The AVG() function is a powerful tool in SQL for summarizing data. It allows you to quickly determine the average value of a numeric column within a table or a subset of rows. This is essential for understanding central tendencies in your data. For instance, in a sales database, you might want to find the average sales amount per month or the average customer order value. The AVG() function simplifies this process, providing a concise summary statistic. It's important to note that AVG() ignores NULL values in the specified column. If all values in the column are NULL, the result will be NULL. This behavior is crucial to understand when dealing with potentially incomplete datasets. Finally, AVG() is often used in conjunction with other aggregate functions like COUNT() or GROUP BY to provide a more comprehensive analysis of your data.