I would also argue that Digital Service Design is essentially UX Design practiced correctly, and therefore doesn’t really justify a separate term. However it’s my understanding that inside GDS, UX was seen as being more akin to Product Design i.e. less focus on abstract problem solving and more focus on interface outputs. As such it’s also my understanding that GDS started the trend of calling digitally focussed designers with abstract problem solving skills “Digital Service Designers” and the title has stuck; largely because “service design” is an aspirational term that panders to designers send of self importance.
With the market now being flooded by lots of ex GDS contractors who I would consider to be straight up UX Designers, but who market themselves as digital service designers, it’s only natural for agencies to adopt a more commercially attractive label. Especially when so many people describing themselves as UX Designers, are focussed primarily on interface outputs, and don’t practice those higher level skills.
All this aside, I do think there is some potential value in this term, beyond UX Designers using it to differentiate themselves from Product/UI designers; that is, for situations where a product or service is digitally led and therefore requires a certain amount of digital expertise, but includes a significant proportion of non-digital touch-points that require co-ordination.
For instance, I think it would be reasonable for somebody with a portfolio full of work designing car club experiences, click-and-collect experiences, and airport check-in experiences, where the bulk of the interactions were mediated through an app, but they could also demonstrate expertise marrying this with service staff training, on-site spacial design, and back-of house operational activities, as a digital service designer. If I saw this from a portfolio of somebody that primarily designed stand-alone apps or websites, it would smack of job title inflation, while if I saw this from somebody who had designed service experiences that only used physical or phone based touch-points, the “digital” qualifier would feel superfluous.