This study looks at the topic of innovation in the services with specific focus on retailing. By linking up with the theoretical models for services in general, the work takes into consideration the distinctive characteristics of the innovative processes at the level of retail distribution. Attention is centred around the innovative relational phenomena based on "vertical branding" strategies, in which product brand and retail brand constructs overlap, giving rise to innovative arrangements. Thus two of the main relational dimensions of contemporary retailing are investigated, namely, sales outlet and brand, through which business-customer relationships are realized and consolidated. On the basis of this theoretical perspective, the author proposes a key for interpreting the processes of relational innovation in retailing, quoting the results of a first empirical application of the proposed model in specialized retail.