Ayeni Adebanji Adejuwon William, Sedio Philadelphia
Abstract
This research examines the relationship between consumer confidence and incremental innovation strategies utilised by small-scale skincare entrepreneurs in Lagos, within Nigeria’s informal economy. This study, rooted in the dynamic capabilities framework, examines the responses of informal businesses to changing consumer preferences via service personalization, product rebranding, and packaging refinement. Utilizing qualitative data from 17 semi-structured interviews, which were thematically analyzed using NVivo 13, the research demonstrates that innovation in these contexts is fundamentally based on customer feedback and trust-based relationships, rather than formal research and development. Results demonstrate a reciprocal relationship: trust enhances innovation, which subsequently bolsters consumer confidence. Micro-level innovations, typically low-cost yet high-impact, provide entrepreneurs with adaptive tools to maintain competitiveness in resource-constrained and rapidly evolving markets. The research highlights relational marketing, transparent communication through social media, and agile responsiveness to consumer needs as essential mechanisms for maintaining growth and trust in informal business contexts. The research enhances the entrepreneurial marketing literature in emerging economies by elucidating the roles of trust and adaptability as strategic assets. The text delineates practical implications, including the necessity of structured feedback systems, investment in micro-rebranding, relational marketing training, and the requirement for supportive policy environments that acknowledge and empower informal entrepreneurs. The study concludes by advocating for additional investigation into trust-based innovation cycles within under-explored entrepreneurial ecosystems. It aligns managerial recommendations with sustainable development goals, specifically SDG 8, which encourages inclusive and sustainable economic growth through decent work and innovation.