Favicon stands for favorite icon, is also known as a shortcut icon, website icon, tab icon or bookmark icon. The favicon is an icon adjacent to a URL displayed in a browser’s address bar or subsequent to the site name in a bookmark list. When a visitor adds a website to his bookmarks list, the favicon is appeared before the website link.
Favicon is just an small icon makes your website more memorable and professional. Usually famous websites are known by their Favicon. Your favicon is like a trademark. People associate it with your "brand". If you're working to build brand name recognition, it is a mandatory, It helps its users to easily distinguish your site when it's opened on crowded browser.