It just means “that” like in “that person” (người ấy), “that man” (ông ấy), “that day” (hôm ấy) … used more in the northern Vietnam
“Đó” is actually an similar word to “ấy”, more popular in the south, like “ông đó”, “hôm đó” instead
In colloquial dialog, southern Vietnamese tend to omit the word “ấy” or “đó” by adding a “asking” tone to the noun it modifies, for few of the heavily used cases:
Ông đó (that man) → ổng
bà đó (that lady) → bả
cô đó (that young lady) → cổ
hôm đó (that day) → hổm