When Sie has a capital letter during a sentence, its meaning changes completely, being a pronoun that doesn’t exist exactly in English: the courtesy pronoun.
We use the courtesy form when we don’t know the other person (meaning in a formal relationship) and combine it with Frau/Herr + last name (We don't always do that):
Was möchten Sie, Frau Zimmermann? (What would you like, Mrs. Zimmermann?)
It corresponds to the Spanish usted/ustedes or the French vous. Just like in French, in German there is no difference between singular and plural in the courtesy form, you always talk in plural (see example above).
