The exact answer is “never”. In fact all locations are “relative”. When you give the (absolute) geographycal coordinates of a place, you are giving them relative to a chosen system of coordinates.
But let’s forget the mathematical abstractions. You need to know your absolute location when you have no well known land mark you can easily refer to.
Suppose that your boat is sinking the middle of the Ocean, you need to communicate your location to the rescue team. The only way you can do it is by geographycal coordinates. The same applies to a plane over the Atlantic. If the control tower wants you know where you are, unless you are flying over the Açores, you would give them Lats and Longs. In most other cases it would be enough for you to say : “I am 60 nauticals west of Bahamas”, or “We just left Shannon”.
A relative location is very helpful when you give your friends your street adress. Telling them that you live at n° 157 of 23rd Ave. is a lot better than saying 12°56’12” E. of Greenwich and ….
(In case you might be wandering what your street adress is relative to, n° 157 is relative to the beginning of 23rd Avenue; and 23 is relative (most likely) to some Centre Avenue in the middle of your city).