What does it do?
Identify lets you immediately learn the properties of a magical item, or know what spells are affecting a creature or object.
It takes a minute to cast, and requires a one-time 100 gp investment for the material component, which the spell does not consume. It can be cast as a Ritual, so you can spend an additional ten minutes to cast it without expending a spell slot. If you’re a wizard or bard, you don’t need to have the spell prepared to cast it as a ritual. If you’re a Forge or Knowledge domain cleric, Identify will be a domain spell, so you’ll always have it prepared.
Other ways to identify items
According to the Dungeon Master’s Guide, characters can identify a magic item by spending a short rest with it in their possession. Potions can be identified simply by tasting them. This makes the utility of the Identify spell a little less obvious.
However, Identify works in eleven minutes (or one minute, at the cost of a spell slot) instead of an hour for a short rest. The spell can also identify things you can’t identify by taking a rest. The spell can reveal the properties of basically anything that has been magically created or has a spell affecting it. For example, it can be used to identify a teleportation circle inscribed on the ground. You can also use Identify to learn which spells are currently affecting a creature or object, if any.
Identify is a thoroughly useful utility spell, especially when cast as a ritual. You could cast Identify on every object you encounter without expending a single spell slot. At least one person in your party should know this spell.