Earlier:- Before we introduced hierarchy functionality with the new Item Categories feature, the Product Group feature was used to design a one-level hierarchy by making a strong coupling between an item category (the parent) and product groups (the children). With this functionality, only a one-level hierarchy can be maintained.
Now:- New Item Categories feature provides multi-level hierarchy functionality and thereby does the same and more than the Product Group feature.
Now Microsoft has introduced a Subcategory in the Item Category. i.e., in Item Category, there is Parent Category we can add Item Category. For the parent category, the Highlighted field will be empty and for subcategories, we can select the parent category.
On the List Page, the Parent category is highlighted in bold.
Item Category Card Page:-
Attributes also we can add as per Item Category.
Attributes for parent category are flowed to subcategory and in the sub category, we can add new attributes if we want.