While other answers already noted that the related work section is targeted at an audience much broader than peers in your field of study, I also want to note that the related work section could be essential for peers with "average knowledge in your field" as well.
At times, it happens that a specific problem in field A is best solved via techniques from field B. However, when applying techniques from other fields, perhaps with some modification, it can be difficult to determine whether this application is still a novel result. The related work section can provide the context in order to determine this.
Another purpose of the related work section is an indirect argument for the relevance of your results: if you are studying the same problem as all those other published papers, then a priori it seems your paper would also be relevant if it adds something significant that is not already in those papers. (Of course, all of this depends on context. It is possible some other recent result renders the entire field, including your paper, obsolete)
Finally, a thorough discussion of related work can be valuable on its own. It can give an brief overview of a (sub)field, like a mini-survey. Sometimes, there are papers which I primarily read for this discussion, if there are no good survey articles or PhD theses.