How does online retailing typically differ from traditional retailing?

Online retailing typically differs from traditional retailing in that it generally has lower operating costs. This stems from several factors. In an online retail environment, businesses do not need to invest as heavily in physical store locations, which incur significant expenses such as rent, utilities, and maintenance. Instead, online retailers can operate from warehouses or even drop-ship directly from manufacturers, allowing them to reduce overhead costs.

Additionally, online retailers often have the advantage of a broader reach, operating 24/7 without the constraints of store hours, which can lead to higher sales volumes without proportionally increasing costs. Marketing expenses can also be optimized through digital channels, which might be less expensive compared to traditional advertising methods, thereby reducing overall operating costs.

In contrast, options such as higher customer interaction, limited product availability, and increased physical space requirements do not align with the characteristics of online retailing. Online retailing typically sees lower physical space needs and can offer a wider range of products due to its ability to stock inventory in central locations and ship items directly.