This attack serves as the basis for any feral druid's group DPS.
You do not have to be prowling to use Shred; you just need to be behind your target.
You will also want to have a Rake or Rip applied to your target before using Shred as well, as it will significantly improve damage.
In Cat Form, especially PvE, this is pretty much the best way to start a fight until [Ravage] (Level 54); [Prowl] up behind the mob, Shred for a huge initial damage. This is always a good move when grouping, because if someone else is holding the aggro, shredding from behind is serious damage while in combat (Ravage requires prowling).