The term, navigation refers to the methods shoppers use to move from page to page throughout your store. The main menu, or top navigation of your store is actually a list of category links. The category structure of your catalog is the main way people find products in your catalog. You will also find categories in the breadcrumb trail that runs across the top of most pages, and in the “layered navigation” that appears on the left side of some two- or three-column pages.
For a product to be visible in your store, it must be assigned to at least one category. Each category can have a dedicated landing page with an image, static block, a description, and list of products. You can also create special designs for category pages that become active for a specific period of time such as for a holiday season or promotion.
The main menu of your store displays the selection of categories that are available in your catalog. You can think of the top navigation as different departments in your store. A top-level category serves as landing page for all the subcategories below. The position and presentation of the top navigation might vary by theme, but the way it works is the same.
The first level of categories below the root typically appear as options in the main menu. Below that, you can have as many additional subcategories as needed. The category structure of your catalog can influence how well your site is indexed by search engines. The deeper a category, the less likely it is to be thoroughly indexed. As a general rule, anywhere between one and three levels is considered to be the best. You can set the maximum number of levels that are available in your top navigation in the system configuration.
To set the depth of the top navigation:
Step-1: On the Admin menu, select System -> Configuration.
Step-2: In the panel on the left, under Catalog, select Catalog.
Step-3: Click to expand the Category Top Navigation section.
Step-4: In the Maximal Depth field, enter the number of subcategory levels you want to make available for the top navigation.
Step-5: When complete, click the Save Config button.