The performance of the retail industry declined in 2015. The retail sales growth decreased by -3.0% compared with that in 2014 [1]. Retail sales, including clothing, footwear, and allied products, declined in both value and volume in October 2015 [2]. Hong Kong is known for its expensive rental charges which have affected the buying power of local consumers. High operation cost pressured the retail business because of the high rental fee and labor cost, which led the high markup price of retail products. Consumers remained cautious in their spending. Domestic spending weakened in 2015 [3].

Tourist arrivals from mainland China contributed to the buoyant tourism industry in Hong Kong. It created multiplier effects and benefitted the retail industry. However, events in China during the latter part of the review period, such as an anticorruption campaign and a new law on the cost of shopping tourists from China, reduced retail spending in Hong Kong [4]. Moreover, more tourists from second- and third-tier cities visited Hong Kong, which recorded a lower average spending per trip compared with those from first-tier cities [3].

Fashion chain stores competed fiercely in Hong Kong. The fashion retail industry in Hong Kong was characterized by intensifying competition from domestic and foreign companies [5]. The foreign fashion chain companies included GAP, H&M, ZARA, and Uniqlo, and the domestic fashion chain companies included Bossini, Giordano, and G2000. More sophisticated and demanding customers had high expectations on their consumer experiences [5]. Fashion chain stores also faced the pressure from the downward trend of retail performance and the weakened domestic or foreign spending power. Ensuring customer satisfaction was a non-debatable way to retain customers and increase competitiveness. Marketing scholars have argued that the cost of gaining a new customer could be as high as five to six times the cost of retaining an existing customer [6]. If fashion retailers cannot effectively cater to the needs and want of customers, they would lose dissatisfied customers to competitors, erode profits, and fail in the fashion business [5].

Understanding consumer complaint behavior (CCB) is an important tool to ensure customer satisfaction. Complaints are strong indicators for fashion chain stores to recognize service failure areas and mend loopholes. A complaint is an opportunity to turn a dissatisfied customer into a loyal one [7,8]. If the problem is identified, more than 13,100 practitioners in Hong Kong will benefit.

Hong Kong retailing overview

In September 2015, 65,550 practitioners in the retail industry had “food, alcoholic drinks, and tobacco”; “supermarket”; “fuel”; “clothing, footwear, and allied products”; “consumer durable goods”; “jewelry, watches, and clocks”; and other consumer goods [1]. The fashion industry (wearable apparel) involved more than 19% of its market share in the retail industry [1].

Hong Kong has become a renowned shoppers’ paradise over the past decade [9]. The emergence of a shopping paradise brought Hong Kong a staggering source of revenue [9]. The retail trade sector had the largest share with 24.3% of the GDP in October 2015 [1].

To enhance the protection of consumers, the Trade Descriptions (Unfair Trade Practices) Ordinance 2012 was implemented on 19 July 2013. The ordinance prohibits specific unfair trade practices used by traders against consumers, which includes false trade descriptions of service, misleading omission, and acceptance of the wrong amount of payment [10]. The ordinance increased the number of complaints in the retail industry. A total of 29,547 complaints were received by the Hong Kong Consumer Council from 2014 to 2015. Clothing and apparel were one of the top ten consumer complaints in the industry [11].

Even though, the total number of complaint cases of the “clothing and apparel” industry decreased by 11% [11], clothing and apparel remain on the top ten consumer complaints in the industry [11]. Does the decrease in the number of complaints imply that the overall service quality of fashion chain stores has improved?

Under the fierce competition, which includes13, 100 practitioners in the fashion industry [1], maintaining good reputation and positive word-of-mouth in the industry is essential to increase competitiveness. Therefore, this study can help industry practitioners in identifying the reasons for complaint and consumer behavior, which helps in improving complaint handling and service recovery to retain customer loyalty.

Study rationale

The customer-centric marketing philosophy was an important drive for fashion chain stores that seek to establish long-term business relationships with profitable customers [12-14]. To recognize customer satisfaction, customer feedback is important for the fashion retail industry. Complaining is one way of obtaining feedback, which is an effective source of information to improve satisfaction [15]. Learning about the customers’ complaint behavior has helped companies serve customers satisfactorily and prevented unfavorable service experience [16].

The present study aimed to understand the factors that influence CCB and identified complaint behavior based on a conceptual model. Fashion chain stores also helped in lowering the number of dissatisfied consumers based on this study. Moreover, fashion chain stores improved the level of their service quality to enhance customer loyalty for re-purchase, gain positive word of mouth, maintain a good reputation among competitors, and generate profit.

Therefore, the research is under the following objectives:

1) To examine customers’ perception toward complaints at retail chain stores,

2) To investigate the customers’ complaint behavior at retail chain stores, and

3) To make recommendations to retailing chain stores’ management on devising policies to improve complaint handling and service recovery.

This study used a qualitative approach to investigate customer behavior. Consumers who had complaints in the retail industry were invited for an in-depth interview. Thus, the retail industry improved the service quality based on the findings of this study.

Benefits incurred by customer complaints

CCB refers to an action taken by an individual that involves negative communication regarding a product or service [17]. It is any action that is triggered by perceived dissatisfaction with a purchase experience [16,18].

Many studies examined the benefits obtained from customer complaints. Companies can benefit by preventing customers from switching to competitors [19]. Other studies also provided dissatisfied consumers the chance to vent their anger [20]. CCB is crucial for the development of effective service recovery strategies as it encourages organizations to adopt a relevant strategy to manage unresolved customer complaints and gain the confidence of dissatisfied customers. Moreover, CCB can help organizations redesign their service or product to meet customer expectations. Effective complaint handling can also culminate into satisfaction, trust, positive word-of-mouth communication, and future purchase [21]. Researchers agree that service organizations should address, welcome, and encourage complaints from their customers, particularly the dissatisfied ones [17].

Customer satisfaction/dissatisfaction and complaining behavior

The rationale of CCB is linked to customer dissatisfaction. Previous studies confirmed that dissatisfaction is the main reason for complaints [22]. This view is rooted in expectancy disconfirmation theory [23], which suggests that dissatisfaction results from a discrepancy between customer expectation and perceived product/service performance. Given that consumer expectation affects consumer’s evaluation of their purchase experiences [24], consumers become dissatisfied when their expectations are not met by the performance of a product or service. These consumers become upset and disappointed, thereby engaging in complaint behavior. Thus, an overall customer evaluation of a product or service should be conducted based on buying experiences [23].

Several studies have investigated formal complaint and intention. Fewer formal complaints are made than expected from the expressed levels of dissatisfaction [6]. Several cases have shown that dissatisfied consumers do not complain to retailers, manufacturers, or third parties. Therefore, retailers, manufacturers, and third parties receive complaints or requests for redress from an unrepresentative sample of the total population of consumers who have experienced dissatisfaction; complaint statistics understates the frequency of dissatisfaction [24]. Many dissatisfied consumers participate in various “hidden” or indirect activities, such as boycotting retailers, changing service operators, or engaging in negative word of mouth. Many service operators underestimate the effect of such indirect activities. However, many unhappy customers opt to “do nothing.” By not taking action, a consumer decides to tolerate, rationalize, or forget the dissatisfaction and do nothing [25]. The non-behavioral response should be considered a legitimate form of consumer complaint despite its passive nature [25]. Therefore, such response is justified and necessary in comprehending the process underlying CCB response [25].

Factors influencing consumer complaint behavior

The complaint behavior of consumers is not simply a matter of perceived dissatisfaction with a product or service [26]. Other factors, such as demographic variable and cultural variable, needed to be examined to study consumers’ complaint behavior.

Demographic variables: Several studies indicated that consumer complaint to service failure is linked to demographic variables, such as gender, age, and education [17,24,27]. On the other hand, some researchers suggested that those who complaint end to hold professional jobs, earn a high income, are well educated, and are younger than those who do not complain. Gender may influence consumers’ coping behavior. Some studies suggested that female customer’s are more likely to voice out their dissatisfaction [17,21], and others indicated that men are more likely to engage in face-to-face complaining. Most studies suggested that younger consumers are more likely to complain than older ones [28]. However, some studies have found that middle-aged consumer is associated with complaints [28]. Education is a significant characteristic of complainers [16]. Customers with high education are more likely to complain than less-educated ones [16]. However, Singh [25] suggested that customers with less education had high complaint frequency.

Culture variables: Culture also influences complaint behavior. Customers’ complaint behavior determines the motive to complain. In the Chinese context, a public argument is a face-losing act and damages interpersonal harmony [17]. The four Chinese cultural values of harmony, moderation, face, and reciprocity shaped customers’ attitude toward the behavior. Therefore, Chinese consumers tend to be avoidant and silent when they are dissatisfied. Given that the laws for protecting customers became consolidated and the government body that deals with the unfair treatment of customers became transparent, Chinese customers, such as Hong Kong customers, are likely to complain if they are unsatisfied with the company [17].

Theoretical frameworks for CCB

Hirschman’s [29] theory was concerned on exit and voice for understanding CCB [16]. Hirschman’s theory pertains to situations in which a customer of a business firm becomes dissatisfied with services or products. Hirschman’s [29] theory mentioned that management discovers its failure to provide satisfaction through two feedback mechanisms: exit and voice mechanisms [19] (Table 1).

Table 1: Definition of “Exit” and “Voice”.

Day and Landon [24] proposed a two-level hierarchical classification scheme of CCB. The first level was divided into behavioral (action) and non-behavioral response (no action), whereas the second level distinguishes between private and public actions [30] (Figure 1).

Figure 1: Classification of CCB.

CCB - No action: Although customers experience extreme dissatisfaction with a product or service, they do nothing about it [31]. Organizations need to know about their customers’ likes or dislikes in their services. Organizations cannot gain feedback from their customers on service improvement.

CCB - Private action: Consumers do not bring the issue to the attention of the business. Private actions opt for negative word of mouth to friends and boycott the fashion store. This action will also lead to the decision of switching brands or warning others about the dissatisfying experience. These private actions may not come to the fashion chain stores’ attention, but it harms the sales and profitability of the fashion chain stores [32].

CCB - Public action: Consumers expend significant effort to resolve their complaints. Publicaction relates to seeking redresses, such as a refund, an exchange, or free repairs directly from the retailer [31]. It also means complaining to the retailer, a public consumer protection agency, a voluntary organization, or the media, or taking legal action against the retailer [26].

Previous studies [26,31,33-35] have investigated CCB in different industries, such as electronic retail stores and hotels, but few studies have evaluated CCB in the fashion retail industry.

Others studies were targeted at Westerners, whose complaint behavior may not be the same as those of Asians. The result might not be valid in Asia. Oktay [33] found that different nationalities (i.e., German, Turkish, and Russian) showed the differences in complaint behavior. The present study focused on investigating the complaint behavior of Hong Kong people toward the fashion retail industry. Therefore, the result may be different compared with those of consumers of other nationalities.

Badghish, Stanton, and Hu [35] stated that Filipino and Saudi consumers in Saudi Arabia showed differences in complaint behavior. Investigating the complaint behavior of Hong Kong consumers and their motivations is worthwhile. Therefore, the present research attempts to fill this gap.

A qualitativemethod was used in this study. Qualitative research focused on understanding the important characteristics of typical small samples of data. In-depth interviews were conducted in the current study. The sample size included 20 participants. An in-depth interview obtains rich and extensive information from interviewees. It explores the experience of interviewers and the meaning they make of that experience [36]. This approach revealed and solved unforeseen problems encountered in the industry [37].

Secondary data provided valuable data to this study. Information was collected from academic journals, industry data report, and government publications.

A qualitative in-depth interview approach was adopted in this study to investigate CCB toward fashion chain stores. The interview followed a semi-structured format with open-ended questions. A pilot test was conducted in January 2016. Question setting adopted back-toback translation. The context of the in-depth interview was translated into English. The context of the interview was sent to the interviewees to avoid misunderstanding. An interview consent form was sent in early February 2016.

Sampling method and data collection

Purposive sampling was adopted in the in-depth interview. Purposive sampling refers to the selection of units based on personal judgment rather than randomization. Purposive sampling aims to maximize the depth and richness of data to address the research question. In the in-depth interview, the minimum sample size required to reach saturation and redundancy in grounded theoretical studies is 20 participants [38]. The small sample size ensured that the research was rich of constituencies and in diversity [39]. Interviewers have experienced complaints in the fashion chain stores. This condition would increase the representativeness of the findings. Moreover, interviewers had different characteristics and experiences on complaint behavior. They had different demographic segments, which included age, gender, and education level or culture. Therefore, the data had been enriched by carrying out interviews and performing preliminary analyses.

The informant communicated often with other people. Friends or relatives who were willing to share and articulate useful data would be selected as the interviewees. Information-rich data is important to the findings of this study. Therefore, the respondents must be selected as people who are willing to provide detailed information. Otherwise, findings will have low representativeness and low credibility. The interview was conducted from February to March 2016.

The study followed the theoretical saturation of Strauss and Corbin [40] when no additional findings were presented. The current study interviewed 9 males and 11 females. Table 2 shows the profile of the interviewees.

Table 2: Profile of respondents.

The details of interviewees are shown in Table 2. Out of 20 interviewees, 52% were aged 18 to 25 years old (9 interviewees), 40% (7 interviewees) were aged 26 to 33 years old, and 8% (4 interviewees) were aged 34 to 41 years old. Approximately 45% were male (9 interviewees), and 55% were female (11 interviewees). Majority were degree holders. Approximately80% (16 interviewees) were bachelor degree holders, and 20% (4 interviewees) were master degree holders. Approximately 80% (16 interviewees) had managerial positions in their organizations, and 20% (4 interviewees) had non-managerial positions. Approximately 16% had an income of HKD$8,000 or under (3 interviewees); 47% earn between HKD$8,001 to HKD$14,000 (9 interviewees), and31% earn between HKD$14,001 to HKD$20,000 (6 interviewees); 6% (2 interviewees) earn between HKD$20,001 to HKD$26,000. All interviewees have complained in a fashion chain store.

Hong Kong customers’ perception toward complaints in retail chain stores

Complaints in fashion chain stores: The respondents were subjective when they complained in the fashion chain stores. If they mostly felt discomfort, anger and impatience can lead to dissatisfaction. They chose to complain to express their feelings. Some respondents were objective and analytical. If they perceived that the service or product quality cannot reach their expectation, they complained to express their anger.

Reasons for consumers to raise their complaints in fashion chain stores: The respondents claimed that service and product quality are the major reasons for complaints. Tronvoll [16] identified service process on staffs is important and affect service quality. The most frequent reason from respondents is the service quality of the staff. Service quality focuses on customer service, which includes their attitude, skill in the services, and relevant training, and ignored the needs of and respect toward customers. Moreover, unclear information about the product and refund policy leads to service failure. The service quality of the staff is an important point in a fashion chain store’s business. The inflexible exchange and refund policy is another reason for complaints. The staff does not have good communication with the management. They also misunderstand the exchange policy. Respondents argue with the staff on the exchange and refund policy, which results in dissatisfaction. The middle management insufficiently handles the complaints of customers. They do not have enough training to receive complaints from customers. Therefore, dissatisfaction occurs if managers could not handle complaints properly.

Customers’ complaint responses that are expressed in fashion chain stores

Private action - Face culture in an Asian society: Most customers do not express their complaints to service providers [25,41]. Face culture leads Asian customers to complain less and engage more in private action instead of public action [42]. However, half of the respondents claimed that they would complain to management if they are dissatisfied. In the Chinese context, face culture is crucial, engaging in a public argument is a face-losing act and damages interpersonal harmony [17]. Previous scholars claimed that Asians fear losing face. Asians tend to be avoidant and silent even if they are dissatisfied [17].

Nearly all respondents stated that they have acted privately. Private action implies minimal effort for consumers to complain [31]. Therefore, consumers found private action to be easier. Only two respondents claimed that they would not proceed with any private action because it was not “worth complaining about.” Most of the respondents claimed that they would proceed with private action, such as spreading negative word of mouth to friends and family, boycotting the fashion chain store, and pointing out the problem to staff directly. The respondents demonstrated that they are aggressive regarding the incident by using the internal source to share the experience with friends and family. They shared to discourage friends and family from buying in those fashion chain stores. They alerted family and friends for them to be careful when they shop at fashion chain stores. With the advancements in technology, some respondents claimed that they share their experience with others using external sources, such as sharing their shopping experience in their social media account. Respondents drew support from others by posting their experience in social media platforms, such as Facebook, Instagram, and forums. Private action would harm the sale of the fashion chain store by informing friends about the bad experience. Given that most of the consumers would choose private action, knowledge of private action was more significant to the management than that of public action.

Public action - Written format via e-mail: Half of the respondents choose to act publicly when they feel dissatisfied. Public action includes complaints to the staff or the store manager. Others fill up a complaint form or contact the store personally via email to their official website. Complaints are triggered by perceived dissatisfaction with a purchase experience [16,18]. However, Hong Kong customers choose to express their dissatisfaction in the buying process through public action. Customers seek problem solving and economic incentives. For example, front-line staff in fashion chain stores reject the request to exchange clothes. Thus, customers complain to the management to solve the problem. However, customers take public action because of its usefulness and result oriented. It can create more noise in the community. Some customers think that complaining to the management cannot help them.

Approximately 35% of respondents claimed that their patronage depends on the situation, product value, and their personal preferences. Customers are willing to continue their patronage if a fashion chain store handles the complaint well. By contrast, half of the respondents stated that they would not patronize the same fashion chain store because of lack of trust, confidence, and goodwill, as well as the existence of sufficient alternatives. The fashion industry in Hong Kong includes more than 19% of the market share in the retail industry. Therefore, customer loyalty is difficult to maintain because of high competition. To retain the customers, the management must understand the needs and wants of customers by receiving their complaints [16].

Recommendations to management on devising policies to improve complaint handling and service recovery

Providing training: During the interview, the respondents strongly expect training provisions to staff. Given that fashion chain stores provide various products to customers, they need to improve service quality to customers to increase competitiveness [5]. The staff must have a good attitude and manners when they serve customers. Thus, the management should provide more training on consumer service and complaint handling rather than job training. Training provision could help maintain the stores’ reputation and increase their profit. Few respondents claimed that they would not take public action because the complaint process is a waste of time and ineffective. Managers take a long time to handle their complaint. The customer’s do not receive reasonable and immediate feedback. Fashion chain stores should provide training on handling complaints among the managers to enhance customer loyalty.

Conducting questionnaire on service quality: Respondents claimed that service quality is one of the reasons that lead to complaints. Examining the staff is essential to maintain the service quality of fashion chain stores. Management conducted a questionnaire to customers and found that obtaining feedback from consumers is important [16]. After collecting feedback from consumers, the management contributed resources to improve their service and sustain their brand name.

Improving the exchange and refund policy: During the interview, the respondents noticed that the exchange and refund policy was not flexible. The respondents were confused about the policy on exchange and refund. The staff misunderstood the exchange policy, and the fashion chain stores did not present it clearly. Thus, the management clearly listed the restrictions of the exchange and refund policy. It gained a positive word of mouth among the consumers.

This research demonstrated new findings from the interviewees. These findings include demographic and cultural factors that affect their complaint behavior. Moreover, the consumers who took private or public actions were different compared with those of previous studies.

Demographic variables

The research finding showed that various customer demographics influenced customers on whether they will take action or not. Some studies have suggested that female customers are likely to voice their dissatisfaction [17,21]. This research found that male customers in Hong Kong were likely to voice out their dissatisfaction and choose public action. While most studies suggested that younger consumers are more likely to complain [16,28,43], the current findings show that middle-aged consumers in Hong Kong were also associated with complaints [44-50].

Cultural variable

Chinese people tend to be avoidant and silent when they are dissatisfied. This research discovered that Hong Kong consumers take public action rather than silence. A previous study claimed that Asians fear losing face; thus, they do not to take public action. However, Hong Kong consumers are not concerned about losing face but believe that public action is useful and time efficient [51-54].

Private action

Most studies stated that private action includes boycotting and sharing to friends. The current research is significant because of its finding on CCB. Hong Kong consumers also used social media platforms to share their shopping experiences to the public. They prefer to use Facebook and Instagram to vent out their anger. The negative word of mouth spread to the public and created a harmful effect on retail chain stores [55,56].

Public action

Public action is related to seeking redresses, such as a refund, an exchange, or free repairs directly from the retailer [31]. It also means taking legal action against the retailer [26]. This research discovered that consumers complain to the retailer through emails or complaint forms. They are more likely to use a written format to show their dissatisfaction. Many consumers prefer organizations that provide incentives (i.e., coupons or discounts) for those who complain to the store.

Therefore, findings demonstrated that consumers prefer “black and white” to reflect their dissatisfaction. Consumers tend to seriously complain instead of mere face-to-face communication.

Figure 2 shows CCB among consumers in Hong Kong. Consumers took private action, such as sharing the negative word of mouth, boycotting, and pointing out the problem directly. Hong Kong consumers engaged in negative word of mouth with friends, family, or social media platforms. They also pointed out the problem directly to the staff. The public problem includes complaining to the manager or the government, sending complaint letters through complaint forms or official websites, contacting stores, and taking legal action (Figure 2).

Figure 2: Complaint to Hong Kong retail fashion chain stores.

The retail industry is one of the largest industries in Hong Kong. The service providers in this industry should improve and maintain service and product quality to compete with competitors. Moreover, service providers satisfied customer expectation of increasing their customer loyalty for generating profit and building positive word of mouth.

Interview results reflect that the service quality of staff is the main concern of Hong Kong consumers. They know their rights as consumers. They take private and public actions to their express dissatisfaction. They regard public action and do not worry about losing face. They are concerned about effectiveness and time efficiency. Therefore, they prefer to write emails or fill in complaint forms to express their dissatisfaction. Consumers who act privately prefer to tell their friends and family or upload comments in social media platforms, such as Facebook. Consumers who act publicly include reflections, such as opinions about the store or governmental department, to express their anger. Others act by composing emails or taking legal action. To gain a positive reputation and build customer loyalty, fashion chain stores provide professional service quality to meet the expectations of customers and reduce their dissatisfaction. Therefore, staff training and management, examination, and improvements in the strategy and policy are necessary for retail chain stores.

Implications for marketer

This research suggests that service quality is an important concern in the complaint of Hong Kong consumers. Management should pay attention to the quality of service. Given the many alternatives in the clothing retail industry, establishing customer loyalty and protecting their brand name are important. Therefore, examining service quality is essential to the industry.

Most respondents admitted that they take private action than public action when they feel dissatisfied. The management should be more aware of these kinds of customers. Private action would not normally be brought to the attention of a business. Understanding this condition will increase customer attrition. Therefore, service providers should pay more attention to such customers, seek feedback through questionnaires, and engage in conversation with them to gain more information about their shopping experience. Moreover, Hong Kong consumers share their opinion through social media platform, which negatively affects fashion chain stores. Marketers should create a platform to monitor comments and reduce negative word of mouth.

Strong expectation in providing training to staff and management was also found. The staff needs more training on consumer service. Staff training can maintain the service quality of the staff. The management needs training that focuses on complaint handling rather than job training. If the management has a relevant complaint handling process when customers feel dissatisfied, customer loyalty and repurchase intention will increase.

Implication for scholars

This study identified new findings on complaint behavior among Hong Kong consumers. This study discovered new factors on complaints, such as demographic and cultural factors. Previous studies [17,21] have claimed that female customers are more likely to voice out their dissatisfaction than male customers. However, the current study found that male customers also voice out and take public action when they feel dissatisfied. Moreover, Chinese tend to be avoidant and silent when they are dissatisfied. However, the present study found that Hong Kong consumers are more likely to speak up or voice out their anger through various channels, such as complaining to the shop or composing an email to demonstrate their dissatisfaction. Their concern about face culture issues does not apply to Hong Kong consumers. An understanding of CCBamong Hong Kong consumer has been identified. New findings can provide future research direction, particularly in Hong Kong or other Asian cities, as a roadmap for future studies.

Limitations and further research

This study emerged from the related literature, which includes the use of secondary data analysis and in-depth interview. However, this study is limited. Findings are limited because of the sample size. The findings may not be representative of all Hong Kong consumers. Moreover, the research is limited to Hong Kong consumers and maybe different from those of other countries. Therefore, the analysis had these restrictions.

Future study should use different approaches to collect data, such as quantitative and qualitative approaches. The sample size should be enhanced, and different income levels should be included. Thus, the findings would be more representative and accurate. Moreover, future investigation should include the complaint behavior of different Asian countries and compare among Asian cities. Furthermore, future research should investigate the perception of service quality and consumers’ purchase intention or buying behavior. Therefore, retail chain stores would have a better understanding on CCB.