Vest-wearing contestant Elijah Holloway ribbed at 55-year-old Martin, who played Steve Owen in the hit BBC soap EastEnders, and suggested that he was a "wooden" actor.
The 18-year-old hopeful from Letchworth Garden City revealed that he works in a department store selling perfume to "rich customers".
"I've got quite a good technique. My technique is to convince the customer they have to buy this product," said Elijah.
Dannii Minogue, 45, asked the contestant: "What are you selling today?"
Let It Shine: 'That's below the belt' Martin Kemp jibed for his 'wooden' EastEnders acting
I know I was in EastEnders for a while but that's below the belt I thought!
The contestant replied: "I'd say Amber, you're looking for a spicy rich fragrance. Gary, you're looking for something floral. Light. Like yourself.
"I'd say Dannii, you're definitely looking for something elegant, quite sophisticated.
"Martin, I'd say you're looking for something wooden… and by wooden I mean mature and elegant."
With the crowd howling with laughter, the shocked panel turned open-mouthed towards the Spandau Ballet judge.
Let It Shine: Martin Kemp was not impressed as the rest of the panel laughed at the 'wooden' remark
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Martin addressed the contestant, saying: "I know I was in EastEnders for a while but that's below the belt I thought!"
However, Elijah failed to impress after the remarks, and the damage had already been done.
One viewer tweeted: "#Letitshine love the show, definitely no to perfume boy pfft wooden! @realmartinkemp and @GaryBarlow had the last laugh."
"Wooden… lol got Martin spot on #letitshine," teased another, before a third posted: "That perfume joke didn't do well for him #LetItShine."