A grouped product in WooCommerce allows you, as a store owner, to add additional products to another product (known as the parent product). So when a customer searches for this product, similar products will be displayed alongside it.
WooCommerce itself suggests these products should be within a ‘range’ of products. For example, if you have a set of t-shirts from within a new collection or range (that were single products rather than variations). You could display each of these as a group.