The Lives of Timothy Eaton and Frank W. Woolworth

The Lives of Timothy Eaton and Frank W. Woolworth

The retailing industry is primarily engaged in selling goods and services to the general public through stores. This essay focuses on two prominent North American retail leaders, Timothy Eaton and Frank W. Woolworth, who both came from farming backgrounds but shared an interest in the retail trade and therefore undertook employment positions in small general stores. Consequently, both these men realized the available opportunities in the retailing industry and took advantage of them by opening up their own businesses. Furthermore, after facing many hardships, they both succeeded enormously as they continuously expanded their businesses. However, while Eaton only focused on the Canadian market, Woolworth expanded his business in the United States, England, and even Canada. Although these leaders both achieved immense success through the development of their companies, they had different strategies and strengths, as while Eaton was extremely innovative, Woolworth was better at successfully adapting new ideas.
In 1834, two months after the decease of his father, Timothy Eaton was born. His widowed mother raised him on a farm outside Ballymena, a town in Northern Ireland, along with his eight siblings. After being withdrawn from school in 1847 on the master’s advice, he was apprenticed at the age of thirteen at a general store. Unfortunately, his mother died shortly before he completed this apprenticeship, causing him to become extremely self-reliant. He then briefly worked for another merchant, which allowed him to acquire the necessary funds to follow in the footsteps of his siblings and immigrate to Canada in 1854. It was then that he undertook his first entrepreneurial venture, as he opened his first small general store in Kirkton, Ontario with one of his brothers in 1856. On the other hand, Frank W. Woolworth was born in 1852 in New York. Unlike Eaton, he had the opportunity to attend a commercial college where he studied commerce at the age of sixteen. He also worked as an unpaid assistant at a general store where he gained the necessary experience to convince him that the retail industry was for him. After working on his family’s farm until the age of twenty-one, he decided to decline an offer to work on his uncle’s farm and instead tried to find a job in the retail industry. He obtained a position at a dry goods store in 1873 and later on went to open his very own store in 1878 in Utica, New York. It is evident that both Eaton and Woolworth formed an interest in the retail industry after their experiences in unpaid work.
Both Eaton and Woolworth formed new and innovative ideas and took risks that allowed them to achieve immense success in their respective countries. After realizing the advantages of selling goods for cash, Eaton decided to implement the concept in 1861 when he opened a general store in St Marys, Ontario. Not only did this allow him to offer cheaper prices and therefore increase his sales, it also allowed him to appeal to the working class who received regular cash wages. He was therefore able to successfully tap into the developing market that eventually formed his base for growth. After his partnership with his brother ended in 1868, Eaton moved to Toronto, where he eventually decided to permanently settle. He opened his own wholesale business in Toronto in 1869 and continued his entrepreneurial activities by purchasing a dry goods business that same year on Yonge Street and reinventing it to a point where business flourished. After opening another wholesale house on Scott Street in 1881, Eaton realized that the retail trade offered greater opportunities for gain over the wholesale trade and therefore ended his wholesale business. Moreover, Eaton introduced the novelty of electrical lights and a sprinkler system in his new, three-storey store opened on Yonge Street in the mid-1880s. He also developed aggressive advertising strategies as he distributed his first mail-order catalogue in 1884 and staged concerts in order to attract off-street trade. The mail-order service was immensely significant as it further extended the concept of cash sales and gave Canadians access to merchandise they otherwise could not purchase. As his business underwent continuous expansion, he also introduced new services such as waiting-rooms, restaurants, parcel checks, and free busses from train and boat stations, and new product lines such as sporting goods, musical instruments, and groceries, and eventually transformed his stores into department stores. Moreover, he attracted customers with musical programs, parades, and fashion shows.
Woolworth took a similar but unique approach. While working as a clerk, he helped introduce a revolutionary new concept in retailing known as the five-cent counter. Woolworth saw the commercial potential in this concept and adapted it by displaying goods on counters so that customers could select items themselves. In 1878, he went on to open his first five-cent store in Utica, New York, where skilled clerks were no longer needed and were replaced with low-paid young woman who were a huge cost advantage to his business. He opened his second store in 1879 in Lancaster, Pennsylvania, and furthered this concept by opening several dime stores, which were highly successful. By offering quality at remarkable prices, he was able to attract a large amount of customers. Eaton and Woolworth shared a willingness to venture into constant expansion and innovation, and that is what set them apart from their competitors.
Although Eaton and Woolworth were very successful, they also faced many hardships. It took many failures until they began making millions. In fact, Eaton’s first store in Toronto, which was opened in 1869, was a disaster and closed down almost immediately as there was too much competition. In addition, Eaton endured a lot of hostility from many small retail merchants due to his aggressive sales and advertising methods. Protests, rallies, and political pressure did not stop him as he continued to strive for success, eventually employing over 9000 hands and bringing his business to a level where it was considered a model among establishments of its kind. Similarly, Woolworth’s first five-cent store did not produce the results he expected it to and was closed in three months. It failed in making a large profit due to the fact that it was poorly located and its novelty wore off. Furthermore, three out of five of his first stores failed as there were an insufficient number of customers and he had a lack of buying experience. After World War I, he was also cut off from his European suppliers and faced a crisis, as he could not find immediately find substitutes. However, he was eventually able to discover domestic supply that was cheaper than importing from Europe and therefore able to nurture mass-production in the United States. This holds great significance, as he helped the American industry catch up with their European rivals and become self-sufficient in terms of cheap mass-market goods.
Eaton and Woolworth achieved success using different strategies. After the failures of his first few stores, Woolworth decided to take a different approach. He decided to expand his business through the use of partners. This strategy involved a partner keeping half the profit in exchange for putting up half the money to outfit a new shop. He built partnerships with family members and other businessmen, and then also a number of “friendly rival” companies in order to maximize volume discounts. Additionally, after discovering that Germany had a comparative advantage over the United States in the manufacture of toys and Christmas decorations, he began importing goods from there. He also began importing cheap vases and glass goods from the Austria Kingdom of Bohemia. By doing so, he was able to keep his costs low. Furthermore, he opened his first foreign store in Canada in 1897. After realizing the potential of five and ten stores in Great Britain, he opened a British store chain as well, with the first store opening in 1909. Eaton, on the other hand, kept his locations in Toronto, Canada, only venturing as far as opening another store in Winnipeg in 1905 in order to protect his market in Western Canada. His strategies included locating cheaper sources of supply from Britain and eventually opening his own firm, Wilson and Company, in 1892 in order to acquire the Canadian material necessary for his growing production and reduce costs and prices. In addition, he established the Paint, Oil and Chemical Company in 1897, opened the T. Eaton Drug Company in 1906, and also ran farms in Georgetown and Islington in order to supply the products he needed and diversify his company. Furthermore, he paid close attention to costing and accounting to maximize accountability and avoid bankruptcy.
Timothy Eaton and Frank W. Woolworth are two prominent North American leaders who achieved great success in the retail industry. Woolworth personally identified ways of reducing costs through counter displays of goods and importing cheap goods, built partnerships in order to expand his business, and opened up foreign stores in Canada and Britain. Eaton created aggressive advertising strategies such as mail-order catalogues, introduced novelties in his stores such as electrical lights, and opened up his own firms in order to acquire necessary materials. To conclude, as both these men achieved immense success in the retail industry, they are models upon which business leaders today can learn to improve on and further study in order to achieve success.

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