Hello Lydia.
First - I don't recommend it in general but it does work to a degree. It used to work better.
The idea is that if you link to a page dedicated to a subject and cram enough instances of that phrase onto the page (such as in a product list as in your example) that the page will rank for at least longtail versions of those queries.
In the example you sent it likely does work to some degree but that's because they're a fairly strong site. Nonetheless they probably saw their search volume decline as of late as it's pretty thin content. Focus on this type of strategy and you're basically asking for trouble.
If you stick to creating good content people want to link to and work hard to get people to find it and link to it in the first place (pretty necessary) you'll do far better overall. If you want to rank for longtail phrases - build real pages on the subject. Sure you can mention and link to products but provide some value for readers - not just a product list.
And of course ... GOOD LUCK !