<![CDATA[The rapid development of digital technology and changing consumer behavior have encouraged retail businesses to strengthen their innovation capabilities to remain competitive. However, many businesses, particularly micro and small enterprises (MSEs), still face challenges in systematically understanding customer needs, resulting in innovations that do not fully address market demands. This community service program aimed to enhance the innovation capacity and competitiveness of retail business actors through Design thinking training as a customercentered innovation approach. The program was implemented using the Participatory Action Learning (PAL) method, which integrates lectures, group discussions, case studies, simulations, hands-on practice, and mentoring. The training materials were structured around the five stages of the Design thinking process: Empathize, Define, Ideate, Prototype, and Test. Through these stages, participants gained practical experience in identifying customer needs, defining problems, generating creative ideas, developing prototypes, and evaluating solutions based on user feedback. The results demonstrated a significant improvement in participants' understanding of Design thinking concepts, as well as their ability to develop customer personas and empathy maps, generate innovative ideas, and design simple prototypes aligned with customer needs. In addition to enhancing individual competencies, the training fostered an innovative mindset, strengthened collaboration among participants, and increased awareness of the importance of customer experience in building competitive advantage. This program contributed to strengthening the innovation capacity of retail business actors while supporting the achievement of the Sustainable Development Goals (SDGs), particularly Goal 8 (Decent Work and Economic Growth) and Goal 9 (Industry, Innovation, and Infrastructure). Continuous mentoring and collaboration among higher education institutions, government agencies, and business actors are recommended to ensure the sustainable implementation of Design thinking in the development of Indonesia's retail industry. ABSTRAK Perkembangan teknologi digital dan perubahan perilaku konsumen telah mendorong pelaku industri ritel untuk meningkatkan kemampuan berinovasi agar tetap kompetitif. Namun, banyak pelaku usaha, khususnya pada sektor usaha mikro dan kecil, masih menghadapi keterbatasan dalam memahami kebutuhan pelanggan secara sistematis sehingga inovasi yang dihasilkan belum sepenuhnya mampu menjawab tuntutan pasar. Kegiatan pengabdian kepada masyarakat ini bertujuan meningkatkan kapasitas inovasi dan daya saing pelaku industri ritel melalui pelatihan Design thinking sebagai pendekatan inovasi yang berorientasi pada pelanggan. Kegiatan dilaksanakan menggunakan metode Participatory Action Learning (PAL) yang memadukan penyampaian materi, diskusi kelompok, studi kasus, simulasi, praktik, dan pendampingan. Materi pelatihan mengacu pada lima tahapan Design thinking, yaitu Empathize, Define, Ideate, Prototype, dan Test, sehingga peserta memperoleh pengalaman dalam mengidentifikasi kebutuhan pelanggan, merumuskan permasalahan, menghasilkan ide kreatif, menyusun prototipe, serta mengevaluasi solusi berdasarkan umpan balik pengguna. Hasil kegiatan menunjukkan adanya peningkatan pemahaman peserta mengenai konsep Design thinking, kemampuan menyusun customer persona dan empathy map, mengembangkan ide inovatif, serta merancang prototipe sederhana yang sesuai dengan kebutuhan pelanggan. Selain meningkatkan kompetensi individu, pelatihan juga mendorong terbentuknya pola pikir inovatif, kolaborasi antarpeserta, dan pemahaman mengenai pentingnya pengalaman pelanggan dalam membangun keunggulan kompetitif. Program ini memberikan kontribusi terhadap penguatan kapasitas inovasi pelaku usaha ritel sekaligus mendukung pencapaian Sustainable Development Goals (SDGs), khususnya Tujuan 8 tentang pekerjaan layak dan pertumbuhan ekonomi serta Tujuan 9 tentang industri, inovasi, dan infrastruktur. Pendampingan berkelanjutan dan kolaborasi antara perguruan tinggi, pemerintah, dan pelaku usaha direkomendasikan untuk memastikan keberlanjutan implementasi Design thinking dalam pengembangan industri ritel di Indonesia.]]>
