How a headphone site operator built loyalty startup Lantern to solve his own problems

Andrew Lissimore runs the audio clothing site headphones.com For almost a decade now. While audiophiles have a high affinity for their gear and want to try out new gadgets, Lissimore wasn’t satisfied with constantly spending money on platforms like Meta and Google to acquire new customers; He already wanted to find ways to better retain his customers.

The founder began looking for solutions within the Shopify ecosystem that would help businesses with loyalty programs. But most of what he found offered only cost- and tier-based solutions. So he decided to create his own system.

What started as a project for Headphones.com’s loyalty solution is now known as a startup the lanternwhich other companies can easily use to integrate loyalty solutions into their own businesses

Initially, the company integrated different apps for different types of loyalty points based on stamps, spend, points and referrals, but it was difficult to manage. Also, integrating different apps introduces challenges with user experience flow and brand identity.

“We thought it would be great to have a Shopify native system for loyalty that’s easy to customize and integrate,” Lissimore said. “I convinced Shopify designers Kyle Peet and Dominic McPhee, who created their Polaris design system, to work on it.”

Both later joined Lantern as co-founders. Pete currently serves as Chief Design and Product Officer and McPhee serves as Chief Technology Officer. In total, the company currently has eight full-time employees.

Lantern can handle customer account creation and management, loyalty, and referrals for any seller working on Shopify. Websites can reward returning or new customers and award them points for activities such as forum participation. The company explained that vendors can easily integrate their solutions and do not need to add any additional code to do so.

Lissimore said operating Headphones.com provided the perfect testing ground for Lantern to understand the pain points of being a seller and better retention.

“I think we were in the perfect place to come up with something like Lantern because we are [headphones.com] Was so desperate to raise the repurchase rate. A lot of businesses like clothing brands or makeup brands are naturally built around repurchases, but for us, it was existential,” he told TechCrunch.

After Headphones.com adopted Lantern, its purchase rate for repeat visitors increased from 30% to 50%. The time to buy a second pair of headphones has also reduced from 198 days to 98 days.

The company now has clients such as skincare site Counter, which generates more than $200 million in annual revenue, and footwear brand Vesey. It has developed tools to effectively measure retention to demonstrate lantern value to its clients.

To further grow its business, Lantern has raised $3.1 million in seed funding led by Salesforce Ventures with participation from private investors such as Sidekick Partners, Day One Ventures and Vessi’s Tony Yu. The company directly competes with such existing startups Loyalty Lion And Yotpo.

Rob Keith, a partner at Salesforce Ventures, said Lantern stood out to the firm because the startup is moving toward retention by moving beyond points-based loyalty with a flexible approach.

“Lantern combines something unique — Andrew built and scaled Headphones.com and lived these retention challenges as a merchant, while Kyle and Dominic came from Shopify, where they built the Polaris design system that thousands of developers use today. This combination means they both understand what merchants really need and how to build solutions that feel more local than platform,” he says. do

Keith added that Lantern features, such as wallet functionality, appear directly at checkout without any pop-ups or redirects, which helps both customers and brands.

In its product roadmap, the company plans to leverage AI and provide insights and recommendations on customer retention.