Soft Shadow is a rendering term referring to the softening of shadows - either from the sun, or from artificial lighting.
Soft Sun Shadows
One way to make soft shadows from the Sun - using SketchUp's shadow renderings is to create several images at different times or dates - and therefore with different shadows and then combining them into an image with softer shadows.
Here is an example of soft shadows made by combining SketchUp images.
(Images rendered with SketchUp and combined using Npr Tools)
This image was created using NprTools - which automatically created the SketchUp renderings and merges the image.
However, the same effect can be achieved by changing the sun time or position and saving the images one at a time.
Soft Artificial Shadows
A similar trick could be used to make soft shadows with a Ray Trace rendering add-on for SketchUp.
You could move the lights and merge images, or some renderers allow you to specify larger surfaces for the lights and automatically sample multiple positions from each surface to create the shadows.
Here is a Ray Trace imace created with a small light source and harsh shadows.
Here is the same mode rendered with a larger light area,
which creates softer shadows.