Usability tests usually take place in a special kind of lab that allows recordings of the sessions or observing the participant by team members in the other room. Participant gets a product or a prototype and a series of situations that are created to test the usability and intuitivness of the product.
The participant goes through the situations and the designers with other stakeholders are able to see how is their product actually used and what parts should they work on.
Steps you should go through in a usability testing
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Usability testing with UserUp
Before investing into a new solution, conducting initial tests with your users can ensure your concept is strong enough to bring into later development stages. This testing phase helps to identify the most efficient solutions to bring forward for development and launch.