The Scarlet Letter is rife with characterization. Hawthorne does both kinds of characterizations, direct and indirect, to effectively convey to the reader both the surface and the depth of each character. In fact, the most important characters, Hester, Dimmesdale, Chillingworth and Pearl are consistently compared and contrasted to many different things, both natural and supernatural. This is Hawthorne's way to illustrate them to the maximum in terms of their physical appearance, behaviors, and their particular situations.
Here are some examples.
Hester Prynne, the heroine of the novel, needs to be understood as a martyr and as a victim of a sanctimonious society. For this reason, Hawthorne characterizes her as a beautiful, proud, and strong woman who, compared to her female social peers, exerts an air of superiority. This superiority is not meant to come from her being necessarily prettier or more talented than her peers (which she is), but from the strength of her character. She is fully aware of what she has done, and she knows that she is paying for it. Yet, she will not back down or let Puritans bring her down, which is something they are hungry for.
[S]he took the baby on her arm, and, with a burning blush, and yet a haughty smile, and a glance that would not be abashed, looked around at her townspeople and neighbors.
With this type of characterization, the reader can sense how Hester feels when confronted by the people. She is embarrassed, but not ashamed; she feels threatened but is not scared. She has no problem making eye contact. She is set in her ways. All of these facts came from just a mere characterization based on her behavior toward the villagers.
Another example is Dimmesdale. A man who is dying of guilt from the inside out due to his his secret "sins" with Hester, is revered as a spiritual leader by the villagers. He, however, knows quite well that he is entirely undeserving of this type of admiration. That is what adds on to his suffering. He likes being lionized and revered. He enjoys being thought of as a leader. However, the "Hester conflict" is eating him alive.
For his characterization, Hawthorne paints Dimmesdale as a miserably sick and weak man who once would have been, ironically, considered the catch of the village. Dimmesdale is so revered that people see him as an angel on earth. However, they now believe that his condition is nothing but yet another dimension of his sanctity.
He was a person of very striking aspect, with a white, lofty, and impending brow, large, brown, melancholy eyes, and a mouth which, unless when he forcibly compressed it, was apt to be tremulous, expressing both nervous sensibility and a vast power of self-restraint.
Chillingworth is yet another great example of characterization. Using a creepy and accurately descriptive name as Roger's newly adopted last name, Hawthorne presents us with a scary, chill-causing man who is own the prowl to bring both Hester and Dimmesdale down at all costs.
Upon recognizing Hester on the scaffold in chapter 3, Hawthorne characterizes Chillingworth as a "snake", which is a proper allusion to the danger and deception that he is about to wreak in Dimmesdale's life.
A writhing horror twisted itself across his features, like a snake gliding swiftly over them, and making one little pause, with all its wreathed intervolutions in open sight. His face darkened with some powerful emotion,[...] its expression might have passed for calmness.
Throughout the novel there are plenty more examples of characterization. The way Hawthorne describes the women of the village makes them look common, thick, and nearly vulgar. The way that the other elders are characterized, living lush and obviously non Puritanical lives, while hiding under the guise of religion, makes them out to look hypocritical and cringe-worthy. Pearl is characterized as an "elfin" due to her endless efforts to punish Hester.
Read on and you will find a lot much more.