1977-2014

Thane Calder
5 min readOct 24, 2014

We bid farewell today to one of Canada’s biggest brands, an adieu to one of CloudRaker’s first significant clients.

1977 Jacob’s story began in rural Quebec when Joey Basmaji took over his father’s (Jacob Basmaji) apparel company with a dream to create a Canadian fashion powerhouse. And he did just that. Targeting chic French-Canadian women, the brand found a strong following providing elegant evening wear as well as casual and office couture. As their customers grew, so did they with the addition of Jacob Junior to provide style for new families. At its prime, there wasn’t a shopping mall or main street in Canada that didn’t have a Jacob banner.

The last few years for Jacob have been harrowing; since 2010 they have been under creditor protection. After filing for bankruptcy in May, an injection of capital gave them 5 more months of life, and early this week the fashion retail company drew its last breath.

What brought about the end?

Is it because of the arrival of foreign heavyweights like H&M, Gap, and Zara? Did Canadian women’s tastes for clothing change overnight?

As I write this, most mainstream business newspapers blame “the foreigners” — a common trend since the arrival of Walmart in the early 90s. For years, we’ve seen headlines about the retail giant’s tendency to move in and “colonize” markets. The manifest destiny of foreign retailers here to colonize us only continues with the arrival of the likes of Target, Nordstrom and Japanesse retailer Muji.

Though Target’s struggles point to a plateau in that traditional colonization, they have only been able to take so much out of the market. I firmly believe the real cause of Jacob’s death boils down to “eColonization”.

I firmly believe the real cause of Jacob’s death boils down to “eColonization

Jacob had a solid retail footprint, knew fashion and was willing to adapt — the thing they couldn’t overcome was the dramatic uptick in Canadian shoppers’ shift online.

About 10 years ago, I and my digital firm CloudRaker had the opportunity to work with Joey and his team at Jacob. We did some awesome (if I may say so) strategic and creative work on their digital platforms. Jacob and CloudRaker really collaborated well together, we had shared visions on just about everything — except eCommerce.

We tried but we just couldn’t get Jacob to dip its toe into eCommerce even though it was already the mid-2000s, and the data was there to back us up. And this wasn’t secondhand data, we knew firsthand from working with eBay that Canadians were ready to embrace eCommerce.

Joey resisted with arguments like: “She [he always referred to his customer with the utmost respect] wants to browse, discover and experience, not just transact from behind a machine.” We backed off from our eager eCommerce position respecting that our client in all likelihood knew more about their business than us. The truth is Jacob wasn’t the only Canadian client who resisted — we found this everywhere.

But in hindsight we were wrong in not pursuing our case further. We should have been more belligerent. We should have proven our point. We should have perhaps launched our online store for them anyways. That’s the past.

Jacob is the canary in the coal mine for Canadian retailers

Today, Jacob is the canary in the coal mine for Canadian retailers. Canadians are spending over 40% of their online dollars on foreign websites. We are the most inclined nation in the world to buy online from outside our borders, more willing to pay duty and wait an extra few days for those jeans.

When we do buy on Canadian websites, we spend upwards of 80% on “.ca” imports like amazon.ca, walmart.ca, homedepot.ca, ebay.ca, etc. Don’t believe me? Take a quick peak at the Canadian comScore web traffic.

The decline in the value of the Canadian dollar may slow down eColonization a little, but by no means is it stopping. Canadian companies need to step up and reverse this trend.

But how does the digital team at a retailer like Reitmans or Simons compete with a Walmart digital team that now includes a dedicated R&D Lab of 2,100 employees (replete with engineers, designers, and hackers)?

We see a way to battle back.

We need to embrace our vulnerabilities, shed our coats of pride and embrace the energy of start-ups like Frank&Oak and Beyond The Rack. They asked ‘what do customers here and elsewhere want?’ And they defined their businesses around what they found. Over 60% of Frank&Oak’s business is done in the US; they are the ones driving the counter-colonization.

Being a start-up doesn’t have to be a small team in a basement. A large business with the energy of a start-up can be lethal. One killer transformation we’re watching happen is at Aldo. It still remains to be seen if they will turn themselves into a real threat, but they are at least making moves.

And the start-ups need the experience of those who have grown with their demographics. It is sadly too late for Jacob to offer it, but other veterans can still step in, perhaps in exchange for some of the energy start-ups bring to the table . There’s strength in numbers, and strength in Canadian brands.

Jacob was a very good brand; we believe it was gone before its time. I hope this reflection does not come off as morbid in its attempt to inform those looking to endure. With a digital outlook, and willingness to make tough choices, Canadian companies need to show that eColonization works both ways.

RIP Jacob 1977–2014

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