Kmart is opening a new type of standalone homewares store as it delves deeper into the furniture and homewares space.
The discount retailer has become a key player in the $19 billion sector, with the new style of store set to further solidify its place among rivals like IKEA and Freedom.
The new concept store, called ‘K Home’, is slated to open in Box Hill in Melbourne in the coming weeks. The new-look store has noticeably dropped Kmart’s familiar red and blue branding, and instead sports an orange colour scheme and is a fraction of the size of a full-size Kmart.
QUT professor of consumer behaviour and retail marketing, Gary Mortimer, told Yahoo Finance it was a “really smart move” from the Wesfarmers-owned retailer.
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“They’ve obviously looked at one of their categories, homewares and furnishing, that is one of their successes here in Australia, and are extending it into a standalone store,” he said.
“I think it’s good news for consumers because if you love the Kmart home brands products, now you don’t need to go to a full Kmart store.”
Kmart creates its own ‘mini-IKEA’
Mortimer said Kmart was creating its own version of a “mini-IKEA” with the new style of store, which is set to include furniture and storage pieces previously only available online.
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“IKEA is very well known for being on-trend, fashionable and generally low prices, where you’re going to get that, but at a smaller level with Kmart, as I would hope to see them roll these K Home stores out,” he said.
Kmart has already “stamped their credentials” on the furniture and homeware space with its own brand Anko, with items frequently trending on social media.
Anko accounts for more than 85 per cent of Kmart’s sales, with more than one billion items sold across Australia each year.
Homewares a ‘major growth category’ in Australia
The Australian furniture and homewares market is currently worth about $19 billion.
Harvey Norman currently leads the market with a 10.8 per cent market share, followed by IKEA with 5.8 per cent, and Amart and Freedom at 4.8 per cent.
That’s according to a pitch deck for Home Furniture Group Holdings, the group behind Amart and Freedom, which is preparing for an initial public offering and records nearly $1 billion in sales.
“We know that home furnishings here in Australia is one of the major growth categories that we’re seeing, that even despite this cost-of-living crisis, people still want their homes to look nice, and if I can do that on a budget, that’s a win-win,” Mortimer said.
