Kmart has opened its first physical showroom for furniture and homewares, launching the new K Home concept in Melbourne’s Box Hill South as it tries to turn an online-only category into a store format customers can walk through, test and buy from.
The 3,800-square-metre trial site is designed to answer a simple business question: can Kmart sell enough home furniture in person to justify a second store? Wesfarmers says the chain already holds a 12 per cent share of the $35 billion furniture and homewares market, but it has been limited by the space inside a standard Kmart shop, which has made it hard to display larger pieces.
Rob Scott, who spoke at Wesfarmers’ strategy day in Sydney on Wednesday, said the company had been building the furniture range for years but had only sold it online because a regular Kmart store could not properly show the products. That online approach helped grow the category, but the new K Home format is the first time Kmart has put the range into a dedicated physical showroom.
The move matters because it comes as shoppers are spending more time with digital tools and buying habits are shifting online. Scott said Australians are fast adopters of technology and pointed to Bunnings’ Buddy tool, which drew about 50,000 customers a week only weeks after launch. He said Kmart’s own AI tools, including Buddy and Joy, have encouraged shoppers to buy more, even as the retailer keeps expanding its physical footprint.
That mix of expansion and digital reliance is the awkward part of the plan. Wesfarmers is backing a bigger store presence at the same moment retailers are trying to win customers through artificial intelligence, convenience and online discovery. Kmart’s furniture push also nudges it closer to IKEA, and while that raises the stakes, it also sharpens the test: the Box Hill South showroom has to prove people will still come in for sofas, tables and homewares when the internet can do much of the browsing for them.
The answer will not come from the launch itself. Wesfarmers has said a second K Home store is possible only if the trial delivers strong customer traffic, sales growth and a profitable result. If Box Hill South performs, Kmart will have a new way into a huge market it has mostly reached from behind a screen. If it does not, the company will have learned that even a well-known brand cannot assume shoppers will trade digital convenience for floor space alone.
