Services vs products

Goods and services were clearly distinguished in traditional economics in the past. Goods were physical items like groceries and clothes. Services were often intangible or instantaneous exchanges like haircuts or babysitting.

Today, there is no longer such a clear distinction. There is now what we call a goods-services continuum that offers a combination of the two.^[1]

An example of the goods-services continuum is the purchase of a car. While the physical car is a tangible good, the overall experience of owning a car involves a combination of goods and services. These can include services like car maintenance and repairs, roadside assistance, and insurance. In addition, many car manufacturers offer digital services like in-car entertainment systems and remote car monitoring via mobile apps. The user experience of owning a car involves a combination of goods and services that are increasingly intertwined.

Services are only becoming more complex by the day. This signals an increasing need to focus on good service design that improves the experience of everyone involved in the exchange of services.