Order types allow you to control how an order interacts with the other components of Drupal Commerce, and the how the order moves through the system.
Orders have a specific workflow that defines what states and transitions the order can move in. Each order type can have its own workflow.
This means your default order type, which has shippable products, can use the Fulfillment workflow. Meanwhile, your digital goods order type can have the more simplistic Default workflow.
Each order type can control its refresh settings to control how often order draft’s are processed. This controls the order refresh process.
The cart module allows each order type to control the default view used when rendering carts in the cart block or cart form.
You can use a different checkout flow for each order type. In this case you would have a physical order use a multiple step checkout flow that requires shipping information. A digital order could have a more simplified checkout flow that has one step (i.e.: payment.)