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In MPOS if you want to use categories, catalogs must be setup and validated.
See the below TechNet article on setting up Catalogs

https://technet.microsoft.com/en-us/library/jj728723.aspx

See the following steps to create a new product and see the product as part of a category in MPOS:

USRT for the Houston store has a catalog called Men’s suits – My MPOS device is for the Houston store

Fashion category hierarchy – Dress Shirts

Create a new item in AX called “8888” this item is added to the Hierarchy Fashion > Menswear > Dress Shirts

Click OK and Edit the new item and add a selling price of 15.99

Find the assortment that the Houston store is using
Retail > Common > Retail channels > Retail stores
Select Houston
Select View assortments
Select Fab-base and click Edit
Add the Fashion category to the assortment
Click Publish

Go to Retail > Periodic > Process Assortments
Run the Retail assortments job
When finished, go to the Houston store and select View channel products
You should see item 8888

Go to the Men’s suits catalog and edit
Select Menswear > Dress Shirts
Click Add under Products

Select Assortment Fab base
Add item 8888

Click Validate catalog

Process the Retail catalog approval workflow

Ctrl+D to Developer workspace
Expand Forms
Type U
Select Tutorial_WorkflowProcessor
Right click and open

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Click Start

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When done publish the Catalog

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Run the Products and Catalog job

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When done Close MPOS if open and re-open.

The item will now show in the category

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