PSSG dependent demand sensitivity is critically important because it affects the equilibrium PSSG significantly.