Especially with the advent of smartphones, GPS and online maps, a completely new user behavior has emerged - faster and more eager. Users can search for any information almost instantly and usually want an answer within seconds. It has also changed where users search for queries, and it's no surprise it's often on the go.
Therefore using Google at home or on the way from work will result in completely different queries and very often the services or openning hours are the winners outside of home. This indicates that local SEO is very important especially for the service sector.
For example, a hungry user going from work and looking for a restaurant in Berlin will most likely search "restaurant berlin" and follow the list that shows up.
In addition to the fact that most users today use mobile devices, local SEO is also important from the point of view of the so-called SERP Real Estate (the total space on the search results page that belongs to one entity).