Hard and Soft Goods in Retail

Hard goods and soft goods – also referred to as hardline and softline – represent the different types of goods a retailer offers. Soft goods include apparel and bedding. Hard goods encompass a broad range of products, including furniture, appliances, tools, electronics, jewelry, and sporting goods.

Key Takeaways

  • Retail business is often segmented into hard goods and soft goods, with different inventory management strategies for each.
  • Hard goods are usually physically solid, including many electronics, furniture items, and appliances.
  • Soft goods, on the other hand, are often pliable and include bedding, clothing, and apparel.

Hard Goods Versus Soft Goods

Hardlines and softlines are the two major classifications of retail inventory. "Softlines" generally refers to goods that are literally soft, such as clothing and bedding. "Hardlines" commonly refers to less personal items, such as appliances or sports equipment. Hardlines are essentially synonymous with consumer durables.

Hard goods are often distinguished in a retailer's inventory by whether they come in boxes. Small appliances typically come in boxes, while most sporting equipment does not. Manufacturers and marketers of hard goods sometimes aim to increase the appeal of carrying their products by minimizing package sizes so that retailers can use less shelf space to stock the products. This is a benefit to the retailer because it allows for carrying more items or having additional space available for displays.

How Retailers Manage Inventory

Large retail discount or department stores carry both hard goods and soft goods in their inventories. The basic idea behind the creation of department stores is to offer consumers the opportunity to take care of virtually all of their shopping needs in one place. Retailers may divide departments according to hardlines and softlines or mix the two together if that appears to provide more convenience for shoppers. For example, a department store might locate bed linens with bedroom furniture.

Small retail stores don't have the ability to carry the same diversity of inventory as department or discount stores. Because of this, their business model is often to cast themselves as specializing in a certain product line or category.

An example of this approach to retailing is a bed and bath store. Small retailers commonly carry a mix of hard goods and soft goods designed to present themselves as complete suppliers for their chosen retail market.

Other Considerations

The explosive growth in online shopping has led to companies like Amazon (AMZN) disrupting the way inventory is managed and fulfilled. Unlike traditional retailers, Amazon relies mainly on a network of its own massive distribution centers to store both hard and soft goods, before leveraging its industry-leading logistics to make the delivery of products to customers a speedy and reliable process.

Article Sources
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  1. Amazon. "Why Amazon warehouses are called fulfillment centers."

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