Background: Kmart is Australia's largest discount department store, owned by Wesfarmers and operating more than 300 stores nationwide. The retailer generated over $11 billion in revenue last financial year, with its private-label brand Anko doing much of the heavy lifting. In fact, Anko accounts for more than 85% of Kmart's total sales and sells over one billion items across Australia each year.

What happened: Now, Kmart wants a bigger piece of the furniture market. It has announced plans to launch a standalone furniture concept store called K Home, which expands its product range to larger household items like mattresses, couches, shelving units, and bookcases.  

What else: While Kmart is positioning K Home as a trial, the move puts it in more direct competition with furniture retailers like IKEA, Amart, and Freedom. The first pilot store will open in Melbourne, and if the concept proves successful, K Home could be rolled out nationally.

What's the key learning?

💡 Inspirational retail is the way that a showroom can inspire shoppers - with the goal to drive significantly higher basket sizes than a traditional shelf-based layout. Rather than simply displaying products on shelves, retailers create fully styled spaces.

💡 IKEA has built an entire business model around the concept. Its showroom layouts guide customers through fully furnished rooms and apartments. And it makes sense - around 58% of Australian furniture shoppers still prefer to see and touch products in-store.

💡 It's no surprise that Kmart wants a slice of the local furniture and homewares market, which worth roughly $19 billion. But, K Home will be competing against established players like IKEA, which has spent decades refining its showroom experience and customer journey.