Tried to download and install latest iPhone update

I clicked "Download and Install" when prompted to install the most recent iPhone update and I got this message:
There are purchased items on the iPhone that have not been transferred to your iTunes library. You should transfer these items to your iTunes library before updating this iPhone. Are you sure you want to continue?
What do I need to do (specifically) as I don't know what this it talking about.
Thanks

This mean there is an app or some other Store content on your phone that you do not yet have in your iTunes library.
In your iTunes menu bar go to file> devices > transfer purchases to move them to your library before you update the iPhone.

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