What are Site Designs?
Modern SharePoint Site Designs are a step above modern themes in SharePoint Online. When a site is provisioned, the site design script is executed. The script can do many things including setting the theme, updating the navigation, even creating columns, lists, and libraries within the site. It is essentially the modern way to apply site templates.
When can you use site designs?
When a new site is provisioned.
Run a site design script on an existing modern site.
What actions can be applied to a site design?
Create a site column, content types.
Create a list or library.
Apply a theme.
Set the site logo.
Trigger a Microsoft Flow.
Install a deployed solution.
Set regional settings.
More information can be found here: https://docs.microsoft.com/en-us/sharepoint/dev/declarative-customization/site-design-overview