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T. Eaton Co. Limited

For 130 years, the T. Eaton Co. Limited—or more commonly Eaton’s—operated as one of the most recognizable businesses in Canada. From its humble beginnings in a 24 by 60 feet shop with two windows, Eaton’s grew to control 60 percent of department stores in Canada and transformed the Canadian retail industry. Although innovation is generally associated with manufacturing firms, it can be argued that both process and marketing innovations are key drivers to success in the retail industry. This idea was demonstrated repeatedly throughout Eaton’s company history. During the late 19th century and throughout the majority of the 20th century, Eaton’s continued to revolutionize the Canadian retail landscape with new ideas and business practices. The company’s inability to adapt to a changing business environment during the end of the 20th century led to its drastic decline in market share and eventual bankruptcy. Each of Eaton’s retail innovations can be examined and their effects on the Canadian retail industry can be identified.

In 1869, Timothy Eaton opened the first T. Eaton & Co. store at 178 Yonge Street, Toronto.1 The location was not ideal for a dry goods store and haberdashery, situated away from Toronto’s then fashionable King Street shopping district. In addition, there were doubts about the viability of the business with its cash only policy. This would be one of Timothy Eaton’s first pioneering business ideas and stood in contrast to the standard purchase-on-account policies generally expected by consumers at the time. Eaton’s cash only practice contributed to the business’s success in two ways. Opening two years after confederation, the store benefited from the rapidly growing population of Toronto. This growth was accompanied by an increase in the number of salaried workers in the area. In contrast to seasonal incomes of agricultural workers, these consumers enjoyed a constant income throughout the year. This...