It's an email list to which you may periodically send updates and news.
On your site there's a box where visitors may add themselves to the list: within your site manager you prepare your email and send it to the whole list.
Newsletter may be installed with antispam protection (a captcha will prevent false subscriptions).
You may ask for more newsletters on your same site.
You may send a site page as your newsletter.
Newsletter is a powerful fidelization tool: every sent email recalls your existence to your customers and informs them on your activity.