The inventory is a part of your player card that stores your pins, clothes, awards and colors. You can wear the item if you click on it. The items are sorted according to their item ID in each category.
When Club Penguin had its update (Club Penguin Improvement Project), the inventory was put into 1 category instead of 2. Before, there were 2 categories. One stored clothes, one stored pins, backgrounds, and colors. The update created a combined one with sub-categories. Those categories are: