WHEN Simpsons-Sears Limited opened one of its plush new stores on the outskirts of Hamilton last November, the downtown Hamilton store of the T. Eaton Co. sent a huge bouquet of white mums with good-luck wishes. Then Eaton’s, having observed business protocol, quietly began to do everything in its power to prevent those good-luck wishes from coming true.
For Hamilton had temporarily become the focal point of the nation’s hottest merchandising battle —the coast-to-coast Eaton’s-Simpson’s struggle for the biggest slice of Canada’s billion-dollar-a-year department-store sales. Eaton’s has had the biggest slice by far, with annual sales probably double those of Simpson’s. But two and a half years ago, after some eighty years during which Simpson’s didn’t seriously challenge Eaton’s lead, the Robert Simpson Company joined forces with the powerful Sears Roebuck Company of the U. S., set up the new Simpsons-Sears and began a program of swift and aggressive mail-order and store expansion with the apparent aim of toppling Eaton’s from its long-held spot on the top of the department-store heap.
Simpson’s is still a long way behind, but it is challenging the Eaton’s colossus as it was never challenged before. The merchandising war is reaching into virtually every Canadian home from the Eskimo tents of Aklavik to the mansions of Westmount, for there are few Canadians indeed who do not at some time or other buy something displayed in Eaton’s or Simpson’s catalogue or store. And with each side striving to outdo the other with service and bargains, most Canadians stand to gain.
The Hamilton battle last November was a miniature of the nationwide struggle.
Hamilton had been an Eaton’s stronghold for many years. Its six-floor downtown store had been the city’s biggest—in size, sales volume and prestige. But the long-standing Eaton’s supremacy in Hamilton was threatened when the dazzling new Simpsons-Sears store opened at the city’s eastern outskirts. Eaton’s on its six floors has 190,000 square feet of selling space; Simpsons-Sears on two floors has 220,000 feet. But perhaps more important for today’s shoppers -Simpsons-Sears is surrounded by a floodlit, seventeen-acre parking lot, large enough to accommodate 1,500 cars—more parking space than on all of Hamilton’s downtown streets.
Eaton’s had been planning for the Simpsons-Sears opening almost as long and as carefully as Simpsons-Sears itself. Early last fall when it became known the new Simpsons-Sears would be open six full days a week, Eaton’s, which had always closed Saturday afternoons, began to stay open all day Saturday. Long before Simpsons-Sears was completed, Eaton’s and other downtown stores started advertising the slogan: “It’s Fun to Shop Downtown— Where the Shops Are Tops.” (Simpsons-Sears is not downtown.) And Eaton’s meanwhile was saving up bargains for a blitz to coincide with the Simpsons-Sears opening in mid-November.
The opening was scheduled for Wednesday, Nov. 17. On the preceding Saturday Eaton’s launched a sale which it called a “Pre-Christmas Shopping Festival” and heralded with four pages of advertising in the Hamilton Spectator. It followed that with two pages of ads each night for the next week. It splurged with its best bargains the night before the Simpsons-Sears opening and hedged them with a “no telephone or mail order” restriction to lure customers downtown from the equally attractive bargains Simpsons-Sears was offering to mark its suburban -opening.
Simpsons-Sears slashed its $334 automatic washer to $288, a $46 saving. Eaton’s offered a $319 automatic washer for $219, a flat $100 cut.
One of Simpsons-Sears’ best bargains was on women’s woolen sweaters normally priced up to $10.95. It cut these to $4.98. Next day Eaton’s featured the same sweaters—for $4.98 too.
Simpsons-Sears had 59-cent nylons on its first day, Eaton’s had 59-cent nylons the next day. Simpsons-Sears, for one day only, sold seven-dollar nylon window curtains for $4.49. Two days later Eaton’s were featuring slightly smaller curtains of the same quality for $3.98.
Simpsons-Sears reduced a line of women’s winter coats, which normally sold for $40 to $50, to $29.90. Eaton’s cut the same coats to $29.88, and when these sold out a similar line was offered for $27.
Hamilton hadn’t had such a week of bargains in years, and each store did a roaring business. But Eaton’s didn’t lure many shoppers from the Simpsons-Sears opening. As has happened everywhere that a new Simpsons-Sears store has opened, crowds began gathering long before the opening ceremony. Fifty police toiled to untangle traffic jams that extended like spokes of a wheel in every direction. When the doors of the store were thrown open a crowd of 7,000 swept in.
“If was havoc,” said L. E. Coffman, former manager of a Sears Roebuck store in Omaha, Nebraska, now manager of the new Simpsons-Sears at Hamilton. “We sold out our main brand of refrigerator the first day—105 of them. And that first day we sold twelve thousand pairs of nylon hose, practically every one we had.”
The shopping crowd saw a store that differs radically inside and out from those of its downtown rivals. It’s framed with ornamental shrubbery and has covered outdoor walkways so that the exterior resembles a luxury hotel. Its two floors sprawl across three acres. There are no conventional boxed-in display windows; instead picture windows dropping almost to ground level open directly to the main floor, in effect turning the store into one vast display window.
Inside, tables of merchandise are arranged for self-selection. There are few conventional store counters. The floors of many departments are covered with $15-a-yard broadloom. To promote what Simpsons-Sears calls “family shopping,” there is a service station and auto-accessory shop attached to the store where pop can browse or get a grease job for the car, and there are TV sets through the store where mother can leave the children while she shops.
Since the Simpsons-Sears opening, Eaton’s has stepped up its advertising and is using more newspaper space than its new competitor. Eaton’s reported that it did its normal brisk Christmas trade. Simpsons-Sears claimed it was bringing new department-store business to Hamilton, making deliveries as far as Fort Erie and Brantford, forty and fifty miles away. A Hamilton newspaper advertising executive commented: “One thing is certain. If Simpsons-Sears is hurting downtown business, it is hurting Eaton’s least of all.”
Hamilton’s bright new Simpsons-Sears store is just one of seven the company has already built across Canada. For the Eaton’s-Simpson’s battle is not a short-term price war but a long-term, multi-million-dollar merchandising struggle geared to the biggest department-store building race of Canada’s history. And prices and new stores are only two of its phases. It is also providing Canadians with a broader selection of goods in lines as divergent as suede windbreakers, geiger counters and automobile insurance—in both mail-order catalogues and retail stores. It is speeding deliveries and providing easier credit-buying terms. It is bringing new industries to Canada. And it is bringing lower prices based on streamlined manufacturing methods rather than here-today-gone-tomorrow price wars.
How do the two sides stack up?
Before Sears Roebuck of the U. S. came in, dramatically changing the picture, it was a simple two-team line-up—the T. Eaton Company versus Robert Simpson Company. Eaton’s had a coast-to-coast chain of more than fifty department stores and a mammoth mail-order business, the biggest in the Commonwealth. Simpson’s was a modest chain of five stores (Toronto, Montreal, London, Halifax and Regina), with a mail-order business reputedly about half that of Eaton’s. Both were big, between them commanding close to three quarters of Canada’s total department-store trade, but Simpson’s was a distant second to Eaton’s.
Then, late in 1952, Simpson’s and Sears Roebuck tossed twenty million dollars each into a kitty to set up Simpsons-Sears, the new company to be half owned by each of its parent companies. The original Robert Simpson Company still operates its five department stores, but the former Simpson’s mail-order business went to Simpsons-Sears in the deal. For its part, Sears Roebuck contributed the world-wide connections and buying power that have made its U. S. chain of seven hundred stores the biggest name in department stores. The newcomer, Simpsons-Sears, in addition to reorganizing Simpson’s mail order with the mass-selling techniques pioneered by Sears Roebuck, also launched the big store-building program which, to begin with, will put about fifteen Sears-type stores in Canadian cities.
So here is the new line-up:
On the one side, the T. Eaton Company with its eighty-five-million-dollar empire of mail-order warehouses and offices, and fifty-eight retail stores.
On the other side, the Robert Simpson Company with its five original stores and its Simpsons-Sears Limited which is operating the mail order and building a new chain of stores of its own. On this side too, but in the background, is the vast, wealth and experience of Sears Roebuck of the U. S.
But Eaton’s, with almost five times as many stores doing business as Simpson’s and Simpsons-Sears combined, is still far in the lead. And there is no doubt Eaton’s cash registers jingle louder and oftener than those of the opposition.
The dollar value of the business Eaton’s does is one of Canada’s most, closely guarded business secrets. Eaton’s is a family-owned company with no public stock, so it does not have to reveal business figures except in confidence to the government. But the Dominion Bureau of Statistics publishes each year the total business by all Canadian department stores—around one billion dollars. Since many stores publicly announce their figures, it is possible by elimination to arrive at a total sales figure that must be Eaton’s. By this means it is estimated that Eaton’s stores and mail-order offices sell between four hundred and fifty million and five hundred million dollars worth of goods a year.
Simpson’s at the time of the Sears Roebuck merger was doing around two hundred millions worth of business a year. With seven new Simpsons-Sears stores opened in 1954 and the mail order offering a much wider range of merchandise, Simpson’s and Simpsons-Sears between them last year probably hit two hundred and fifty millions.
“They are closing the gap,” said Ed Nelson, secretary of the Canadian Retail Federation, “but Eaton’s still has a comfortable lead.”
Edgar Burton, president of both Simpson’s and Simpsons-Sears, has predicted that the chain of new Simpsons-Sears stores will be doing another hundred millions worth of retail business a year within ten years.
The merchandising war got under way in August 1952 within a few days after the Simpson’s and Sears tie-up was announced, five months before it was actually to take effect. And the opening round was over credit terms. Simpson’s Toronto store pulled a surprise out of the Sears Roebuck bag of tricks and on a wide range of items cut the required down payment to a straight ten dollars instead of the customary ten percent. The offer was for August only, it advertised, and applied to many high-priced articles like furniture, cameras, rugs, radios, TV sets, electrical appliances, boats and motors—-two and three-hundred-dollar items on which down payments had been twenty and thirty dollars. This gimmick—"a ten-dollar bill gets you anything in the store”—was a trick Sears Roebuck had been using effectively in the U. S. for years. It also indicated that Sears Roebuck ideas and methods as well as Sears Roebuck dollars were going to invade Canada.
To experienced retailers, this Simpson’s move had two significant implications: 1. It was aimed straight at Eaton’s because it covered only “hard lines” (furniture, appliances etc. ) which were an Eaton’s specialty but in which Simpson’s had not previously been strongly interested; 2. It meant that Simpson’s planned a real fight, because competing in the credit field is costly and hazardous. Credit sales tie up money in partly paid goods and increase the cost of doing business. “When stores start trying to outdo each other on easy-credit terms,” another Toronto merchant said, “it is almost certainly a sign they are squaring off for a long hard fight.”
Eaton’s reply to the Simpson’s offer came the very next day when the company advertised a no-down-payment plan for the duration of its August sale.
Then in January 1953, when the first big Simpsons-Sears catalogue appeared, it was accompanied by another coup in credit selling. The catalogue announced that on a wide range of home appliances priced at two hundred dollars and more a down payment of only ten dollars would be required—instead of the customary ten percent. Appliances priced below two hundred dollars could be bought for only five dollars down.
This time Eaton’s didn’t nibble at the bait. It left this line of credit to Simpson’s and continued to demand ten percent down on all credit purchases.
In addition to competing for customers with easy credit, the two firms are now engaged in a store and warehouse-building race to accommodate the customers they now serve or expect to get. Between them they have spent in the past couple of years or will spend soon about seventy-five million dollars on new buildings.
Simpsons-Sears has the larger program underway. Its first plans two years ago called for fifteen new department stores across Canada—to be built over five years at a cost of fifty millions. Seven of the new stores are already up and doing business in Vancouver, Nanaimo, Peterborough, Sarnia, Hamilton, Moose Jaw and Guelph. Three others, at Port Arthur, Saint John and Ottawa, are being built and at least three more are planned (Winnipeg, Edmonton and Calgary). Five of the seven new stores now operating come in direct competition with Eaton’s in cities where Eaton’s was already firmly established.
The first project announced by Simpsons-Sears was the sprawling, modernistic Sears-type store in Burnaby, B.C. —to serve Vancouver. Like most Simpsons-Sears stores, it is in a suburb with plenty of space around for car parking. The Burnaby store sits on sixteen acres and handles a thousand cars which many consider a big advantage over shopping in traffic-choked downtown Vancouver.
The Burnaby store foundations were just nicely dug when Eaton’s began building a five-story $600,000 parking garage next to its downtown Vancouver store.
Meanwhile the Robert Simpson Company was setting a trend in Toronto for big-city retailing. Instead of storing heavy furniture and appliances in downtown warehouses close to its store, where property costs are extremely high, it built a warehouse on a northern outskirt where land values and taxes are lower. Thus the costly downtown space was released for displaying goods instead of storing them.
Three months after Simpson’s completed this streamlining in the spring of 1954 Eaton’s announced it had awarded a contract for a nine-million dollar storage and service building just northeast of Toronto.
But the majority of building projects are stores, not warehouses, and Simpsons-Sears has pioneered a new department-store trend for Canada —locating stores on suburban wasteland far from downtown areas. Morgan Reid, a young Simpsons-Sears executive who has played an important role in planning the expansion of the new Canadian firm, said: “People are moving into the suburbs, so we are moving out there after them. The automobile has become the biggest factor molding shopping habits and the modern store must make adequate provision for automobile parking.”
Like Cattle in an Elevator
There is more to building in the suburbs than parking however. Property values are lower and, perhaps most important, it permits outward instead of upward expansion.
“Cooping people in an elevator like cattle in a car is a poor way to promote sales,” said one Simpsons-Sears executive. “You’ve locked them in a box where they can’t see the goods you want them to see. Escalators are better. At least they take your purchaser to every floor. But the single-story or two-floor store is best of all. No selling time is lost while you go through the costly business of lifting your customers to shopping areas.”
Selecting a site for such a big investment in a suburb has certain elements of risk. Simpsons-Sears has borrowed the procedure developed by its U. S. parent Sears Roebuck.
The store planners first analyze the population and income characteristics of a city in which they plan to build. (They have now done this for most Canadian cities of more than forty thousand people.) Next they survey other stores already serving such cities, checking their business volume to decide whether Simpsons-Sears will fit into the competitive picture. They examine population-density maps to make certain of the direction of new residential development. They study traffic flow to get a picture of where people are going and they check carefully to discover if any roads are planned in the future that will alter the traffic flow.
On the basis of these studies the planners select two or three possible sites. For each site a traffic-zoned map is prepared, showing the number of people living within five, ten or twenty minutes’ driving time. This usually brings down the selection to a single site. Simpsons-Sears has already used this technique to find eleven store sites and its experts are still looking for more.
But under the agreement by which it was established Simpsons-Sears cannot put stores in Montreal, Toronto, London, Halifax or Regina, the five cities where its Canadian parent, the Robert Simpson Company, already has department stores. Early in 1953, after the new Simpsons-Sears had started its store-building program, the original Simpson’s company announced it was also launching an expansion that would greatly enlarge and modernize its traditionally styled downtown stores. The biggest projects were carried out in Montreal and London. Simpson’s at Montreal was doubled in size at a cost of seven million dollars; the London store was given a million-dollar expansion and face lifting.
Meanwhile Eaton’s has not been sitting still. Late in 1953 when Simpsons-Sears announced it was moving into the Maritimes with a store planned for Saint John, Eaton’s—already well represented throughout the Maritimes with two main stores and four smaller ones—announced it was buying a store in Corner Brook, Nfld. Then it disclosed plans for its first Prince Edward Island store—at Charlottetown. Recently when offering a bond issue for seventeen and a half million dollars Eaton’s announced that twelve millions were earmarked for additional land and buildings.
But for a majority of Canadians, Eaton’s and Simpsons-Sears are not city stores at all, but the familiar names on the fat slick mail-order catalogues that are awaited eagerly twice each year in practically every Canadian rural and small-town home. In many thousands of those homes Canada’s two big mail-order catalogues form the main, often the only link, with the outside business world. They and the Bible are the three books you are sure to find in every farmhouse.
They set the styles for almost half of Canada. They are the inspiration for thousands of children’s letters to Santa Claus (“and please bring daddy the electric fence on page 472 cause the black heifer is getting in the fall wheat”). The women’s lingerie pages torn from catalogues are the only pinups known to thousands of boys who have never heard of Marilyn Monroe.
During the past two years these catalogues have become probably the main battleground in the Eaton’s-Simpson’s rivalry. “The battle of the big books” is grim and closely fought. Mail-order sales represent about half the total business for each side, so the stakes are large. And the risks are high, for once a catalogue is issued the issuer is committed to its prices for months until the next catalogue appears. A price higher than the competitor’s cannot be adjusted as is possible in newspaper advertising.
The battle has three fronts: 1. the content, prices and make-up of the catalogues themselves; 2. speed and economy of catalogue production; 3. their circulation.
Until Sears Roebuck came into the picture and Simpson’s mail-order division switched to Simpsons-Sears, mail-order competition was at most lukewarm. Eaton’s catalogue was larger than Simpson’s, more colorful and contained a much greater variety of items —particularly furniture and appliances.
The first Simpsons-Sears catalogue appeared in January 1953, after several months of feverish preparation by a staff augmented with a number of Sears Roebuck mail - order veterans. And it was immediately obvious that the new company was going to give Eaton’s a run for its money in mail order as well as retail stores.
For the first time Simpson’s, now Simpsons-Sears, had a catalogue thicker and brighter than Eaton’s (556 pages against Eaton’s 552). In millions of Canadian homes it was exciting news. The most apparent change, other than size, was a great increase in furnishings, appliances, power and garden tools, boats, firearms, and plumbing and heating supplies, many of them Sears Roebuck brands from the U. S. The index was increased from two-and-a-half to six pages, hunting guns from eleven to twenty-one. There were twice as many refrigerators and washers and eight power lawn mowers where there used to be one.
When the next catalogues appeared, Eaton’s hit back with a bigger more colorful 676-page book. But Simpsons-Sears had just started. It jumped to 708 pages and now held a 32-page lead. By this winter’s catalogue, Eaton’s was still catching up and Simpsons-Sears’ lead had dropped to eight pages.
Under Sears Roebuck influence Simpsons-Sears has been breaking with the old Canadian catalogue tradition and injecting a good deal of razzle dazzle into its book. The catalogue sparkles with gadgets, gimmicks and guarantees. You can buy a geiger counter with instructions on how to find uranium, or a plumbing system, an astronomer’s telescope, “sizeless” nylons, car insurance, an electric alarm that wakes up Junior the second he begins bed-wetting.
Since children are always losing one mitten, Simpsons-Sears sells mittens in threes. It sews name labels free on most children’s clothes and has snow suits that grow with the child (large hems permit lengthening).
Eaton’s catalogue has some gimmicks of its own, like the free extra layette for mothers who order one layette and then have twins. But Eaton’s has left this field mostly to its rival.
Today’s mail-order customers are more conscious of style and fit than they used to be, so both catalogues bulge with charts and measuring advice. Eaton’s has a half-page chart to order a man’s suit; Simpsons-Sears helps women find out if they are petite, shapely, classic or tall in nylon-stocking sizes. Eaton’s provides a diagram telling women how to wear a brassiere for the utmost “support and flattery.”
Simpsons-Sears was quick to leap on the do-it-yourself band wagon, and in its catalogue there are free instructions on how to upholster furniture, set up your own TV antenna, lay a tile floor, panel your walls, do your own electric wiring, cut your family’s hair, shingle your roof, put up an eavestrough or install a plumbing system. Eaton’s has followed along, but lukewarmly, and there is less in the Eaton’s book for do-it-yourself fans.
But Simpsons-Sears was forced into its most elaborate do-it-yourself service. Its first catalogue offered complete plumbing and heating systems; it caused endless grief because no local plumber would install them. Plumbers are usually dealers too and many would have nothing to do with mail-order systems they themselves didn’t sell. Many of the systems were returned to Simpsons-Sears by purchasers demanding their money back.
Eaton’s mail-order chiefs, usually careful to avoid antagonizing local businessmen, listened with glee as the stories of Simpsons-Sears’ woes leaked through.
But the next year Simpsons-Sears had engineers provide a planning and advisory service to go with plumbing and heating systems. Now the purchaser fills in an order blank and diagram showing the layout of rooms, where he wishes to put his fixtures and the distance to water and sewer connections. He gets back a blueprint with step-by-step instructions on how to install the system. And for a deposit of $132 Simpsons-Sears also will lend him all the plumbing tools he needs to do the job—vise, pipe cutter, thread cutters, plumber’s furnace, melting pot, pouring ladle, blow torch and the rest.
Baby Chicks Are A Nuisance
Eaton’s hasn’t gone into the plumbing business, but it offers a hot-air furnace and heating system and provides a blueprint and instructions so “you can install it yourself and save.”
With the stiffening of competition, the basic mail-order appeals of the two companies have not changed. Simpsons-Sears still makes its main pitch to suburban and small-town residents; Eaton’s catalogue is aimed principally at the laboring man and farmer. So the Eaton’s customer has fifty-six different brands, shapes and colors of men’s long underwear to choose from; Simpsons-Sears has thirty-five. Eaton’s has four pages of men’s work shirts, Simpsons-Sears has two. Eaton’s has four styles of snowshoes for trappers and lumberjacks, Simpsons-Sears has none. Eaton’s still has a full page of harnesses and harness supplies for the farmer but only one saddle for the riding fans; Simpsons-Sears has four fancy saddles for the suburban dude ranch but not a stitch of harness for a work horse.
For the suburban and town home Simpsons-Sears has thirteen refrigerators and home freezers, Eaton’s has six. Although Eaton’s is well ahead in men’s work shirts, it has only two pages of dress and sports shirts against Simpsons-Sears’ six.
Eaton’s wasn’t sorry to see one traditional mail-order service for farm customers copied by Simpsons-Sears. It was the selling by mail of live baby chicks and turkeys, often a nuisance because Eaton’s had to assume responsibility every time cold weather or a railroad delay caused the chicks to die. Eaton’s stuck with this business for years simply as a service to its thousands of farm customers. Simpsons-Sears now offers baby chicks and turkeys with the same live-delivery guarantee.
One important change by Simpsons-Sears was to abolish the old Simpson’s policy of prepaying shipping charges on orders of more than two dollars. Eaton’s still pays shipping costs on all eastern Canada mail-order business, although in western Canada Eaton’s charges extra for shipping some heavy goods. Simpsons-Sears pays shipping costs on lightweight articles like clothing and shoes, but the buyer pays on furniture and appliances.
“We feel this is the most equitable way of doing it,” said J. H. Thomson, manager of Simpsons-Sears catalogue. “Instead of averaging shipping costs and charging everyone the same, each customer pays his own. The nearby customer isn’t subsidizing the customer who lives several hundred miles away.”
But some other merchants see another strategy here. All Eaton’s catalogue prices include an averaged shipping cost. All Simpsons-Sears prices in “hard lines” like furniture and appliances—the lines in which Simpsons-Sears is competing most keenly with Eaton’s—do not include a shipping cost. So the average buyer comparing prices without considering shipping costs gets the impression Simpsons-Sears’ prices are lower.
Eaton’s cheapest refrigerator is $249. Simpsons-Sears has approximately the same machine $9.05 cheaper. But the freight cost on the 256-pound Simpsons-Sears refrigerator to, say, Sault Ste. Marie is $5.35, so at the Soo the Simpsons-Sears refrigerator is only $3.70 cheaper. And at Kenora, twelve hundred freight miles from Toronto, the Eaton’s refrigerator delivered at $249 is cheaper.
Both firms are constantly speeding up and streamlining catalogue production methods and working to expand catalogue circulations, while maintaining strictest secrecy about projected contents and plans.
Production speed is as important to a mail-order catalogue as it is to a newspaper. Just as a newspaper has to keep on top of the ever-changing news, catalogues have to keep up with changing fashions. The catalogue produced in the shortest time will have the latest styles and prices. For many years Eaton’s had a comfortable edge and Simpson’s buyers had to close their deals and accept goods several weeks ahead of Eaton’s buyers to get them in the same catalogue. Simpson’s gradually narrowed the production gap until Simpsons-Sears took over. Now Eaton’s and Simpsons-Sears are running neck and neck with their catalogue deadline dates.
Each firm publishes six catalogues a year—two main ones for winter and summer and four supplementary editions. The small editions are spaced between the two main issues so prices can be reduced on items from the preceding catalogue that are selling slowly, and so that new styles can be tested to determine what treatment they merit in the next big catalogue.
Officials of both sides staunchly declare they wouldn’t think of spying on one another’s catalogue prices ahead of publication, yet both surround their catalogue-production divisions with a security system as tight as the Iron Curtain.
“If the other people got possession of advance proofs of our catalogue they could crucify us, practically put us out of business,” said J. H. Thomson, Simpsons-Sears catalogue manager. “They could beat us on every price and we couldn’t do a thing about it for six months.”
To prevent this, catalogue-production employees are carefully screened, and trained never to discuss their jobs outside. Copy on the way to printers is watched closely so it cannot go astray. And the whole operation is so decentralized in both firms that most individuals have access only to information relating to limited departments. Only a few key men know the whole picture. If a man engaged in catalogue production has to be dismissed, the firing is almost certain to be postponed until the catalogue is off the press so that he cannot retaliate by taking information to “the other people.”
Larger size, more color and costlier paper have boosted catalogue production costs during the past few years of increasing mail-order competition. The catalogues used to cost about a dollar each to turn out and, though the exact figure is secret, it is probably about a dollar and fifty cents today.
Catalogues Flown to Aklavik
Each mail-order house keeps count of how much business it gets from each catalogue, and catalogues that don’t bring in a certain minimum per year (that minimum is top secret too) are cut off. But since the competition stiffened, both firms have become freer with their catalogue circulation.
At the end of the war Eaton’s had a catalogue circulation of about one million and Simpson’s was somewhat less. But last February Simpsons-Sears when floating a bond issue announced its catalogue circulation to be more than one and a half million. Other retailers believe that each firm is now distributing close to two million copies of each edition of its catalogue.
Average catalogue postage is twenty-eight cents, but with the two companies trying to outdo each other circulating into remote areas they are spending many times more than that to get some catalogues to their destination. The big books of both are now sent to Aklavik in the Arctic by air at a cost of almost seven dollars a book.
This is only one expense the companies are assuming to expand mail-order business in the hinterlands. Their COD policy is a costly service in the Arctic, for Indians and Eskimos, flush with money after cashing in a winter’s fur catch, often send in COD orders, then spend their money on something else. The order has to be sent back over the same costly freight route —with Eaton’s or Simpsons-Sears paying shipping costs both ways.
A year ago sixty-five COD mail-order parcels were returned from the tiny Mackenzie River settlement of Fort Good Hope alone. Both Eaton’s and Simpsons-Sears keep blacklists of people from whom COD orders have been returned and don’t accept further orders.
When Simpsons-Sears began doing business there were some indignant accusations that the new company was only an “import house” and a “Yank invasion” of Canadian business. Eaton’s was careful to keep its name from being linked with these back-stabbing accusations, but it launched its own subtle attack against the U. S. connections of its competitor.
Soon after the Sears deal was announced Eaton’s began to boast of its long all-Canadian background in a demonstration of patriotism skilfully designed to contrast with the newly acquired U. S. roots of Simpsons-Sears. Instead of calling itself simply “Eaton’s” in its ads and on its delivery trucks, it suddenly blossomed forth as “Eaton’s of Canada.” Symbolic maps of Canada, and Union Jacks to draw attention to its British-made goods, were spotted through the Eaton’s catalogue. While the Simpsons-Sears catalogue overlooked the fact that many of its “hard line” items were Sears Roebuck brands imported from the U. S., Eaton’s catalogue was playing up Canadian and English-made goods wherever it could, stressing that its woolens come “from Britain’s finest mills” and that its furniture is the product of “finest Canadian craftsmanship.” Even Eaton’s budgie birds are “from Canadian talking strains.”
The same sharply contrasting attitude is shown by the covers of their current winter catalogues. The cover is the most valuable selling spot. Simpsons-Sears’ cover features one of the company’s most attractive women’s coat and hat bargains; Eaton’s devotes its entire cover to selling the Eaton’s name. Under the heading “What’s in a Name?” it presents a brief essay on the Eaton name “. . . 85 years under the management of the Eaton family . . . a distinctively Canadian name.” And it’s signed at the bottom in heavy red type: “Eaton’s of Canada.”
But the biggest Simpsons-Sears worn arising out of its U. S. ties is not the subtle ribbing it gets from “Eaton’s of Canada.” It is tariff trouble laid on by the Canadian government.
Under the original plan Simpson’s and Simpsons-Sears hoped to profit handsomely from the vast volume buying and production of Sears Roebuck in the U. S. Because of the tremendous production contracts it can give, Sears Roebuck gets articles produced exclusively for it at prices well below the U. S. average. Simpsons-Sears gets these same U. S. - made articles, notably in the home appliance line, at the bargain Sears Roebuck price, and it expected as a matter of course to be charged customs duty also on this lower price. But Canadian customs ruled that tariff on these goods entering Canada had to be based on the “going” U. S. price, not the much lower Sears Roebuck invoice price which Simpsons-Sears actually pays. As a result the Canadian firm found itself paying larger tariffs than it had planned, a factor that has prevented Simpsons-Sears from getting the full advantage from Sears Roebuck volume buying.
As a result of these tariff troubles Simpsons-Sears is going all out on a program to get its Sears Roebuck “private brand name” products such as “Coldspot” refrigerators and “Kenmore” washers manufactured in Canada. It aims eventually to make eighty-five percent of Simpsons-Sears goods in Canada. But setting up a “private brand name” manufacturing program isn’t easy for it is a business that manufacturers are often not too keen to undertake. Usually it requires mass-producing a product as good as the manufacturer’s own brand, but selling it to Simpsons-Sears at a cheaper price so that Simpsons-Sears can sell it to the public at a price lower than the manufacturer’s own brand.
To get over this obstacle Eaton’s years ago branched out into the manufacturing business and produces some lines like stoves for itself. Simpsons-Sears to get its “Coldspot” refrigerators produced in Canada, recently had to buy a twenty-percent interest in Kelvinator of Canada at London and get two Simpsons-Sears men on the Kelvinator board of directors, before a deal with Kelvinator was successfully closed. And there are said to be more such Simpsons-Sears deals pending.
In some other cases U. S. manufacturers handling big production contracts for Sears Roebuck are setting up branch plants in Canada to produce the same products for Simpsons-Sears. Most recent example is a Wisconsin producer of water pumps and farm water systems, Sta-Rite Products Inc., which has taken over a plant at Ajax near Toronto.
Meanwhile at Toronto, the birthplace and modern headquarters of both firms, the nation’s biggest individual Eaton’s and Simpson’s stores face each other across narrow Queen Street, eyeing each other’s movements like belligerent eagles on neighboring crags. Like newspapers, they are always striving to scoop each other. The day Marilyn Bell swam across Lake Ontario last September Eaton’s window-display staff worked late and secretly behind drawn curtains setting up a special window to honor the teenager who had suddenly become Toronto’s sweetheart. Then they crossed the street hopefully to see if they had scooped “the other people.” It was a draw. The Simpson’s display staff was just putting the finishing touches on their Marilyn Bell window.
Shopping Is Their Secret
Every shopping day a surging stream of shoppers flows back and forth across the street between the competing stores. What the shoppers do not know is that among them often are Eaton’s or Simpson’s spies furtively crossing the street to spy out the opposition’s newest bargains or merchandising methods. In the trade they are called “comparison shoppers,” but no cloak-and-dagger undercover agent has had greater claim to the title “spy.” Because of their comparison shoppers it has become virtually impossible for one store to have an exclusive bargain more than a few hours—the other store’s comparison shoppers spot it, rush back home with the word and the bargain is quickly duplicated in the second store.
The identity of comparison shoppers is kept secret in their own stores as well as outside, for their duties include spying on their own staff as well as the opposition. A Simpson’s comparison shopper recently bought at Eaton’s a dress she deliberately selected as requiring alteration before it would fit. Then she bought a dress at her own store that required the same amount of alteration. Her own store, Simpson’s, wanted one day longer to make the alteration. Next day the department manager was curtly informed that Eaton’s was giving faster alteration service and that his service must speed up or else.
Both stores refuse to discuss their comparison-shopping staffs or methods, hardly admitting that such staffs even exist. But some other Toronto merchants claim that the two big stores are watching each other as never before, and that both, since the Sears-Simpson’s merger of two-and-a-half years ago, have doubled the number of comparison shoppers.
One thing is certain—the battle of the big stores has only begun. Comparison shoppers are a small part of the immense forces being brought into play in the struggle for a billion-dollar prize—the amount Canadians spend each year in department stores.