SEO is often thought to be something that is meant to target a global audience, and this is true in situations where you might be making a universal product. However, when it comes to small businesses the vast majority of them would not be able to gain all that much from a global focus once all has been said and is now out of the way. The reason behind this is that even if they were to find a customer or two in a far flung locale, chances are that they would not be able to send their products over in a cost effective or efficient manner anyway so that would essentially turn into money that the small business would have wasted which could very well have gone into something more fruitful.
Whenever a business asks the question of do I need local SEO, they need to ascertain where their customer base is. If your customer base is local, implementing local SEO can end up becoming a lot more beneficial than might have been the case otherwise. Indeed, many businesses can benefit from adding location specific keywords into their content as this would create hits whenever someone makes a search query with the local information added to it.
If someone wants to buy something while living in a specific city, chances are that they would incorporate the city name into their search query. Otherwise they would risk the chance of having to sift through search results that are not going to be relevant to them to any extent at all and this would be a very understandably frustrating thing for them to have to go through. This is why local SEO is important.