Business Advice

Harvey Norman tops list of NSW business complaints, but will it have an impact on the brand?

Dominic Powell /

Australian retail giant Harvey Norman has found itself at the top of the list for customer complaints on New South Wales Fair Trading’s March complaints register.

The business received 43 complaints to NSW’s office of fair trading during March. This is 14 more complaints than what Apple, the business next on the list, received. The complaints were directed across 25 different Harvey Norman stores in NSW, with the most stemming from its Liverpool store.

Harvey Norman has been a regular feature near the top of the Register, receiving 29 complaints in February and 34 in January, where it topped the list again.

Last month the retailer was third on the list of most complained businesses. It was beaten out by Apple and online florist business Bloomex, which garnered a record-beating 47 complaints. At the time, NSW Fair Trading said “no company had come close” to 47 complaints, though Harvey Norman has landed just four complaints away from that number in March.

Harvey Norman boss Gerry Harvey has previously shrugged off poor consumer confidence surveys, claiming in 2015 his business was the “hottest retailer on the market”. Brand analyst Michel Hogan believes it would take a lot more than the register to affect the retailer in the long term, saying complaints require a “multiplier effect” before having any real impact.

“These complaints rarely have any impact on organisations in the short term,” Hogan told SmartCompany.

“There’s a two or three feed complaints economy, and it’s become the de facto solution to go loud and proud on social media if you want to get noticed and drive short-term change.”

“If people want to air their grievances, they’ll take to social media.”

Beware the “multiplier effect”

Hogan says official complaints coming through channels such as Fair Trading or business’ websites are unlikely to impact a brand’s image in any short or long-term way, and highlighted the significance of social media when it comes to damaging a brand.

“In regards to the 43 complaints to Fair Trading, I doubt Harvey Norman is losing any sleep over it, they’ve got a whole internal machinery to deal with customer’s day to day complaints,” she says.

“One complaint to Fair Trading is unlikely to affect the organisation in any way.”

What businesses should be looking out for is the “multiplier effect” that numerous complaints can cause, says Hogan. As people are more likely to discuss bad experiences rather than positive ones, numerous complaints across different channels can cause businesses damage.

“A fundamental shift has occurred in how we deal with complaints. It used to take a lot of complaints to scale into a big deal, now one person complains and it’s a front page story,” Hogan says.

“Social media means the megaphone is much bigger, and when that causes a storm of people complaining and discussing the complaints, that’s when it can have a long-term impact.”

With the imminent arrival of competing retailer Amazon, Australian retailers may need to lift their game, despite Harvey recently claiming that locals have the upper hand in facing the unique logistical challenges of doing business here.

“At Harvey Norman our skills set have been built up over 35 years. You can’t do that over from scratch, it doesn’t happen, as you run into so many different ­obstacles,” he said.

“That’s 100 percent guaranteed they will run into trouble”.

SmartCompany contacted Harvey Norman but did not receive a response prior to publication.

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

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