Andrew Lissimore, founder of the audio retail site Headphones.com, recognized a critical gap in customer retention strategies after nearly a decade in ecommerce. Frustrated with the high costs of acquiring new customers through platforms like Meta and Google, Lissimore sought a more effective method to keep existing customers engaged and returning. His search within the Shopify ecosystem revealed mostly spend- and tier-based loyalty programs, which failed to meet his needs. This led him to develop a proprietary solution that evolved into Lantern — a startup offering a fully integrated loyalty platform designed for Shopify merchants.
Lantern provides Shopify vendors with a seamless way to implement loyalty, referral, and customer account management without additional coding. Unlike assembling multiple apps, Lantern offers a unified system that supports diverse reward mechanisms such as points, stamps, spending thresholds, and referrals. The platform also allows merchants to reward customers for community engagement, including forum participation, enhancing brand loyalty through varied interactions.
“We thought it would be great to have a Shopify native system for loyalty that is easy to customize and integrate,” said Lissimore. He enlisted Shopify design veterans Kyle Peatt and Dominic McPhee, creators of Shopify’s Polaris design system, who joined Lantern as co-founders to lead product design and technology.
Proven Results: Increased Repeat Purchases and Faster Repurchase Cycles
Lantern’s efficacy was validated through its deployment at Headphones.com. The site’s repeat purchase rate jumped from 30% to 50%, while the average interval between purchases dropped from 198 days to just 98 days. This improvement addresses a critical challenge for niche ecommerce businesses like audio gear, where repurchase frequency is not naturally high compared to sectors like apparel or cosmetics.
Expanding Clientele and Strategic Funding
Lantern has attracted notable clients including skincare leader Counter, generating over $200 million annually, and footwear brand Vessi. To accelerate growth, Lantern secured $3.1 million in seed funding led by Salesforce Ventures, with participation from Sidekick Partners, Day One Ventures, and angel investors such as Vessi’s Tony Yu. Salesforce Ventures partner Rob Keith highlighted Lantern’s unique positioning: combining deep merchant experience with Shopify-native design expertise to deliver solutions that integrate natively without disrupting user experience.
“Lantern brings together something unique — Andrew built and scaled Headphones.com and lived these 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,” Keith noted. Lantern’s wallet functionality, which integrates directly into checkout flows without pop-ups or redirects, enhances both merchant and consumer experiences.
Looking Ahead: AI-Driven Retention Insights
The company plans to leverage artificial intelligence to provide merchants with actionable insights and personalized recommendations to further optimize customer retention.
FinOracleAI — Market View
Lantern addresses a persistent challenge in ecommerce: improving customer retention through a flexible, integrated loyalty solution tailored for Shopify merchants. Its native platform reduces friction associated with multi-app setups and enhances user experience, positioning it well against competitors like LoyaltyLion and Yotpo.
- Opportunities: Growing demand for sophisticated loyalty programs as ecommerce competition intensifies; AI integration to deliver data-driven retention strategies; strong founding team with domain expertise.
- Risks: Competition from established loyalty platforms; dependency on Shopify ecosystem; need to continuously innovate to maintain differentiation.
Impact: Lantern’s solution has demonstrated tangible improvements in customer loyalty metrics, signaling positive market reception and growth potential in the loyalty technology sector.
