What it means
Search for a service plus a place, or search for one on a phone, and Google usually puts a map at the top with a handful of nearby businesses under it. Those entries come from Google Business Profiles rather than from websites, and they get the attention before anything else on the page does.
Why it matters to a small business
Being in it and being first on the ordinary results are different competitions with different rules, and small businesses spend money on the wrong one all the time. The pack is decided largely by your listing, your reviews and how close you are to the searcher. No amount of work on your website gets you into it if the listing is unclaimed.
The bit people get wrong
It is personalised by where the searcher is standing, so checking it on your own phone in your own shop tells you almost nothing. You will nearly always see yourself. Ask somebody on the other side of town to search the same words.