The technique—also known as LQIR (Low-Quality Image Replacement)—loads a tiny blurred image which will function as a placeholder. This visual cue lets your visitors know that there is content in this position (in the form of an image).
Note: This add-on also requires the True Responsive add-on to have any effect.
There are a ton of different blur-up libraries and drop-ins. This one is specifically tailored to ResizeFly and either the lazy loading add-on or the full-responsive add-on.