From Headphones to Loyalty: How One Founder Built Lantern
▼ Summary
– Andrew Lissimore founded Lantern after struggling to find suitable loyalty solutions for his audio apparel site Headphones.com, leading him to build his own system.
– Lantern is a Shopify-native loyalty platform that allows businesses to manage customer accounts, loyalty programs, and referrals without requiring additional code.
– The startup was co-founded by former Shopify designers Kyle Peatt and Dominic McPhee, who helped create a customizable and easily integrable system.
– Lantern significantly improved Headphones.com’s performance, increasing repeat visitor purchase rates from 30% to 50% and reducing repurchase time from 198 to 98 days.
– The company raised $3.1 million in seed funding led by Salesforce Ventures and competes with platforms like LoyaltyLion while planning to incorporate AI for retention insights.
For nearly ten years, Andrew Lissimore has operated the audio gear retailer Headphones.com, serving a dedicated community of audiophiles eager to test new equipment. Frustrated by the constant expense of acquiring customers through platforms like Meta and Google, he shifted his focus toward improving customer retention. This strategic change led him to explore loyalty solutions within the Shopify environment, but he found most options were limited to basic spending or tier-based models. Determined to create a more effective system, Lissimore began developing his own.
That internal project evolved into Lantern, a standalone startup that enables other businesses to seamlessly integrate comprehensive loyalty programs. Initially, Headphones.com combined multiple apps to manage rewards through stamps, spending, points, and referrals, but this patchwork approach proved difficult to maintain. It also created inconsistencies in user experience and diluted brand identity. Lissimore envisioned a Shopify-native loyalty system that was both customizable and easy to implement.
He successfully recruited Kyle Peatt and Dominic McPhee, the designers behind Shopify’s Polaris design system, to join the effort. Both later became co-founders of Lantern, with Peatt serving as chief design and product officer and McPhee as chief technology officer. Today, the company employs eight full-time team members.
Lantern provides Shopify merchants with a unified platform for customer account management, loyalty programs, and referral systems. Retailers can reward both new and returning customers, offering points for various activities, including forum participation, without writing any additional code.
Operating Headphones.com gave Lissimore firsthand insight into merchant challenges, particularly the need for better customer retention. He explained, “We were in the perfect position to develop Lantern because our survival depended on increasing repurchase rates. While clothing or cosmetics brands naturally encourage repeat purchases, for us, it was an existential issue.”
After implementing Lantern, Headphones.com saw its repeat visitor purchase rate jump from 30% to 50%. The average time between a customer’s first and second headphone purchase also dropped significantly, from 198 days to just 98 days.
Lantern now serves prominent clients such as skincare brand Counter, which generates over $200 million annually, and footwear company Vessi. The platform includes analytics tools that help merchants track retention metrics and demonstrate Lantern’s value.
To support its expansion, Lantern secured $3.1 million in seed funding led by Salesforce Ventures. The round included participation from Sidekick Partners, Day One Ventures, and individual investors like Vessi co-founder Tony Yi. The company now competes with established players like LoyaltyLion and Yotpo.
Rob Keith, a partner at Salesforce Ventures, highlighted why Lantern stood out: “The team brings a unique perspective, Andrew built and scaled a merchant business and lived through these retention challenges, while Kyle and Dominic developed Shopify’s Polaris design system. They understand what merchants truly need and build solutions that feel native to the platform.”
Keith also praised features such as wallet functionality that integrates directly into checkout without disruptive pop-ups or redirects, improving the experience for both consumers and brands.
Looking ahead, Lantern plans to incorporate AI-driven insights and personalized recommendations to help businesses further optimize customer retention.
(Source: TechCrunch)
