One's horizons are restricted, often by what one can see in line of site and even more by how far one can easily travel. The advent of the rail and consequently the motor car has greatly enlarged a human's horizon and this of course was greatly increased with the airplane and now the intercontinental airliners that are currently carrying millions of people all over the world on a daily basis.
Commerce was similarly restricted. When farmers depended on horses and oxen to plough their fields and carry their produce to market they were automatically limited as to range. There used to be massive competition to see who could bring their produce from the Far East to the European and American markets when intercontinental shipping was sail driven.
Commercial horizons have similarly been freed with the Internet and ever evolving electronic commerce where someone with a decent internet connection can be situated in a small town in Eastern Europe and yet be in immediate contact and commercially active with the entire world.
Internet Banking and trucks, ships and airfreight, combined with logistics companies mean that our guy in Northern Romania, for example, can be actively selling and delivering goods into the middle of the United States within an acceptable time frame of 2 or 3 days, provided the value of the items, combined with delivery costs still keep him competitive.
But the search engines are now giving a lot of weight to one's local positioning. The idea being that it is very hard for a business that is in existence serving a local community to have a web presence at all. For the corner Paint and Hardware store in Idaho Falls and servicing the local community to have to compete with Sears and Roebuck and the big paint manufacturers on the web means he would have to spend thousands of dollars on SEO and will still be out spent.
But he doesn't need to compete with them on a national level. His market is local and he wants to be number 1 for anyone looking for paint in Idaho Falls or neighboring counties and should not need to pay for page ranking in Houston, New York, London or Berlin. Those are not his target markets nor is he likely to be able to sell them anything even if he has what they are looking for as the logistics and delivery costs would probably put him out of reach.
It is similar with the local deliveries from supermarkets. They are servicing their local areas, picking and delivering orders in a logistically viable delivery area.
But the search engines are happy to allow one to register one's business as a local one and when customers whose IRP addresses place them within the target are search for one of your keywords they can automatically see your website and read reviews of what you have, what products you sell and customer testimonials.
Local optimization is a growing and important trend in SEO and one that should be considered in any campaign.