Andrew Lissimore has been running the audio apparel site Headphones.com for nearly a decade. Audiophiles have a strong affinity for their equipment and like to try new gadgets, but Lithymore wasn’t satisfied with continually spending money on platforms like Meta and Google to acquire new customers. He wanted to find a way to better retain the customers he already had.
The founders began looking for a solution within the Shopify ecosystem to help their business with a loyalty program. However, most of what he found offered only spending and tier-based solutions. So he decided to build his own system.
What started as a project to solve Headphones.com’s loyalty is now a startup called Lantern that other companies can use to easily integrate loyalty solutions into their own businesses.
Initially, the company connected different apps to earn different loyalty points based on stamps, spend, points, and referrals, but it was difficult to manage. Additionally, integrating different apps created challenges for user experience flow and brand identity.
“We thought it would be great to have a Shopify native system for loyalty that was easy to customize and integrate,” says Lissimore. “I was able to convince Shopify designers Kyle Peet and Dominic McPhee, who built the Polaris design system, to work on this.”
Both subsequently joined Lantern as co-founders. Pete currently works as Chief Design and Product Officer and McPhee works as Chief Technology Officer. The company currently has a total of eight full-time employees.
Lantern can handle customer account creation and management, loyalty, and referrals for vendors working on Shopify. Your website can also reward returning and new customers and give you points for activities such as participating in forums. The company explained that merchants can easily integrate the solution and do not need to add any additional code to do so.
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Lissimore said running Headphones.com was a perfect testing ground for Lantern to understand its pain points as a seller and increase customer retention.
“We (headphones.com) were desperate to increase repurchase rates, so I think we were in the perfect place to come up with something like Lantern. A lot of businesses, like clothing brands or makeup brands, naturally incorporate repurchase, but for us it was a matter of survival,” he told TechCrunch.
After Headphones.com adopted Lantern, repeat purchase rates increased from 30% to 50%. The time to purchase a second pair of headphones has also been reduced from 198 days to 98 days.
The company’s current clients include skin care site Counter, which generates more than $200 million a year, and shoe brand Vessi. We’ve also built tools to effectively measure retention to demonstrate Lantern’s value to our clients.
To further grow the business, Lantern raised $3.1 million in seed funding led by Salesforce Ventures, with participation from Sidekick Partners, Day One Ventures, and private investors including Tony Yu of Vessi. The company competes directly with established startups such as LoyaltyLion and Yotpo.
Rob Keith, a partner at Salesforce Ventures, said Lantern stood out for the company because it takes a flexible approach to retention that goes beyond points-based loyalty.
“Lantern brings together something unique. Andrew built and scaled Headphones.com to address these retention challenges as a seller, while Kyle and Dominic came from Shopify and are building on the Polaris design used by thousands of developers today. “We’ve built a system. This combination means they understand both what sellers actually need and how to build a solution that feels native to the platform rather than bolt-on,” he said.
Keith added that Lantern’s features, such as the wallet feature, which appear directly at the checkout without pop-ups or redirects, will benefit both consumers and brands.
In its product roadmap, the company plans to leverage AI to provide customers with retention insights and recommendations.
