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

Andrew Lissimore has been running the audio clothing site Headphones.com for nearly a decade. Although audiophiles have a great affinity for their gear and want to try new gear, Lissimore was not satisfied with constantly spending money on platforms like Meta and Google to acquire new customers; He wanted to find a way to better retain the clients he already had.

The founder began looking for solutions within the Shopify ecosystem that would help the company with loyalty programs. But most of what he found only offered solutions based on spending and level. So he decided to build his own system.

What started as a project to solve the loyalty problem for Headphones.com is now a startup called Lantern, which other companies can use to easily integrate loyalty solutions into their own businesses.

Initially, the company linked different apps together to earn a variety of loyalty points based on stamps, spending, points and referrals, but they were difficult to manage. In addition, combining different applications created challenges regarding user experience flows and brand identity.

“We thought it would be great to have a native Shopify loyalty system that’s easy to customize and integrate,” Lissimore said. “I was able to get Shopify designers Kyle Pitt and Dominic McVey, who built their own Polaris design system, to work on this.”

Later, they both joined Lantern as co-founders. Pete currently serves as Chief Design and Production Officer, and McPhee serves as Chief Technology Officer. In total, the company currently has eight full-time employees.

Lantern can handle customer account creation, management, loyalty, and referrals for any seller running on Shopify. Websites can reward returning or new customers and give them points for activities like participating in forums as well. The company explained that vendors can easily integrate their solutions and do not need to add any additional code to do so.

Lissimore said running Headphones.com provides the perfect testing ground for Lantern to understand the pain points you face when being a seller and get a better retention rate.

“I think we were in the perfect place to come up with something like Lantern because [headphones.com] They were very desperate to increase their repurchase rate. “A lot of companies like clothing brands or makeup brands have done buybacks organically, but for us, it was existential,” he told TechCrunch.

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

The company now has clients such as skincare site Counter, which brings in more than $200 million annually, and shoe brand Vessi. It has also built tools to effectively measure data retention to demonstrate Lantern’s value to its customers.

To continue growing its business, Lantern has raised $3.1 million in seed funding led by Salesforce Ventures, with participation from Sidekick Partners, Day One Ventures, and individual investors like Vessi’s Tony Yu. The company competes directly with existing startups like LoyaltyLion and Yotpo.

Rob Keith, a partner at Salesforce Ventures, said Lantern stood out to the company because the startup approaches employee retention through means beyond points-based loyalty with an agile approach.

“Lantern brings something unique together – Andrew built and scaled Headphones.com and lived those retention challenges as a merchant, while Kyle and Dominic come from Shopify, where they built the Polaris design system that thousands of developers use today. This combination means they understand both what merchants actually need and how to build solutions that feel native to the system basic instead of installing it.

Keith added that Lantern’s features, such as the wallet function, which appears directly at checkout without any pop-ups or redirects, help consumers and brands alike.

In its product roadmap, the company plans to leverage artificial intelligence and provide customers with insights and recommendations on retention.