User Experience Design (commonly referred to as UX Design) is the study of how a user interacts with a digital or physical product. This design discipline is all about how to ensure a user has a seamless, positive experience with the product or digital product/interface they are interacting with.
For instance, you've poured yourself a nice hot cup of coffee in a ceramic mug. When you go to pick up your cup of piping hot joe, you find the handle on the mug isn't large enough for the average size hand of the target audience. This mug is sturdy, dark, stout, and contains a beard pun - this design indicates the target audience, is likely men. However, the handle is dainty and appears to only be able to fit a child-sized hand. Frustrating the target user, the lumberjack waits for hit hot mug to cool and sadly sips his cold cup of coffee.
UX Design focuses on the intended user and the market. This means the most important part of the UX process, is the research.
Understanding the target user is incredibly important when it comes to designing a physical or digital product. Skipping this stage often leads to creating a product that doesn't connect with your audience, confuses your audience, doesn't answer an issue your audience has, or is riddled with user frustrations. Many clients of mine have been web or brand re-design clients; they found a previous designer didn't do their due diligence when it comes to their audience, and now they have a brand that doesn't resonate and a website that unfortunately doesn't convert. By investing in UX - you'll save money down the line.
The next important part of this process is the prototyping stage.
This is equally important for digital products/interfaces as it is for physical products.
It's much easier to address an pitfalls in a design or a user frustration when that design is a prototype versus a design that went to development and launched. If you find a pain point or flaw in your product after development, now you not only wasted cost on the time it took to develop/manufacture, but you've created a product that now has a negative impact on your users. This means you not only have to spend more money on pulling the product and redeveloping/remanufacturing, but you also need to do a public relations adjustment as your product now has a negative relationship with your target audience.