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Functional productsdo not go out of style and can be found at a variety of retail outlets. The term "functional products" refers to objects or goods used regularly. Innovative items have a short life cycle. For a variety of reasons, including luxury and comfort, people buy these types of products.

Functional products have stable and predictable demand,whereas innovative products have volatile and unpredictable demand. Functional products have long life cycles,i.e.,more thantwoyears,whereas innovative productshave a shorter life cycle,fromthreemonths tooneyear. Functional products have low variants per category,i.e.,10–20 per category,while innovative products have high variants,often millions of variants per category.

The stock-out rate for functional products is 1% to 2%,whereas innovative products have a 10 % to 40% stock-out rate. Functional products have low-profit margins,while innovative products have high-profit margins. Lead time for functional products issixmonths to 1 year compared to innovative products, whichhave a lead time of 1 day to 2 weeks.

Examples of functional products are products bought from grocery shops whereas examples of innovative products are personal computers and fashion apparel