What is a "skin shard"?

I recently received a "skin shard" when opening my free chest in League of Legends.

I thought it gave me a free skin, but that appears not to be the case. What is a "skin shard" in league of legends and what is it good for?

They are part of a new system Riot is implementing. They can be combined via Hextech Crafting to permanently unlock skins. Champion shards are used for unlocking champions and skin shards for skins. If you have a skin shard, you can either reroll it with 2 other skin shards (can be different skin shards) or skin permanents to get another skin permanent (guaranteed to be a non-dup of one you own) or you can upgrade it with essence (price may vary between skins, depending on rp price) to a skin permanent. The same applies to champion shards. You can also use a skin shard to temporarily unlock the skin. It will last 7 days.